Keep it Simple

For Investors, complexity equals risk … and demands a higher payback.

Keep it simple. Seldom have truer or more useful words applied to entrepreneurs and their ventures. And it’s not just about the business; it’s also about the people.

Keep it simple for your customers. When your product or service strikes an immediate chord and customers understand intuitively how you are creating value for them, no further explanations are necessary. If, instead, the value isn’t obvious and it takes time and energy to explain why someone should part with their hard earned cash in exchange for what you have to offer, then it may be time to step back and figure out a way to simplify either the product or the message.

Keep it simple for your investors. Often, your first investors will be your family and friends. They may back you simply because they believe in you. Later, you may need to convince bankers and other financial professionals to support you. They’ll need more than love and faith in your abilities. They’ll need a clear explanation about how you are going to make money, how much of their money it will take, how much they’ll get back, how long it will take, and how you’ll get their initial investment plus a premium back out of your business. While they will understand complexity, that doesn’t mean they will welcome it. For investors, complexity equals risk and risky investments demand higher paybacks than less risky ones. New ventures are risky enough without adding complex financial schemes to the equation.

Keep it simple for your staff. If everyone in the business knows what you are trying to do and why you are trying to do it, there’s a reasonable chance that they’ll all work together to help you get there. If they don’t know, or don’t understand the big picture, employee alignment will happen only by accident. It may sound simple, and it is. But that doesn’t mean it’s easy. And it won’t happen unless you make the effort.

Keep it simple for yourself. I can juggle three tennis balls. Lots of people can, with a bit of practice. Not many can juggle four. And only really talented professionals can manage five or six. As complexity creeps into your life – and for most, there’s more to life than just business – the ability to do things well can fall sharply. It’s hard enough to do a few things with excellence. Doing many things well is fiendishly difficult. Simple is good.