April 28, 2016
A Pyramid Scheme for Startups
Most startups traditionally all want to approach the market in a similar way. Scratching an itch. Starting with a great idea. Focusing on fixing a problem that the entrepreneur has personally experienced or seen. This is common. And certainly nothing wrong with this way for getting started. Ultimately you have to feel passionately about the problem you’re trying to solve; the pain you want to alleviate.
If you didn’t have this deep-seated desire there’s no need joy in the task you’re undertaking. But too many times (I’m learning this too as I talk with others) this is the sole foundation and focus of the business. When this personal perspective is the only focus of the startup there will be a struggle. So how does a startup grow beyond this phase? What’s the better approach to take for a successful business?
As I learned from a good friend there is a simple diagram which can be immensely helpful in creating this structure. I call it a pyramid scheme for startups. Only this pyramid scheme is highly beneficial and immensely helpful. And totally legal.
I’ll start by giving you the picture and then digging into it a bit to better explain each level and what it looks like from a couple different perspectives.
How the marketing uses the pyramid
First, we want to look at this pyramid scheme from the position of the marketer. The marketer needs to create the branding and marketing message for the organization. They have to start with the core and work out. In this role they need to take this pyramid, start at the top, and work their way outwards (or down).
A good marketer recognizes they must begin by identifying what the company is (What we are). Once they have a good handle on the “why” for the business; they align with the company goals and objectives; and then they shift their focus to be slightly more broad and begin to create the marketing message. This marketing message should point people to what the business does and funnel traffic “upstream” into the what and why statement.
We’re Different. Here’s How.
Continuing downward the marketer then begins to build on this marketing message into some of the specific ways in which the business is different from the competition. This is the differentiating aspect of the marketing message. Again, this stage is broader still in the overall marketing context and begins to include other sources, the general market space, and a broader reach.
The broadest and most generic marketing message is the bottom of the pyramid. The last part a marketer builds out and focuses on revolves around the practical application of the business/product to an audience. How the customer would use the product.
An interesting point you’ll notice as the marketer builds this pyramid from highly specific (company-focused) to very broad (audience-focused) there begins to form a number of different “channels” or as more commonly known “verticals”. This can be easily shown in the pyramid with the following minor addition.
What you’ll see is with the addition of these vertical markets the marketer continues to funnel everything upwards into a single core message and becoming more company-centric and refined.
It’s a brilliant way of thinking about the marketing message. I think it represents similar concepts to what you’ll find if you look at Simon Sinek’s presentation on Start with Why. Which incidentally is also one of my personal biggest influences. I’ve written on that topic time and again. But this is only one part of the equation.
How sales uses the pyramid
We can take this same pyramid structure and look at it through the eyes of the salesperson. If we start from a sales standpoint we have to approach the situation from the opposite direction
The reason for this is simple but let’s walk through it anyways as an exercise. First, when you’re approaching a business from a sales perspective you have to start from a common point. The best salesperson recognizes that instead of yelling about what makes the business great the best way to begin involves listening. A salesperson that listens first to a customer, understands and helps identify pain points is going to have a much easier job providing a solution that solves specific problems.
You have to listen first.
This approach of listening and identifying pain points means simply identifying how the business/product would be most effectively used by the customer (aka the bottom of the pyramid). This is a critical step. This lays the foundation for the relationship and helps the salesperson reach the broadest possible audience. Keep in mind the verticals we discussed previously. Listening to the pain points and identifying use-cases means targeting a specific vertical path from the bottom of the pyramid.
Secondly, once the customer recognizes and relates to the pain points and how they would use the solution the salesperson can continue to refine the sales message to begin to highlight key differences between the product and the competition. This is still the differentiating step, but specifically as it relates to the pain points previously identified.
Relate to your customers
The third step is the relational step. At this level in the pyramid the salesperson takes the differentiating factors and leverages those along with the pain points to relate to the customer. Here the interests of the customer need to be aligned with the solutions provided by the company. This is the “caring” level where the customer begins to see in a semi-focused manner why this particular company will uniquely be able to help them.
Finally, the last step in the sales process is where the company can share a bit more of their personal message, culture, and experience. This is where the company can open up a bit. Note, that you don’t want this to occur too early in the relationship but rather be saved until the connection has been made and the basis for a relationship formed.
I hope you find this helpful to think about as you work within your company (really any stage company can probably benefit from this). Keep these principles in mind as you build your marketing strategy and your sales strategy. Focus your time and efforts where they matter most. Of course this isn’t a perfect picture and there are ways this could be improved upon both generally and also in specific company use cases.
As I’m learning and thinking on these things I’d love to hear your thoughts and opinions. Have you found a particular pyramid or other diagram that helps identify and organize your thoughts around preparing a marketing message (sales traffic) besides the funnel. Because, yes, I’ve seen enough funnels to last a lifetime.
December 28, 2015
What’s Your Name
I’ll never forget the lesson I learned from a rather famous book entitled, How to Win Friends and Influence People. Granted, this book is almost a rite of passage for some industries and now sits among others on the shelf of great books. There are many lessons you can learn and practical tips you can take away from this author’s suggestions and advice. One of them which I doubt I will ever fully master (though I continue to try) is the importance of remembering a person’s name. One of the quotes from the book perfectly encapsulates this idea:
“Remember that a person’s name is, to that person, the sweetest and most important sound in any language.”
If this is the sweetest and most important sound than what a tremendous opportunity to demonstrate that you also find them important. Simply remember their name. There are of course numerous ways to attempt to do this. I’m sure you’ve experienced the sad, and awkward occurrence when someone tries to remember your name by repeating it at you over and over through the course of a one minute conversation. Clearly this is somewhat embarrassing and a bit annoying. They’re attempting to use a technique which has been around forever. Remember this?
“Repetition aids learning. Repetition aids learning. Repetition aids learning.”
This advice, though accurate, can be detrimental to the relationship if used inappropriately or done too obtrusively. Therefore, remember the importance of learning someone’s name but also the importance of doing it the right way.
A person’s name is special. Even though there may be millions of Davids, or Steves in the universe to each individual that name is special and unique. If there is one way to improve your relationship with someone then prove that they are important to you by remembering something special to them: their name. It’s almost an offhand conversation starter. What do you do when you meet someone for the first time? You ask their name. You’re probably not even listening to the answer because you have already moved on to the next question in your mind or the next thought you want to share. But this is a mistake if you want to build a relationship (and all those times when you don’t know if you want to build a relationship). Because you don’t always know where a road will lead.
Asking someone their name therefore is your first chance to build the right foundation for a relationship. Don’t take the opportunity lightly and don’t let the moment pass you by. Ask with care, ask with purpose, ask and then…listen. Your first question is also your best chance to start right. Take a moment the next time you ask: What’s your name?
July 27, 2015
You’re Going The Wrong Way
This was my first experience with Lyft, the other popular ride-sharing service. I had previously used Uber on multiple occasions but all the recent publicity and press I figured it might be time to explore the alternatives and see what else was available in the ride-sharing space. Lyft is of course the second most popular service with others coming along behind them.
I was familiar with Lyft but to be perfectly honest I hadn’t checked them out earlier partly because I was a bit turned off by the “fun” nature. I’m looking for a nice, professional ride, not a party car with a giant pink mustache. But here I was in Portland preparing to return after a long week of conferences and I decided to give the mustache a chance. I’d be leaving in the dark anyways. And so in the early morning hours with some hesitation I requested a Lyft and waited.
My driver, Max arrived promptly and to my relief the mustache effect was minimal. He helped me get all in and as I had heard I rode in the front seat instead of the back…no big deal. We settled in and he immediately guessed my destination to be the airport (I suppose there’s not much else people use Lyft for at 4 in the morning). I explained it was my first time using Lyft and was interested to see how things went. I had barely gotten these words out of my mouth when I was treated to one of the most heart-stopping experiences you want to face at a time of day when your eyes are barely open.
Max had pulled out and started driving along unaware he was driving the wrong way on a one-way street. No big deal, it’s deserted roads at this time of day right? Mostly. You see the one vehicle that seems to always be on the roads is the impressively-built, industrial-sized, public transit, also known as the city bus, equipped with a wonderful set of powerful headlights. It was at this moment, caught in the brilliant glare of two spotlights I turned to Max and rather casually observed;
“I think you’re going the wrong way.”
I can’t help but think in that moment how much I felt like John Candy and Steve Martin in Planes,Trains, and Automobiles. If you’ve seen the movie you know what part I’m referring to. Let’s just say I was relieved to see that Max did not have horns and an evil laugh when I turned to him with my now fully-open eyes and racing heart.
Thankfully Max was able to pull a quick and well-maneuvered three-point turn (I guess the Department of Motor Vehicles must have planned for this type of thing when they made three-point turns a mandatory part of the driving test.) We escaped without incident and were able to get back headed the right direction and had a relatively uneventful remainder of our trip to the airport. (Not sure there’s much more that could have been done to make it more exciting at this point).
So now comes the question. Would I use Lyft again? After a hair-raising experiencing like this do I feel comfortable doing it again? I’d have to answer absolutely I would. Things happen. Mistakes can be made by anywhere and at any time. This could have very easily been a once-in-a-lifetime fluke. But if I book a Lyft in the future and find myself in a similar situation, or any other less-than-optimal experience…well that might just close the book on the service for me.
You see, as humans we’re tolerant of an occasional faux-paux (well, most people are). We recognize that things happen and we’re willing to overlook them, forgive them quickly; particularly in a new service or new product. We are more tolerant. However, repeated negative experiences build on each other. We don’t forget things quickly (I can assure you I won’t forget this Lyft ride anytime soon).
How quick are you in turning?
This is the aspect that can absolutely destroy an otherwise great startup. You can have glitches in your beta, you can have a bug here or there that hopefully can be fixed quickly. A minor three-point turn and you’ve redirected the user back onto a successful journey in your app. But fail multiple times and your users will leave. They will establish a perceived pattern, they will assume a poor product, a bad implementation, and leave you with a failed startup. Yes, first impressions are important and critical to get right, but they are not the only thing to consider. The overall user-experience, the attention to details, the responsiveness handling issues or bugs when they arise are just as important.
Are you listening?
In my startup life these are the types of lessons I’m learning. Listen to your users, they may be telling you that you’re going the wrong way. You may need to pivot or simply do a quick, three-point turn, but always be listening. I hope if you’re in a similar situation you can draw some inspiration, encouragement, or at least a laugh from my journey and use it to make your startup-life more successful.
June 10, 2014
Leading through Listening
Too many times we think the best way to market ourselves and our businesses is through talking (and talking) about our business, our services, or our products. We neglect one of the very most basic marketing methods. Listening to the customer.
We’re Listening, We Promise
Sure, we hear all the advertisers as they blare out their claims of “we’re listening to you.” How many people really believe these big corporate conglomerates are truly listening to their customers? Most doubt the sincerity and most believe the reality is quite different. Common thinking seems to be major shareholders, investors and other big business interests more frequently shape the direction of a company than the average consumer.
But how does a small business listen to their customers? How does the small business not fall into the trap of claiming to listen without really hearing? It’s easy to overlook and yet the ability to connect with people is one of the biggest advantages a small business can have.
The Long Shot
People relate to small businesses. I’ve shared statistics previously about the number of small businesses in America, and yet the sheer volume of revenues generated by small businesses. People love cheering for the underdog, the little guy, the long shot. Often the small business is considered the long-shot. The little guy willing to stand up and speak out for the average consumer against the Goliath in the market place, the big business.
The truth may be the big business offers better services, better products, and better support; but the small business has by its very nature an inherent advantage. And this has to be realized and nurtured. Successful small businesses realize this. Successful small businesses focus on the personal connection and the communication with their customers and their industry. Open transparency regarding company size and struggles can be intimidating and yet highly rewarding.
Listening and Speed
Size matters, but in this case smaller is better. Lacking the volume of business means each customer is important. The customer realizes this and appreciates the fact that their purchase and their presence is valued. When the customer feels they are truly appreciated they engage more. They offer their advice and their opinions. Small businesses absolutely must take advantage of this.
Success comes from listening to others, hearing the needs, and then implementing improvements.
Successful small business realize they can more quickly make changes to their business and their services then a bigger company. I often hear it compared to a speedboat versus an ocean liner. Big business has a much harder time implementing a shift in their business. This leads to a perceived lack of “listening”. Small businesses should capitalize on the ability to make changes quickly and implement improvements based on feedback.
Listening and Hearing
An interesting point arises when considering the act of leading by listening. Most would understand the concept of leading and what is involved with taking charge of a situation. But how does listening fit within that understanding? How does the act of listening make for a better leader? The answer is simple.
Listening is more than gathering feedback. Listening is the active process of collecting feedback and hearing the underlying need.
A good leader does not merely listen to people. A good leader takes what they hear and analyzes what is being said. The sub-context. The meaning for the response. Small businesses looking to be the leader must do this too. This takes effort, takes work, and takes humility.
Listening and Humility
Small businesses must realize that even though they listen and they implement changes based on the perceived underlying need they will not be right all the time. Everyone filters their communication through their own experiences and beliefs. As a result no one is perfectly in-sync with someone else and there will be times when the response is wrong.
Leading through listening means acknowledging those times when the art of listening has lead to the wrong solution. The true need was misinterpreted and the outcome provided the wrong one. Successful small businesses connect with their customers and openly communicate through the process of rebuilding and resolving problems. It’s hard to be genuinely humble in offering an apology.
Yet here is one more way a small business holds an advantage. Small businesses are people too. People are not perfect and people make mistakes. Humbly apologizing and demonstrating a desire to improve based on listening to feedback shows customers that the small business cares. The small businesses must relate to their customers and share their struggles and their desire to improve.
How do these concepts of listening apply to leadership? In particular, how do small businesses lead through the art of listening.
The best leader is humble in attitude, quick to take action and dedicated to hearing the need.
If a small business wants to be a leader they focus on their strengths. Find the ways in which they hold the advantage and capitalize on them. Listening is one of those advantages. Leaders don’t charge blindly forward. Leaders must listen. Small businesses must listen. When they do they become leaders. They become successful.
Small businesses often struggle with the concept of leading, they hold the mistaken belief that their size constrains them from being a leader. This notion of leading being available only to the big company is misguided and flawed. Industry leaders can come in a variety of sizes and shapes. Small businesses have equal opportunities to be leaders. Notice they are not the same opportunities, they are different but they are truly equal. The successful small business identifies and capitalizes on those opportunities.
Take the Time
Do you take the time to listen? Remember, listening is more than just getting people to fill out a contact form or a survey. Listening is an art. Listening takes practice. Spend time learning how to listen better. Your business will benefit from the investment. You’ll find you gain trust, you gain support, and you gain customers. Be the leader in your industry. Embrace your company size, find your niche and lead through listening.