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Friday, March 31, 2023

How to Build the Best Mousetrap in the World

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How to Build the Best Mousetrap in the World

The basic purpose of a business is to create a customer. The higher purpose is to create a repeat customer, Jason Jordan wrote. Repeat customers fall squarely in the category of Things a Company Wants.

Ironically, customers also fall squarely in the category of Things a Company Fears.

Companies see customers as “unpredictable, varied, fickle, stupid, shortsighted, stubborn, and generally bothersome” entities that keep them from working on things they can control: software code, Excel sheets, and production lines. And oh! They always want discounts.

But they also have what companies desperately want—dollars and cents. So businesses take the easy way out to keep the ship from rocking.

They avoid talking to customers out of the fear that they’ll leave if the business cannot deliver (rather, doesn’t want to deliver) what they ask for.

They refrain from creating content that challenges the status quo out of the fear that it could upset customers (or empower them to solve their own problems).

In other words, they try to retain customers while keeping them at an arm’s distance.

Let’s make no mistake. Companies are right to fear customers. Users are a fickle wind, Paul Graham agrees. But this wind is more powerful than any other. It can either loft a company up in the sky or leave it flat on the pavement. If customers take you up, no competitor can keep you down.

Your customers have made your business what it is. They’re who you have a relationship with, whom you owe an obligation to, and who will remain loyal to you until someone else offers them a better service.

As buyers, don’t we fully subscribe to this thought process? Then why should things be different when we become sellers?

As a business, your purpose is not to one-up the competition, but to constantly strive to deliver a better customer experience.

In an insightful podcast, Gaurav Munjal shared the three key pillars to build a successful company.

How to Build the Best Mousetrap in the World

1. Clarity of Thought

Leaders are often high on adrenaline and enthusiasm, and constantly direct their limited time and energy towards new challenges.

While this feels exciting, it compromises their ability to win the wars they’re already in. By chasing every shiny object that promises to let them build a better mousetrap, leaders jeopardize their core competencies. Eventually, they end up being just another player in a flooded market, forced to compete on the basis of cost.

Successful businesses set strong foundations before building skyscrapers on them. This foundation gets set when you have clarity on what you want to do and why. This clarity is your North Star, your GPS.

It’s visible in your words and actions. It helps you connect with people who believe in what you believe. (Gaurav credits his clarity as a reason why he could work with great talent, investors, and mentors to build Unacademy.)

Clarity is also the energy behind what you choose to do and the reason behind what you choose to ignore. Thus, it lays the path for meaningful innovation.

2. Innovating in the Right Areas

Innovation doesn’t occur with an idea. It occurs when your product, service, or initiative moves the society forward. And it starts by asking interesting questions.

Questions that start with “How” lead to incremental innovation at best, because companies often end up asking themselves “How can we do what we’re already doing, better?” The result is that their cool (and feature-rich) products and technologies often cause customers inconvenience.

But questions that start with ”What if” and “Why” don’t just create revolutionary products, they also push the industry forward.

When Apple asked themselves why there was no device between laptops and smartphones, they created the iPad, which was far superior to the Microsoft tablet PC.

Unacademy used similar questions to create breakthrough innovation. They empowered students to transcend geography or test scores and access top-quality courses by the best lecturers. They slashed the content-creation learning curve for their lecturers from three hours to three minutes.

The lesson here is not to innovate to replace a product, but to revolutionize the industry and move it forward.

3. The Ability to Execute

Many companies agonize over decisions and refuse to take action because they ask themselves, “What if we’re wrong?”

Here’s the kicker. Most companies that innovate will often be wrong. But on the bright side, they know about it, return to the drawing board and work on fixing it. Eventually, they turn out right about one thing. And it yields 100X returns.

“When you swing [in baseball], no matter how well you connect… the most runs you can get is four. In business, every once in a while, when you step up to the plate, you can score 1,000 runs. Big winners pay for so many experiments.” — Jeff Bezos

If you don’t execute, you can never tell whether you’re right or wrong. You’ll play the dangerous game of guessing what your users like and go down the wrong rabbit hole.

Successful companies understand that innovation is a continuous process. They ship things fast and let their customers tell them what they like. Then they go back to the drawing board, work on the feedback, and ship again. Rinse. Repeat.

If there is a single key to success, it is the trait of being able to make things happen in the world—willfulness, determination, execution focus, not giving up when you hit a roadblock, the ability to solve any problem that comes your way, and self-belief.

— Sam Altman (@sama) January 6, 2020

Summing Up

Good companies create value for shareholders. Great companies create value for customers and employees (and shareholder value becomes a byproduct).

Your customers aren’t an unwelcome interruption in what you do. They’re the reason why you do what you do.

Keep striving to help them make their lives better. That is how you can build the world’s best mousetrap that customers will take the beaten path for.

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