To run one of the world’s biggest companies is an impressive achievement; to have run two just seems greedy. Fortunately former PepsiCo president andApple CEO John Sculley, isn’t hoarding the insights he gained in those two high-profile jobs and the other experiences he’s had during his long career in business.
Moonshot!: Game Changing Strategies to Build Billion-Dollar Businesses is not an autobiography, Sculley insists, but a book of lessons that I and other entrepreneurs have learned while building successful businesses.
Sculley thinks the book particularly timely because of broader economic trends that are incentivizing entrepreneurship. Large corporations and governments aren’t hiring, and the rise of the contractor economy means it’s relatively cheap to embark on a new venture.
“We’re in this truly amazing moment for anybody who’s interested in building a successful entrepreneurial business on a substantial scale,” says Sculley. Here’s what he thinks new entrepreneurs need to understand if they want to make the most of this opportune moment for entrepreneurship.
Outcomes matter more than technology
Today’s most talked-about startups and valuable companies can be found in the technology sector. Solutions like cloud computing, Big Data analytics and mobility are the buzzwords of business, but Sculley says entrepreneurs need to focus on what these technologies enable, not the technologies themselves. “It’s the derivative effects of those technologies that is shifting market power from large, incumbent product and service companies all over the world to new companies,” he says. “Customers are paying more attention to the opinions of other customers than they are to the established positions of the incumbent companies.”
Sculley cites the example of the food services industry, where established players like McDonald’s are facing tough competition from upstart fast-casual outfits. The reason that the global fast-food giant finds itself backed into a corner is simple, according to Sculley. “If you go online and look at customers’ opinions of Shake Shack and Chipotle, you’ll see very happy customers and they’re telling other customers just how good they feel,” he explains.
Deliver a standout product with great service, and you too could benefit from making today’s empowered consumer happy.
Take advantage of mentorship
Sculley admits to knowing fairly little about Silicon Valley culture when he moved there to take over Apple in 1983. Unlike today’s entrepreneurs, he couldn’t simply seek out a mentor to learn from. “I had been really only in Corporate America, so it was an entirely new experience to me,” he says. “There was no one there I could turn to—there was no e-mail, there were no mobile phones, there was no easy way to have conversations on a routine basis with somebody.”
Today’s entrepreneurs face no such problem staying in touch with mentors, and there’s no shortage of experienced business people—like Sculley himself—willing to offer advice and assistance. You just have to be willing to ask.
Focus on the customer first
Entrepreneurs and established executives alike are taught that they need to lay out a thorough business plan in order to succeed. Yet if you review that laboriously-crafted plan just a year later you’ll find that very little actually got done says Sculley. “My sense is that the business plan is really just a budgeting process,” he says. “What you really want is the customer plan.”
Research suggests that acquiring a new customer can cost five to eight times as much as it would have run you to keep an existing one who departed instead. “Keeping a happy customer happy inside of your franchise is a far better business decision than just going out and trying to find another customer,” Sculley says.
Have a sense of urgency
Big established corporations have a lot of middle managers with veto power. “That means that things take a long time to get yes’ answers,” observes Sculley. Entrepreneurs have the advantage of a higher risk tolerance, and “have to be willing to do things on a faster, more flexible time schedule.”
Learn what you don’t know
No entrepreneur is an island. So while your own skills and interests are crucial to finding the right business idea, it takes more than one person to make a startup successful. “Entrepreneurs by definition wear different hats at different times,” Sculley says. “[You] have to be able to not only become an expert in a domain—where you have to really know your way around and have a network of relationships—but you’ve got to know how to recruit talent that may have expertise in domains that you don’t have talent or experience in.”
As your challenges and opportunities change, so should your business. You need to be an adaptive entrepreneur, says Sculley: “What you do in the startup phase is dramatically different than what you do during the expansion stage.”
For more insights from John Sculley, listen to this week’s BusinessCast by clicking the button above or download by clicking on the iTunes logo below:
For more BusinessCast podcasts, click here.