Noble businesses

[socratix]

Hi,

I have been looking for noble businesses. My criteria, though very
fundamental, seem to be hard to find in any of the companies I know
of. The criteria are:

1. the company has a mission that involves providing new true value to
a class of real world customers.
New value, as in, it is not just a copy of something that exists.
True value, as in, it is not sold solely based on marketing and brand,
but has some real value for the customer segment.
2. The company intends to generate its revenue primarily in return for
such value given to customers. For example, online advertising based
revenue does not meet this criterion, as the business is built around
revenue from advertisers, and not from the customers who use the
product or service.
3. The company is committed to streamlining its activities to align
with such a mission, and is willing to convince employees of how each
activity feeds up to such a mission. If such alignment is not found,
the company considers it a high priority to re-evaluate its activities
to align back with their mission.
4. The company works in a way such that it intends to be around for a
long time, and takes the long term approach in making decisions
related to business, its employees and its customers.

I have worked with and evaluated some of the best companies in the
software/technology industry, but am sad that none of them seem to
meet all these fairly simple criteria.

Do you know of any company today that works on these principles?

Thanks

[Mark T.B. Carroll]

I would like to think that the LLC I'm a member of meets your criteria.
We have skills and tools that I think can bring value to customers
beyond what our competitors offer, and we try to make sure that activity
within the company is in the service of delivering those applications to
the customers who can get the most value from them, but in the longer
term delivering them to nearly everyone who would benefit from them.

I'm working for Aetion Technologies LLC. (Sorry, our website sucks just
now, we're working on it.) We largely do software for situation
understanding and multi-criterial decision support. It's a platform
technology, so the challenge has been to make stepping stones out of
particular applications of it. But, I'm quite sure that we often knock
the spots off the competition in terms of what we can offer in terms of
value to customers, and we try to step back and see what we need to do
to get there and who should do what. (And there's a lot of "there" to
get to.)

Our main issue has been being underresourced, with respect to the
vicious circle of it being easier to sell once you actually have a
polished product, but it being easier to fund product development once
you already have some revenue.

-- Mark

[socratix]

Thanks, Mark

I am glad that you are working on something that meets these criteria.
Since I am no expert in your domain, it is hard for me to sense the
newness, or uniqueness of your offering as compared to your
competitors. Maybe one way to characterize that is to see - do all
customers in your segment go - I want the "abcd" experience where
"abcd" is your unique offering, and they want to pay for abcd? Or do
they go - I want a solution to "efgh", and which of the companies
provides a good/affordable solution to the problem? The first would be
an example of what I am talking about, while the second would not.

Examples from the past of things that could be candidates for new
value, could be the first plane manufacturer or the first car company
or the first word processor or the first email client, or the first
search engine that returns relevant results. Maybe a more apt term is
disruptive innovation, but that does not capture the value aspect...

Post by Mark T.B. Carroll
I would like to think that the LLC I'm a member of meets your criteria.
We have skills and tools that I think can bring value to customers
beyond what our competitors offer, and we try to make sure that activity
within the company is in the service of delivering those applications to
the customers who can get the most value from them, but in the longer
term delivering them to nearly everyone who would benefit from them.
I'm working for Aetion Technologies LLC. (Sorry, our website sucks just
now, we're working on it.) We largely do software for situation
understanding and multi-criterial decision support. It's a platform
technology, so the challenge has been to make stepping stones out of
particular applications of it. But, I'm quite sure that we often knock
the spots off the competition in terms of what we can offer in terms of
value to customers, and we try to step back and see what we need to do
to get there and who should do what. (And there's a lot of "there" to
get to.)
Our main issue has been being underresourced, with respect to the
vicious circle of it being easier to sell once you actually have a
polished product, but it being easier to fund product development once
you already have some revenue.
-- Mark

[creativechaos]

Quite often it is the question that provides a clue as to how difficult it
will be to arrive at a satisfactory answer for a particular question.

The word "noble" is in the same league as the word "moral" and has a large
component that is in the eyes of the beholder... You might consider
providing a set of metrics (objective criteria) that would help make it
easier to determine whether or not a given business is noble.

All successful businesses provide true value to a class of customers.
Emerging and failing businesses are usually still trying to match up their
product/service to a target class of real world customers or are trying to
convince a target class of world customers of the merits of their
product/service.

That being said, I'll make a wild assumption that you may be looking for a
software/technology company that has the potential of adding to the
"greatest good" for a large customer segment.

Look to the industries involved in attempting to solve many of the thorny
problems facing society at the local, regional, national and international
levels. You will find no shortage of software/technology companies working
on these problems. Some have promising solutions that are already helping in
these areas.


If you are looking for "principles" then look to the leadership/owner(s) of
the company rather than the company itself. The primary purpose of a
business is to generate surplus revenue for it's owners... Period. Anything
else is a "hobby" of a key decision maker(s) running the company. Nothing
wrong in taking this approach as long as the hobby doesn't kill the goose
that laid the golden egg... Which isn't as easy as it sounds.

I'm guessing that you may be looking for a mature company to meet your
criteria. A mature company typically focuses on reaping the benefits of
having hit the nail on the head. Most of their attention will typically be
on lowering operational costs and maximizing profits... So your best bets
will probably be in looking at emerging and growing businesses operating in
industries with much turmoil going on: Energy, pollution, healthcare, space
safety, food, logistics, etc.

A few thoughts...


J.P.

Post by socratix
Hi,
I have been looking for noble businesses. My criteria, though very
fundamental, seem to be hard to find in any of the companies I know
1. the company has a mission that involves providing new true value to
a class of real world customers.
New value, as in, it is not just a copy of something that exists.
True value, as in, it is not sold solely based on marketing and brand,
but has some real value for the customer segment.
2. The company intends to generate its revenue primarily in return for
such value given to customers. For example, online advertising based
revenue does not meet this criterion, as the business is built around
revenue from advertisers, and not from the customers who use the
product or service.
3. The company is committed to streamlining its activities to align
with such a mission, and is willing to convince employees of how each
activity feeds up to such a mission. If such alignment is not found,
the company considers it a high priority to re-evaluate its activities
to align back with their mission.
4. The company works in a way such that it intends to be around for a
long time, and takes the long term approach in making decisions
related to business, its employees and its customers.
I have worked with and evaluated some of the best companies in the
software/technology industry, but am sad that none of them seem to
meet all these fairly simple criteria.
Do you know of any company today that works on these principles?
Thanks

[socratix]

Post by creativechaos
Quite often it is the question that provides a clue as to how difficult it
will be to arrive at a satisfactory answer for a particular question.
The word "noble" is in the same league as the word "moral" and has a large
component that is in the eyes of the beholder... You might consider
providing a set of metrics (objective criteria) that would help make it
easier to determine whether or not a given business is noble.

I have illustrated the definition a bit more in the last response.
Objective metrics could include - filling a real need, versus creating
a need (the first word processor allowed users to author documents and
was new true value, while in the twentieth version of a word
processor, most users use less than 20% of the features provided. And
yet they are effectively forced to upgrade due to compatibility,
etc.); providing a product and nothing more (for example, I only need
two programs a week on cable, yet I am forced to deal with at least
ten channels. I want a new cell phone, but then I am effectively
forced to sign up for two years - which is unrelated to the value
provided by the phone.)

Post by creativechaos
All successful businesses provide true value to a class of customers.
Emerging and failing businesses are usually still trying to match up their
product/service to a target class of real world customers or are trying to
convince a target class of world customers of the merits of their
product/service.
That being said, I'll make a wild assumption that you may be looking for a
software/technology company that has the potential of adding to the
"greatest good" for a large customer segment.

No, I am not referring to philanthropic or humaitarian businesses/
organizations.

Post by creativechaos
Look to the industries involved in attempting to solve many of the thorny
problems facing society at the local, regional, national and international
levels. You will find no shortage of software/technology companies working
on these problems. Some have promising solutions that are already helping in
these areas.
If you are looking for "principles" then look to the leadership/owner(s) of
the company rather than the company itself. The primary purpose of a
business is to generate surplus revenue for it's owners... Period.

I understand that - but I believe that businesses have drifted away
from their original purpose - of providing a way to create value for
individuals by dividing the work on specialized lines. Consider 3
prehistoric cavemen A, B and C - it is way more efficient for A to
hunt, B to cook, and C to make clothes than for all three to do all
three. Hence, specializations, and consequently businesses emerged.
However, today, most "innovation" is an amorphous blob hidden behind
pretty packaging, pushed as value by marketing. That is what I call
false innovation, versus truly creating something that people truly
want.

Post by creativechaos
Anything
else is a "hobby" of a key decision maker(s) running the company. Nothing
wrong in taking this approach as long as the hobby doesn't kill the goose
that laid the golden egg... Which isn't as easy as it sounds.
I'm guessing that you may be looking for a mature company to meet your
criteria. A mature company typically focuses on reaping the benefits of
having hit the nail on the head. Most of their attention will typically be
on lowering operational costs and maximizing profits... So your best bets
will probably be in looking at emerging and growing businesses operating in
industries with much turmoil going on: Energy, pollution, healthcare, space
safety, food, logistics, etc.

No, this is not what I am looking for - for instance, innovation in
solving pollution issues would not meet the criteria of "new" because
we are only trying to get back to what we started with - an unpolluted
planet:-)

Post by creativechaos
A few thoughts...
J.P.

Post by socratix
Hi,
I have been looking for noble businesses. My criteria, though very
fundamental, seem to be hard to find in any of the companies I know
1. the company has a mission that involves providing new true value to
a class of real world customers.
New value, as in, it is not just a copy of something that exists.
True value, as in, it is not sold solely based on marketing and brand,
but has some real value for the customer segment.
2. The company intends to generate its revenue primarily in return for
such value given to customers. For example, online advertising based
revenue does not meet this criterion, as the business is built around
revenue from advertisers, and not from the customers who use the
product or service.
3. The company is committed to streamlining its activities to align
with such a mission, and is willing to convince employees of how each
activity feeds up to such a mission. If such alignment is not found,
the company considers it a high priority to re-evaluate its activities
to align back with their mission.
4. The company works in a way such that it intends to be around for a
long time, and takes the long term approach in making decisions
related to business, its employees and its customers.
I have worked with and evaluated some of the best companies in the
software/technology industry, but am sad that none of them seem to
meet all these fairly simple criteria.
Do you know of any company today that works on these principles?
Thanks- Hide quoted text -

- Show quoted text -

[mlwyland]

Intreresting question. It is constructed in a way as to define, or
set limitations on, several terms used in the consideration of
eligible candidates.

One example of this limitation is the definition of the term "value."
In a broader context, value is in the eye of the consumer. An
apparently duplicative or replicative effort may be seen by a customer
to be true value because it comes with convenience, service,
satisfaction, or other elements not found in similar products or
services.

BTW, it's also important to better define the term "consumer" as one
determines what the consumer sees as value, as well as in determing to
whom a business should market and advertise and sell.

Another example is the use of the term "mission." In a strictly
capitalistic way, all for-profit corporations exist to create value
for shareholders (owners). This is most commonly done through short-
term excess revenue over expense (profit) and longer-term asset growth
ourpacing liability growth (building asset value).

Most corporate missions rightly focus on the "how" of building profit
and asset values. Productivity as accomplishment is even more
important, for both the individual and society, than the accumulation
of capital in itself.

In an entrepreneurial model, business success can be nothing more than
the superhuman effort to build an idea into a concept into a service
or product that becomes (or has the potential to become) successful in
the marketplace. At this point, the business is an eliglble asset in
itself, and could be offered for sale to another business better able
to sustain its product or service line over the long term while
exploiting its profit and asset growth potential.

While it's true that a company should have close contact with its
mission and core business strategy, it also needs the freedom to take
the occasional flyer as it pursues new opportunities. Some notable
successful products are based on R&D failures. Having corporate
values such as agility, imagination, inventiveness, flexibility, etc.,
will result in occasional deviations from the stated mission.
However, mission statements are re-examined periodically (every 1-3
years, and sometimes more often) based on changing market conditions
(both internal and external) and interpretation of corporate values
and beliefs.

I'm not sure what one would end up with if a "noble" company, by your
criteria, is identified. What is the opportunity cost for the
business's owners, employees, customers, and other stakeholders, of
achieving "noble" status?

[socratix]

Responses inline...

Post by mlwyland
Intreresting question. It is constructed in a way as to define, or
set limitations on, several terms used in the consideration of
eligible candidates.
One example of this limitation is the definition of the term "value."
In a broader context, value is in the eye of the consumer. An
apparently duplicative or replicative effort may be seen by a customer
to be true value because it comes with convenience, service,
satisfaction, or other elements not found in similar products or
services.

I agree - value is in the eye of the consumer - I am not saying that
duplicative efforts are in any way inferior to 'new' value - it is
just that I have often noticed that the line between duplication and
promotion based on orthogonal means (such as marketing, etc.) - is
more common than incremental value over an overlapping offering.

Post by mlwyland
BTW, it's also important to better define the term "consumer" as one
determines what the consumer sees as value, as well as in determing to
whom a business should market and advertise and sell.

If a concretely defined segment of consumers of the technology agree
(sometimes immediately, sometimes after using the technology for a
while) that the new technology is indeed significantly more valuable
to them than prior offerings addressing that problem, then it meets
the criteria. This is the distinction between agreeing that the
technology is definitely cooler than the older options and saying that
the new technology has solved a problem that was previously
unsolved.

Post by mlwyland
Another example is the use of the term "mission." In a strictly
capitalistic way, all for-profit corporations exist to create value
for shareholders (owners). This is most commonly done through short-
term excess revenue over expense (profit) and longer-term asset growth
ourpacing liability growth (building asset value).

I believe that the definition of a mission as increasing shareholder
value leaves the option of not necessarily increasing customer value
(for instance, you may increase shareholder value by investing heavily
in marketing a product that doesnt really solve any fundamental
customer problem in a better way). However, the mission principle i
propose would over time increase shareholder value, though it may be
harder to achieve - there are several examples of companies that go
out of the way to ensure that they maintain their commitment to the
customer, and though it is harder in the shorter term, they land up
building a level of customer trust and employee motivation that
eventually wins the investors over. (See for example some of the
companies described in the book "Good Business" by Mihali
Csitszenmihalyi.)

Post by mlwyland
Most corporate missions rightly focus on the "how" of building profit
and asset values. Productivity as accomplishment is even more
important, for both the individual and society, than the accumulation
of capital in itself.
In an entrepreneurial model, business success can be nothing more than
the superhuman effort to build an idea into a concept into a service
or product that becomes (or has the potential to become) successful in
the marketplace. At this point, the business is an eliglble asset in
itself, and could be offered for sale to another business better able
to sustain its product or service line over the long term while
exploiting its profit and asset growth potential.

True. I realize however that some entrepreneurs start off with a
genuine value proposition, but over time many succumb to the pressures
of investors to heavily diverge from the initial value offering to
realize short term revenues. There are three ways one can respond to
this - 1) embrace the change, and become an investor/shareholder
driven company 2) Focus on ideas that delay or avoid altogether
requirement for significant external investment - i.e ideas that can
go from concept to revenue generating without external investment. 3)
Take idea to working implementation, and sell it to investors/
entrepreneurs/other companies, and move on to other ideas. I believe,
as an advocate of customer value, that more people can aim for 2
before taking the (relatively) easy way out with 1. IMO, the benefit
would be that overall customer value of technology offerings would be
higher than not, increasing the satisfaction of customers and thus
increasing their intent to buy.

Post by mlwyland
While it's true that a company should have close contact with its
mission and core business strategy, it also needs the freedom to take
the occasional flyer as it pursues new opportunities. Some notable
successful products are based on R&D failures. Having corporate
values such as agility, imagination, inventiveness, flexibility, etc.,
will result in occasional deviations from the stated mission.
However, mission statements are re-examined periodically (every 1-3
years, and sometimes more often) based on changing market conditions
(both internal and external) and interpretation of corporate values
and beliefs.

Absolutely - while mission itself should change with external data, I
am more interested in the mission's alignment with the principle I
mention. There are lot of companies that start with one mission and
change it for various reasons, but keeping the customer needs as a key
factor in the decision, and there are others who prioritize short term
shareholder value over customer needs, doing things that are less
valuable to the customer.

Post by mlwyland
I'm not sure what one would end up with if a "noble" company, by your
criteria, is identified. What is the opportunity cost for the
business's owners, employees, customers, and other stakeholders, of
achieving "noble" status?

Adhering to such a principle would increase customer satisfaction,
hence encourage spending, and hence increase shareholder value, and
enable asset growth, etc. Focusing directly on shareholder growth
could lead to shareholder value, etc. but not the customer
satisfaction factors that propel the customer to invest more.

I feel forced to spend on some things because I have no choice (where
I will try every way possible to avoid spending), versus I willingly
spend on some things because it is clearly providing me value (where I
will spread the word on the value of the offering to me).