Industry Selection, Competitive Advantage, and Business Success

Note: One of our goals with the smbZen BizJournal is to make it an educational resource & reference guide for entrepreneurs and small business owners.  In the coming weeks, we will have more posts like the one below, posts that aim to provide guidance and discourse on business methodologies and trends.  We hope you find these posts insightful and useful. To that end, any feedback would be greatly appreciated.  Simple leave a comment here or send an email to support @ smbzen.com.   Thanks!

Industry Selection

Industry selection is the single most important determinant to business success. If the characteristics of an industry are unsound (i.e it is shrinking, there are many entrenched competitors, etc), the probability of failure is extremely high.  Conversely, if the industry is growing, i.e. the general trends are in your favor, the probability of success substantially lower.  March Andreessen, founder of Netscape, OpsWare, and Ning writes:

In honor of Andy Rachleff, formerly of Benchmark Capital, who crystallized this formulation for me, let me present Rachleff’s Law of Startup Success:

The #1 company-killer is lack of market.

Andy puts it this way:

  • When a great team meets a lousy market, market wins.
  • When a lousy team meets a great market, market wins.
  • When a great team meets a great market, something special happens.

You can obviously screw up a great market — and that has been done, and not infrequently — but assuming the team is baseline competent and the product is fundamentally acceptable, a great market will tend to equal success and a poor market will tend to equal failure. Market matters most.

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December 16, 2008 | Filed Under Research & Analysis, small business | Comments 

The Future of Small Business Marketing and Operations

This past February, the Intuit Institute for the Future issued a 32 page report discussing the three trends that will affect small businesses over the next decade.  Given our focus on entrepreneurship and small business here on the smbZen BizJournal, we found the report to be both interesting and incredibly insightful.  The trends are:

  1. “The Connected World: Small Business Management On My Time, On My Terms”
  2. “Beyond Web 2.0: Technology Fuels Small Business Formation, Operations, and Innovation”
  3. “Small Business Marketing: The Mindset from Push to Pull”

In the following sections, we discuss trend two and trend three. read more

December 15, 2008 | Filed Under Research & Analysis, blogging, marketing, small business | Comments