The business purpose is not only important at the personal level, both for the Founder(s) and the team working in the business, your marketing, and the audience; but also to align with the objective of what your company wants to achieve. Moreover, the “why” is your contribution to the world.
Business owners and their consumers have become more conscious and sensitive to the world around them. The simple concept of selling things people want and earning profit is not enough for both the buyer and the company. It has become a necessity to be associated with a bigger cause or meaning that people can feel comfortable subscribing to it. The business purpose or “why” includes the:
- Company mission,
- Product vision,
- The measure of success.
The mission brings everything together and creates a sense of direction.
Why your business needs a purpose?
Speaker Christos highlights that startups emerge and fail every day. Here are some statistics that would show the importance and value of a company mission that helps build a strong foundation.
- 1 in 5 startups fail within the first year of operations,
- By year five, half of them will fail, and by the end of year 10, 70% of startups will seize,
- If you want to stay afloat, build a strong foundation.
6 Biggest Startup Mistakes: Why do they fail?
42% of startups fail because they don’t solve a market need.
- The problem is not significant enough,
- The market is not big enough,
- Combination of both of the above,
- Picking too big of a market but not distinguishing their services and who it’s for,
- Lacking the clear ability to sell and market effectively,
- Unable to articulate the value to the target market.
For instance: A company wants to make sustainably sourced wooden sunglasses.
Context:
The idea is sustainable, which will appeal to some people.
Issue:
- In the market, it’s not a burning issue for many people,
- There are solid alternatives in the market,
- The idea doesn’t address a significant problem for a large market.
Result:
- The company will invest resources, but there won’t be significant ROI,
- Marketing efforts might produce some success initially, but the company will eventually fail due to a lack of market demand.
If any one of the 6 biggest startup mistakes is your current business struggle, you can directly talk to a business mentor at the MentorConnect Open session at Eprenz every Thursday.
Company Vision and Mission
What motivated you to become an entrepreneur in the first place?
The vision is what you aspire to achieve in the future. It reminds you of the overarching goal and reason for being in business. The vision allows you to focus on tomorrow and what you want to become eventually.
The mission is focused on the present and how you will operate today to achieve your vision eventually.
A Deeper Dive to Crafting a Company Mission Statement
The mission is where things start getting a bit tangible. Being concise and action-oriented defines the approach to fulfilling the vision.
- The mission focuses on the “what” and for “whom”, but not on the “how”.
- It’s measurable, i.e., it leads to metrics that define success.
- The mission statement creation guideline: “Verb – Target – Outcome”.
How to choose the right mission statement
You can follow a technique by Eprenz Speaker Christos Kritikos to craft a mission statement:
- Grade your statement on a scale from too technical to too dreamy.
- If it feels too technical, ask “why” and what is the result of doing this.
- If it feels too dreamy, ask “how will this happens”.
- Iterate until you reach the sweet spot that feels correct.
How to choose the right mission statement
Pro-tip for crafting your Vision: Describe what the future would look like thanks to your products.
Pro tip for crafting your mission statement: Think about what do you want to do and for whom?
Guideline 1: Verb ⚡ Target ⚡ Outcome.
Guideline 2: To <deliver a certain result> ⚡ <for a particular audience> ⚡ <within a certain time>.
IKEA
Vision: To create a better everyday life for many people.
Mission Statement: Offer a wide range of well-designed, functional home furnishing products at prices so low that as many people as possible will be able to afford them.
Airbnb
Vision: Belong anywhere.
Mission Statement: Help creates a world where you can belong anywhere and where people can live in a place, instead of just traveling to it.
Tesla
Vision: To create the most compelling car company of the 21st by driving the world’s transition to electric vehicles.
Mission Statement: To accelerate the world’s transition to sustainable energy.
Ferrari
Vision: Ferrari, Italian Excellence that makes the world dream.
Mission Statement: We build cars, symbols of Italian excellence the world over, and we do so to win on both road and track.
TED
Vision: We believe passionately in the power of ideas to change attitudes, lives, and ultimately, the world.
Mission Statement: Spread ideas.
Product Vision: How to Create one
To create your product’s vision, there are two steps.
Step 1: Define the Problem
- Create a concise description of the problem to be addressed or to be improved upon,
- Identify the gap between the current (problem) state and the future (desired) state.
- Focused on the beneficiary (user/customer/etc.)
Step 2: Describe the Solution
A solution description illustrates how your solution solves or improves upon the problem.
A Guideline to describe the solution: [Company] provides a [product or service] that [key attribute or differentiating factor] resulting in:
- Bullet points listing the benefits of your products.
How to Bring it all Together
Christos provides an example to show how you can bring all the elements together to create a strong foundation.
Company Vision: Help people live healthier lives,
Company Mission: Provide resources to millennials to decrease obesity,
Measuring Success
Measuring your success helps you progress towards your vision, mission, goals, and objectives effectively. The results of your activities can be broken down into 3 categories:
Outputs: Immediate outputs of your activities,
Outcomes: Short-term change caused by the outputs,
Impacts: Medium-term impact of the outcome.
