What business are you really in? Have you defined your north star in your business?

I ran into Tony Robbins's LinkedIn posting and was inspired to reflect on his question: What business are you really in? As business owners, we have to ask that question regularly to ensure that our competitiveness and the value we deliver to our clients are still something the clients are willing to pay for. We should ask this question often and be true to ourselves. If we are in the products business, we tend to fall in love with the products we build.

Robbins refers to Apple's Steve Jobs's move from pure computers, phones, music, etc. Steve wanted his product development to focus on things that could broaden the horizons from pure computers to bigger things. Apple decided to offer access to unlimited volumes of high-quality music that people loved at 99 cents per song. If you look at the current division of revenues per product line (previous 2024 quarter), the 90.8 billion dollars is divided as follows:

It is clear that without asking the question a long time ago, the revenue model would have been very different. Staying purely with computers would not have taken Apple where it is today.

Apple is not the only organization that asks what business it wants to be in. An example of this is Microsoft, at some point, decided to be in the phone business by acquiring Nokia but to exit the business with the new leadership. I assume tough questions were asked when Microsoft CEO Satya Nadella took over from Steve Ballmer, the architect behind the Nokia acquisition.

Robbins states, "Sometimes we fall in love with our product instead of our customer." If you look back at your decisions and career, I am sure we all recognize some of these from our past. When facilitating business design workshops with discussions of value propositions and market segmentation, I typically ask the client, "What does your optimal customer profile look like?" If the customer already has a product, I want to know what the most successful customers look like and their characteristics. There is something in those customers that makes the solution appealing, and they are willing to pay for it.

The biggest mistake (and I have been guilty of it) is having too broad a market segmentation. If your approach is to be a "Swiss knife" where anybody can use your solution, you will encounter issues. Customers won't be able to "paint the picture" of how your solution fits their specific situation. Furthermore, your marketing efforts will be more difficult as you must maintain different messaging for different stakeholder groups. That is both expensive and will eat your resources.

Robbins suggests four criteria when responding to the question of what business you're really in:

??Get outside your box and expand your market—think bigger!

??Use language that creates energy in you

??Use language that is aspirational and compels people’s interest

??Describe the benefits, not the process (how you’re serving others)

Robbins suggests that you "write down what business you are in, what business you're really in, and what business you need to be in."

That is a powerful way to remind ourselves what we should focus on. How often do we remember to stop asking those questions, especially if business is flowing in and we don't have to think about these foundational topics and potential decisions we need to make? Sometimes, we might be too late to react, and you might be on the wrong track with our offerings.

I would love to hear if you agree with this and what your experience is with whether these are questions that companies ask occasionally.

Yours,

Dr. Petri I. Salonen

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