‘A business is simply an idea to make other people’s lives better.’
—Sir Richard Branson
IF YOU WANT to create something massively successful you probably expect to put a lot of attention from the start on how it’s going to make money. So you may be surprised to find that’s not the focus of many of the world’s most successful organisations.
Google, Facebook, Virgin and Apple have all publicly declared their focus on creating value rather than monetisation. The brilliant Sir Jony Ive, Chief Design Officer of Apple, explained it in the following way in 2012 at the British Embassy’s Creative Summit:
We are really pleased with our revenues but our goal isn’t to make money. It sounds a little flippant, but it’s the truth. Our goal and what makes us excited is to make great products. If we are successful people will like them and if we are operationally competent, we will make money.
Jony explained how, in the 90s, after Steve Jobs had been forced out, Apple was very close to bankruptcy. When Steve returned to the company in 1997 to save it, his focus was not on making money but on making better products.
This is how Jobs himself described the shift he made when he came back and took over from former CEO, John Sculley:
My passion has been to build an enduring company where people were motivated to make great products. The products, not the profits, were the motivation. Sculley flipped these priorities to where the goal was to make money. It’s a subtle difference, but it ends up meaning everything.
Steve’s new focus on creating a small number of very valuable products directly led to Apple becoming the most valuable company in the world.
Perhaps your idea is a little more humble than those of Apple. No matter the scale of your idea, creating value is still the key to making a living out of it. While most people stress about how they’re going to make money, smart people concern themselves with how to create something of real value. Because once you’ve done that, making money is relatively straightforward.
While most stress about how they’re going to make money, smart people concern themselves with how to create something of real value
The opposite extreme, chasing the money even when it’s against your best judgement, rarely turns out well. Award-winning author and screenwriter Neil Gaiman said in his University of the Arts commencement address, ‘It’s true that nothing I did where the only reason for doing it was the money was ever worth it except as bitter experience. Usually I didn’t wind up getting the money either.’
Brian Eno, renowned producer of bands such as Coldplay and U2 and one of the most respected innovators in music, puts it even more strongly, saying, ‘If all I’d ever wanted to do was make money, I’d probably be really poor by now.’
We typically have a poor understanding of value because the bulk of the public conversation about business is about pricing, revenue and profit – in other words, money. In addition, as an employee, the value we create is somewhat detached from the money we make; just because you do something brilliant at work today doesn’t mean your paycheque will be any bigger at the end of the month.
The other reason value is difficult to understand is that we see what we are creating from our own perspective. But value is about seeing what other people want, from their perspective. Your customers, clients or audience are always tuned into what’s been called WIIFM, or ‘What’s In It For Me?’, so you need to get onto their wavelength in order to create something of value. You can create the best-quality product in the world but, if your target market never wanted it in the first place, it’s of no value to them and you’ll still make no sales.
Here’s how to focus your project to ensure that it’s valuable to people. No matter how logical people may think they are about making decisions such as a purchase, it has been proven in psychological experiments that all decisions are really emotionally driven. The emotion – desire, for instance – comes first. Then we construct logical reasons afterwards (often subconsciously) for why it was the right decision to buy. So we need to tune into the emotions of the people we think will want our stuff. Look for something people feel strongly about if you want to create something that will be really valuable for them.
Your idea will be valuable and therefore successful if your target market either:
Or …
The stronger the customers’ emotion, the more value your good solution will have. Note that it is usually easier to market to the ‘away from’ motivation than the ‘towards’ – i.e. to solve a pain or frustration rather than simply fulfil a desire. This is because our brains are wired to prioritise avoiding pain, discomfort and risk before exploring new opportunities. I guess that’s the result of natural selection in early man – favouring those of us who got out of the way of a sabre-tooth tiger before we stopped to pick up a juicy mango.
Remember that even if people should value something (for instance, because it will improve their health, have long-term business benefits or contribute to making the world a better place), if they currently do not have any strong feelings about it you will not be able to sell it to them. Do not try and convert people who have no desire to change a situation; it’s exhausting. Instead, connect what you offer with the things they already have awareness of and concern for.
Sometimes that means you have to, ‘sell what they want, deliver what they need’. For instance you might be passionate about raising staff morale within companies. But the company may be more concerned with underperformance and high staff turnover (typical symptoms of low morale). So your conversation starts there – solving the problems of performance and retention. Part of your solution, of course, will be to address the poor staff morale behind the problem.
So how do you find out what people really want?
Sometimes you have to sell what they want and deliver what they need
The best information you can get is out in the real world, interacting with your market, learning more about them, working with them and marketing and selling to them. To start learning what your target market or audience really value, seek out any situation that gets you in direct contact with them. There’s nothing as revealing as being in a room with the people you want to become your customers, clients or fans.
How do you make that happen? Organise a networking or social event to get people in the room with you; arrange appointments to see a handful of people individually to ask them what their challenges and needs are. Email key people in companies to ask to meet them and ask what their number one concern is right now.
The closer you can get to your market the better because then, instead of guessing, you can find out directly what it is they need and want. What are their desires in this area? What are they excited about? What are their challenges and frustrations? Where are the current solutions still leaving people unsatisfied? If you want real answers ask the experts – your target clients and customers.
The same goes for art and performance. When you’ve got something you think is good share it. Take your best photos to an exhibition and see which pieces get the most interest. If you’re a stand-up comedian and you’ve got five minutes of good material, go try it out at a friendly open-mic night. You’ll learn very quickly which bits were valued by your audience!
At this early stage you might have no idea how to create something of value or even know who your target market is, you just have a desire to do something with your passions and creative abilities. That’s fine!
Just put your skill, knowledge and effort into doing something good, keep trying to be useful or interesting to others, offering what you think might meet people’s wants and needs and you will eventually hit the value target. How will you know when you do? People will tell you.
They’ll click on your links, comment on your blog, ask you questions, argue with you, show up at your events, ask when you’re going to write another post, ask you if you’re for hire, ask you what other products or services or pieces you can provide and they’ll also start to share your work with others spontaneously. When that happens, monetisation can be as simple as slapping a price on it.
Tomorrow we’ll look at how VALUE is the central element of the five-element Playcheque Formula for a money-making idea you love.
•Who would like what I’m offering?
•What can I offer that might be of particular interest to them?
If you don’t know the answers to these questions at this point, that’s OK. Just keep them in the back of your mind as you progress your project. And if you get the chance to interact closely with your target market, take it and learn what you can about their interests, desires and frustrations.
Creating value takes time and effort. There are no get-rich-quick schemes. If there were a way to create something valuable with no effort, everybody would rush to do it and then the value in it would collapse. This is why it’s important to choose an idea that both energises you (so that you can stick at it) and that uses some of your skills and natural talents (to give you a competitive advantage). More on this tomorrow.
‘I can’t go meet anyone or share anything until I have business cards and my website finished.’ This is rarely true. If nothing else, you can always create your profile on LinkedIn to share with others or simply email people with details of what you do. Leave aside the trappings of business and instead focus on creating value and finding out more about your target market. Both of those can usually be done without waiting for the perfect website and business cards.
‘I asked my friends/colleagues/mum about my idea and they said it was great.’ Asking people’s opinion on your idea without actually taking action is a very unreliable way to gather information. The test is whether they’re willing to invest something – time, attention or money. And to prove that you’ll need to have something tangible to offer them.
‘I need more traffic to my website.’ Until you’ve got something people value there is no point trying to get tons of traffic to your site. And you can usually test whether you’ve created something of value by personally talking to a small number of people. Once you’ve done that we’ll learn about how to bring more people to your website in Week 4.