A new independent service, a freelance, for example, is always hard to start. Even if the freelancer is a competent professional on his discipline, there are no clients at the beginning. There are no resources, no product, no services, no way of making customers know that they have a new option.
There is a general guideline that newcomers on any business follow at the beginning: forget earnings, just create customers. This means that the right time to make earnings, to focus on money, is later. The priority at the beginning is just entering the market. This principle seems logic and normally works very well.
As time passes by, the time to focus on money arrives, this may mean not only avoid buying irrelevant stuff or unrequited staff, but also spending as less as possible by trying to provide an equivalent service, even if it becomes different from the original.
But then, many companies get into bankrupt. A lot, because at some point they started focusing on money just a bit in excess. There is a typical chain reaction: a weakness on the service causes a double risk reaction: for one side, customers starts leaving. In consequence, and this is the other side, a hole is created on the market which is quickly filled by growing competitors. This double reaction is the same exact as in physics: not only a ball bounces back by hitting a second one, but the second one gains opposite energy. A natural outcome is bankrupt.
Now, this can be analyzed from the systems and interaction theories points of view to explain what happens. Basically a company is a system that has been growing healthy into an environment and suddenly fails, so it dissipates as the second law of thermodynamics predict.
Systems can grow healthy when they interact properly with the environment. But if they start to get greedy, the environment starts isolating them. That is the explanation of this mechanism.
When do a system starts to get greedy? On the systemic field, objectivity is just a myth. It doesn’t exist. There is no way of measuring it. If you own a company, there is no way you can measure internally the greediness of it. This is not an objective measure: it is completely subjective. The environment -that is, the customers- are the ones that measure it. And they behave subjectively.
The interaction theory says that reactions are normally nonlinear. This means that a small factor can be changed on the facade of a company, that affects hugely on the environmental reaction, on customers. There is no way of knowing what clients will decide.
Even if reactions are nonlinear, probably the most important fact, the one that can change radically the decision of a neighboring system (a client) is survival. The theory of Interaction proposes that the main objective of all natural systems is to persist in time. Therefore, if something risks the survival of the client, it will make him away. Is money a surviving factor? Of course! It is probably the main one. A company can’t menace the wallet of the customer. It is the very company that will get damaged. If you are the ball that hits the second one, the customer, you do not only receive the impact energy back, but also push him in the opposite direction.
There is a big and clear difference between a company that is growing and a company that is decreasing: the root of the behavior: a biggest lesson on this theories is that systems that interact well tend to attraction, like an the internal particles of an atom. Systems that don’t interact correctly tend not only to stop interacting, but also to create rejection between them. If a company generates rejection to one customer, it is in final terms creating rejection to several customers. It is the company itself that is creating rejection to the environment.
And that is not all. Which is the root of all attraction and rejection? the content of the interaction. If the content of what is given is good for the customer, and the pay he is paying is good for the company, attraction happens. This is a two-way winning mechanism, that doesn’t always happen. The one that doesn’t win causes rejection. Therefore, the win-lose, lose-win and lose-lose cases cause at least one rejection. And that is the rejection of the customer, the environment. Therefore, there is only one chance to earn: if both systems get a subjective benefit.
Simplifying, the customer requires under all circumstances to win. And not only win something. Winning high would cause high attraction. This is the only way for a company to continue growing. If the client lose, and not only that: if he thinks -even wrongly- he is losing (remember subjectivity), rejection will happen.
The only thing the company controls is what it provides in exchange, not what it takes. Controlling what is received backfires the controller itself. This applies not only to companies, but to the personal level. In fact, it could be that it is not the strongest who survives, but the one that best controls what it provides during the environmental interactions. This does not mean that the company should give all to the client. That would be destructive. It means a) becoming a good interactor; b) finding the right interactor and provide him with the best. A strong positive reaction is natural with good interactors.
This rule can be simplified to a very high level: concentrate on giving, not receiving.
That is the rule that startup companies follow to succeed. That is the rule that big companies usually forget, and even turn into the complete opposite, concentrate first on earnings, and then on the customer. This is not moral, this is not ethics, this is not religion. This is the mechanics of nature, as described by systems and interaction physics.