In this episode, Matt and Rick discuss the Hedgehog Concept and how to focus on business simplicity to grow your business. They share the 3 principles of the hedgehog concept to help identify your core value proposition to ensure you are on the path to success. 

The Hedgehog Concept comes from the book Good to Great by Tom Collings. In the old Greek essay “The Hedgehog and the Fox,” Isaiah Berlin divided the world into hedgehogs and foxes, based upon an ancient Greek parable: “The fox knows many things, but the hedgehog knows one big thing.” The fox chases many things, whereas the hedgehog rolls into an armored ball with spikes on the outside for protection.  

Applying the Hedgehog Concept to entrepreneurship is essentially identifying the one thing you should focus on and use it to identify your core value proposition. Then you consistently apply that focus to make sure everything you do is in line with your core value proposition. If you are considering chasing different business opportunities like a fox, make sure you ask yourself it will support your key core values. 

Are you a hedgehog or a fox? It is not as easy as it sounds, especially in the current spirit of entrepreneurship. If you listen to social media, some will suggest you need multiple lines of revenue to be successful. This is a terrible idea because, more often than not, you’ll end up chasing dreams like the fox with half-baked ideas.

It is more likely you will succeed in a business venture if you focus on one thing, do it well, and do it for a long time. Everything else is a distraction. At Alloy, we keep our franchises focused on the one thing that you can do really well, and everything that you do should support that direction. Anything that you do outside of that scope is a complete waste of your time. We wrote about this in How to Keep it Simple for Business Success with Occam’s Razor and Focus On The Main Thing To Succeed In Business.

Use The Hedgehog Concept To Identify Your Core Value Proposition

The diagram below with three circles are the 3 values you should consider when developing your business strategy.. In the middle, where the circles intersect, is where the magic happens. That’s your core value proposition. 

hedgehog concept-good to great book

1. What Are You Deeply Passionate About?

Your personal passion isn’t necessarily what you want to base a new business venture on. Consider what do you really want your business to do and who you serve? Does it solve any problems for consumers or businesses? In fitness, you shouldn’t base a business concept based on concepts, fads, or equipment that won’t last. Ultimately, your goal should be about the passion of helping people. Once you identify the passion, build the machine to take it to market. 

Whether you’re an Alloy franchisee or part of the franchise brand, our core passion is still ultimately the same – we’re all about helping people.

The primary passion for most Alloy franchisees is to raise the self-esteem of our local clients and the communities we live in by helping them live life to the fullest.

As a franchise business, our passion for starting the Alloy Franchise brand is to help people become entrepreneurs and get a good return on their investment so they can realize their dreams of helping people.

We like to help people, period. 

2. What Makes You The Best?

We start with what is best for the customer? Is it going to help the customer achieve their goals? The Alloy Franchise brand really has two markets; we have the franchisee and the customer. In a lot of ways, they are the same because what’s best for the customer is obviously best for the franchisee. We always Look At Business From a Customer Perspective, because that’s what makes the franchise stronger. How can you be the best in the world at the one thing you are passionate about? 

3. What Drives Your Economic Engine To Success?

The trickiest circle for most is what drives your economic or resource engine. What is it you’re going to measure in your business that tells you if you’re successful? By applying the hedgehog concept to Alloy, our simple principle is we’re the best in the world based on our measure of success, which is we have one of the best customer lifetime value (LTV) in the fitness industry. The higher customer LTV is one of the Alloy franchise differentiators, because it means our customers are paying more and staying longer. The combination of those two things is our core value proposition. In the long-term, we deliver on that value promise, resulting in that higher customer LTV.  

In summary, the  3 circles include:

  1. We’re passionate about helping people.
  2. We are the best in the world at delivering a personal training service that helps people. 
  3. We prove our value by delivering the highest customer lifetime value in the fitness industry.

Tune in to learn more about how to use the hedgehog concept to determine your core value proposition. Keep your focus on that simple mission and apply your value proposition consistently. 

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Key Takeaways

  • The hedgehog’s only big thing (03:03)
  • Identifying the one thing you can be good at (03:42)
  • Walgreens vs. Eckerd drugs case study (04:28)
  • Three circles of the Hedgehog Concept (08:24)
  • Delivering on your value proposition (10:36)
  • Simplicity is key to success (13:28)

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Mentioned in this episode

Matt Helland

Rick Mayo 

Alloy Personal Training Franchise


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