Job Of A Company

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I think a lot of people don’t quite understand why companies exist or what their job is.

Contrary to popular belief, it’s not to make your life comfortable, it’s not to enrich your shareholders and it’s not to employ a lot of people. (Yes, companies do actually need to have social responsibility.)

Although these reasons need not be mutually exclusive, it’s not the raison d’être of a company.

The job of a company is simply to make the world better by using a business model.

The world means your slice of it. 

A very specific and well-defined audience that you serve

Better, means the world is better because your company exists. This is probably not the case for tobacco companies and for most meat companies.

A business model means:

Making something someone loves, at a profit, in a repeatable way.

Why at a profit? 

Because if you’re not profitable, you’ll go out of business and can’t positively impact the lives of your users anymore.

Why repeatable? 

Because if you shovel snow but it only snows 1 day out of the year then you can’t turn that into a business.

Alternatively, if you don’t understand why people are paying you and who they are is unclear, then you can’t systematize it. So the second revenue declines, you’re hosed.

(This seems obvious and yet virtually all companies I’ve worked with didn’t have a clear system in place to deal with this variability… Flying by the seat of your pants is only fun as long as your pants stay on.)

If the world no longer needs your services then I don’t think going out of business is bad. 

However, if the people you serve still need you (which is most of the time) then going out of business is the result of bad business practices as opposed to a fundamental market shift.

You could argue that record labels simply didn’t obey the ‘job to be done’ which is why Napster and later iTunes and Spotify ate their market share.

Putting all of this together means:

The job of a company is to make the life of your minimum viable audience a little bit better by making something they love and selling it to them at a profit in a way that’s repeatable.

RJ Youngling