A nice piece of writing (here) from by Jim Dougherty in HBR on what really matters when evaluating a business, especially a start up. Hint; it's all about the cash. That is to understand whether a business will succeed or fail often the key can be found by looking at just important items; a) compensation package for employees and b) the pricing plan for customers.
- Are they in sync?
- Are they crystal clear and easy to understand?
- Do they work together or against each other?
- Do they incentivize new growth or in helping management make their goal?
To often firms sacrifice success for a dogmatic business model or approach that is devoid of reality. Remember the two most important tasks of every business are in this order:
1. Keep the customers you have
2. Find new customers
Bravo to Jim Dougherty for cutting through all the baloney.