Fear & Greed for “Acquire Your Customers”
Unless your business model is your innovation, your business model should focus primarily on reducing fear:
- Fear: You seem to assume that if you build a better mousetrap, customers will find you.
- Greed: You have identified a smart, validated business model that supports scaling with time.
No one is going to beat a path to your door
“If a man can write a better book, preach a better sermon or make a better mouse trap than his neighbors, though he builds his house in the woods, the world will make a beaten path to his door.”Ralph Waldo Emerson
With all due respect to Emerson, his quote leaves out a major step: people need to hear about your new “mousetrap” and get excited about it before they will take the time and energy to find your door and knock on it, let alone beat a path to it.
Your business model needs to illustrate how:
- Potential customers will hear about your “mousetrap” (marketing).
- You have “beaten the path” to your door (channels).
- You can supply your “mousetrap” (operations).
- You will increase the number of customers (scaling).
I often see pitches with a slide titled “Business Model” that shows only a price list. Obviously, customers care a lot about prices and you have likely done customer interviews to ensure that your pricing is competitive. But first they have to know that your product exists and solves a problem for which they don’t already have a better solution.
If your business model slide is just a price list, that’s a reasonable start, but it doesn’t say anything about how you will market, sell, distribute and service your products.
Fear: Great product BUT no Go-To-Market strategy
The good news is that it has never been easier or cheaper to reach millions of people around the planet than it is today. The bad news is that so can everyone else. Your customers are already bombarded with other people’s brilliant ideas, ludicrous scams, and fun toys to the point that it can be very difficult for your target customers to notice your existence.
Standing out from the crowd takes hard work, creativity and smart strategies. If the sum total of your go-to-market strategy is to launch a website with a webform and a pricelist, your market impact will likely be negligible. Your stakeholders will be concerned if your business model does not capture marketing channels, market segments, opportunities for scaling, etc.
Fear for B2B customers: “Your product will make my job harder.”
If your customers are other businesses (not consumers), then they are likely to be less interested in your business model than in theirs. They know they will have to deal with a learning curve, possibly a disruption in their workflow, and likely the need to educate their customers. In addition, if they have been trying to develop a solution similar to yours internally, you may run into resistance because your innovation is NIH: Not Invented Here. Help them to understand that you are there to help them succeed, not to make their jobs harder or damage their reputations.
Greed: Great product AND validated business model
Unless your business model is your innovation – in which case you would have described it in “Show Your Impact (Q02)” – you should strive to make it as low-risk as possible. You should be able to point to examples of other, similar businesses (e.g., competitors) that have used a similar one successfully for years.
Fortunately, the work you did in analyzing your customers (“Be the Best” (Q03)) should have provided you with a portfolio of successful business models. You may also have identified mistakes that they made that you can avoid, as well as given you inspiration for opportunities for improvement.
Greed for B2B customers: “Your work is about to become easier and more profitable”
When communicating with a customer, make sure that they are aware of the benefits they will gain from your products and services:
- Your product integrates with their standard worfklow.
- Their costs will go down.
- You will help them add new products or market segments.
- You are there to help them succeed with the new technology.