Phase: Launching business
What is the most important requirement for a business?
A customer! You cannot have a business without a customer. Something that is underestimated if you are not continuously customer facing or not rewarded or incentivised for generating a happy customer! Then you need the cash flow from your business (opportunity) in order to be successful and it needs to be worth your while or effort pursuing this enterprise. And in order to do this, you need to follow the particular needs of the customer so that they satisfactorily fulfill their requirements or exceed your competitors’ ones as they case may be.
I recently came upon a great TED talk on trust by Harvard University professor, Francis Frei. I think this is probably the most underestimated area of business and one that can have huge consequences on unemployment, technical wastage and ineffective organisations.
So why is trust important?
Well there is actually a very cool application providing a good example of various ways people may react to payoffs or rewards. And since selling products or services takes effort. People need trust so that they know this effort will not be wasted.
What is also quite interesting is how many form of business transactions one can conduct. Here is a quick list I drew up:
And all of these transactions can be billed in the following ways:
Then of course the above can be financed in all sorts of fancy ways but all discounted on a time basis (some more aggressively than others).
So why discuss all this? Well actually there are two elements I want to zoom down on. Firstly the glue of trust and binding mechanics (we call contracts) and then natural risk. Trust is a social element is determined by local environmental factors e.g. general scarcity or abundance in a community and human tendencies to put one’s desires behind those of others. Risk on the other hand is a lot more complicated but inevitably results from forces of nature or mistakes by a our fellows. From weather to car accidents, all sort of things can happen which can result in adverse consequences or our hard earned payoffs.
Trust as discussed by Francis only has 3 requirements: authenticity, logic and empathy. Definitely food for thought.
So then I get to a simple question? Is there a way we can share risk generated by nature and share the payoffs we capture in the technological trajectories we pursue without putting each other at a disadvantage. I think so.. but as a species we are not their yet.
January 18, 2018