Consumer Sovereignty: A Gut Check for Entrepreneurs

[Jonah Hartsburg]

The direction of all economic affairs is in the market society a task of the entrepreneurs. Theirs is the control of production. They are at the helm and steer the ship. A superficial observer would believe that they are supreme. But they are not. They are bound to obey unconditionally the captain’s orders. The captain is the consumer. Neither the entrepreneurs nor the farmers nor the capitalists determine what has to be produced. The consumers do that. If a businessman does not strictly obey the orders of the public as they are conveyed to him by the structure of market prices, he suffers losses, he goes bankrupt, and is thus removed from his eminent position at the helm. Other men who did better in satisfying the demand of the consumers replace him. ("Human Action", Ludwig von Mises)

Do I offer what I enjoy or what the customer wants? 

Typically our business ideas begin out of a passion for what we do or an enjoyment of the product we offer, yet the key application here is that finding comfort in the nature of our services without adapting to consumer preference comes at the cost of lost potential profit. Yes, at a scale of financial success, a business owner can switch from 100% entrepreneur to part consumer and choose not to adapt to the market while still maintaining market viability. However, if we're searching for profitability as a primary means to achieve some personal goals, we have to focus on the unmet needs (perceived or actual) of the consumer.

Profitability isn't necessarily the result of degrees, titles, popularity, or passion. You must be an orchestrator of resources who solves needs in the market. 

Agree? What key elements are missing here? 

[Mike Dymski]

I agree with the thesis here...we absolutely have to deliver what the consumer wants rather than delivering our passions.  But, the consumer often does not know what they want and it's the entrepreneur who invents and creates new things that the consumer will then demand.