The No.1 Indicator of Success for a Business You Want to Start or Grow

Everyone wants to be successful in their business but what exactly constitutes success? What are the key indicators to measure success? The new challenge facing businesses today is “oversupply and contracting demand.” To succeed in this rapidly changing global economy, identifying key indicators to measure success has become increasingly important. The aim of this article is to show what is the number one indicator of success and offer practical suggestions on how to implement it in your company.

What is the importance of this question?

Why is it important to analyze these indicators? As Bob Parsons, the Founder of GoDaddy, once said, “Anything that is measured and watched, improves.” Similarly, to understand whether or not your business is improving, you need to know the indicators that measure business success. They ensure successful implementation of current and new strategies. Effective indicators become critical tools to improve businesses of every size. Ineffective indicators lead to ineffective measurements of success. Therefore, indicators of business success are an important area of research.

“Anything that is measured and watched, improves.”

A new indicator for a new age

What is an indicator? Simply stated, an indicator is a criterion that a company uses to measure how well it meets both its set operational and strategic goals. Generally, there are two types of indicators – lagging and leading indicators. The operational measures are identified as lagging indicators and strategic measures as leading indicators.

For several decades, businesses have used traditional indicators to measure their company’s success. In the past, the formula for growth was to increase profits by increasing product offerings and streamlining supply. While the old measurement tools were important they are not enough. In today’s business world, they are met with plain criticism. Rather than being a roadmap directing where you should go next, they typically tell you where you’ve been. They measure only what has already happened. They only tell you half the story.

However, the internet age has changed consumers, competitions and companies. The tectonic plates of the global economy have shifted from “supply driven economy to a demand driven economy”. We are in a period of “oversupply and contracting demand”. Therefore, “with all the options consumers have today, it is critically important to understand demand. It is how you satisfy your customer better than your competitors” says Brian Cornell, President & CEO, Sam’s Clubs.

Consequently, the way your business will succeed in the future will be significantly different from the way in which your company succeeded in the past. Jack Welch, bestselling author of Winning says “winning in today’s market requires an understanding that supply-driven business models of the past will not keep pace with fundamental changes in our global economy and its digitally enabled consumer.” Therefore, we need a new indicator to tackle a new challenge in a new era.

“with all the options consumers have today, it is critically important to understand demand. It is how you satisfy your customer better than your competitors”

Lack of Demand

Prior to substantiating the idea that ‘demand’ is the number one indicator of success, let me show you how lack of demand is the number one indicator for failures specifically in startups.

According to a study of 101 post-mortem reports by CB Insights, the top reason for startup failures is that “there is no market need for their products” in other words there is no demand. One of the failed startups, Patient Communicator, wrote:

“I realized, essentially, that we had no customers because no one was really interested in the model we were pitching. Doctors want more patients, not an efficient office.”

Treehouse Logic, another failed startup wrote:

“Startups fail when they are not solving a market problem. We were not solving a large enough problem that we could universally serve with a scalable solution. We had great technology, great data on shopping behavior, great reputation as a thought leader, great expertise, great advisors, etc., but what we didn’t have was technology or business model that solved a pain point in a scalable way.”

From the evidences presented by 101 post-mortem reports by CB insights, we can conclude that turning a blind eye to the customer’s demand is the number one indicator for failure.

Understanding Demand: The Solution to Success

Everyone’s looking for the next big idea and pretty much every manager says to their team “let’s get innovative.” What is innovation? The authors of “How Companies Win” define successful innovation as “identifying unsatisfied demand and then fulfilling it.” Innovation then is not just a creative process – it’s strategic. It satisfies an existing or emerging customer demand.

Have you ever wondered, how did Apple know it’s consumers wanted a device that was a combination of mobile phone and personal computer? How did McDonald’s know that it was time to introduce salads and to keep their stores open 24 hours per day? The simple answer is that both these companies understood, in a deep way, the facts, and contents of what their customers and consumers demanded. Their business was solely based on what customers wanted, rather than what the suppliers already had.

So, the solution to continued success is going to be determined by how you look at your demand chain. It is about identifying new ideas and new emerging trends and satisfying them. This relatively new approach will help your company effectively fight the forces of globalization and increase your business success.

Have you ever wondered, how did Apple know it’s consumers wanted a device that was a combination of mobile phone and personal computer?

How to achieve “demand – driven” change in your business


  • Cultivate the Demand way of Thinking

Most companies create supply and then use marketing and sales to go in search for demand to absorb the supply they already created; however, the demand way of thinking is a reversal of that process. First, you identify the demand and then align your current supply or the supply you are going to create to satisfy the demand you know better exists than your competitors. It’s no longer just about perfecting the end of the supply chain, but instead perfecting the beginning of the demand chain. This shift in thinking encourages all functions of your company to respond to market demand and emerging trends rather than mere internal performance indicators.

  • Solve the “Pain Point”

If someone’s thirsty and you bring them water, they want to drink it. What you need to do is identify the pain point and satisfy it. Here’s another classic example, according to Steve Jobs the conversation at Apple went like this:

“We all had cellphones. We just hated them, they were so awful to use. The software was terrible. The hardware wasn’t very good. We talked to our friends, and they all hated their cellphones too. This is a great challenge. Let’s make a great phone that we fall in love with.”

The terrible software in cell phones that Job’s friends hated was the “Pain Point” that Treehouse logic referred to in their postmortem report. Jobs, developed a business model that solved the “pain point” of its customers in a scalable way that resulted in huge success. He created what people loved before even before they knew what they wanted. Today, Apple has sold more than 1 billion iPhones.

Practical questions for your Company

To be successful in today’s market, perhaps companies need to answer the question posed by Calhoun and Kash in their book How Companies Win: What do you know about the demand of your most profitable customers that your competitors don’t know?

This question can be best broken down into four more focused questions:

  • Who are my most profitable customers?
  • What is their unsatisfied current, latent, and emerging demand?
  • How do I differentiate my products and services so I better satisfy the demand of those most profitable customers?
  • What is the action plan so I can align the people inside of my company to satisfy the demand for all of our customers outside of my company?

Demand is the new game changer. It is the underlying force behind every business. Identifying and analyzing unsatisfied customer demand and aligning your resources towards that could have world – altering power for each of your businesses. At the heart of this powerful new indicator is an attainable vision for a new kind of success for your company. Go out hunting for the next great need that is to be satisfied.