Now you understand that you need to create value for your customers. This is how enterprise makes the world a better place.
You understand that you need to capture some of that value for yourself. That’s profit, sustainability, the ability to do it again, grow, reach more people with your value creation.
You also need to make a machine.
Think about what a machine does, and you’ll start to understand why your business needs to be one.
- Your value creation and capture shouldn’t just happen once. That’s a trade, or a project: it’s not a business or enterprise. It needs to happen again and again. That’s what machines do: repeat, repeat and repeat.
- It should have processes and controls so it is doing the right things and that this can be monitored. An out of control machine is one that crashes and stops working, potentially causing a lot of damage along the way.
- The machine should do what it does without you, though. The whole point of machines is to reduce the need for human energy and labour: your value capture machine should work without you.
- But you, or someone else, should be able to improve it, adjusting it on every repeat cycle, to ensure that performance gets better and better, more efficiently creating value for more people.
- And it should never, ever, ever stop hustling.
Remember how all the way through capture we talked about how the key purpose of capture was to create a business that can sustain itself, that can generate enough profit that it can re-invest in its future operations.
The machine is that future.
On your first value creation and capture, perhaps it won’t be a machine. You’ll be doing it for the first time. Like Steve Jobs building his first computer from scratch in his garage, you’ll be hands-on in your business.
That’s fine for the first time around. The second time around, you have two options. Automate the things that went well. Change the things that didn’t.
Automating the things that went well will free your time and energy to focus on changing the things that didn’t, so that on the second time around, more things go well. All the things that worked the first time will work, because they’ve been repeated like a machine, and some of the changed things will have improved.
The improvements should either create more value, or capture more of it, or hopefully both. And so on.
The E-Myth Revisited by Michael Gerber states that good entrepreneurs stop working “in the business” as quickly as they can, and start working “ON the business”. Our emphasis.
Converting your value capture into a machine as quickly as possible will enable you to do just that: stop being in the business, stop being the machine yourself, and focus on building and operating the machine that the business has become.
Once you have answered those questions, move on to finding out the secret recipe for programming your machine.