Using Market Segmentation to Improve Your Business
Rem Oculee (00:05):
Welcome to the Exit Mindset Podcast. I’m Rem Oculee. Many years ago, when I was trying to sell one of my companies, I couldn’t get what I thought was the right price for it. I realized I had things set up wrong, even though the company was profitable. So, I spend years researching and studying exit strategies to improve my company valuation. And I discovered, the same process that improves valuation would improve business profitability and give me more free time. And here I am to show you what I have learned. You see, the best way to grow your business is to look at it from the perspective of someone who’s going to buy your company. Once you start thinking that way, magic happens, and you start seeing things you couldn’t see before. But that’s not all, I also discovered the three principles that you must know to command a better price for your company. These principles are your product, your infrastructure, and your conversation with the consumer. Once you master these three principles, you will be on your way to increasing your profits, and your company valuation, and get more work-life balance through your free time. I will teach you through this podcast, lessons from the trenches, and we will have dialogues with some of the greatest minds on the planet.
Rem Oculee (01:30):
Today’s date is July 30th, 2020, and we got some news on the USGDP and the economy, and it’s down by about 30% roughly. And you are probably wondering, what do I do in these times? And, and how does the Exit Mindset help me navigate through those difficult times? So, let’s get started. As you may know, the Exit Mindset focuses on three principles, product, infrastructure, and the conversation. And what we try to do is take the buyer of a company perspective to figure out what could be wrong with what you’re doing. And once you understand the buyer’s perspective, you go fix it, and ultimately you would have a better model that you might decide to keep for yourself. So, let’s take one element that could be something that it should be looking into, your strategic relationships. And this time of COVID-19 and a pandemic, one of the most important things is to have sufficient strategic relationships that can help you with your business. But setting up those strategic relationships is an animal of its own.
Rem Oculee (02:34):
It takes time, it takes effort, it takes a lot of work to start building them. But more importantly, above all that, it takes brain power, thinking. By the way, when I refer to brainpower, I mean, all are referred to as simple thinking. And one of the things that I will give you here is this race story. So, one thing you’re going find this podcast is that no sugar coating, you’re going to get reality. And I’m going to try to drive to the point directly without any sidetracking from the, from the fact, or from what really makes a difference to you. So, let’s get to strategic relationships. When I say brainpower or thinking hard, it just means strictly thinking. All of us have the ability to think, and sometimes we get sidetracked in our thinking, by looking at things from a sort of a negative perspective, rather than a positive perspective.
Rem Oculee (03:28):
So, the first thing we do sometimes when we are having a thought, is that think, “Oh, well, this one may not work.” Most of the time I say that because sometimes you think, “Oh, this could work.” And that’s one sort of like the point between either delusional or desperate comes into play, and the human brain will play tricks on you. Your job is to figure out what’s real and what’s not. So, when it comes to a strategic relationship, so you’ve gotta be very, very realistic. And you gotta think as to what are the best ones you could engage with and that could get you the most leverage in your business. Every business is different. Yours certainly have certain kind of organizations, associations, number of people that you know in the industry, that if you reach out to and try to understand who are they partnering up with and what are they doing?
Rem Oculee (04:17):
You will get a lot of leverage and a lot of understanding of what is it that you need to do. Sometimes you’re going to talk to somebody and they’re going to tell you, “Well, I’m having a strategic relationship with so and so, and, and we work with them in that way,” and you go, “Okay, well maybe that’s a good one, but maybe I should be working with something else that’s sort of similar to it, but not exactly the same type of relationship.” And I always call it, that’s the cousin of the idea that you got from somebody else, meaning that the initial idea you get from somebody, lots of times, you’re going to find that they aren’t necessarily the exact idea that you should be implementing or using. So, when it comes to strategic relationships, you could never have a specific on that one. There’s no such a thing as one strategic relationship, and you can apply it to everybody.
Rem Oculee (05:04):
Your strategic relationships are going to be different from the next person, when I mean next person, I mean the next company. So where do strategic relationships fall in the Exit Mindset? They fall under the category of infrastructure; infrastructure is anything you do to produce your product or to enhance the process of selling it or supporting it. So, let’s look at it that way. If a buyer was to come to buy, purchase your company and would observe that besides everything you have in there, that you have a great strategic relationship with somebody that you’re helping them, and they’re helping you, they’re getting something from you, you’re getting something from them. And that relationship is anchored in, it’s solid, and it’s providing continuous streams of revenue to supplement your other business activities. When the buyer sees that, they’re going to have a better valuation of your company, and they’re going to think, okay, well, the company is worth more.
Rem Oculee (06:00):
Now, I tell you this so that to get you out of the rut of being inside the company and thinking, how do I do this? So, put yourself in the place of the buyer, what kind of relationship that you think a buyer of a company would look at and go that is really, really good. It’s intelligent, it’s effective, it’s delivering results. When you get to this level of thinking, you’re almost seeing the forest, you’re not looking at the trees and your thinking becomes clearer. And again, that is the ultimate objective of the Exit Mindset, is to take you away from the company and put you outside the company to put you in a perspective of somebody else, such as the buyer of that company. And that differs from the unique traditional ways of looking at company. Well, let’s step back and look at it from far away.
Rem Oculee (06:49):
Let’s see if we could dissect this and that. It’s very hard, as it is, you’re mired in today-today. And now I come and ask why don’t you just step out of the company and step out of your comfort zone and think about it, very difficult. But if I put you in the eyes of the buyer of the company, it’s easier, it’s much more comprehendible. If I tell you, “Forget…” Okay, let’s and you say, well, maybe you might say to me, “Rem, this is hard and difficult, I can’t even look from buyer’s perspective.” Well, I have a one, another one for you. What if you are the buyer of another company that looks just like yours? What if I do that to you? I’m sure you know some competitors in your industry, I’m sure you know some people that do the similar type of business that you do.
Rem Oculee (07:28):
What if I tell you, “Go ahead and pretend for a second you’re going to go buy their company.” Well, how would you look at it? You probably gonna find ways to find distinctions and things that could help you create about a model for you. Now let’s do it in a different way. I’m going to rally you up a little bit here. What if I tell you, “What if your competitor comes and looks at your company and decides to come and offer you a price for it?” Would you like the competitor that he’d been fighting with maybe in a very ethical and a very nice way, but still competing with, and you want them to undervalue your company? That would make you very upset because you feel that maybe you got the better model, you feel that you should do more or better. Well, if you put yourself in their shoes then you might discover things about your company, that they would tell you. What I’m trying to help you here, is understand that the way to look at your company is to look at it from the outside perspective, no matter what the perspective is, no matter how you do it, it doesn’t really matter.
Rem Oculee (08:29):
Ultimately, the result is what matter. And that’s another key component of the Exit Mindset, it’s result oriented. You don’t want to be going through just a satirical exercise of, of trying to figure out what could, what could be, or could not be. Trying to figure out what works, trying to put a tangible element to it, such as if a buyer comes in, what would they think of it? So back to the strategic alliances, it’s the same thing. You got to look at it, what would my competitor, if they’re coming to buy my business, say to me about my strategic alliance? Or if I was in their shoes and I would be coming into buy my company, how would I, what would I think of it? If that answer is, I have zero strategic alliances, then you probably ought to reevaluate how you’re approaching things. And one thing about these kinds of approaches is that in the beginning, they appear to be very difficult and very hard.
Rem Oculee (09:23):
Unlike anything else out there, you got to do research. You got to invest time and effort, and I call it brainpower. And again, I repeat brainpower doesn’t mean you gotta be used like mathematical differential equations and all sorts, uh, uh, ways of figuring out something. I’m talking about simple thinking, just think about it. And as always seen is that when you think in the beginning, the first thought isn’t gonna necessarily be the most productive one. So, you got to keep looking at it and examining, and reexamining until you come to the right conclusion. But ultimately if you go ahead and make the effort, you’re going to have probably several, let’s say days or weeks of research and finding nothing. And then next thing you know, you find one thing, and that one thing is going to make a difference because it’s going to be a beginning.
Rem Oculee (10:12):
That one thing will lead to the next thing and the next thing and the next thing. And next thing you know, you had it set up, you have a relationship that could be helpful to you, that could work. And we apply this in our companies. We have strategic relationships and we researched them. We go after them and we cultivate them until the time comes where we find them to be productive. Sometimes by the way, you need to understand something about strategic relationships is that you’ve got to invest in them, and the investment has to come from you first. Now there is the whole thing, the whole theory about it, well it’s all about reciprocation. Of course, a relationship is about reciprocation. You can’t have a relationship; a one-sided activity is not a relationship. It’s just, you know, an action. A relationship consists of two sides.
Rem Oculee (11:03):
Each engage with the other in a sincere, a straightforward manner that is productive for both sides, and everybody’s benefiting from it in their own way. However, to do that, you have to start by giving without expectation in the beginning. Of course, you have expectation that the relationship will yield something in the end, but, and that’s where thinking and being strategic comes into play. So, if there’s a strategic relationship that you think ultimately, if cultivated correctly, is going to get you the results you’re looking for. Then, by beginning the process of giving, which is the opposite of what people do, because everybody starts wanting and they start requesting and they start waiting. You end up with a different result than the one you’re looking for. Successful people start by providing and giving. Leadership is in order here, I’m a firm believer in leadership and you got to lead to get somewhere.
Rem Oculee (12:02):
If you don’t lead, you’re going to be lead. So, both sides expecting to be a lead, what’s going to happen? What’s the result? Think about it. Really end up with the, you know, two divergent objectives. Each one is expecting the other side to do something. So there, you know, you’re not gonna, you’re not gonna meet anywhere. But if you do what most people won’t do, and start by providing and giving and helping, you’re going to find that is going to come back to you because that other side is going to see that you are serious proactive, and they will work with you. That does not mean by the way you start giving, giving, giving without thinking, you gotta be strategic. You gotta think about what you’re doing. You got to assess the results you’re getting. Even if those results are zero, is that zero going to continue based on what? Can I encourage the other side to help me, or do something?
Rem Oculee (12:54):
So, evaluate what they’re doing and have a plan, have a plan, give it time. Also communicating with the other side as to what you’re looking for. Example, I’m just going to make a simple example of that is just randomly. Let’s say you sell a certain type of product, and you have people in their industry, or you have people in other industries that sell a different product, but the product is complimentary to yours. And, you know, by working together with them, that you would be able to accomplish more than had you just not had them in there. You gotta be the first one initiating that strategic relationship. You gotta be the one going to them and offering them the solution. Lots of times you got to realize you got to go to them with almost a ready solution, because if you go with a solution that’s sort of, you know, left to them, most people aren’t going to think that way you’re thinking.
Rem Oculee (13:46):
And remember, you are trying to establish leadership. Leadership means that you got to get them and show them the results you’re looking for from them. Meaning that when you walk in and you’re talking to them, you have to have a model for what it looks like. You have to show them that model, and you have to put the vision in front of them as to how you want that strategic relationship to look like. And you gotta show them the path at the end as to what it looks like and how you can help them, and also highlight to them how they can help you as well. And again, I find some people are open to this, some people aren’t, you’re going to find certain people in the same category. Willing to work with someone? Some people aren’t willing to work with someone. You gotta go through a lot, a lot of those to be able to find the ones that work for you.
Rem Oculee (14:34):
And the biggest component is continuously searching until you get to the right relationship. So, in the beginning of this podcast, we talked about COVID-19. But those concepts apply if every single time period, it doesn’t matter. Because if we’d have COVID-19, you still got to go pursue strategic relationships. You still have to be proactive in that area. You still need to search and find until you find the right one. So, the important thing for you to do is not to orient your thinking in terms of, oh okay, well it’s COVID-19 now, let’s see who I can find. I think that’s all the way, only more motivation for you to do it. And we find that a lot of companies that I talked to are doing just exactly that, they’re very proactive nowadays. I see things, I see activities, I see resources being pulled that was not being done before COVID-19. What changed?
Rem Oculee (15:32):
The reality of it, nothing changed about those companies. In fact, if anything, they’re in worse situation and that’s the thing about it; it’s worse situation than they were before. Yet somehow some way they managed to pull resources and find ways to do it that they didn’t do before, they didn’t have before. Why? Simple, they just had an adversity. Humans have to have adversity sometimes to find out their potential, and maybe that would be a great time for you to find your potential to go forward. It’s the time to look at your abilities, look at what you’ve done. If you’re able to pull a rabbit out of your magic hat, ask yourself, how did I do that? And why didn’t I do that before COVID-19? In some instances, some of you might be having problems and those problems, maybe in one area, but none other area. So, you find yourself in one area having problems and other areas.
Rem Oculee (16:21):
It looks like you’re really moving differently. Take that as an inspiration, take that and use that as a springboard to see what other things you can solve on the other side that is not working. And again, think in terms of exit, think in terms of your evaluation. Ask yourself, I am in a COVID-19 right now, pandemic right now. If a buyer is to come in right now and ask me for the price of my company, what should I tell them? What should they think? If I say, give them a number and I’m in their shoes, would I take it? If the answer is no, and it’s a real no, not you convinced yourself of some inflated number or reason why they should take it. Then think why, and then start thinking in this particular podcast about your strategic relationships, just focus on that for today.
Rem Oculee (17:13):
Don’t do anything else. Don’t go think of a million things you gotta do. Think of your strategic relationships. How many of them do I have? Maybe write that down on a piece of paper. Look at them. If it’s zero, maybe you should stare at the paper for a little bit until they could put one potential one. I would say put 10, crazy 10. It doesn’t have to be good 10 because if in the beginning, I’m sure you’re gonna have difficulty figuring it out. And sometimes you may have easy time figuring out. Some people I’ve seen that can just pull a piece of paper and just write everything they’re asked, and it works. And some people have trouble putting in a paper. If you’re one of those, perhaps like me, sometimes I’ll look at a paper. I have to stare at it for a few minutes before something could come up, then go ahead and wait.
Rem Oculee (17:56):
Be patient, it’s annoying. Get up, walk around a little bit. Come back to the paper, pull your Rolodex, pull your phone book, whatever you use for your contact information. Just go through them. That might give you an idea. Look at your bills. Who of your vendor partners could be a potential strategic Alliance? Call your partners and say, who should I partner, partner up with? Who should I talk to? Who should I have a relationship with? And when that happens, you gonna find magic occurs. Magic just shows up. Now the only caveat to that, it won’t happen in a flash. That’s just the only thing. Very rarely it does, it happens that way. Most of the time you think there’s nothing going on after you think about it, and that thinking gyrates in the background and you keep thinking about it. You keep assessing and reassessing.
Rem Oculee (18:50):
You keep working at it. And one day a glimmer of hope shows up in front of you with something. And he takes that thread and follow it. And next thing you know, it’s all there. And when people a year later ask you, “How did you do that?” You go, “It was hard. It wasn’t easy, but I figured it out. It took me time.” They say, “Did you work at it?” You say, “A lot.” “Did you make sacrifices?” “Yes.” Meaning that you have to be proactive, you’ve got to move, you got to show them what the vision is. Show them what the strategic relationship could yield for them. That’s the essence of what needs to be done here. There’s of course, another subject we get to talk about in a later podcast, which is the subject of negotiations and how to negotiate these things. But that’s a whole long topic we can talk about that does relate to the Exit Mindset. So, I’m going to wrap this up by saying to you that bringing strategic relationships into the mix, bringing strategic relationships into your company is not just a destination. It’s a journey, and you need to focus on that journey. That’s what separates winners from the people that don’t win. They simply focus on the journey. They have a destination, don’t be confused. You must have a destination, and that destination must be clear to you and to the other side. But ultimately you got to focus on where you’re going, and how are we going to get there. I’m Rem Oculee. Remember, action is everything. Use it or lose it. Thank you, and we’ll see you on the next podcast.
Amber Giannone (20:13):
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