I spend a fair bit of time trying to develop frameworks to guide business analysis and in a meeting yesterday I realized that the one I had adopted to ask companies about their business strategy was too loosey goosey. The four strategic questions I typically asked were:
- Who are you selling to?
- What are their needs?
- How are you meeting those needs?
- How are you beating the competition?
I am finding those questions can be answered very broadly and in not enough detail to be valuable. This lack of specificity often extends to the marketing plan, to collateral material, to websites and to fundraising. I’m trying to get more specific in order to improve a company’s ability to go to market and drive growth. As a result, I am experimenting with changing the questions being asked to the following:
What is the industry and title of the person you are selling to?
This is much more specific as it is easy to define the industry within which we are trying to solve a problem. Defining a title is more difficult as you have to understand the industry and the problem so well that you know who is tasked with solving it. Understanding this enables you to do a better job as well in targeting your prospective client.
What problem are they motivated to solve?
This gets tricky because most startups define a problem that they see and not one that the target buyer sees. And the current answer may mean that the person has a problem, but they might not care about the problem, have a budget or be motivated to solve the problem. In order to be motivated to solve a problem, I think there are three things that must exist.
- Do they have a budget and if not, where are they going to get one?
- Does your buyer need to solve this problem due to external motivation: it is in their list of job responsibilities, part of their annual plan job plan and is their performance appraisal dependent on solving the problem
- Does the problem cause the buyer so much pain that they are personally motivated to solve it?
What you might find is that you have to go upstream in a company and solve a more generalized problem related to quality, speed or cost if the specific one is not on the to do list. This will take more time as the specific problem will need to be added to the individual employee’s work plan for the year. This typically occurs in cases where there is not an existing market for a particular technology and you’re trying to create the market.
How much value do you bring in solving this problem?
This is a trickier question to answer than dealing just with the product features you are bringing to bear. This gets down to benefits of the solution. And here you must get very specific, not just dealing with general terms like reducing cost. You must be able to measure the benefits. How much cost is reduced, how much faster, how can you measure quality improvements?
How can you measure material differences in value delivery from the competition?
Once again, not just the features of your solution but what are the benefits you bring and how are they different from the benefits your solution brings.
This is a work in progress so don’t be surprised if I keep on refining this.