Asked what a business is, the typical entrepreneur is likely to answer, “An organization to make a profit.” The answer is not only false, it is misguided. The only valid definition of a business is an organization which creates a customer.
Because its purpose is to create a customer, the startup has just two – and only these two – basic functions: marketing and innovation, both of which must be the charge of all the employees of a startup.
Marketing is not asking, What do we want to sell? Rather true marketing answers, What does the customer want to buy? To answer this question, the business must start out with the needs, the realities, the values of the customer.
Today, consumerism is rampant. And what is consumerism but the failure of marketing? Consumerism is nothing more than potential customers voicing their unaddressed needs in an area where marketing has failed. And for a startup, consumerism in a segment represents an opportunity.
This is because most marketing is confused with selling. Marketing discovers latent and sometimes hidden customer needs by listening, understanding the consumer and translating those needs into profitable products, i.e. innovation. Sales is the process of demonstrating to the customer that the product satisfies their needs.
There is certain magic in discovering a product that has been built to solve a problem one has as a consumer without having told anyone about it. We all know it and this is the driver of Apple’s success.
Profit is a by-product of great marketing and successful innovation. Maximizing ongoing customer satisfaction at a price that enables continued investment in marketing and innovation is the goal all entrepreneurs should look to satisfy.
— A riff on Peter Drucker’s ideas