The Hardest Thing in Startup Strategy: Finding the Right Shiny Object for Each Audience
«How are you different?» — It’s probably the question startup founders hear most frequently. Customers, investors, employees, journalists — they all want to know why they should care about your startup in particular out of the countless other ones out there. Having a good answer to this fundamental question is therefore essential. It’s a crucial door-opener for almost every important discussion.
However, it’s also the most difficult question to answer for a number of reasons. First, being truly different in today’s busy startup environment is not easy to begin with. Everybody has access to the same commodity technology. For example, machine learning used to be a real differentiator, now it’s yet another checkbox item that is quite easily available. Also, there are plenty of smart people who nowadays want to work for startups, and they all have brilliant ideas. In some ways, it’s easier than ever to start a company, so finding your unique niche takes a lot of creativity, grit and resourcefulness.
Secondly, people’s attention span is shorter than ever. As a startup founder you might be tempted to talk about all the incredible details of your product, your profoundly unique approach to market development, your amazing culture. You deeply care and think others should too. But guess what? People don’t have the time, and if you can’t get your differentiation across in a sentence or two, they’ll probably lose interest immediately.
In other words, you need a “shiny object”, something people can easily grasp and understand and, most importantly, remember. Being subtle is not the goal here. All the great details follow later, your shiny object just needs to be a foot in the door, something enticing and memorable.
But the third reason is probably the most overlooked: Not every audience reacts to the same shiny object. Inexperienced founders often make the mistake to pitch investors, customers, journalists and potential employees with the exact same message. That’s a recipe for failure because these groups couldn’t be more different in their needs and interests.
Investors care about one thing only: How a startup can become outstandingly valuable in the long run, or at least as long as it takes to reach an exit. The way to do this is unique technology that can be protected with patents; a unique market position that leverages unfair advantages, for example proprietary access to customers or resources; and a team with a unique skillset that can execute, attract talent and grow the business quickly. A shiny object in one of several of these categories will get the attention of investors, and it’s what makes them write a check.
Employees care about many of these things too (at least if they have stock options), but more important to them are the company’s culture, the specific product or technology they’re going to work on, and their future boss and colleagues. Founders, who tend to be a risk-friendly and big-thinking bunch, often underestimate how much employees also care about seemingly boring things: Benefits, vacation plans, training, a defined career path, what the office looks like, what kind of laptop and monitor they will stare at all day. Startups are by now a mainstream career choice, and many of the most talented people choose their employer based on a mix of these factors rather than just a grand vision. Being a great place to work in a unique and demonstrable way is the shiny object that often works best for potential employees.
Journalists don’t care about your startup, they care about their readers or listeners — which means that your startup has to have a story that people might care about even if they would never buy anything from your company or never work for you. The human aspect is important to journalists. A founder with an unusual background is always worth an article. Technology that is not just interesting but fascinating in some way (remember those videos of running robots?) always works too. And then there are of course remarkable events like substantial funding rounds, spectacular customer wins, or exciting key hires. But all of this has to be really newsworthy. Journalists don’t give a damn about yet another boring product launch or the slow and steady growth of your business. Finding shiny objects for journalists is therefore a very tactical thing. You have to come up with something new all the time.
Customers finally are probably the most difficult case. That’s particularly true if you’re in the B2B space because then you will likely sell to different job roles within a customer company. C-level executives typically react to very different things than operational employees, which leads to the well-known phenomenon of the Golf Course Pitch in which a savvy salesperson sells a top executive on some big idea that the real end-users of your product don’t necessarily care about. Navigating this power structure with the right shiny object for each level is crucial. But even in B2C markets it’s normal to find very different customer groups that behave differently and react to different things.
So, it’s obviously complicated, but what’s the right approach to find effective shiny objects for each target audience?
1. Be aware that you need different messages for each audience and educate your employees about it. Most people don’t understand how complex the environment of a startup is and that you need different shiny objects to reach all these people. It’s normal that employees (and investors and board members) get a bit confused about this, so make sure to clearly explain why a particular message is out in the market and who it is trying to reach. As always in management, repeat over and over.
2. Test, test, and then test some more. Shiny objects primarily connect on an emotional level, and human emotions are famously unpredictable. That’s why you should never assume that something will work just because the internal team really likes it. The best way is to run a few low-cost tests, such as using a new differentiation message in a sales presentation, on an A/B-tested version of your website or a targeted ad campaign. People will tell you with their behavior what sounds appealing to them. Surveys can help too at early stages, but they are not nearly as insightful as real-world tests. Make sure you get detailed feedback reports from your salesforce if you have one, because nothing beats a test on the sales front.
3. Dumb it down. Then dumb it down some more. And ignore objections about dumbing it down. If you’re trying to explain a new product to a market with a short attention span, there is no such thing as too much simplicity. That’s why if you feel that you’re really oversimplifying, you’re on the right track and need to keep going. Your most passionate opponents will be your own engineers and product people because they feel that you’re underselling their amazing technological achievement with this dumb new slogan. But a shiny object is not the place to talk about details, and not even for logic. A famous example is Salesforce’s legendary pitch of “No Software”. It’s of course idiotic in a technical sense because SaaS is just software that runs somewhere else, but “software” in this case was extremely effective as a shorthand for expensive, painfully configured locally installed programs that people hated so much.
4. Take feedback with a grain of salt, and understand who’s giving it and why. The most passionately discussed object is probably going to be your website, because it needs to appeal to all audiences, which automatically means that some will be neglected. If you optimize your website for customers, investors might hate it. If you sell to several different target markets, some will not find their needs reflected. That’s unavoidable. The trick is to set the right priorities (which means: Talk primarily to the people who write the biggest checks or are otherwise most important for your success), but any priority will disappoint more than half of your constituents. Deal with it, filter the feedback by relevance to your most important goals, then explain the strategy, but don’t water down the message.
Finding the right differentiation for your product and entire company is hard, complex, and risky. It’s of course not only essential for startups, but for established companies too. But finding effective shiny objects is particularly crucial for young companies because they not only have much less room for error, but also a much bigger upside if they hit it right.
This is a topic startup management teams should spend a lot of time on and do so proactively. The right time to talk about your true differentiation and its simplification to shiny objects is not when you miss your quarterly number and the sales team tells you that nobody understands your message. It’s not something you can delegate to marketing or sales. It has to be a standard, scheduled part of the overall top strategy and planning process, and it needs plenty of attention, time and resources. When you look at the history of the world’s most successful startups, you will typically find compelling shiny objects in their past. It’s one of the most worthwhile areas of focus for startup management teams.
Originally published at innospective.net on August 21, 2018.