Environment

The environment for emerging businesses is tougher than ever. Companies compete in the face of a handful of stiff external forces, including:

Scarce customers – Competitors have increased in number, improved their productivity, and accelerated their rate of innovation. At the same time, customers are more precisely defining their requirements, heightening their expectations, and are increasingly willing to show loyalty to good suppliers. Together, these factors create the very real effect that supply and suppliers far exceed, or totally miss, customer demand.

Shifting markets – It's a truism that "the only constant is change" but the pace of change today requires emerging business leaders to build an updated appreciation of this truism into their plans. New and shifting markets – shaped by changing customer needs, technology disruptions, new business models and other dynamic business drivers – often form and reform faster than a new business can go through the normal growth stages required to determine and meet customer needs. This upsets fundamental business strategy, product development and marketing plans, and creates the need to build a more dynamic business model and company.

Demanding investors – While great people with good business ideas still get funded, the cost of that support has increased dramatically. Investors are setting higher, sooner and more difficult to reach targets for revenue, profit and other key ingredients that create value. Not reaching these targets often forces an unplanned transformation in the business, its management, and its relationship with investors.

Lean teams – As investor demands intensify, emerging businesses must reach targets with fewer management team members and employees than ever before. Pressures on business leaders to partner with technology developers, sales partners, operations contractors and service providers have increased, usually for the better. Leaders of emerging businesses must therefore think and act across their entire ecosystem to leverage the full range of resources available to them.

Uncertain economies – While always unpredictable, state, national and international economies appear more uncertain now than in recent memory. Massive budget deficits, international terrorism, sagging business growth, and flagging consumer confidence has created recurring revisions of the time and intensity of a recovery. In the midst of this uncertainty, already scarce customers continue to hold tight their personal, capital and operating expenditures, making it even more difficult for emerging businesses to gain and sustain market traction.

Each of these environmental factors can and must be controlled by emerging businesses to create advantage and value.