Monday, May 18, 2009

test for a reason to believe

OK, so here we are in this economically depressed period. In this time, we can look to see about 15-20% of businesses fail or have to go through intense restructuring. Why that figure? It comes from looking at the amount America overspent past what it earned during this long two decade party. With several trillion in lost wealth and with folks having to spend no more than they earn, this is what we get.

Now, how do we expect to fare? Will our business or service be a winner or at least a survivor? To look at this is important, because otherwise we may be pouring money down a hole and working hard on the wrong things. I say, think about your business model and value proposition.

If you have one, great! If not, and even if you do does it pass the "elevator" test. That is, can you explain your business model and unique selling proposition (USP) in few enough words that it can presented during a short elevator ride. This is a great test as that is about all the time you will get from consumers looking at your store, or website or listening to you, or reading about you.

Think that is wrong? Don't bury your head, or try to explain around it. People look at packages for about 10 seconds before they move on or come closer for more. Stand in front of people like VCs for money and you will lose them if they cannot "get it" in that time. So, look at you store, or your website or your business plan and see if people can "get it".

If not, then try to write it up in Twitter type of prose (meaning as few words as possible). If you get past a page you are in trouble.

This is a very valuable exercise. It is not about being better, it is about people being able to grasp you are better. It is not about great product and services, it is about people seeing that you have them. If you cannot explain it, then it is time to figure it out.

Many have floated on the froth stirred up by our collective spender-bender. Now as consumers recover from the hangover they are thinking about why they are spending and where. If you cannot be succinct, they will move one. Once you have this done, it will be key to helping you decide what to do, and what to not do.