"What is the one thing you cannot fail at?" - I've heard this stated many ways in business. For instance you could ask "What is the one thing you're better at than anyone else in the world?" and get a similar answer.
As an entrepreneur, if you're asked this question, one of two things is happening:
- You're not explaining what your business does clearly enough, and the person asking the question is looking for clarification. The person asking this question is confused about your business.
- You're explaining your business as clearly as possible, and the person asking this question understands this. The person asking this question wants to see how well you know your business.
I've been in several meetings over the last few weeks where, after hearing a company pitch, a similar question was asked of the entrepreneur who was presenting. In a room full of big headed i-bankers, angels and VCs, you'd be right if you guessed that they were asking because of #2.
The presenting company was an energy production company, and the answer that came back was pretty standard - something about building a plant. A collective "DOH!" went off silently in everyone's mind, because everyone knew that an energy company's most important task is hedging. An energy company makes money by buying production at a lower price and sells that same energy at a higher price. Typically, they lock in most of their profits with sales contracts before they start their work - or, they map out all the risks of not locking in their profits, if they want to play the market. In a market where product pricing changes almost every second of every day, You could be risking your entire company if the price of energy dropped drastically, or strike it rich if it rocketed skyward. Either way, it's a risk that isn't taken lightly by most credible energy companies.
Strip away all the extraneous parts of your business and understand what you must excel at to survive and thrive. Then, make sure all of your employees understand it too.
Comments