Elements of Sustainable Companies
I was looking at the website of one of our (StrongMail: Startup 5.0) investors, Sequoia Capital, and I came across the following list of "Elements of Sustainable Companies". I think this list is spot on. I guess this is how a world-class firm like Sequoia Capital finds and invests in world-class companies such as Google, Yahoo!, Cisco, Oracle, Apple, Electronic Arts and Atari.
I have copied their list of "Elements" below and I have included a few additional ones of my own at the end.
Clarity of Purpose
Summarize the company's business on the back of a business card.
Large Markets
Address existing markets poised for rapid growth or change. A market on the path to a $1B potential allows for error and time for real margins to develop.
Rich Customers
Target customers who will move fast and pay a premium for a unique offering.
Focus
Customers will only buy a simple product with a singular value proposition.
Pain Killers
Pick the one thing that is of burning importance to the customer then delight them with a compelling solution.
Think Differently
Constantly challenge conventional wisdom. Take the contrarian route. Create novel solutions. Outwit the competition.
Team DNA
A company’s DNA is set in the first 90 days. All team members are the smartest or most clever in their domain. "A" level founders attract an "A" level team.
Agility
Stealth and speed will usually help beat-out large companies.
Frugality
Focus spending on what's critical. Spend only on the priorities and maximize profitability.
Inferno
Start with only a little money. It forces discipline and focus. A huge market with customers yearning for a product developed by great engineers requires very little firepower.
And here are my additions:
Be Scrappy
Emerging markets change rapidly. Companies need to react quickly, sometimes on instincts alone, to take advantage of a new opportunity. Not everything has to be perfect immediately.
Start Simple
It will only get more complicated. Start simple and do it best.
Handle with Care
Take care of your customers, they will help you build better products, recruit better talent and attract other customers.
Speed
Make fast decisions and figure out if they are right or wrong as quickly as possible. If you're right, you've taken a leap ahead, if your wrong, you didn't lost minimal time.
Customer, not Competition
Be a leader, not a follower. Companies often focus too much on their competition. Sometimes companies focus on the wrong competitor and follow them to failure. You'll never go wrong focusing on the customer first.