There was an excerpt posted today on the Four Hour Workweek blog from a new 81-page book: A Few Lessons for Investors and Managers from Warren E. Buffett.
I love succinctness, and you can’t get much better than distilling the essence of “what Charlie and I have been saying over the years in annual reports and at annual meetings” into 81 pages.
Here’s one of my favorite sections:
THE REALLY GREAT BUSINESS: High returns, a sustainable competitive advantage and obstacles that make it tough for new companies to enter
A truly great business must have an enduring “moat” that protects excellent returns on invested capital. (2007)
“Moats”—a metaphor for the superiorities they possess that make life difficult for their competitors. (2007)
» » » Click here to read the rest of this post « « «
It’s very easy to get caught up in the day-to-day of the hamster wheel inside the fishbowl of building your business and forget about the overall opportunity parameters.
If you are struggling for traction, it indicates that you may be:
- Experiencing a mismatch between what you believe to be the opportunity and the reality of the opportunity (this is very common in the immediate-post-bar-napkin, just-keep-grinding and true-believer phases)
- Building a solution looking for a problem (this is typical of engineering driven companies)
- Not understanding who your ideal customer is and what their pain is (this is also typical of engineering driven companies)
- Lacking sufficient ideal customers who are willing to pay for a solution to their pain at a price point that supports a sustainably profitable business model (this is a strategic leadership error, typically a variation of “it’s my idea so it must be good”)
- Not effectively creating the perception of need in your prospects (this is marketing’s job, and this is fairly common when building solutions looking for a problem)
- Not closing on the perceived need (this is sales’ job, and this one is rare compared to the others in this list)