Recently, I was fortunate enough to be able to hear Michael Bloomberg, the former mayor of New York City as well as the founder and CEO of Bloomberg, LP, speak at an event.
Michael Bloomberg gave a long speech in which he talked about his philanthropic work, his views on the media, and some important lessons about business and leadership.
1. Construct, make money off of and protect
Michael Bloomberg went over the strategies that he used to turn Bloomberg into a profitable business. This is what he had to say:
“In order to be successful in business, you need to do three things. To begin, you must create a product that fulfills a need in the market. Second, you will need a strategy for making money off of the product. And finally, you must have a strategy for defending the product. It’s over with”
This is what we were able to accomplish with Bloomberg. People are in need of a product that provides them with up-to-the-minute business news and analysis. We generate revenue for the product by restricting access to the content it contains to only our own terminals and requiring payment in advance. And how did we defend the product that we were selling? Since we were the pioneers in this field, we immediately set out to establish a customer base. Then, as our revenue increased, we reinvested that money in the company to broaden and deepen the scope of the content we offered. In addition to that, we invested in globalization and in making content from all over the world available to our users. That was something that was difficult for other people to imitate.
This piece of advice is so straightforward: develop a product that people require, find a way to make money off of it, and stand by it. My observations have shown that business owners and product managers don’t always consider new opportunities in the context of this framework. Naturally, the most essential aspect is to develop a product that can fulfill the requirements of the market; alternatively, as Sam Altman puts it, “Your job is to create something that users adore.” If you are successful in doing so, you will be in a much better position than the majority of new businesses. I’ve written in the past about the significance of conducting research on customers and how to apply the Jobs to be Done framework in order to develop goods that satisfy customers’ actual requirements.
However, you should also consider your business model (how you intend to profit from the venture) as well as your points of differentiation and competitive advantages (how you intend to defend).
2. You shouldn’t pay attention to what your consumers say they want.
Michael Bloomberg gave some good advice on how to figure out what kind of product will best meet the needs of your customers.
“When you are designing products for the future, there are two groups of people whose opinions you should not take into consideration: your customers and your salespeople.”
Now, I’m not suggesting that you should disdain your clientele in any way. Listen to them, but don’t let what they say influence you.
“Both your customers and salespeople are wed to the information they have at their disposal right now. They might not even be aware of the possibilities that the future holds.
“Rather than asking your customers what they want and doing what they tell you to do, ask them where they want to go and lead them there rather than asking them what they want and following what they tell you to do.”
The significance of this cannot be overstated. Listen to your clients, but don’t just take everything they say at face value.
In the blog post titled “What You Can Do to Simplify Your Products,” I discussed the potential pitfalls of placing an excessive amount of weight on the feedback received from customers regarding their preferences.
Customers will frequently consider what they are already receiving from your rivals and then request that you build features that are identical to those ones. If you place too much emphasis on what customers tell you they want, you may find yourself developing products with extensive feature lists that aim to close every single gap in competitive parity. As a result, you may find yourself with a “kitchen sink” full of features that are indistinguishable from one another.
You should focus your efforts on gaining an understanding of the “why” rather than the “what.” When speaking with customers, it is important to look beyond their explicit needs (i.e., “what they tell you that they want”) and discover their implicit needs (i.e., “what customers need but that they don’t tell you”).
When you pay attention to customers’ implicit needs, you can unearth the fundamental challenges they are facing and then offer potential solutions to those challenges. This is a significant improvement over relying on customers to explain what it is they want.
Listening to customers and salespeople should be approached with the same openness and interest. Listen to them, but don’t just take at face value what they have to say about what customers want. Especially when considering what to construct in light of the anticipated demands of the market in the future, Michael Bloomberg once said that if you don’t get to where your customers are quickly enough, they will have already left.
3. Accept failure
Bloomberg discussed the way in which he deals with failure within his organization.
“If somebody tries something and it doesn’t work, I’ll walk down the aisle with them,” she said. They are made aware that they are not being punished in any way for their performance. And everyone else does as well.
“Whenever one of us is unsuccessful, I want everyone to pull together and support one another,” she said. I don’t want people to be pointing fingers; I want them to say, “We’re all in this together.”
“I would like for people to ask forgiveness rather than permission. It’s possible that not every time will be successful, but I’d rather that we try for it than that other people don’t try for the next big thing.
Bloomberg addresses a number of salient points regarding the process by which he cultivates a culture that is willing to take risks and accepts the possibility of failure.
To begin, he makes it a point to openly show his support for individuals who have attempted something significant but have been unsuccessful. The organization receives the message that failure is acceptable and should be anticipated as a result of this.
Second, he does not put up with playing the blame game when things go wrong. Instead of blaming the individual in the organization who was the one to take the risk and end up failing, he wants everyone to pull together as a team. It is not the failure of a single individual but rather of the entire team. (On the other hand, I think it’s important for leaders to maintain the same behavior when they are successful. It is not the success or victory of just one person; it is the success and victory of the entire team.)
Last but not least, it is abundantly clear that he is aware of the fact that attempting to “go for the next big thing” will inevitably result in some failures and setbacks. The ability to learn from one’s mistakes is essential to the creative process.
According to what Ed Catmull wrote in the book Creativity, Inc.:
“Errors are not an unavoidable form of dysfunction.” They are not even remotely malicious. They are an inevitable result of starting something new, and because of that, they should be seen as valuable. Without them, there would be no room for innovation.
4. Get people who are smarter than you
Many business leaders stress the importance of recruiting individuals who are more knowledgeable than themselves. This is what Michael Bloomberg had to say about the issue that was brought up.
“I want people who are bright and curious about the world. They might not be smarter than you in all aspects, but they ought to be smarter than you in at least one facet of things. Improving the overall performance of the team can be accomplished in this way.
“You are interested in observing their line of thought. When I conduct interviews with people, I always ask them questions about unrelated topics about which I have some knowledge. Are they able to reason and argue a point of view, and can they participate in a conversation? What are their thoughts exactly? It doesn’t really matter what their viewpoint or answer is; what’s more important is how they arrived at it.
This article from Bloomberg offers some helpful pointers on how to find and hire individuals who are more knowledgeable than you. A former teacher of mine once advised me that when hiring new employees, you should look for candidates who are generally strong in a few areas, but who have a “spike” in one specific area. This is the area in which they may be smarter than you; in fact, they may be smarter than anyone else on the team. The spike represents this potential advantage. If you are able to put together a squad of powerful “general athletes” who each bring something unique and complementary to the table, then you have the ingredients necessary to create a winning team.
He also gives good advice about how to hire smart people in general. Concentrate on the way that they think. How do they assess a situation, dissect it into its component parts, and put together their own point of view? When they make a point, do they argue it in a way that is logical and consistent with itself? They are willing to participate in vigorous discussion and debate, right? Can they think critically under pressure and adjust their thinking to account for new information or points of view?
5. Don’t give what critics want.
Michael Bloomberg provided some excellent guidance on how to respond to unfavorable remarks made about one in the media or by one’s competitors.
“How do you respond when the press asks you questions or comments that are critical of you? Don’t give in to their demands and satisfy them. Saying “I haven’t heard that” and then moving on is all you need to do if they try to trap you with a hurtful question.
What should you do if your rivals spread false information about you to the press, to industry analysts, or even to you personally?
“Your rivals want you to be miserable and hopeless so that they can have an advantage over you. Because of this, they say the things that they do. When someone comes up to you and slaps you in the face, the one thing you absolutely cannot do is show any sign of pain or discomfort to that person. Because if they do, then they will have won twice.
Find something within yourself that gives you confidence, hope, and strength whenever someone else says something negative about you (whether it’s the press or your competitors), and draw on that. Do not put any stock in the naysayers. Otherwise, you’re doing nothing more than satisfying their desires. According to the words of author Jane Roberts, “You should tell yourself frequently, ‘I will only react to constructive suggestions.” This gives you something to fight against negative thoughts, both your own and those of other people.