Exist or Exit : The goal of camel is to make your business sustainable for as long as possible.
- Dithanon Khrutmuang
- Oct 18, 2024
- 7 min read
Updated: Sep 3
3 important pillars of business
Profitability (P)
Customer Satisfaction (C)
Business Growth (G)
Table of Content
In 2024, the strategy that Pop Mart has adopted to differentiate itself is Labubu.
Choose a magical creature that is suitable for your business status. An easier way for you to analyze your business through 3 business pillars.
If Apple chooses you to be the manager with more than 100,000 employees from all over the world and a cash flow of more than $100 billion, could you manage in place of Steve Cook?
The ability of business owners often grows along with their business. This means the magical creature you ride on is actually your own company. Different people have different magical creatures. Even if they are all riding camels, the characteristics of each camel will be different. For example, some camels run fast, while others run slower (you can read the other magical creatures' ability here https://www.powerladder.net/post/magical-creatures-model-1) Not to mention the factor of the person riding the magical creature, who represents the business owner, they also vary. Some owners are impatient and want to see their business grow rapidly, which may lead them to make decisions that are prone to mistakes. On the other hand, some owners are too cautious, causing them to be slow in introducing new products or services to the market.
In the business field, each industry, or even in different business objectives, the decisions made in business will vary. For example, let's say you ask Elon Musk to manage a small cosmetics store. Do you think Elon Musk will lead this business to success? The store could potentially expand globally, or it could fail completely. The answer is uncertain until Elon Musk actually tries to manage this business and see if he can handle the unique challenges of running a small cosmetics store. I think Elon Musk might attempt to transform the cosmetics store into a tech company, just like how Twitter changed its logo to X.
If there are regulations that prohibit Elon Musk from making changes, but allow him to use technology to develop the store, I believe that with Elon Musk's determination to make this business grow, this small cosmetics store has the potential to succeed.
The measures to achieve success and the process to get to the point of success need to be taken?
Whether it's Jeff Bezos, Elon Musk, Bill Gates, Warren Buffet, or even you who may have the appearance of success and different ways and means, every decision and action in your business can be measured through the 3 business pillars. So the 3 business pillars of each person are different. Let's take a look at the business appearance managed by famous entrepreneurs and investors through the rules of the 3 business pillars.
Rules of the 3 business pillars
You can increase profitability while also enhancing customer satisfaction and the ability to grow.
In ISMAIL's book "Exponential Organizations," it is clearly explained that businesses aiming to create a brand or business with a broad impact on people (aspirational brands) will accelerate growth in all aspects. This includes profitability, customer satisfaction with products or services, and the ability to grow the size of the business. I would like to further clarify ISMAIL's concept through the lens of 3 business pillars as follows.
If Jeff Bezos were to come in to manage a small boutique hotel business, with the condition that he cannot use the assets he already has invested in the business, how would it be like?
First of all, we need to understand Jeff Bezos' original magical creature. Jeff Bezos achieved success through the Amazon business, which is a platform that brings buyers and sellers together. Therefore, the magical creature of Jeff Bezos is Amazon. Jeff Bezos aims to allow buyers to purchase products at affordable prices but with good quality, fast delivery service, and a Prime experience where members also have the privilege of watching movies and series. You can clearly see that Jeff Bezos focuses on the second aspect, which is customer satisfaction (Customer Satisfaction). Let's understand the magical creature named Amazon through a 3-dimensional business portfolio. Jeff Bezos' Amazon business will be as follows.
I will skip explaining pillar 1 which is the ability to make profits (Profitability) for now. Let me provide a brief overview of the key factors that make Amazon strong in just a few lines:
Pillar 2 : Customer Satisfaction (C)
scoring 95 points is excellent for serving a customer base of nearly half the world. While there may be some negative reviews on products or services, it's not a major issue for Amazon.
Pillar 3 : Business Growth (G)
scoring 85 points is quite high for Amazon due to heavy investments in expanding their business, such as AWS (Amazon Web Services). This is a game-changer for future development in the Cloud business and infrastructure that supports AI processing, attracting new customers for Amazon.
Pillar 1 : Profitability (P)
Going back to Pillar 1 scored only 55 points due to the performance of the company in terms of profit margin being around 9% (data from June 2024).
Based on the summary of the magical creature called "Amazon" in this context, it may seem contradictory to what the author is trying to convey in this book. The author is suggesting to focus on pillar 1, which is the ability to bring in profits first, but the results of Amazon seem to contradict this. Analyzing it further, Amazon's higher profit margin in 2023, at 5%, signifies that Amazon is investing in new businesses like AWS and promoting a brand that instills trust and love in customers to purchase products or use Amazon services. This is a long-term strategic move that Jeff Bezos wants to achieve to develop pillar 1, which is profitability, in the long run. However, this also means that the magical creature called "Amazon" must be a unicorn, where both pillar 2, customer satisfaction, and pillar 3, business growth, need to be in a state of completeness to make this happen.
And what if Jeff Bezos had to run a small business ?
Now that we have a general idea of Jeff Bezos's approach to business, going back to your original question, how would Jeff Bezos fare if he had to manage a resort business, with the condition that he cannot use his existing assets to invest in this new business?
Based on the principles outlined in Salim Ismail's book "Exponential Organizations," it is possible for Jeff Bezos to continue using the traditional method of focusing on Customer Satisfaction (C) and Business Growth (G) before prioritizing Profitability (P) if the business is less than six years old and aiming for exponential growth. It is important for businesses, especially small ones, to focus on survival and growth before maximizing profitability. In adherence to the exponential growth model, some businesses may achieve significant growth in less than six years, while others may take longer. It is crucial for small businesses to prove their ability to survive and thrive, which may not necessarily align with achieving exponential growth within a short timeframe, possibly even less than three months.
Can Jeff Bezos still use the old method, which is to first focus on increasing customer satisfaction (C) and business growth (G) scores before enhancing profitability (P), after a period of 4 to 6 years? Salim Ismail's principle as explained in the book Exponential Organizations states that "These Exponential Organizations is fewer than six years old." It's certain that for businesses aiming for growth in all 3 business pillars, some may require less than 6 years to reach that point — the point where the business experiences exponential growth. However, for small businesses such as the ones I have worked with or observed the customers of, the goal may not necessarily be to achieve exponential growth, but rather to simply survive in the business. This means that small businesses may have a very short time, possibly less than 3 months, to prove whether they can survive or not.
That means businesses need to think about survival first before considering exponential growth. Just imagine if Jeff Bezos had to change the magical creature he rides from Amazon to a resort business, how would that be?
Pillar 3, Business Growth (G), is rated at 40 points. Jeff Bezos must focus on keeping the resort small initially, expanding only directly related businesses to the resort to reduce investment budget that does not generate income in the short term.
Going back to Pillar 1, Profitability (P), Jeff Bezos must strive to score more than 80 points in order to ensure that his resort business has sufficient cash flow to develop. Next, we can look at Pillar 2 and 3.
The summary of this resort business shows that it follows a camel model. A simple observation trick: if the score of Pillar 1 / (score of Pillar 1 + score of Pillar 2 + score of Pillar 3) > 0.4, it is considered to be using a camel model. I propose to name this rule the
D. Khrutmuang Rule. By plugging in the values of the business into the equation, we get 80/(80+65+40) = 0.432, which is greater than 0.4. Therefore, Jeff Bezos is still riding a camel, not a unicorn like Amazon.
Until the resort business can survive, Jeff Bezos can expand the business further by transforming it into a large-scale resort business or integrating cloud systems with AI to help with operations. Alternatively, he can diversify into other businesses as long as there is a focus on Pillar 1 of profitability to generate sufficient cash flow. When that day comes, Jeff Bezos will decide whether to transition from riding a camel to becoming a unicorn like Amazon, which he admires. Or he may prefer to stay loyal to the strong camel model, being known as a super camel.
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