MSP Answers

MSP Answers

29.6.2012 Article 34


Learning from Masterchef

I was a little desperate for entertainment tonight. I wouldn’t normally admit it but it is all for a good cause. I watched MasterChef with the family. Normally reality shows are about as enjoyable as fingernails on a chalkboard – and cooking reality shows are even harder to take - but the challenge last night tweaked my interest.

The challenge for the four teams was to set up a stall at the famous Salamanca markets in Hobart, Tasmania. My wife was at these markets recently and they have been running for 40 years and they attract over 300 stallholders each week.

The interesting part of this challenge was that to win the challenge you firstly had to be in the top two in terms of income and then the winner was decided from those two by the judges who based their final decision on the quality of the food.

I started thinking this was a lot like the challenge any business, but in particular an MSP business faces every day.

For a start, they were trying to compete in a very competitive environment. Not all of the 300 stallholders sold food but many of them do and many are well-established at the markets with regular clientele. Secondly, they needed to establish their space in the market landscape. What type of products were they going to sell and how do they communicate what they are selling? How do you market yourself in only a few hours?

Ultimately in business, you need to sell products as the first step to survival. If you aren’t selling you aren’t making money and you aren’t paying wages. In the long-term the quality of your products is essential to continued survival but if you have the best quality products and no-one is buying them, you won’t have a business.

The approach by each team was completely different. Immediately you could tell the red team was in trouble. They had planned a beautiful menu of four different foods that were going to taste and look fantastic. They were right on top of the quality but…the challenge only went for six and a half hours and the preparation time of some of their products was going to take several hours. Furthermore, their food was labour intensive. They were the last team to actually start selling any products at all and their best product, the one the judges absolutely raved about, was only ready two and a half hours before the finish time.

The green team, on the other hand, had a simple tactic. Be the first to market and have limited choices. Action and simplicity were the drivers. General George S. Patton Jr. once said, “A good plan, violently executed now, is better than a perfect plan executed at some indefinite point in the future.” I admired the concept of first to market – with a limited time to sell I saw it as essential that sales were able to be made as soon as possible. In the MSP game, you need to have your product able to be sold rather than planning it for years. The only problem I had with this attitude was that they saw price as a determining factor. Once they were first to market and they were selling a product, they needed to capitalise on the brief monopoly they held. The generally accepted price for a bacon and egg roll was $6 yet they went to market at $4. They simply couldn’t keep up with demand and I don’t believe the demand was price driven.

The blue team had an ace up their sleeve. While the team put together a simple plan and menu and started cooking and producing quite quickly, they realised they needed some marketing to drive people to their stall. Enter their ace. The blue team had Ben – he was the only Tasmanian in any team. While the rest of the team worked in the stall, Ben worked the markets. He was all over the markets like an Energizer Bunny and made sure everyone was aware of the blue team.

In the end, the green team and the red team fought hard over last place. Ultimately, the pricing mistake of the green team dropped them into last place with $1251.80 takings for the day. If they would have charged $6 instead of $4 they would have been a clear winner of the challenge. The red team sold well when they finally started producing and ended up with $1333.70 in takings but just didn’t have enough time to sell the quantity they needed. I haven’t mentioned the yellow team – they were efficient and capable but not outstanding. $1497.50 for them was a good result. The clear winner though was the blue team - $1788.50 for their efforts.

The lesson here for an MSP? Don’t make the mistakes of the red and the green teams. Over-planning and under-pricing killed these two teams. Learn from the blue team – plan efficiently and produce a good product at a good price but most importantly don’t be backward in coming forward to tell everyone what a great product you have. Many technical-focused companies shy away from marketing but it is an essential tool in your business armoury.

Tell me how much you would pay for a bacon and egg roll at md@smallbusinessrules.com.