Cause vs. Benefit | The Quickbooks lesson

Hey Rob, welcome back, man. How you doing?

Good, good, good, good. It snowed yesterday. I hate everything.

No snow here in Mexico City. It started— we're entering the 6-week period in which it becomes intolerably hot, but, uh, eventually it'll just start raining. But, um, anything, anything new going on, or would you— we want to jump into QuickBooks and, uh, causes and benefits?

Yeah, let's— I can't think of anything, so let's jump in.

Okay, cool. Um, well, this week, uh, we're talking about your Substack cause versus benefit, the difference and Matters. We're going with a simple and direct approach to this conversation, and I think incredibly practical. We'll jump into an example from QuickBooks here in a moment, but why don't we start with, you know, who— why is this on your mind and who's this one for?

Yeah, so, so this one, I've actually had a lot of startups coming to me recently who've gone through like product positioning exercises and come out with something that is logical and doesn't work and not, they're not sure why, cuz it makes so much sense. And so I've been struggling to articulate this and articulate the difference between, there's good product positioning exercises, which you, you see from product marketing people. And then there's sometimes there's really bad versions of it and they're really bad because they sound like they should work and they make a lot of sense and the words seem smooth as a result of them and they just don't work. And so I've been racking my brain as to how do I articulate the difference here. And so the cause versus benefit angle, I think, is a useful frame on this.

Yeah. You know, when I was reading this post, I was thinking about all the, you know, things that you might see on LinkedIn or that we've seen on Twitter or X over the, you know, over the months and years that are like, I only fund businesses that solve a revenue problem, or I only fund businesses with a 10x ROI, or, you know, you know, whatever that finishes. And, and I, I think what you're doing here is saying like, okay, ex post, afterward, you can identify that some businesses that took off had that benefit. However, what we want is, you know, I'm just being a, you know, a broken record for things that you talk about, but what we want is day zero before you have taken off. Understand what is the thing that will cause, you know, cause a startup to take off and, and really like shift shedding away all of the other confusing things. Um, why don't we— Rob, I'm going to start with, um, uh, like what you wrote about this, and then I want to jump straight into, uh, jump straight into the QuickBooks example because it makes it highly practical. Um, you wrote at the start, uh, when anybody buys anything, they buy the thing because they are in a specific kind of stuck situation. They're trying to do something, but they are blocked from doing it by their existing tools, methods, options, etc. Given this, they are looking for a thing that unblocks them. This is what causes a purchase, and it tells us exactly how to describe our product and its value. It's very simple. But when someone buys something, they also get a bunch of other benefits like value, ROI from it. Uh, they may use a variety of different features, all of which provide an array of different benefits. After they buy, they explain what they like about the product based on these post-hoc benefits they received after they purchase it. And I think that's kind kind of the, the crux of it. Is there anything you want to add here on top of that? Or do we want to jump into the example?

Yeah, I think, I think let's jump into the example because it makes it a little bit clearer because the challenge is always how do I make my startup take off? I have to say some words to some person and show them something that causes them that like fits with something that's happening in their brain that causes them to rip it out of our hands when that is not the default state. Usually the majority of words and concepts and visuals they see just default state. They just kind of go on by. It just passes through and they keep doing what they were doing otherwise. And so we need some sort of a model for what sticks and what situation does something stick that helps us know what to say and, and why people buy. And so the example I'd want to go to here of why this gets super confusing is an example that I was talking with Bob B. Moezda. He now goes by Bobby, which I assume we're both named Rob or Robert. I've changed my name like 40 times and I don't know if you have.

Well, I went to RC because it was getting too— what was happening was it was too confusing when we were both responding to emails as Robert, Robert. Everybody was like, what is going on? Anyway. Yeah. So Bobby, Bobby Moezda.

I, so I went I went by Robbie for my entire life until my first McKinsey interview. And they said, you're not Robbie anymore, you're Rob. And so that's why I'm Rob now.

Random aside, I had a beard when I was at Bain, you know, as a 23-year-old analyst because they told me it looked, I looked older and they were like, this is not about you, Robert. Like you have to show up with a beard. So not really proud of that, but yeah, shows you the strong character I brought. Anyways, so Bobby Moesta. Yeah. So, okay.

Bami Mustafa, I was talking with him and he was telling me the story about when he helped QuickBooks out. So I don't know if you know QuickBooks, but it's like accounting software that basically does a ton of things and it's kind of always done a ton of things. And so the question is like, how do you get people to buy that? Or how do, why do, why do people buy QuickBooks? And so the traditional way that we're taught to think about describing a tool like QuickBooks. Is from the supply side. It's, it's basically, it starts with what does the product do? What are all the pieces of it? And then you might ask a question of like, what's differentiated about it versus the alternatives? What differentiated value, what unique value does it provide versus the alternatives? And from that you say, okay, then who cares a lot about those differentiated benefits, values, and therefore what do we, how do we describe it? That's coming from the supply side. And so if you do that exercise with QuickBooks, it's probably some, there's a bunch of different things you could come up with, but it's something about it being this all-in-one platform for small businesses that can do everything for them. Right. And that, that's what makes sense to it from the supply side. Bobby told the story though, that. Whenever anyone bought QuickBooks, the, there was only one cause of them buying, which was basically, I need to send or receive money. And so if you describe QuickBooks in the way that it is an all-in-one accounting and da da da da da software in that situation, and you advertise it that way, they're not going to buy it. You're gonna have a super compelling, logical way to understand, to like describe your product that is differentiated, that has very tight messaging, and it's just gonna wash on by. And so instead, and you can see this still today on QuickBooks' website, that there's like a, I didn't even cut out this section, but like the key things they highlight is you can send money, you can receive money, get paid, whatever. Right. And that's how you get people in. And then after they are in, they run into a bunch of other things that the product also enables them to do, but we can't conflate the cause of them buying with all the other things the product does and all the other benefits they get out of it. Because if you look at it from that, from that view, you're going to wind up with a description of a product that does not work, that does not cause you to take off. Yeah.

And so it feels like there's two things going on here. One is we may often make the mistake of a supply-side start, like this is what our product does. And second is that irrespective of what your product does, you describe things that are not causal and what is going to lead them to purchase. So even if you weren't taking a supply-side approach and you were talking about the demand side, You could, QuickBooks could still describe the many things that they do and overwhelm the customer, the potential customer with, with that.

Yeah. And like I was, another example of this is I was listening to a startup's recorded sales call and the customer, the potential customer bought super fast. They described probably 14 different benefits of the product. It'll save our team time. It'll enable us to scale without hiring further. It will da da da da, like all these different benefits, but those benefits are not necessarily the cause of them purchasing. There are so many benefits that every business, any, so much value, so many high ROI opportunities that every business has available to it at any one point in time that they are not actively prioritizing. And so we have to focus on the situation when somebody is trying to accomplish something but blocked because it's the only cause of a purchase.

This actually reminds me of like payroll when I was starting my business and had no idea how you, how you start a business and I was trying to figure out payroll and I was The only, really the only thing I was worried about was the business eventually getting shut down because of non-compliance with some tax regulation. And I kept asking, you know, I kept reaching out to these like payroll and HR providers and they were, I was over, like just overwhelmed by everything that they were demoing and everything. And eventually I just like sort of figured it out and was like, okay, this, I think I can do this. But if they, if somebody early on would've come to me and said like, like, look, if you're starting a small business, like these are the two things you're worried about, I would've bought like immediately, 'cause it would've taken that, you know, taken that concern off.

Yeah. And like at that situation, it's basically I need to pay my employees in a way that's compliant.

Yeah, exactly. That's it.

Like, that's literally it. And if they said that, cool, that's how you get in. And then you run into other things once you're in there, but you can't, but what they're doing is they're conflating the fact that, oh, well, we have a all-in-one payroll IT, da-da-da-da-da platform. And so therefore we need to tell you all about it and tell you why it's different. And you're there just like, listen, I'm literally just trying to send money to and from you.

Yeah. Yeah, exactly. Um, cool. There's a couple implications that you highlight in this one. Um, uh, we've, we've touched on these, but just to, just to see if there's things you wanna add, add here. Uh, one is it makes it very difficult for us to describe our product. And then two is when we describe our product based on benefits, it doesn't work very well in practice. But anything additional you want to add to those, Rob?

Yeah. So, so it actually is like a super complex thing to try to do if you try to go come from the supply side, because there are so many different angles that you could look at. Oh, it could save time. It could do da da da, like it has all these different features. We can combine them in different ways. And so that's like really, really, really difficult to do. And then at the end of it, after you've done this mentally grueling work to come up with something, you show it to customers and, and here's the worst part is they understand it. They understand it. They will nod their head. They'll say, wow, that makes total sense. I totally get it. And guess what? They're not buying. Yeah. Because why would they, right? Like the way that you are describing your product, does it, and you might, it's like, here's the hardest part is that you might then like QuickBooks might say, oh, the all-in-one, right? Like accounting, da da da da da platform. And then they could work from there to problems and pain points from that perspective, which they will come up with. Problems and pain points that people have and don't act on. Yeah. And so they'll come up with, it's frustrating to manage things across a bunch of different tools. It certainly is. It certainly is. Isn't it painful logging in and logging out and, and having to copy paste things? Oh, it's the worst. Yeah. We offer an all-in-one solution. It's like, okay, cool. Great. Thanks for, uh, I just need to get paid. And so I'm going to go and find some way to get paid, right? Like that's it. And, and like, that's what winds up happening as a result of this. And so the, the end result of all of this is we wind up doing a ton of work, a ton of mental exercises, mental gymnastics to come up with something and become two ships passing in the night. With our potential customers. Yeah.

Yeah. Yeah. Having, having wasted, uh, uh, more of my life than I care to own up to creating slides that immediately like disappear because I took the wrong approach here. I can, I can vouch for that. Rob, how do you, how do you find that causal element? Let's say, you know, a founder listening is, is thinking, okay, like I've been talking about benefits. I see that I'm done, you know, that I, that's the wrong approach. How would you, how do you advise founders that are like, okay, how do I actually find the causal thing?

Yes, it's going to depend on what stage your business is at. If you're, if you like a bunch of people who've reached out to me recently, we're at millions in revenue and you've grown kind of fast, but it's kind of, it's like not super, some people buy fast, some people buy slow. It is in the people who buy fast, especially if They come back, they ghost you for 6 months, come back and buy fast. You figure out what changed, what came on to you or to do what's— what about your situation changed that caused you to try to do something, but, but you were blocked from accomplishing it from your existing options, right? Like it's, it's really, really helpful to go back and look at your existing customers way easier if you have existing customers and some of them have bought fast, some of them haven't. Other than that, if you are in a situation where you are trying to figure out what people want, first of all, get off the supply side. Just stop thinking about products and just focus on situations where people are trying to accomplish something and blocked. And you can see that by going and watching them do their do their job, doing their job alongside them, or asking the question, what would you pay me to solve for you? What would you pay me to take off of your plate? And what they'll tell you there is, or, you know, what are you trying to buy right now? You can even look, I got a message from a founder this morning who was like, yeah, I just started asking that question in sales calls and it got way clearer and I sold something. And it's like, yeah, great. And because what they'll say is, yeah, I'm trying to buy something that's gonna Or I'm gonna try to, I'm trying to buy this kind of product and they give you some sort of supply side mess. I'm trying to buy an AI agent for da da da da. Okay, cool. I don't know what that means. So maybe let's jump to the demand side. I know you're trying to buy something here. Jump to the demand side. Explain to me what you're hoping to accomplish, why you can't do this with your existing tools and solutions. And like, okay, based on that. Can I sell you this?

Yeah. Yeah. The, like, it feels like a couple targeted questions. Like, it's, it's not inaccessible. It's just like the way that you approach the conversation frequently unlocks it. I like your point on when they, when they buy fast, figure out why. Like, that's the, the gem is in there. Frequently they won't even tell you though. Like, if you don't ask, like, yeah, yeah, yeah.

Or they will, or, or what they will say are things that are benefits that are not causes. And you can, get wrapped on around an axe. Like what we're looking for is not something that's in the product. Yeah. We're looking for something that's in their world.

So how does that conversation look like? What, uh, let's say they say like, well, we, we looked at a couple competitors and y'all's, um, you know, we, we liked your interface more than somebody else. Or, you know, something like that. What if they get, they give you a, they, you ask why they bought, they give you a supply response. How do you interrogate that?

Yeah. So, so in that case, it's like, cool, let's maybe zoom out from the competitors, the, the products. Why did you, like, tell me about when you prioritize this, when you decided that we need to start looking into these options, what was happening in your world outside of the products? Yeah. What changed?

It reminds me of another type of customer that buys, which is the one that goes to you for 6 months and then shows up and buys in a week or in 3 days or something. Um, like that one, it's typically, it seems very clear, like they know what was going on and they can specifically pinpoint it frequently.

Yeah. Yeah. And they, and even then they might say, oh, okay. Like I got approval to work on this internally. Right. Which is not helpful. And you have to like zoom out from, from that kind of like very narrow thing to be like, okay, but why was this the relevant thing internally? What was happening.

Yeah. I love it. Well, Rob, let's wrap up this bite-sized episode. Any, anything else you want to add here before we wrap?

The framework is simple. Trying to accomplish X, but blocked because of Y. This, it might feel like a straitjacket, but it is for our own good that it is a straitjacket.

I love it. Yeah, I've got, I've got some messages that I'm gonna be thinking about that with, uh, later, later today. Um, you also have, uh, your next bootcamp, uh, the, we're calling it Physics of Sales Bootcamp. Is that right?

We're calling it the next bootcamp.

Yeah. The, the artist formerly known as PMF Camp, whatever it might be. Um, coming up on May 4th. Uh, still have, uh, still have slots with that if I'm not mistaken. So, um, links will be in the, in the show description. And with that, Rob, if there's not anything else, we can let folks go.

Let's do it.

All right.