April 2024 - Hunter Hastings

The Value Creators Podcast Episode #37: Bill Aulet Disciplined Entrepreneurship

April 26, 2024/0 Comments/in The Value Creators Podcast /by Hunter Hastings

Disciplined entrepreneurship refers to an approach to starting and growing a business that emphasizes rigorous application, methodical processes, and practical tools to achieve success. This concept, discussed by Bill Aulet in his book “Disciplined Entrepreneurship“, involves systematically identifying needs, customers, and markets, validating ideas and experiments, and executing plans with discipline and focus. It includes understanding customer needs deeply, developing innovative solutions, and creating value in a structured manner. By following disciplined entrepreneurship, entrepreneurs can increase their chances of building sustainable businesses and navigating the challenges of the rapidly changing market landscape.

Bill Aulet and Hunter Hastings discuss various aspects of entrepreneurship, focusing on proven methodologies (Bill has multiple successful launches from the MIT incubator as case studies) and practical approaches to building successful businesses. They emphasize the importance of understanding customer value, rigorous market research, and adopting innovative business models tailored to customer needs.

Bill emphasizes the significance of a beachhead market strategy over traditional total addressable market calculations and he emphasizes that the primary challenge to entrepreneurs is to identify customers’ top priorities, fears, and motivations, aligning their value proposition accordingly.

The dynamic landscape of entrepreneurship in the digital era is characterized by the emergence of innovative pricing strategies, such as dynamic pricing and subscription-based models, which present novel opportunities for value realization.

Resources:

Connect with Hunter Hastings on LinkedIn

Connect with Bill Aulet on LinkedIn

MIT: entrepreneurship.mit.edu

To Read, Sample, and Buy the Book on Amazon:

1st Edition: Disciplined Entrepreneurship: 24 Steps to a Successful Startup, 1st Edition

2nd Edition: Disciplined Entrepreneurship: 24 Steps to a Successful Startup, Expanded & Updated

Show Notes:

Knowledge Capsule

Entrepreneurship as a Mindset, Skill Set, and Way of Operating:

Entrepreneurship is not just a mindset; it also involves a skill set and a way of operating.
Mindset: It involves a mental approach to problems, discomfort with the status quo, and a willingness to challenge norms.
Skill Set: Entrepreneurship requires specific skills that are detailed in the book.
Way of Operating: Entrepreneurs operate in a distributed environment, seeking opportunities with resources that are beyond their control.

Entrepreneurship as a Craft, Not a Science:

Bill Aulet shares that entrepreneurship cannot be reduced to science due to its unpredictable nature.
Entrepreneurship is compared to a craft like pottery, where principles can be taught but mastery comes through practice and experience.

Corporate Entrepreneurship:

Bill emphasizes that teaching entrepreneurship within large corporations is challenging due to the constraints of existing structures and incentives.
Companies like Google need to balance entrepreneurship with efficiency and effectiveness.
Microsoft’s successful turnaround under Satya Nadella exemplifies the potential for corporate entrepreneurship.

Teaching Entrepreneurship in Academic Institutions:

Academic institutions like MIT play a vital role in fostering entrepreneurship, despite their inherent inefficiencies.
Taking a long-term view is essential for institutionalizing entrepreneurship within corporations and universities.

Disciplined Entrepreneurship Book Structure:

The book Disciplined Entrepreneurship offers a comprehensive guide with 24 steps and six themes.
It emphasizes rigor and practical application through case studies and exercises.
Bill highlights market segmentation as a critical initial step in entrepreneurship, ensuring a focused approach to problem-solving.

Beachhead Market Strategy:

Start with one thing and do it well: Foundational strategy involves focusing on a single narrow market niche and excelling in it before expanding.
Expand gradually after nailing the initial offering: Once success is achieved in the initial market, expansion into additional markets becomes viable.
Geoffrey Moore’s concept of the beachhead market: Reference to Moore’s concept, emphasizing the importance of securing a secure foothold in a specific market segment before expanding.

Full Cycle Use Case:

Understanding the entire journey of the customer – from recognizing a problem to finding an alternative new option and ultimately paying for it and experiencing the solution – is crucial for business success.
Significance of the user experience: customers installing and using the product to realize its benefits and value proposition fully.

Value Learning Cycle: Customers go through phases of learning, comparing, buying, using, and evaluating the value provided by a product or service.

Predicted value assessment: Customers assess the anticipated value or benefits of a product or service.
Relative value comparison: Comparison of the perceived value against existing alternatives or solutions.
Exchange value (purchase decision): Customer decision-making process regarding whether to purchase the product or service.
Experience value (product usage): Customers’ evaluation of the product’s effectiveness and utility during usage.
Evaluation of expectations met: Reflection on whether the product or service met the customers’ initial expectations and needs.

Customer Value Determination:

Understanding customers’ top priorities, concerns, and fears is essential for identifying triggers that lead to product adoption.
Identifying triggers and incentives that prompt customers to take action, such as purchasing a product or service.
Ensuring that the product or service addresses customer pain points and aligns with their desired outcomes.

Business Models:

Creating and extracting value from customers through business models involves understanding the value created, identifying target customers, and selecting appropriate revenue-generation methods.
Choosing appropriate revenue models that align with the perceived value of the product or service to customers.

Pricing Strategy:

Pricing should be determined after understanding value creation, customer needs, and competitive landscape, followed by iterative testing to find the optimal price point.
The iterative process of testing different price points and refining pricing strategies based on customer responses and market conditions.

The Value Creators Podcast Episode #36 Aberrant Capitalism: The Decay and Revival of Customer Capitalism

April 10, 2024/0 Comments/in The Value Creators Podcast /by Hunter Hastings

Capitalism fosters widespread prosperity. But we must acknowledge a set of emerging hazards associated with corporate management practices, and take proactive measures to mitigate such risks.

The hazards that have transformed capitalism over time are vividly described in Aberrant Capitalism: The Decline and Revival of Customer Capitalism, authored by Hunter Hastings and Steve Denning and published by Cambridge University Press. In this episode of The Value Creators podcast, Hunter shares capitalism’s journey from an external orientation, where customers and their needs were the focus of business activity, to a more internalized orientation, where management processes, methods and measures became the focus. The customer-centric approach of the first great corporations of the nineteenth century reflected the vision and purposes of owner-entrepreneurs using their own capital. But over time, these entrepreneurs left, and a debt and equity finance model took over in the twentieth century. Success became synonymous not with happy and satisfied customers but with stock market performance and shareholder value. This shift represents an undermining of the original animating spirit of capitalism. However, Hunter expresses guarded optimism about the emergence of new business models in the twenty-first century, embodied by companies like Apple and Amazon, which prioritize direct customer engagement and long-term growth over short-term financial gains.

Despite this optimism, the conversation acknowledges the challenges and risks associated with contemporary capitalism, including dehumanization of labor, data privacy concerns, social media’s impact on mental health, and the rise of monopoly power. Hunter emphasizes the importance of preserving the positive aspects of capitalism while addressing these issues, calling for a reassertion of the values that underpin the system.

Hunter concludes with a call to action for readers to engage with the ideas presented in the book and work towards a capitalism that prioritizes customer value, innovation, and societal well-being while remaining vigilant against its potential pitfalls.

Resources:

Connect with Hunter Hastings on LinkedIn.

Check out the book Aberrant Capitalism.

Buy the Book on Amazon: Aberrant Capitalism (Elements in Reinventing Capitalism)

Aberrant Capitalism on the Cambridge University Press

Shownotes:

0:00 | Intro

02:40 | Why Hunter Hastings Wrote Aberrant Capitalism?

5:35 | Journey: Customer Capitalism to a Distorted Managerial and Financialized Capitalism

08:06 | Mass production: What was the Breakthrough?

09:35 | Beginning of Customer Capitalism

11:25 | Myth: Robber Barons as Exploiters and Unethical Businessmen

14:32 | Value Creating Companies: Nineteenth Century Set Stage for Economic Boom

17:38 | How the Objectives of Entrepreneurship and Management Different

19:07 | Dominance of Management Over Entrepreneurship.

21:39 | Transition: Central Planning to Private Industry Planning

24:21 | Post-War American Companies Success

26:01 | Big Twist: Financialization

30:08 | Current Corporate Landscape: Is There Any Hope for Future Change?

33:29 | Conclusion: Hopeful OR Fearful about Corporate Capitalism

35:56 | Wrap-Up: Warning

Knowledge Capsule:

Overview of “Aberrant Capitalism”:

Hunter Hastings explains the book’s title: the capitalism we know today, characterized by dominant corporations whose behavior is often questioned for its ethics and benefit to society as a whole, is an aberration of the original system.
A major concern that results from this aberration is the decline in young people’s confidence in capitalism.
Analysis indicates that the real target of young people’s criticism is not capitalism itself, but today’s corporations.

Evolution of Capitalism:

Historical journey from “customer capitalism” to “managerial and financialized capitalism.”
Examination of capitalism in the eighteenth century focused on companies like Wedgwood and Bentley.
Introduction of limited liability corporations and their role in scaling up businesses.

Customer Capitalism in the Nineteenth Century:

Hunter shares characteristics of customer capitalism, focusing on innovation, customer orientation, and individual entrepreneurs with examples of successful entrepreneurs and their contributions to improving customer lives.

Misconceptions about Nineteenth-Century Entrepreneurs:

Debunking myths of “Robber Barons” as exploiters and unethical businessmen.
Hunter shares examples of entrepreneurs like John D. Rockefeller and Henry Crowell who contributed positively to society.
Their purpose was to improve lives for as many customers as possible.

Contributions of Nineteenth-Century Capitalism:

Discussion on how nineteenth-century capitalism led to economic growth, improved lives, and lowered prices.
Transition from entrepreneurship to management and its impact on capitalism.

Shift to Managerial Capitalism:

Explanation of the shift from entrepreneurial orientation to management control and managerial efficiency.
Introduction of central planning techniques during wartime and their direct migration to corporations after the war.
Negative consequences of central planning on customer orientation and market responsiveness.

Success and Decline of Post-War American Corporations:

Hunter shares how the initial success of post-war American corporations was due to central planning and capital investment.
Challenges faced by these corporations include competition from Japan and failure to adapt.

Financialization:

The rise and eventual dominance of the financial sector and the emphasis on maximizing shareholder value further shifted focus away from customer capitalism towards short-term financial gains, leading to concerns about the impact on long-term value creation and societal well-being.
Corporations now work to serve the financial sector not the customer sector.

Hope for Change:

Despite the challenges, the discussion points to the emergence of new business models driven by digital companies like Amazon, and Tesla, which have a direct connection to customers and the potential to revive customer capitalism.
Hunter Hastings warns about the continued dangers of bureaucratic management, accelerating financialization, and government entanglement.
There’s a need to resist forces that distort the true purpose of capitalism, by reasserting the customer value focus that brings societal well-being.

The Value Creators Podcast Episode #35. Maisie Ganzler: You Can’t Market Manure At Lunchtime

April 3, 2024/0 Comments/in The Value Creators Podcast /by Hunter Hastings

Sustainability in the food supply chain has become a vital consideration for the resolution of food chain risk. It’s also become a mission for some food producers and distributors and for some food brands, it’s become a marketing mandate.

Maisie Ganzler has been orchestrating the critical alignment required for the pursuit of sustainability in the food supply chain and articulating the crucial alignment between marketing and operations. Maisie perfected the concept of organizational support for sustainability, highlighting the creation of specialized roles like the “forager” to facilitate local sourcing initiatives and overcome procurement obstacles. She introduced metrics and tools to track sustainability goals using tools.

Passion supplies energy but it’s ineffective without leverage, pointing to procurement decisions and organizational culture as key leverage points. Flexibility and adaptability – versus ideology – are essential traits in responding to evolving challenges and opportunities in sustainability efforts. Maisie Ganzler delves into the relationship between personal health and sustainable dietary choices, highlighting the alignment between whole foods consumption and planetary health goals.

By integrating marketing, operations, and organizational support, businesses can navigate challenges, build strong relationships, and drive meaningful change toward a more sustainable future.

Resources:

To connect with Maisie: Maisie Ganzler
Find out more about Maisie Ganzler: maisieganzler.com
Get the book: You Can’t Market Manure at Lunchtime
Get the book on Amazon: You Can’t Market Manure at Lunchtime

Show notes:

Knowledge Capsule

Sustainability:

Sustainability can be defined as a multifaceted approach that encompasses environmental responsibility, ethical sourcing, and social impact within business operations
It goes beyond mere rhetoric, requiring concrete actions and operational changes across all facets of an organization, including supply chain management, procurement practices, and employee engagement.

Consumer Focus:

Consumers must be the first focus. They seek flavor as their key benefit before anything else.
Maisie emphasizes that marketing narratives must align with tangible actions and operational changes. This ensures that consumer expectations are met, fostering trust and authenticity in the brand.
Organizations are urged to prioritize transparency in their supply chains, supporting local vendors and sustainable practices. This not only meets consumer demands for ethically sourced products but also strengthens relationships with suppliers and enhances product quality.

Mission and Purpose:

Creation of a mission or dream to establish an emotional connection and guide company direction.
Purpose as the driving force behind brand identity and employee alignment.

Business Aspects of Sustainability:

Maisie shares her point of view that leveraging sustainability is a business differentiator and revenue driver.
Integration of sustainability into business operations and decision-making processes.

Customer Perspective:

Dual customer focus in B2B food service: decision-makers and end consumers.
Creation of value for suppliers deep in the supply chain through enhancing their brand with sustainable practices.

Tradeoffs and Strategic Focus:

Prioritization of sustainability initiatives and avoidance of resource spreading. Focus is key. Don’t try to do too much. Stand for something specific.
Balancing cost-saving measures with investments in quality and sustainability to drive revenue.

Pick one narrative :

Before communicating sustainability initiatives, organizations must first implement tangible changes in their operations and supply chains.
This approach ensures authenticity and credibility in the narrative, aligning with consumer expectations for a genuine commitment to sustainability.
Crafting a clear and consistent sustainability narrative to communicate complex concepts to stakeholders effectively.

Getting the Story Straight:

Practicing and refining sustainability messaging within the organization to ensure accuracy and credibility in communication efforts.

Marketing as Communication:

Marketing goes beyond branding and advertising; it involves actions that align with promises made.
Operations should precede marketing; actions should match the narrative.

Organizational Support for Sustainability:

Creating new positions, such as “forager,” to support sourcing locally and building relationships with vendors.
Overcoming barriers like complex purchasing systems by offering support to local vendors.

Empowering Middle Management:

It’s possible to make a big difference from the middle.
Middle managers play a crucial role in driving sustainability initiatives within organizations.
Sustainability initiatives can provide fulfillment and creativity for employees at all levels.

Measurement and Accountability:

Implementing measurement tools like the “red-yellow-green tracker” to monitor sustainability commitments.
Continuously improving and adapting based on progress made in moving metrics from red to green.

Passion with Leverage:

Passion for sustainability must be paired with leverage to implement meaningful changes.
Leveraging procurement budgets, hiring decisions, and organizational structures to drive sustainability efforts.

Adaptability and Flexibility:

Maisie acknowledges that science, social norms, and cultures are constantly evolving.
Being flexible in decision-making, even if it means taking risks, to stay ahead and lead in sustainability.