In this episode we explore one of the most important and core issues of any business, and that’s cash flow. This is enabled by serving your customers in a way that they see value and are willing to pay you for your services. This will help you bootstrap yourself to success.
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Last time we got together we talked about how to build a 360-view of a customer, and the business elements that can better serve the customer? What are the customer needs. What’s the environment that they work in beyond using your product and its features. What are they going through in their daily experience, and where you can help lift them up?
Today we’re going to talk about one of the most important and core issues of any business, and that’s cash flow. When the pandemic came two years ago, the first thing most people in business talked about was cash flow. The first thing most of us as individuals talked about was what’s this going to mean to our expenses, our cash flow, our jobs, et cetera? Here we are, two years into this. Our economy is being shaken and is headed to a place that generations haven’t experienced. I think it’s important to share some lessons.
It turns out my father was one of the pioneers of a company called Fairchild. That’s where the founders of many Silicon Valley companies came from. It’s what started the electronics revolution. My father ended up recognizing that Fairchild that made its own manufacturing equipment, would have better quality if the manufacturing equipment was built by someone else. He went to Fairchild and proposed to let him provide the machines to help Fairchild manufacture its semiconductors. They said: that would be valuable to us. We’ll pay you for that. Some people call this type of investment, bootstrapping.
He learned from that and started his own company. He learned how to apply going to a customer, identifying something they can’t do, and having them pay you to do it for them. Hopefully that tickles them and is valuable enough for them to pay you for it. That’s the basis of the premise of business.
We get lost because it’s natural to want to sell features and services, but we lose sight of the importance of the need for empathy and to discover those things that would serve the customer. As important as understanding the environment they work in, what’s important to their companies for them to play a role in the success of their companies and get promoted.
I ended up in my 20s going to work and helping my father build the business. I watched him how he managed cash flow. He was a master at it. I think having examples of that, and how that relates to serving the customer and bootstrapping yourself to success is important. In the next couple of weeks, we’ll spend some more time talking about customers, and if you solve great problems for them, they’ll help fuel your business.
In the case of my father’s business, I ended up becoming the CEO and took it public without outside funding. It was all funded on his ability to generate cash flow, and my ability to scale that. Our number one intent was to serve our customers in a way that they saw value and would pay us.
I want to share more stories around that and hopefully something that you can take and apply, such as understanding what’s most important to your customer, not as an individual, but as a company, the individual’s role in that, and then how your product might serve that better.
When we get together next week, we’ll spend more time on this. Hopefully you’ll be able to try out some things. As we get into July, I’ll bring other people into the conversation. Hopefully you will find that this series was valuable and help you do something you weren’t doing before.