A Sustainable Business
Three Principles Separating a Sustainable Business from a Short Lived Business
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“If I am unable to see the defects in the machines I create myself, how can I see properly into myself?”
― Enzo Ferrari
What creates a business that lasts for centuries? Why do others entropy and fail? These are questions I have pondered for a long time. While I don’t have a comprehensive answer, I have tried to come up with a simple one. The essay below outlines a personal take on the three key principles or the three ‘S’ es that create a sustainable business. My hope is that the conclusion at the end of this essay is very easy for you (my reader) to derive.
Solutions First Mindset
One of the key challenges for a business (especially a listed corporation) is balancing its short and the long term objectives. Listed corporations have to demonstrate quarterly growth while investing in long term projects. Long term projects often lose money in the short run. The CEO of a company is therefore incentivized to stray away from a solutions first mindset. This balancing act is easier if the company is well established with significant cash reserves.
This is also a challenge for a solo entrepreneur. Clickbait titles, writing stories on the Zeitgeist to cash in on a trend, writing stories on topics that sell can seduce a solo entrepreneur in the short run and rob him / her of his/her long term vision i.e. writing stories from the heart.
The answer lies in focusing, from the outset, on serving customers needs first. Profits, cash flow and readership will follow. A relentless pursuit of making human lives better will generate enough reserves (profits and cash flows) that will help a business deliver short term returns while investing in projects that will yield returns in the future. One of my favorite stories is the origins of Unilever — a Consumer Packaged Goods (Conglomerate). One of its most popular brand of soaps — Lifebuoy was born during Cholera ravaged England to fight the pandemic. I am also biased in that I have worked for and observed Unilever for a long time.
