Startups.ie

Many of us who listen to politicians mentioning what people “on the doorstep” are telling them, wonder which doorsteps they’re canvassing.

Politicians have a strange ability to pick doorsteps owned by people who want to tell them how great they are. Second hand reports from the doorsteps give politicians great ammunition when facing a hostile interviewer. How many times have we heard a cabinet minister say “actually, the issue of the missing money isn’t an issue, Pat/Miriam/Holy Father. The people on the doorstep are telling me that I’m doing all of the right things and they want me to keep on as minister.”

An unverifiable anecdote masquerading as fact is great when you’re a politician being interviewed on drive time radio but it’s no use at all for a start-up business person who wants to know if anyone likes his product. Politicians have incredibly selective hearing and it’s only by tuning out the sound of all of the doors which are slammed in their faces and by ignoring the angry constituents who vow never to vote for them that they’re left with a group of loyal fans whose welcoming doorsteps give them the self-belief to keep on working.

Many small businesses fall into the category of tuning out opposition and ignoring people who aren’t interested in their product. They think to themselves “actually, people aren’t saying that I’m flogging overpriced tat six months after the trend has moved on. The people on the doorstep are telling me that my product will change their lives and they’re willing to pay twice as much for it.” Survey sample? One person.

Good businesses need good research. They need proper analysis of the facts, not an unverifiable anecdote from a loyal supporter. Not only do businesses need to know who will buy their product and how much will they pay for it, but they need to know what external factors are likely to have an impact on sales. What’s government doing to regulate the field? What’s happening to the economic context in which you’re making a sale? Is there a societal consequence to your business?

Bill Clinton ran an election campaign on the simple statement that it’s the economy, stupid. The economy will dictate everything. The economy will decide how many clients you have and how much money they have to spend on your product. It will dictate how much the government will tax you on your product (and, if you’re lucky, any profits) and it will dictate whether competition from home or abroad will gobble up your business.

At the time of writing, the stockbrokers and financiers are beginning to make their economic forecasts for 2010. Ireland will, depending on whose forecast you read, emerge blinking into the sunlight of strong economic growth, or spend next year in the darkness of prolonged recession. GNP growth (% per annum) is not an abstract number, created by economists for the amusement of economists (although if you go for a pint with a group of economists, you’ll find it is) but it matters enormously to the start-up business Do you want to start your company in a recession? Is there merit in waiting? Will the forecast for the economy help you persuade the bank to finance your endeavour? Have you factored the tax implication of the change in the economy into your business plan?

Personal anecdotes from potential clients and customers will undoubtedly help you hone your business model into one which can maximise customer loyalty. Politicians, economists and stand-up comedians all use focus groups.

But the input of potential customers needs to be grounded in fact, and all start up companies should be spending time listening to the financiers and the economists talking about their projections for the economy. This doesn’t mean you necessarily need to read the Financial Times every day. Indeed, one of the great secrets of economics is that nobody really reads the Financial Times; they just look at the adverts for expensive watches and cry for their lost millions. The pink pages of the paper blot away the tears.) But using good, well-networked research support can help put some facts in place which will make an enormous difference to your business plans.

Why? Well, for one thing, the chances are you already have a better understanding of the macroeconomic context in which your enterprise takes place than anyone else. Donald Rumsfeld (who, as a politician, is probably guilty of using doorstep anecdotes in place of the Financial Times) said of the Iraq War in 2002 that there are “known knowns. These are things we know that we know. There are known unknowns. That is to say, there are things that we now know we don’t know. But there are also unknown unknowns. These are things we do not know we don’t know.”

In six short, but bewildering sentences, Rumsfeld summarised the need for solid research, well presented. And that’s exactly what I’m trying to help Irish businesses do – find out what they know and what they don’t know, but also what they think they know, what they think they don’t know, and sort it, and fill in the gaps.

There are countless books about how to keep your home clutter-free. There are – dotted around different sections of the bookshop – more books about how to keep your mind, your career and your spirituality clutter-free. But there is a task to keep the flow of information in and out of your businesses clutter free. How do you compile and use all of the information you know about your business and how can you use it effectively? How do you summarise it into a report you can give to your bank manager, your PR Company or your shareholders? How can you fill in the gaps in your knowledge without becoming cluttered with more useless information?

The answer is by taking some time to find out what information your company lacks, and present what you do know convincingly. My aim is to look after all of that for Irish companies – streamline and maximise the usefulness of what you know, and present you with what you don’t know. Grounded in fact, stripped of clutter, presented clearly and convincingly, your company will be on better footing than any politician, blinking under the studio lights as he launches into another tale from the doorstep.

Dr Peter Stafford
peter.stafford@gmail.com
+353 (0)86 150 2891
twitter: @peterstafford