Build in Public #1: Defining Outcomes
Before even starting your business, decide what you want out of it.
It’s a maxim as old as time:
“Those who seek to please everybody, please nobody.” —Aesop.
“To please everybody is impossible; were I to undertake it, I should probably please nobody.” —George Washington
“As long as you want to please everyone, you won’t please anyone.” —Seth Godin
Every successful venture must make a decision about whom it shall serve. This is a fundamental paradigm of business.
Back when I was doing consulting with accountants and tax attorneys, here are some examples I would frequently use to illustrate this principle:
Ford doesn’t manufacture mattresses. Hell, Ford even stopped making most of their cars a few years ago, to focus on making trucks.
Serta, Simmons, and Sealy make mattresses. They have factories. They have employees. They have equipment. But they use them to make mattresses. They don’t try to build cars or trucks.
A personal injury attorney represents personal injury cases. They don’t handle DUI cases or business contract disputes. If one of their personal injury clients needs criminal representation or contract law help, they refer the client to a criminal law attorney or a contract law attorney.
Every successful business focuses on providing a specific product or service to a specific target customer.
For a lot of small business owners, especially solo professional service providers like accountants, this can actually be a challenging concept to grasp. Some of my clients would even ask, “Wait, so you want me to turn away business?”
Yes, that’s exactly what I was telling them to do: Turn away business that isn’t a good fit for your firm.
For a solo practitioner that’s trying to make a living, that’s hard. It’s difficult to say no to preparing a personal income tax return, even if your stated goal is to build a clientele of only business clients. It’s hard for a CPA that’s got a family to feed to say “no” to a financial statement audit, even after they’ve decided to focus their practice entirely on IRS representation.
It’s hard for startup founders and indie makers, too, especially if they have rent to pay and kids to feed. Maybe that scheduling app you built for dental offices could be reconfigured to work for truck drivers, with only a week or two of extra programming. It’s hard to say “no” to that if a small trucking company owner is standing in front of you offering you cash to make it happen.
But in all these cases, “no” is the correct answer. Focus, focus, focus.
Before I found success as an entrepreneur, I had my failures. Lack of focus was absolutely a factor in those failures. Specifically, a lack of focus on three key elements:
Who my ideal customer is.
What outcome I was going to create for that customer.
What MY desired outcome was for serving that customer.
All three of these are important. As Napoleon Hill, author of Think and Grow Rich, might say, this is about creating definiteness of purpose for yourself and your business venture.
Here are the answers to these focus questions as they relate to my three successful ventures.
Tax Help HQ — tax practice specializing in IRS Collections representation
Ideal Customer: Small trucking companies in five western states with 5-10 trucks that were delinquent on federal 2290, 941, and 940 tax obligations.
Customer Outcome: Enter a resolution program with tax authorities that stopped aggressive collection actions. Restructure business as necessary to achieve profitability.
Personal Outcome: Generate sufficient personal income such that I would never need to worry about being homeless again. Operate as a lifestyle business that allowed me to travel the world and engage in my hobbies, a la The 4-Hour Workweek.
Tax Resolution Academy — continuing professional education program for accountants and attorneys to learn how to do IRS Collections representation
Ideal Customer: Only licensed CPAs, Enrolled Agents, and attorneys are allowed to do this work, so they were my target market. Ideal customer was a solo practitioner or small firm owner, not an employee at a larger firm.
Customer Outcome: Bolt on a new revenue source to their existing tax firm.
Personal Outcome: Create new competition in the tax relief space as a giant “fuck you” to the fly-by-night tax relief companies that were running rampant. Build a bigger type of business that would help me generate wealth, instead of just income.
Prolaera — Learning Management System (LMS), compliance tracking, and vertical HR integration platform for large public accounting firms
Ideal Customer: Public accounting firms on the Inside Public Accounting (IPA) 200 list. These are the 200 largest public accounting firms in the United States, and related alliances of accounting firms.
Customer Outcome: Streamline firm training management. Simplify compliance report generation for regulatory bodies and prospective client proposal packages.
Personal Outcome: Build an investor-backed, venture-scalable tech startup with the express intent of being acquired.
To be transparent, which is one of the points of doing this sort of “Build in Public” thing, each of these ideal customer profiles, customer outcomes, and personal outcomes were all the result of experimentation and pivots. These target markets are definitely not where each venture started — it’s where they landed after starts, stops, fits, wailing, screaming, and crying.
After two years of being more-or-less retired and repeatedly saying that I’ll never start another business, I’ve arrived at a place of clarity regarding what I want from my next venture. Because of course there’s going to be a next one, it’s what entrepreneurs do. It’s like some sort of sick, twisted affliction. Keep hitting me, market economy! <bonk>
This is subject to a potential future pivot, as I experiment. But from the beginning, I’ll apply the same rubric to this new business as I did to my prior three.
Bizorca LLC — curate and create go-to-market, business development, and growth hacking systems and tools for early stage business ventures
Ideal Customer: Founders, indie makers, and professional services firms desiring startup-like growth trajectories. Entrepreneurial mindset, not small business mindset. Companies solving specific problems for a specific target market.
Customer Outcome: Venture scale growth, even without venture capital.
Personal Outcome: I’m primarily seeking advisory shares in companies.
I’m currently an angel investor in 20+ startups. One of the things I quickly realized with angel investing is that I have absolutely zero ability to impact the direction of the company. As a former founder, that’s frustrating! So here, I’ll be trying to change that. Sure, I might charge some fees here and there for this and that, but what I’m really seeking is a vested stake in the companies I’m helping. I want my financial outcome to be tied to the financial outcome of the companies I’m putting time and resources into. Advisory shares are the common way of doing this in the startup world.
It’s inevitable that a CPA, EA, or attorney that knows me from my previous ventures will read this, and automatically jump to the conclusion that I’m excluding them. No, not at all — as long as our objectives align, let’s get to it!
But, alas, please see the bulleted list above, especially in relation to the growth trajectory. If your goal is to grow your tax firm from $50k a year to $100k a year, then we’re not a good fit. If your goal is to grow your tax firm from $2 million to $20 million, then yeah, let’s talk.
I’ll be writing more of these “Building in Public” posts as I go along. Most of them will probably be about marketing experiments, but since that fits with the biz dev theme of this entire Substack newsletter, those posts should be of interest to the entrepreneurs that subscribe to read it.
See you soon, out there in the great big economy!