Business Edge

September 6, 2022
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What do the leading companies have that others are missing?

What makes them successful and keeps them at the top?

How can some companies build sustainable businesses?

What sets the leader apart from the rest of the companies?

Business edge is the winning formula that many are seeking but only a few find.

The lucky ones stumble upon it but for the rest, it takes effort, dedication, experimentation, persistence, patience, and willingness to go an extra mile.

The business edge is not a single item but a combination of factors that together make the model resilient, growth generating and hard to copy.

The business edge is hard to define but easy to tell when you see it because it’s company, industry and context-specific. You can identify parts of it and you can analyse its components. Yet, replicating them will not yield the desired results. You cannot take it out of its context without losing it.

What are the characteristics of a business edge:

  • high customer loyalty
  • customer-friendly, -praised and -endorsed
  • coherent brand experience, purpose, values, and actions
  • high perceived customer value
  • strong organic growth
  • scalable business and revenue models
  • dedicated and committed founders

What is not a business edge in itself:

  • product-market fit
  • go-to-market
  • business strategy
  • competitive advantage
  • organic growth
  • cash flow positive high growth strategy
  • high customer retention
  • brand loyalty
  • purpose-driven culture
  • strong financial position

It has that extra magic others are lacking and it’s often invisible from the prying eyes. Some of it can also be kept secret on purpose and may involve processes and things that are catalysts only to the overall model.

What are examples of companies with a business edge?

  • Apple
  • TSMC
  • Tesla
  • Netflix

What is it that the early-stage investors are looking for (but often not able to put in words)? The business edge. Early-stage companies are diamonds in the rough and they are unfinished, unpolished and work in progress. Most of the components are not in place but the prospecting gems can be identified if you know what you’re seeking.

Some of the leading indicators:

  • the founders are clearly building their business edge (either implicitly or explicitly)
  • strong positive signals from the market, customers and traction
  • focus on the customer experience and perceived value
  • high clock-speed execution, experimentation and product development
  • strong team, sense of culture and mission
  • alignment and coherence in strategy, planning, implementation and results (i.e. say what you do and do what you say)

How can you identify a company without a business edge:

  • Unclear strategy, mission and purpose
  • vaguely defined value proposition, target market and implementation plan
  • complex and confusing product and brand image
  • muddy positioning
  • focus on means instead of value drivers (i.e. input utilisation vs. results)
  • vanity metrics
  • weak or delayed traction
  • product and development focus instead of customer experience and demand
  • a mix of different business and revenue models in the same product or solution
  • lack of long-term goals (i.e. opportunistic approach with impulsive moves and experimentation)
  • weak financial, cash flow and operational plans
  • lack of cohesion in the culture and the team

In short, if you don’t know clearly what you’re doing, why, what’s the purpose and the value you’re building the rest will follow accordingly: confusion in, mixed messages out yielding mediocre results at best.

Clear goals and communication with thought-out planning, experimentation and execution lead to exquisite results given enough persistence and iteration with a spark of luck together with the drive to find your business edge.