Beyond Products: The Real Currency of Entrepreneurial Success
Expert
Yaroslav Kaplan, President of Kaplan Research Company, an expert in sustainable development and discovering new growth sources.
Having no product means providing no value for consumers, but merely having a product does not necessarily mean providing value for consumers. .
In the realm of customer experience, one cannot ignore the stark disparity highlighted by recent data from Bain & Company. This data reveals a disconcerting gap: 80% of employees in large organizations are confident that they deliver a superior experience to their customers, but only 8% of those customers agree with this optimistic evaluation. This glaring incongruence in perception raises critical questions about the factors contributing to this divergence.
Upon rigorous analysis, it becomes evident that the gap may be attributed to a set of business challenges that can be specifically categorized as "entrepreneurial challenges." Importantly, the consumer's perception of value is shaped at the juncture where they interact with both the entrepreneur and the product. However, this interaction is not an isolated incident; it is part of a larger communicative context that involves the entrepreneur, the product, and the consumer. Understanding this framework is essential for addressing the disparity in perceived value between businesses and their customers..
The designated system sets the stage for a whole area of activity. In this setup, the whole is indeed greater than the sum of its parts, echoing the sentiment of David Herbert Lawrence about water being more than just H2O. Just as you can not understand water by only looking at hydrogen and oxygen, emergent properties in business can not be reduced to their individual elements in a vacuum.
In the business world, this idea of emergent properties can be seen as a shift in "measure," where a change in quantity leads to a new quality. Unlike the common belief that you have to accumulate a certain amount to reach a tipping point—captured by sayings like "the straw that broke the camel's back"—often just combining two elements can create something entirely new. Indeed, this is precisely what happens in a communication system where entrepreneurs interact with consumers through their products.
It would be a fool’s errand to consider either consumers or entrepreneurs in isolation, devoid of their interactions and contextual environment. Focusing too narrowly on individual components risks missing the larger picture—the "forest," so to speak. It is by stepping back and viewing the system as a whole, that we uncover new solutions, discern invisible behavioral patterns, and identify non-obvious connections that can help solve entrepreneurial challenges. In doing so, we arrive at a foundational unit of interaction in entrepreneurship, composed of three elements: the entrepreneur, the product, and the consumer. Drawing a parallel with physics, where a "quantum" represents the smallest unit of energy, I propose to name this elemental unit in business the "quantum of interaction."
This "quantum of interaction" serves as the cornerstone of entrepreneurial thinking. It is the basic building block that shapes the entire relationship between the entrepreneur and the consumer. The well-known marketing adage, "know your customer," evolves into a more actionable principle: "understand your customer."
This means that simply knowing basic facts about a customer is not the same as understanding them. True comprehension can only be achieved by delving into their interactions within their environment and their network of relationships. This is where the "quantum of interaction" becomes invaluable. Customer relations are the bedrock of any business, and they can not be constructed if one ignores the human elements involved. Similarly, one cannot simply try to build a harmonious family first as a whole while disregarding the needs and feelings of its members.
In contemporary business models that overlook the individual—be it their creative or emotional facets—a significant chunk of the picture will be out of frame. Consumers do not conform to preconceived "customer avatars," just as entrepreneurs are not mere automatons delivering a product or service upon receiving payment. Neglecting these human aspects leads to flawed assumptions and, ultimately, to business challenges that are difficult to overcome.
In my book, "Business Incognita: How to Push the Boundaries of Entrepreneurial Thinking" (Alpina Pro Publishers, 2023), I propose defining an "entrepreneurial challenge" as the intellectual endeavor to create or discover an environment where consumers perceive high value in a product. This perception is largely influenced by context. For example, the same bottle of water could hold different perceived values in a supermarket, a restaurant, an airplane, or a desert.
Much like how an artist meticulously considers factors such as ambiance, lighting, and room architecture to create a desired impact on an audience, an entrepreneur's main objective should be to pinpoint the context in which the perceived value of their product is maximized for consumers. In the transfer of products from entrepreneurs to consumers, a specific communication system always comes into play. This system facilitates interaction among its central components: the entrepreneur, the product, and the consumers. Within this business ecosystem, the role of the product undergoes a fundamental shift. It ceases to be an "independent" entity and instead becomes a "medium"—a conduit through which the entrepreneur engages with the consumer. The product morphs into a catalyst for interaction, rather than serving as the end goal. Just as telescopes enable researchers to study stars, microscopes facilitate the examination of cellular structures, and thermometers allow the observation of temperature, the Entrepreneur-Product-Consumer communication system lets us examine how consumers perceive the value of products within an interactive framework.
Emmanuel Kant aptly observed, "You can lead a horse to water, but you can not make it drink." Similarly, while it is possible to create conditions that compel a consumer to comply, it is far more challenging to make them willingly engage in a relationship with us. In my view, this captures the essence of entrepreneurship: it is fundamentally about building connections with both existing and potential customers and understanding the complete dynamics of our interactions together that lead to mutual benefit.
In the realm of customer experience, one cannot ignore the stark disparity highlighted by recent data from Bain & Company. This data reveals a disconcerting gap: 80% of employees in large organizations are confident that they deliver a superior experience to their customers, but only 8% of those customers agree with this optimistic evaluation. This glaring incongruence in perception raises critical questions about the factors contributing to this divergence.
Upon rigorous analysis, it becomes evident that the gap may be attributed to a set of business challenges that can be specifically categorized as "entrepreneurial challenges." Importantly, the consumer's perception of value is shaped at the juncture where they interact with both the entrepreneur and the product. However, this interaction is not an isolated incident; it is part of a larger communicative context that involves the entrepreneur, the product, and the consumer. Understanding this framework is essential for addressing the disparity in perceived value between businesses and their customers..
The designated system sets the stage for a whole area of activity. In this setup, the whole is indeed greater than the sum of its parts, echoing the sentiment of David Herbert Lawrence about water being more than just H2O. Just as you can not understand water by only looking at hydrogen and oxygen, emergent properties in business can not be reduced to their individual elements in a vacuum.
In the business world, this idea of emergent properties can be seen as a shift in "measure," where a change in quantity leads to a new quality. Unlike the common belief that you have to accumulate a certain amount to reach a tipping point—captured by sayings like "the straw that broke the camel's back"—often just combining two elements can create something entirely new. Indeed, this is precisely what happens in a communication system where entrepreneurs interact with consumers through their products.
It would be a fool’s errand to consider either consumers or entrepreneurs in isolation, devoid of their interactions and contextual environment. Focusing too narrowly on individual components risks missing the larger picture—the "forest," so to speak. It is by stepping back and viewing the system as a whole, that we uncover new solutions, discern invisible behavioral patterns, and identify non-obvious connections that can help solve entrepreneurial challenges. In doing so, we arrive at a foundational unit of interaction in entrepreneurship, composed of three elements: the entrepreneur, the product, and the consumer. Drawing a parallel with physics, where a "quantum" represents the smallest unit of energy, I propose to name this elemental unit in business the "quantum of interaction."
This "quantum of interaction" serves as the cornerstone of entrepreneurial thinking. It is the basic building block that shapes the entire relationship between the entrepreneur and the consumer. The well-known marketing adage, "know your customer," evolves into a more actionable principle: "understand your customer."
This means that simply knowing basic facts about a customer is not the same as understanding them. True comprehension can only be achieved by delving into their interactions within their environment and their network of relationships. This is where the "quantum of interaction" becomes invaluable. Customer relations are the bedrock of any business, and they can not be constructed if one ignores the human elements involved. Similarly, one cannot simply try to build a harmonious family first as a whole while disregarding the needs and feelings of its members.
In contemporary business models that overlook the individual—be it their creative or emotional facets—a significant chunk of the picture will be out of frame. Consumers do not conform to preconceived "customer avatars," just as entrepreneurs are not mere automatons delivering a product or service upon receiving payment. Neglecting these human aspects leads to flawed assumptions and, ultimately, to business challenges that are difficult to overcome.
In my book, "Business Incognita: How to Push the Boundaries of Entrepreneurial Thinking" (Alpina Pro Publishers, 2023), I propose defining an "entrepreneurial challenge" as the intellectual endeavor to create or discover an environment where consumers perceive high value in a product. This perception is largely influenced by context. For example, the same bottle of water could hold different perceived values in a supermarket, a restaurant, an airplane, or a desert.
Much like how an artist meticulously considers factors such as ambiance, lighting, and room architecture to create a desired impact on an audience, an entrepreneur's main objective should be to pinpoint the context in which the perceived value of their product is maximized for consumers. In the transfer of products from entrepreneurs to consumers, a specific communication system always comes into play. This system facilitates interaction among its central components: the entrepreneur, the product, and the consumers. Within this business ecosystem, the role of the product undergoes a fundamental shift. It ceases to be an "independent" entity and instead becomes a "medium"—a conduit through which the entrepreneur engages with the consumer. The product morphs into a catalyst for interaction, rather than serving as the end goal. Just as telescopes enable researchers to study stars, microscopes facilitate the examination of cellular structures, and thermometers allow the observation of temperature, the Entrepreneur-Product-Consumer communication system lets us examine how consumers perceive the value of products within an interactive framework.
Emmanuel Kant aptly observed, "You can lead a horse to water, but you can not make it drink." Similarly, while it is possible to create conditions that compel a consumer to comply, it is far more challenging to make them willingly engage in a relationship with us. In my view, this captures the essence of entrepreneurship: it is fundamentally about building connections with both existing and potential customers and understanding the complete dynamics of our interactions together that lead to mutual benefit.
