Through the course of a business it might become necessary, or simply potentially more fruitful, to change the overall direction of the business or its main products. Market conditions may change, new opportunities arise, or internal matters affect the business's capabilities. In such circumstances, grasping concepts such as "pivoting" and "adaptability"—covered in this section—will help your business progress forward.
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If the folks who allocate capital in our society - venture capitalists, hedge fund managers, mutual fund managers, etc - are using IRR, ROCE, RONA, then they are going to allocate capital to companies that are making efficiency oriented investments, not empowering investments. And our society will continue to be awash in capital with no game changing empowering investments that create new industries. Clay suggests that we measure our returns in "dollars in dollars out" and forget about time, " profit as dollars, yen or renminbi". That's they way I was taught the venture capital business back in the 80s. Cash on cash, dollars in dollars out. That's what matters. If it takes a decade or more, who cares?
Think about what your key value proposition is and who is your primary customer and focus on that. And think about what you can do in your revenue model to make it so that it will be hard for others to come in and undercut you. And think about your cost model and how to keep it as low as possible while allowing your company to be best in class at what it does.
You will not stay in business forever if you don't adapt to changing market conditions. This doesn't mean adopting the "business model of the hour" model and this doesn't mean pivoting either. What I am talking about is the once every few years "oh shit moment" when you realize that the path you are on isn't going to work in a year or two and that you need to make some changes.
If you want to stay in business forever, you have to focus on the long term. You must construct a business model that builds confidence and trust with your customers and keeps them coming back day after day, year after year. Many business schools teach executives and entrepreneurs that business is about profit maximization. I don't believe that. I believe business is about making a profit that sustains the business and enriches the owners but is not maximized in any period (month, quarter, year). I believe the goal of a business is sustainability so that all the stakeholders (customers, employees, owners, suppliers, etc) can rely on the business for the long term.