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Learning is Lifelong!
As I head to the Netherlands for my MBA tomorrow, I truly believe that learning is a lifelong process and with the pace at which knowledge and processes evolve today, it becomes imperative for all to keep renewing their skills.
The Customer Purchase Bid-Ask System
Just like in the stock market, a purchase involves a bid-ask
system where a Customer Ask has to matched with the Business Bid. Businesses
need to understand this to convert a potential customer into a customer.
The ‘Customer Ask’ is the pain which the customer is going
through currently to solve a particular need. This involves all the investments
a customer makes in buying a product or service. This investment can be in any
of the following:
Money – the actual price of the product the customer is currently
buying.
Effort – this involves the effort the customer is making to
purchase a product. For instance, since factory outlets of fashion brands are
generally on the outskirts of a city, a customer might have to travel 25 kms to
reach there, which is the investment the customer is making in buying the
product.
Time – some products have along delivery time and hence the
wait is the investment made by the customer. The investment varies with how
quickly the customer needs the product.
Harassment – some purchases might involve some level of
harassment for a customer. For instance, a lot of people feel shy of going to a
chemist and buying condoms. This is also an investment.
A business looking to acquire a customer has to quantify
these costs as closely as possible and needs to set a price (including the monetary price and the services offered along with it) for its product/service
which can convert the customer to buying its product. This price is called the ‘Business
Bid’ and the difference between the bid and ask, which is called the ‘Spread’,
should be big enough for the customer to see the value in changing his/her
purchasing process.
The Biggest Loss of Being an Entrepreneur
Entrepreneurship is a very exciting journey. It teaches one
a lot and personally, it helped me develop an understanding of business which I
probably could not have in the same period of time if I was doing something
else. Having said this, once their companies fail, entrepreneurs do face a lot
of challenges and losses. Other than the monetary and time losses, the
biggest loss of being an entrepreneur is that you tend to have developed no
specialized skills which can earn you a living going forward in your life.
If you decide not to startup, getting a job becomes a task.
I
am facing this very predicament now. My startups have taught me about running a
business as a whole and some things about each and every part of the business.
However, now that I am looking for a corporate career, I realize that I have no
specialized skills which can make me easily employable. I am having to identify
one aspect of business which I feel has potential and which interests me and am
reading up on it, so as to ensure that I can master some skill which can improve
my chances of getting a desired job in the near future.
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