Page 30 of 34

Using Horror Vacui to Innovate

May 11, 2022 / johnhooley

If you walk through a forest, you’ll see a limited number of species of trees. Depending on where you are, this will probably be smaller than you can count on your hands. Why aren’t there more?

There are only so many resources in a patch of earth that a tree can use to grow. Each of the species uses different requirements and advantages to compete for and use the available real estate in a forest. Where the edge of one species advantages end another species begins. For example, one needs a lot of sunlight and won’t grow in the shadow of a hill where another grows best with shade.

For each of these categories of context, a species survives and reproduces the best. This results in them dominating that spectrum in the forest. They fit best there.

The market is the same way. The resources and energy available in the market pull solutions into existence to address the available contexts. Horror vacui or “nature abhors a vacuum,” is how Aristotle described this effect.

If there is a market, there will be a limited number of kinds of solutions in it with dominant market leaders.

Japanese vendors cooking fortune cookies

The Next Level is Within

May 10, 2022 / johnhooley

I spent a month wandering Japan and following the changing colors of autumn as it made its way south in 2018. I traveled by train and as I sat by the window staring out at the shifting colors, I thought about my recent failures to achieve goals.

Prior to the trip, I had set some challenging objectives. I threw myself into achieving them and failed. It was disheartening. The reason I was unsuccessful was because many of the goals weren’t in my full control. They were dependent on external and unknown factors. But if I didn’t set goals beyond my current abilities or knowledge, I wouldn’t grow. That meant I wouldn’t expand my capabilities to take on similar larger goals. It was a catch-22 where any useful goal would likely end with disappointment.

When it comes to growing your business, much of what you want to do is in the category of uncontrollable and unknown. Because if it was controllable and known, you would have already achieved it.

In this way, our business reality is a reflection of our current capabilities.

Jedi Mind Tricks to Achieve Growth

May 9, 2022 / johnhooley

How many people are on your team? How big are you?

This is one of the most frequent questions entrepreneurs will ask each other when they meet. The other common line of inquiry is about how much the business makes.

Headcount and revenue are two indicators we use to get an idea of how successful a business is. Perhaps because of this, we intuitively focus on these two measures when we think about growth. However, they’re not great representations of success. Both can be impressive while the business is burning to the ground.

Most entrepreneurs want to grow, but it’s worth considering what and how you want to grow. Doing so often creates faster paths to growth.

5 Energy Sources For Growth

May 6, 2022 / johnhooley

Growth is driven by energy in the market. That market force manifests as customers buying your products. If you’re trying to grow your business, you have to figure out how to tap into more of that energy.

You might visualize your business as being powered by a water turbine in a low valley. To make the turbine run, you have to tap into lakes, rivers, and streams higher up and channel some portion of them into your pipeline to power your turbine.

To tap into these market energy sources, you could:

Raise prices on products to existing customers or sell more of the same product to them.
Sell a new product to your existing customers.
Sell a new product to your current market.
Figure out how to get more customers in your current market.
Sell your product in new markets.

A Formula for Growth

May 5, 2022 / johnhooley

If you were to reduce growth to a formula, it might look something like:

Resources + Energy + Organizing Pattern = Expanded Capabilities or Capacities

This works for trees, kids, and businesses.

For your business, resources are things like employees and tools. Energy takes the form of customers buying from you. And the organizing pattern is your way of doing business- systems, culture, values. The result is an expansion in what you do or can do.

Growth Isn’t Caused By Skill

May 3, 2022 / johnhooley

A false premise that many entrepreneurs start from when they want to grow is assuming that growth is caused by their ability. However, growth isn’t caused by skill. It’s caused by market forces. And it will only occur to the extent that our decisions align with those forces.

Old sketch of fijin sailors on the south pacific

Choosing Business KPI’s

November 4, 2021 / johnhooley

Imagine that you’re sailing across the South Pacific on a yacht. You sip champagne as you slice silently through tropical seas and watch epic sunset after epic sunset. Congratulations, you’ve made it.

Your big challenge is that you rely on a satellite internet connection to get information about your business Every week your general manager emails you a short update with a handful of metrics.

What metrics are in that email?

This is the role of KPI’s- to provide an at a glance set of numbers that reflect performance.

Most business owners understand the idea that KPI’s are leading indicators.

In this post, we’ll build on that understanding, by examining three questions that determine what makes for an effective KPI for measuring overall business success.

The Money on The Table

September 23, 2021 / johnhooley

What is better: making a sale worth $5 or making one worth $5,000,000?

Got your answer?

If it’s $5 or $5,000,000 it’s wrong. The correct answer is:

It depends on how much it costs you to fulfill the sale.

If it costs you $.25 to fulfill the $5 purchase and $6,000,000 to fulfill the $5,000,000 purchase then you should snap up the small money and run from the million dollar “opportunity.”

Logically, we know this. It’s a “no duh” answer. That’s how profit works: revenue – COGS = gross margin.

However, in practice, we tend to be blind to the cost of opportunities and fixate on the upside.

Success, Snowballs, & The Left Side

September 14, 2021 / johnhooley

I have this fantasy of myself giving a Ted talk on success. I open my talk by saying, “The secret to success is to be really successful early on.” Then I walk off the stage.

It makes me laugh, but it’s true. Advantages and disadvantages tend to accumulate. The rich do get richer.

On the surface, it’s a worthless insight. Who wouldn’t choose early success if they could?

However, there is utility in having a deep understanding of this idea because it provides a more powerful paradigm for long term decisions.

Cost Versus Growth Hiring

September 9, 2021 / johnhooley

When I hired my first employee it was because I felt like I didn’t have any options to do otherwise. I didn’t have 6 months of retained earnings sitting around and I wasn’t doing highly profitable work. But I felt like it was better to risk failing than it was to keep going as I had been.

The common advice would have been to figure out a way to earn more profit, save some money, and then hire with that safety net beneath me. This is cost based hiring.

I didn’t end up going out of business with my new hire and I actually made more money. Unintentionally, I had executed a different hiring strategy: growth based hiring.

Entrepreneurs gravitate towards cost based hiring because it’s clear and safe. But it can drastically limit your potential and carries hidden risk beneath its conservative demeanor.

Knight Errant

Recent Posts

Who

Subscribe

Search