Monday, January 30, 2012

What Would You Change? - Part 2

I wanted to continue my thoughts regarding the business I started and try to answer the question, what would you change?

We're focused on strategy this week, so let's dive in.

When we launched our space, we knew that it was different. We wanted it that way. We were trying to build a professional space that would spur synergy, creativity, and economic development. Our vision was strong, our strategy, specifically how we positioned the space among competitors was not.

We started the space in September 2008, right when the economy was starting to take a dive. I decided to market the space as "affordable office space (plus)." The "affordable" would get them in the door and the added benefits of co-working would keep them and hopefully change their  perspective of the value they were receiving. From a sales standpoint, this worked well. Inexpensive office space got people in the door, singing leases, and paying rent. But, this strategy led to negative impacts to our brand down the road.

When differentiating between our space, a large open plan with 15 work stations, with our competition, which were mostly private office spaces scattered throughout town, we positioned it as "affordable" rather than open, creative, and different. This position led potential customers to believe that our space was affordable because it was open and shared, and therefore was inferior to private office space. When the real estate market worsened and landlords in the town began lowering the rent of their private offices, it made even current customers at the time ask why they would pay the same amount for open space as they would for a private space.

 All that said, due to the timeliness of the launch, I don't know what other strategy would have worked better. The strong economic forces that were bearing down on our small piece of the economy led all of us who were providing space and business amenities to have to adapt very quickly and often.

Sunday, January 22, 2012

What would you change?

For me, this is a pretty strange question. I often don't think about what I would change because I find that there are so many valuable lessons to be learned from diving in head first into experiences like starting a business or...enrolling in grad school.

In September 2008, I started a business. (An excellent time to go into business...) I'm often asked what I would have changed about my business model knowing what I know now. Until recently, I didn't have the context to answer this question with insight outside of my own experiences. Now, I'm starting to formulate news ideas about what I could have done differently.

My business was a 3,500 square foot incubator and co-working office space that I designed and developed with the vision that it would be a catalyst for economic development in my hometown of Shelburne Falls, MA. I envisioned a thriving hub of young entrepreneurs working in synergy and inspiring the community to look ahead. I ran the space for tow years until it was no longer feasible for me to do so. I was not turning enough of a profit to live off of and it was taking up too much of my time to manage. In 2010, I worked with the building owner, a friend and mentor, and transitioned the space into his hands. This allowed me to step out and make an important life change and made it so the space continued to exist and provide value for both the owner and the tenants. When I left there were 15 tenants. There are now 25.

I used to answer that question of what I would change by explaining how I had become a middle man with all the risk. I was leasing a space, making improvements, and releasing it to tenants who wanted to share space and work alongside each other. Because I had no ownership of the building, I had nothing to borrow on and had little control of the expenses of the building.

What I realize now, when thinking about my business model, is that the value proposition was not fully aligned with the existing customer segments within the community. And, I did not have a financial plan that allowed me to bridge the existing needs of the customers with my long term and idealized vision of what the space would be and how it would affect the community.

In a strategy discussion during last month's intensive at BGI we discussed the role of intuition in business strategy. It may have been intuition that led me to build the space, that allowed me to make it something real, and ultimately led me to know that it was time for me to step away. I am thankful for this and I now realize that I put too much reliance on this intuition when starting the space. What is now apparent that was missing were the tools and resources necessary to run all aspects of the  business.

My thoughts are still formulating around this topic so this post be continued.

Wednesday, January 4, 2012

When they Zig...

I'm currently reading a book called Zag, by Marty Neumeier of the Liquid Agency. In it, is the best definition for brand that I have heard. Neumeier defines brand as, "A person's gut feeling about a product, service, or company."

Could it really be that simple?

In essence, yes. Perhaps a company's control and degree of understanding of its own core qualities helps to strategically position itself so that it can survive and thrive. Brand has always been important to a company's success and right now it is more important than ever. Customers not only want a quality product at a good price, they want to align themselves with their choices because they know that our choices, our purchases, are a reflection of ourselves. In a way, the stakes have never been higher for companies to develop a solid brand worth emulating. Neumeier argues that the winning manufacturer is no longer the one with the best product but the one with the fastest supply chain. He quotes supply chain expert Rob Rodin who explains that companies today have no choice but to connect to the "three insatiable demands of business - free, perfect, and now."

How are companies to survive in such a climate, let alone compete?

Zag, simply implies that when everyone else zigs, you must zag.  Neumeier explains that companies no longer have to just compete with other companies to do things in a more cost effective and efficient way, they must compete with the absolute clutter and constant bombardment that the modern marketplace...provides us. Not only must companies stand out from the pack, they must somehow stand aside while the torrent of products and services flow by in a raging torrent. Marketing wise, rather than just yelling louder to be heard, being clever or witty, a company must be so different and confident in its own brand that it shines so (subtly) that nothing else compares. The best brands have always known this and now because of the incredible rate at which ideas and products are actualized  there is even less room for error, or, lack of self awareness and realization.

The question that fascinates me is,  how exactly does a company's collective understanding of its own brand affect its strategy and ultimate success - and - why can it be so difficult for a company to understand itself in simplistic and elegant terms?