When starting a business we're faced with difficult questions and difficult decisions. The importance of asking the right questions cannot be overlooked.
You’re probably not familiar with the term “intuitive heuristics”. It means that when faced with a difficult question, we often ask ourselves an easier one instead and then satisfy ourselves that this is the answer we were looking for. Read Thinking, Fast and Slow by Daniel Kahneman if you want to find out more. He cites the example of a stockbroker investing millions in a car company. Instead of asking "Is the stock currently underpriced?" he asks "Do I like the cars?" It's the easier question – but the wrong question.
If the answer to a question requires a difficult, skilled, time-intensive or scientific solution, we often ask ourselves an easier question that avoids any of the above, without noticing. We do it every day.
1 Blindly following intuition
If we've learned anything from Nobel Prize winner Kahneman, it's that intuition doesn't really exist. It comes with experience. The footballer who can read a game and make impressive decisions quickly does not have an innate gift. He didn't know where on the pitch to stand when he was eight years old and has countless examples of mistimed tackles throughout his career. His understanding of how to react or statistically predict what will happen in a match comes from years of practice, effort and coaching. Any gut feelings you have come from your industry and life experience. Consider it, but don't blindly follow it. Collaborate with other people and learn.
2 Focusing on what you like rather than what your customers like
An instinctive reaction to anything is "do I like it?" We know what we like and make a snap judgement accordingly, from our brand name and logo to how our website looks and feels. But if you want to sell more, it doesn't matter what you like, it matters what your customers like.
Consider customer behaviour, industry best practice and using data available on your existing customers to understand what they like, so you can give them more. What would you prefer, a product you like or a product 100 of your customers like?
3 Getting left behind
Don't stop at asking what you're customers like. Ask what your potential customers will like. If you sell pies, you're not just in the pie industry, you're part of the pastry industry, the catering industry, the lifestyle industry. In 1919 a man called Jack Cohen decided to sell more than just syrup and fish paste. He started selling tea and laid the foundations for what we now know as Tesco.
There's always a danger of trying to do too much too soon, but be aware that industries, technologies and customer trends are changing all the time. Don't get left behind.
Blog supplied by Jonny Cameron of merchant service provider Retail Merchant Services
- 10 mistakes all new businesses should avoid
- Revealed: SMEs' biggest mistakes
- Ten common start-up bookkeeping mistakes