Carl Gould on The 7 Stages of Small-Business Success

When asked to interview Carl Gould, life coach and author of The 7 Stages of Small-Business Success, I admit that I thought it would not take much to see through him. As a gullible youth, I was drawn in by the promises of wealth and personal growth outlined in a plethora of self-help books. A brighter future was laid before me with my own personal road map. Sadly, life and everything else had other plans and soon I realised that life does not operate in a controlled environment of cause and effect. Consequently, I became highly dubious of those who claimed to have “The Answer”. It is from this perspective that I approached this interview.

Gould has a persuasive persona. His firm handshake and steady gaze allude to someone in control of his environment.

If any of my innate cynicism came out, it did not fluster him and his answers were spontaneous and heartfelt. I found Gould engaging and his opinions fresh as well as relevant.

The book itself is full of acronyms and anecdotes. It is neatly packaged and provides relevant insights.

As an occasional entrepreneur, I am aware of the alienation one often feels when trying to establish a business, and I have found The 7 Stages of Small-Business Success a reassuring affirmation of this process. I am sure that even the most jaded of souls will gain wisdom from Gould’s insights.

Here follows an abridged version of my interview with him.

What is “coaching”?

We combine a number of different diagnostic and behavioural models to put together our consulting method, including neuro-linguistic programming (NLP) and the combined feedback from all our consultants and the businesses they advise.

Have you franchised your methodology?

To some extent that is true, but we use more of a distributorship or certification model. We have a number of mentors in South Africa who use the techniques and have been through the training modules.

Why did you feel the need to write the book, given the number of ‘self-help’ books out there?

Most of the business books you will find out there are usually about what someone did to rise to their level of success. So if you read about Richard Branson, you are going to read about how “I” did it. That is what most of the self-help books are.

What is different about this book is that this is my observation and it is all the information we have taken in from successful businesses and entrepreneurs all around the world. So this is not me telling you how I got there.

This is the cumulative successes of more than 50 000 entrepreneurs and 5 000 businesses we have helped launch and hundreds of thousands of assessments that we have run on top performing businesses.

So these are the seven stages I have observed, which successful businesses have taken over time to be successful.

And it is not only in any one area. For example, Donald Trump is only successful in the United States and most of Branson’s success has been in the United Kingdom; whereas this [book] is research from 35 different countries on six continents, where I have found that there are certain patterns of success which – regardless of economy, regardless of currency, whatever the political climate is – in all different types of conditions, people are being successful if they follow these seven stages. And if they violate them, they seem to be punished, regardless of what is going on.

This is a universal road map for business success.

I presume you personally have not had the opportunity to examine 5 000 businesses?

This is the product of information from all our mentors and coaches. We track our clients and assimilate this information. I personally have done 15 000 coaching sessions, but we have a number of coaches and mentors working with business owners in their local markets, which gives us a finger on the pulse of all these different entrepreneurial markets, and at any given time we all report to one central system.

Why did you (for example) trademark the term “Success Cycle”? Why the American obsession with acronyms and catchy terms?

With regard to acronyms, one of the things I have learnt from NLP is as we humans learn things, we try to ‘chunk’ information into the smallest size possible, so we try to get our acronyms as small as possible because more people will remember them and be likely to take action. Fifa is a great example of a good acronym.

Any time you shorten information, it allows people the opportunity to take it on. If we can bring things down to the “Rule of Three” (group information into packets of three), it will stand a greater chance of being remembered.

Come up with a short catchy name, and it sticks.

The principles of coaching can be distilled into the following; “Where are you now? Where do you want to go? How are you going to get there?”

So, in essence, if you want to be successful, it does not matter where you are in the traditional definition of a business life cycle.

Age has become irrelevant to the business process. General Motors shares are worth less now than they were in the 1940s; while in a couple of years, Facebook has become the most visited website in the world – so age does not matter.

So the “Success Cycle” focuses on the following: Number one, if you want to be successful, you can!

It does not matter where you are, who you are or what your accent is. The 7 Stages are the road map to get there. So essentially, we take the organisational life cycle, cut it in half, and that is the essence of the “Success Cycle”.

In our way of thinking, any business can be successful, as long as you are committed. It is more a way of thinking than an exact technology.

How do you reconcile your theory with conventional business wisdom which emphasises the need for a unique selling proposition (USP) in achieving business success?

It is not so much the product or service in relation to the business cycle, but rather the manner in which you allow the consumer to purchase it. You sell the product or service according to the purchasing habits which are best suited to the ‘season’ in which we find ourselves.

There are four major types of business ‘season’ we can clearly identify, which match the seasons of nature. Therefore, they are “Spring, Summer, Fall and Winter”; and for the last 500 years, these seasons have been very predictable.

As of 2005, we find ourselves in Winter season. The hallmark of Winter season is volatility – volatility in the marketplace, volatility of cultures and socio-economic conditions, military conflicts.

What happens in Winter is that people do not make plans because they are uncertain of the external business conditions. The buying habits change radically in Winter.

So what I advise people to do, is to have three basic strategies. If the market conditions shoot upward, people buy in a very specific way – they trade their money for time, meaning they will pay for conveniences. When the market goes down, people trade their time for money, meaning they want to investigate the best deal, so they want the discount, they want to experience the result of the product before buying it.

So imagine a car company saying take the car, drive it all you like and if you are not satisfied, return it and we will give you all your money back. In the US, the car companies are finally doing that because they are struggling.

And now there is the sideways market, and that is when it is choppy. South Africa right now is in a sideways market. We are not sure if it is bottomed out. We do not know where the bottom is going to be, so that creates a sideways market. What people want to do in these conditions is buy a ‘bundle’ of services.

For example, they do not want to buy into a golf course, so they will purchase a subscription or buy membership at a resort where you get all these ancillary services, but you get the golf for free. So rather than join a country club where it is merely golf, they will go down the road to a club that offers a variety of services that are attractive to them. So they will buy bundles because they want to be part of clubs and associations, churches etc.

So ‘clubbism’ rises during Winter. You have your core product (which is your USP), but you offer it in three ways so that people can consume it, depending on prevailing market conditions.

Can you anticipate the next season?

Absolutely! The seasons come in 20- to 25-year cycles, and it has been this way for 500 years, with one exception.

So the Winter season is anticipated to run until about 2023. The volatility we are experiencing now should maintain until about that time.

And then Spring season should start between 2023 and 2025.

When Spring starts, there will be many great deals in the market. It will be the time to buy low and you will have a reasonable expectation that things will trend upward.

At the moment, it seems no one really knows what is happening in the market. Everyone is trying to figure out what is wrong.

When things are wrong, we make excuses and try to figure it out.

Every losing team at the World Cup is analysing its mistakes and the externals – the ref, the ball, the grass, the vuvuzelas etc. But when we win, we are simply good! When things go wrong, we have a million excuses.

Some people simply cannot handle uncertainty. They have to be certain and have an idea of why things are the way they are.

The one thing that has been true forever, but has been tracked for 500 years, has been demographics. Demographics have driven every economic cycle since the Ice Age. This is how it works.

The people who impact the economy the most are people in their 20s, 30s, 40s and 50s.

Those in their 20s have the least impact on the economy in terms of the amount of debt or the things they do. They are important because they have rich parents. Marketers target 20-somethings in order to get their parents to pay for things – university, cars etc. So they are a target, but they are inconsequential in their direct impact

Thirty-somethings get into the most amount of debt – you buy your first house, you get married, you start having your children.

In your 40s, you are making the most amount of money, but in your 50s, you save the most amount of money.

The reason we are in Winter is because the highest earners (Baby Boomers) have gone from their highest earning and spending cycle to their highest saving cycle.

So the 50-somethings downscale their homes, their kids move out and they go from spending the most to saving the most. Since we are a consumer-driven economy, this affects the entire economy.

The 40-somethings now have to catch up, and the global economy experiences a lag; we are in a lag, from which we will come back – it is that predictable.

You can bank on markets moving sideways with much volatility during this Winter time period. During volatile times, you have to be agile, reacting quickly.

Vuvuzelas have gone from nearly being banned at the recent World Cup to becoming a worldwide phenomenon, so some entrepreneur made up his/her mind that we are going to start shipping these things – and now they are everywhere!

People buy according to patterns so Walmart, for example, tracks the weather patterns and knows that before a storm, people buy strawberry Pop Tarts (because they have a long shelf life). Walmart stocks up on these before an area is hit by a storm. So it is able to anticipate people’s buying habits depending on a variety of factors.

So I am saying that when a storm comes, prepare for it – have a down-market strategy.

The game now is being ready for the change in the tides.

My clients teach us as much as we teach them, so this book is the result of working with clients – it is accumulated wisdom.

I am still not sure that business cycles are as predictable as Gould intimates or that the same strategy works for every business. But I do know that reading this book will help you gain significant insights into your own business and may help you to ride out this Winter cycle with a clear strategy in mind.

As the saying goes, “It’s better to have a plan – even a flawed plan – than no plan at all.” ▲▲

George Joubert