Friday, January 11, 2013

The purpose of a startup..Peter Drucker

Peter Drucker famously said that the "purpose of a business is to create a customer. Often people forget. They come to believe that the purpose of their business is to build a product, grow an organization, get funded, or create an efficient supply chain. While these may be essential means to an end, the end is always to create customers. If too much effort and money is spent on the intervening steps, then too little will be spent on Sales & Marketing. This is often the case in start-up where founders can believe that the product speaks for itself, it will become successful through word of mouth or viral efforts, and will need little formal advertising or selling. Particularly today, many talk about avoiding product categories that require a lot of of Sales & Marketing. However, experience tell us that there is no such thing as a free lunch. Nothing will substitute for the tried and tested. Trade Shows and mailing lists are not glamorous compared to a Twitter account, or a partnership with a high profile company, but working the basics is essential for success. What Peter Drucker said half a century ago still holds true.