In modern entrepreneurship, the integration of technology has revolutionized the way businesses operate. Despite these advancements, many entrepreneurial principles remain unchanged from the past. A critical issue identified through extensive research is a systemic defect in the field of entrepreneurship, contributing to a high failure rate among new ventures. This defect lies not within the organization but at the interface between the "world of the entrepreneur" and the "world of consumers."
Understanding the Consumer
A common oversight among entrepreneurs is the failure to comprehend their consumers fully. The adage "know your customer" has evolved to mean a deeper understanding of the consumer's context and relationships. It's not just about knowing facts about the customer but understanding their environment and how they interact with it. This understanding is crucial for building meaningful customer relationships, as neglecting the human aspect can lead to a distorted view of reality. Entrepreneurs need to penetrate the consumer's system of relationships, their interaction with the environment, and the factors that influence their decision-making. This level of understanding requires a shift from a transactional to a relational mindset, where the focus is on building long-term connections rather than short-term sales.
Moreover, comprehending the consumer involves recognizing their emotional and psychological needs. It's about understanding the 'why' behind their actions, their motivations, and their values. This deeper insight enables entrepreneurs to create products and services that resonate with their target audience, leading to higher customer satisfaction and loyalty. By aligning their offerings with the consumers' needs and desires, entrepreneurs can differentiate themselves in a crowded market and foster a strong brand connection. Therefore, a nuanced understanding of the consumer is not just beneficial but essential for the success and sustainability of any entrepreneurial venture.
The Entrepreneurial Task
The concept of the "entrepreneurial task" is defined as the intellectual process of finding or creating a high perceived value of products among consumers. This task is context-dependent, meaning a change in context can alter both the problem and its solution. This is exemplified by the case of Blockbuster and Netflix, where the context of consumer interaction determined the value of each company. The entrepreneurial task involves not only identifying a need in the market but also understanding the changing dynamics and preferences of consumers. It requires a proactive approach to innovation, constantly seeking new ways to meet and exceed customer expectations.
Furthermore, the entrepreneurial task extends beyond product development to encompass the creation of an optimal context for interaction with the target audience. This involves understanding the consumer's environment, the cultural and social factors that influence their behavior, and the technological landscape. Entrepreneurs must be adept at navigating these complex factors to design a product or service that fits seamlessly into the consumer's world. The success of this task hinges on the entrepreneur's ability to adapt to changing market conditions and consumer trends, making it a continuous and dynamic process. In essence, the entrepreneurial task is about creating value that resonates with consumers, ensuring that the offering remains relevant and desirable in an ever-evolving market.
Context and Its Importance
Context is a critical factor in entrepreneurship, influencing how consumers perceive the value of products and services. Different contexts can lead to different interpretations and evaluations. For example, the quality of a product can only be determined within the context of its intended use. Similarly, the value of a product is relative and depends on the consumer's perception, which is shaped by the context in which the product is presented. The context includes a myriad of factors, such as cultural norms, economic conditions, technological advancements, and social trends. These factors collectively create a backdrop against which products and services are evaluated by consumers. Therefore, understanding the context is paramount for entrepreneurs as it directly impacts the perceived value and relevance of their offerings.
Moreover, the importance of context extends to marketing and communication strategies. The way a product is marketed, the channels used, and the messaging can all be optimized by considering the context in which the target audience operates. For instance, a product that is considered a luxury in one context might be perceived as a necessity in another. Similarly, the effectiveness of a marketing campaign can vary significantly based on the cultural and social context of the target audience. Hence, entrepreneurs must not only be aware of the context but also be agile in adapting their strategies to align with the changing dynamics of the context. This adaptability can be a key differentiator in the success of entrepreneurial ventures, making context an indispensable element in the realm of entrepreneurship.
The Communication System Entrepreneur-Product-Consumer
The central idea of this discussion is that consumers' perception of value exists only within the specific communication system of Entrepreneur-Product-Consumer. This system is a business model that defines the integrity of the entire field of activity and the irreducibility of the properties of this business system to its individual elements. In this system, the whole becomes greater than the sum of its parts.
The product serves as a means of interaction between the entrepreneur and the consumer, and its main purpose is to help build relationships. The product is not just an offer but a reason for interaction. This interaction forms the basis of entrepreneurial thinking, with the "quantum of interaction" being the main building block of the relationship between an entrepreneur and consumers.
The systemic defect in entrepreneurship lies in the interaction between the entrepreneur and consumers, specifically in the failure to understand the customer fully. The entrepreneurial task is context-dependent and requires a deep understanding of consumer perceptions. The communication system of Entrepreneur-Product-Consumer is vital for creating and perceiving value, with the product acting as a means of interaction. Understanding and addressing these aspects can significantly reduce the high failure rate in entrepreneurship and lead to more successful and sustainable businesses.
Jaroslav Kaplan
President of Kaplan Research Company
Author of the book "Business Incognita: How to Expand the Boundaries of Entrepreneurial Thinking." Expert in sustainable organizational development and the identification of new growth sources. Developer of the methodology for contextual market research. Member of the international association of professionals in strategic and competitive intelligence SCIP.
