I recently told my board we needed to make a strategic change of direction, which caused a lot of blank and uncomfortable looks.
Our mistake, which was entirely my fault, was listening to the siren of the wrong buyer. All too often, buyers, especially large companies, are so enticing that, like a job that pays a lot but is a wrong mix of culture and objectives, we think we can make it work.
This happened to me and my company over the past year. My company sells a product that large companies could use, and I was lured to those companies because of their size, reputation and potential revenue opportunities. The companies encouraged my interest through their spoken and written interest. My team and I spent hundreds of hours pursuing them, only to find out that our product was a mismatch for what they were trying to accomplish.
Most of us have limited time and resources, so we have to make the most of our assets. You can only do that by being honest with yourself. In business, that requires a strong understanding and acceptance of the following:
Many companies really don't understand their value proposition or overestimate their value. They do this because they claim they don't want to limit themselves. Unfortunately, what they are doing is confusing the marketplace.
We often think our service will fit anyone who is in the market for what we offer. If you are a community bank, you know that you can't handle the financial needs of a multibillion-dollar international company. Sure, you may provide better service and offer all the technological bells and whistles, but in reality, you don't have the cash or the acceptable rate for an international company.
In our case, the competitors are bigger, provide a better rate, have been in the field longer, and their mission is in sync with large buyers. My ego or blindness to the reality of the market put our business on the wrong path. A great middleweight can never beat a great heavyweight because size, strength, quickness and stamina matter.
You have to ask yourself if your team has enough experience and depth of understanding to gain a buyer's trust.
Many businesses require a certain amount of capital investment by the supplier. You often read where a small contractor wins the bid on a project, but can't fulfill the project because it doesn't have the financial wherewithal.
Every business needs some type of competitive advantage. A friend of mine runs a health-care marketing firm, and his competitive advantage is that he is a former brand manager for a pharmaceutical company and has worked with many pharmaceutical and biotech companies over a number of years. His company has the skills to manage the marketing for a midsize company but not a multinational.
Don't waste time and energy going after prospects that put you at a significant price disadvantage before you get started. Great service only wins if price is equal or slightly off. Pick fights you can win, and your business will grow.
Marc Kramer, a serial entrepreneur, is the author of five books and is an instructor at the University of Pennsylvania's Wharton's Global Consulting Practicum, where he serves as Country Manager for Chile.