Einstein is supposed to have said that doing the same thing over and over and over again and expecting a different outcome is the definition of insanity. Now, I’m assuming he meant that on an individual level.
What if a whole community keeps doing something again and again and again – something that doesn’t work – but still expects a different outcome? When multiple people in that community do the same thing, year after year – no one learning from the other and no one thinking “hmmmmm… maybe I should do things differently” – does that mean that the whole community is insane?
Now, I’m generalizing for dramatic effect, of course, and am happy to say that there are exceptions to this. Nonetheless, I can’t help asking myself this question each time I dip my toes into the startup scene.
Since 2009, I’ve intermittently dipped into the Icelandic startup scene. I’ve set up an incubator where I consulted with startups, mentored at a number of events such as Startup Weekend, Startup Reykjavik, Startup Energy, Startup Tourism, Unconference, worked closely with Innovation Center Iceland as well as having worked and consulted with a number of startups in various other settings.
Time and again I see entrepreneurs and founders completely in love with their product or service (and so they should be and need to be to a certain extent) and totally oblivious to the fact that nobody else in the universe feels the same about it as they do. And everybody who works with entrepreneurs is familiar with this. What seems to be lacking however is getting the entrepreneurs to understand this fatal fallacy. The sooner founders grasp the cold hard truth that nobody cares about their stuff, however many bells and whistles, the better.
Tough Love Needed
Anyone who has experience with startups and entrepreneurship for some time knows the danger of this love affair between the entrepreneur and his product or service. Yet, we don’t seem to be prepared to give the tough love needed for entrepreneurs to realise that this could be, and often is, their downfall.
Only yesterday a friend of mine, a well respected startup consultant, was telling me about a company starting the development of a new product before they had even begun to sell the first one, believing that their first one would simply sell itself because it was so awesome. Her advice to focus on getting the first product to market and generating revenue fell on deaf ears as the excitement of more creativity and development beckoned. Their blinding love of the product made them think that the whole world will automatically fall in love with it. Not. Gonna. Happen.
Another business I’ve been following does not in any way communicate what the benefit is of choosing them over any of the alternatives. Their website is chock-a-block with self-indulgent copy that talks endlessly about features and tech and visitors have to work hard to figure out what on earth their solution will actually do for them. To top it off, their target audience are marketers who can quickly spot this flaw.
An event struggles to attract attendees simply because the value proposition is unclear or non-existent. The organizers are too infatuated with their own event and the speakers that they are personally interested in to look at it from the outside and ask themselves: “Why would people come? How can I truly provide value that they care about?”
We don’t care what you are doing or how you do it – we want to know how what you do is going to benefit us!
What’s In It For Me?!
Yesterday I sat through at least 10 pitches or talks about various startups. Many of them are doing truly remarkable things, others I’m not as crazy about – but that’s just the way it goes. What struck me though was that hardly any of them properly got across why the heck any of us should care. Very few of them truly made me realise what was in it for me as a potential customer. Some speakers spent way too much time going through their CV before getting on to anything interesting and there were lengthy explanations of how the product or service worked, features, bells and whistles. But the core thing, the one thing that can make people buy, was generally missing: What’s in it for the customer?
If entrepreneurs are at the stage of having received funding, or asking for funding, I don’t think it’s too much to ask that they can clearly get across their main value proposition to their customers. And if I remember correctly, none of the speakers talked at all about how they were going to bring the product to market.
“Build it and they will come” does not work in business.
Now, here is another problem. When I say marketing, way too many think purely of marketing communications: advertising, websites, emails, social media etc.
Let’s get one thing straight: Marketing is a point of view. Marketing is a core business strategy. Marketing is making sure that your product or business fulfils a need.
A business that truly does marketing is a business that offers a product or service that is truly needed. Not one that just makes something and pushes it onto people or tricks people into buying it.
A business that truly does marketing realises that unless they make people understand what the product or service will do for the customer – what the benefit is – no one will buy and they will fail.
A business that does marketing realises that they need a kick ass go-to-market strategy – none of this “build it and they will come” BS!
A business that does marketing doesn’t interrupt people and shout at them, but talks to them and builds a relationship, all the while communicating how they can meet their needs and solve their problems.
The Foundation Is Flawed
For years I positioned myself as a consultant for small business and startups, providing jargon free marketing advice. As a result, many businesses may think that my strategic consultation is not relevant for them (that it may be only for those that know nothing at all) but then may contact me when it comes to tactical things such as social media, social media advertising and the how-tos of content marketing. But when we start to look at those tactics, very rarely do I find that the foundations are solid enough. More often than not, I have had to backtrack and sort out the underlying marketing strategy before being able to move on to tactics because tactics simply won’t work properly without solid strategy.
Look, I know this is an easy mistake to make. Lord knows that there are a gazillion and four things to think about when building your startup and you will make a gazillion and five mistakes. And if you aren’t truly in love with your product or service, you will run out of steam before you can make it into a viable business. But if you are blinded by love, your business is as good as doomed.
The track record for Icelandic startups in the past years has shown that although we start a lot of them, not as many survive and I believe this lack of marketing thinking is a big part of the reason. (Also note that I am going to generously assume that the reason for foundational strategy often lacking is not because people think they know it all! ;) )
Feedback Is a Must!
My first career was as an actress and singer. The one thing you learn as a performer is that however good an actor you are, you always need a director. The same with your business. However good you are at what you do, you always need honest, no BS feedback on what you are doing, and guidance. You are cursed with knowledge and have long since stopped seeing the wood for the trees. This is what I am trying to give right now – feedback and guidance.
I also think that throughout the years that I have been involved with the Icelandic startup scene, entrepreneurs have gotten better and better at realising the need for feedback. (Incidentally, Bala Kamallakharan, the man behind Startup Iceland, has told me that Icelandic entrepreneurs do not seem to be using opportunities for mentorship and feedback well enough (such as the mentor sessions at Startup Iceland) so we may still have some way to go on this.) However, entrepreneurs seem better at realizing that they need input for areas such as finance, legal, product development and such “hard” areas, and less so with marketing.
What I saw at Startup Iceland has confirmed my suspicions that entrepreneurs need to take off those rose colored glasses and start answering that fundamental question from their potential customers:
“What the fuck is in it for me?”
Helgi Þór says
Spot on, Þóranna! I agree with every word.
Time and again, I’ve the fascination of the genius solution that the entrepreneur has invented, seems to be so strong that any question of a viable business model, route to market and customer needs seem to vaporize.
To be fair, I think the strong emphasis put on the investor pitch by most accelerators is misguided. Before you practice pitching to the investor, how about a conversation with your potential customer first?
Thanks, Helgi Þór.
I find it interesting as well if the investors don’t spot this flaw in the pitch. Why would one invest if you don’t clearly see how they can convince others of buying the product or service.
Great observations Þóranna . Have seen this time and time again. And then on top of that “free consultation” is generally seen as not important. This is kind of like telling an acquaintance that something is wrong with their kid. They won’t listen as they are so overly protective of their loved kid. Understandable but not necessarily in the best interests of the child! How can you “sell them the idea” so they see it without being told, that will get behind the armour! Keep it up!
Thanks for your comment, Hólmar.
Yep, free is never valued. I learned that the hard way, being way too generous in giving free advice. I think the only way to get this point across to entrepreneurs is with investors giving them the tough love needed. Investors need to tell entrepreneurs in no uncertain terms that unless they get their s**t together, stop being blinded by love, and find the value proposition and have a credible go-to-market strategy, they won’t invest. Money talks – definitely not the friendly well-meant (free) advice of anyone else.
Could this be because not every investor has made their money off marketing oriented businesses (stock market players, those that have made money off real estate and such) and may not always themselves be aware of it’s value? I can think of investors like that – but that is definitely not everyone.
Yep, the kid needs tough love or (s)he will end up being one of those spoilt full-of-themselves brat that no-one will play with. ;)