Implosion Points: Value Props and Branding | Guy Smith

The second big problem that founders have is that they don't know how to articulate a value proposition. They're completely incapable of it. So shout it out, give me your definition of what value is. What you give to a customer. Value, what you give to a customer. Anyone else? How many customers you reach. Number of customers, yes. What was that? Okay, in the back there. Value is, you know, say for a B2B business, it is what you can save the other business. If you can make money by saving other industries money, you are creating value. If you can improve upon existing systems, you are creating value by saving time and money. Okay. Those are some reasonable answers. The right answer is a little bit more abstract, conceptual. Value is what lies at the intersection of need and differentiation. Let's break that down a little bit. Let's say you have a product and it is in no way, shape, or form differentiated from all of your competitors. What do you have? You have a commodity. There is no intrinsic value to it. It is completely replaceable by other things on the market. So you have to have differentiation. Likewise, if there is no need, there is no demand. So you have to find this sweet spot. You have to have a product that's different, delivers something that's different, and that, that differentiation has to meet the need of whatever your defined market or segment is. Think about the product that you have designed and ask yourself several basic questions. Is it really different? Is it different than what my competitors do? Is it different than what my customers are already doing on their own? If not, then you don't have a product. Then ask yourself, what do I know about my customers? What are their needs? What are not only their functional needs but their emotional needs? Because you have to really win both halves of the human brain before you can sell somebody. If you don't have that need and you don't have that differentiation, you're going to have a very, very rough go when you launch. So very few founders know what value is. And there's a couple of reasons why they don't know what it is. And this is one of the fundamental things that keep them from communicating it. One of the problems founders have, especially all of you bit coders out there, is that you are intimate with your product on a level that you will never be with another human being. You know it from the inside out. You see the elegance of it. You see how all the parts work together. And one of the problems that founders have, techie founders at least, is that they communicate their products from the inside out. They will talk about features and benefits, and they will talk about internal functions, And they will talk about efficiency scales and blah blah blah blah blah, none of which matters to your customer. Founders look at their product from the inside out. The world, the market, looks at your product from the outside in. So you have to understand what the outside is, which is your customer motivations, to even begin to express what a value proposition is. If you cannot express your value proposition, you cannot communicate it. One of the exercises I take people through all the time is we list the motivations of all the different genotypes, you might call them personas, and we itemize them, we distill them, we find out what the common ones are, and then we compose all of our market messages around those motivations. So quick quiz, shout it out. What is the value that was being communicated by Apple when they launched the iPod? Virtual reality of your individualized venue community. Individualized virtual reality venue community. Okay. Just an absurd number of songs in your pocket. Fun. I don't see any numbers up there. One second. Fun. Fun. Wait, who said fun? Okay, we're homing in on— what else? Back in the back. Different and cool. Different and cool, yeah. One more. In your zone. What was that? In their zone. Oh man, you are 99% there. Can I get the book? Sure, absolutely. What Apple was communicating was the ecstatic relationship To music in your head, your privatized world, your passion to connect with that music that you like. That's why you couldn't put a face on any of these people, because every face is different, and you would hone to that. That's why you couldn't put a lot of words up there, that's why they didn't tell you that the 20 to 20K frequency response of an iPad was nearly flat. None of that mattered, they wanted to connect to that one half of your brain which is all about passion, love, joy, all the human elements of the world. It was such a successful campaign, and I witnessed this, that when you went to Best Buy the first week of this campaign, despite the fact that there were many, many other MP3 players on the planet which had much better technical specs, people walked into Best Buy and said, I want an iPod. And the salesman would say, okay, well, we have a lot of MP3 players. And they said, no, I want an iPod. I want an iPod. And I pulled a couple of these people aside and said, why do you want an iPod? I don't know. I want one. That's the essence of branding is that you bias the purchase decision before the purchase is ever made. Memorize this quote. And if you ever put it in your own materials, you have to give me credit for it because I wrote it. It is the most succinct definition of what branding is that I have ever encountered. And I know it's popular because I see it popping up in a lot of other consultants' slide decks. Branding is making the market think and feel what you want them to think and feel about your product. So let's break that down a little bit. Branding is making, forcing, compelling, causing other people, maybe against their will, to think and feel, left and right brain, heart and mind, Everything that encompasses the human experience, forcing them to think and feel what you want them to think and feel, not what they want to think and feel, not what their neighbor thinks and feels, what you want them to think and feel about your product. The reason it is so important to memorize this, take it to heart, and put it in part of your product planning is that if you do not define your brand up front, the market will define it for you. For you, and the market is not polite or kind in any way, shape, or form. I was one of the people intrinsic to making SUSE Linux the undisputed number two Linux distribution on the planet. When I hired on to do this work for them, I asked, "What is your brand?" And they said, "We don't know." I'm sorry, that wasn't a good German accent. We don't know. By the way, never let a German technologist give a presentation on stage at a trade show. I've seen it. It's a disaster. You will like our features. No. So I went out to the market, and I said, what do you think and feel about SUSE Linux? And aggregating all the comments I got back, SUSE Linux's brand at that time was quirky little German software company that, oh, happens to have a Linux distribution. And they were trying to go toe-to-toe with Red Hat in North America, which owned the market, which owned the minds of all the techies. So we had a lot of rebranding work to do. So decide what your brand is for the segments that you're going to sell into. Make sure it agrees with the emotional bias of your buyers. And then make it stick. Communicate it relentlessly wherever you go. Yes? How do you know if you're communicating it well? Should your brand be like a tagline or should it be like a photo like they had with Apple? I mean, how do you condense it into something? So the basic question is really what is the brand? Is it a tagline or is it a logo or whatnot? None of those. A brand is a statement that you will use internally in your company in order to guide all other communications. That includes the tagline you create. That includes your core market messages. That even includes your logo design. Because if your brand says, we're going to be warm and fuzzy, and your logo looks, you know, like something out of a punk rock concert, then you have a brand misalignment or a brand communication misalignment. So it's a single paragraph, maybe even less, maybe one sentence, that you distill until you have come down to the essence of what you want people to think and feel. If you really want to get into marketing and branding, I suggest reading Bedbury's book, A New Brand World. Bedbury was the brand manager for both Nike and Starbucks. And the fact that he scored huge twice in a row tells you that he understands the art very well. Nike's internal brand statement was authentic, Athletic performance. When you look at a Nike ad, that's exactly what you feel. You feel that if you strap these shoes onto your feet, you will be an authentic athlete, that you will have great performance potential. And it's reflected in everything Nike does. In fact, I stole this from Nike. When they sit down and they say, we're going to write a campaign, or we're going to refine our market message, or we're coming out with a new product, They put that up on a wall so that everyone is staring at it and thinking about it as they're doing their work.