SUCCESSFUL ventures provide compelling answers to three basic questions: So what? Who cares? Why me? Answering these questions is difficult, but not answering them could lead to failure.
I run a workshop called “The Art of Entrepreneurship”, where I provide a framework to increase new ventures’ chances of success. This applies to startups as well as projects launched within large organisations.
The workshop explores failures that have happened in the payments industry (my area of expertise) when “So what? Who cares? Why me?” was not asked and looks at successful products and services in comparison.
Take biometric payments, where customers pay by touching their finger on a reader. The marketing promise is that you can shop without your wallet. A Silicon Valley company called Pay By Touch raised US$340 million (S$468 million), hired 800 employees and promptly went out of business.
It’s as if nobody asked: “So what? How can I leave my wallet at home if most stores don’t use the service? Is it a hassle to carry a wallet? Who cares? The average shopper or a jogger who doesn’t carry a wallet but who still wants to buy a coffee? Is there a big market? Do they care enough to adopt and pay for this service? If not, will retailers pay for it?”
Ask yourself: Does your product resemble vitamins, painkiller or something addictive like caffeine?
With vitamins, people pay for improvements in the future. They think about ROI before buying. Most products are in this category. With painkillers, buyers want immediate relief and will pay more for it. With caffeine or nicotine, those who are addicted can’t get enough. Think iPhones and social networking.
For the question of “Why me?”, ask yourself what is your special story that makes this venture specifically adapted to you? Companies with a very personal story have a higher ability to stick with it and put in the extra effort. Competitors without a compelling story are less robust and will probably die first.
As the company grows and develops a corporate culture, “Why me?” becomes “Why us?”
Much of this was learned the hard way. I started my last venture, Welcome Real-time, in 1996. The company is now a global provider of payment and loyalty software to banks in 30 countries.
However, I always felt we could have done better, addressing a larger market and with a faster time to market. Now I understand that many of our difficulties came from the fact that “So what, who cares, why me?” and “Vitamins, painkiller or caffeine?” were addressed long after the company was launched.
My new venture, Taggo, addresses these questions from the beginning. Taggo provides a convenient and affordable way to use a mobile phone to replace loyalty and membership cards.
Customers don’t need to carry as many cards, and can join new programmes with an SMS, without filling out forms. Retailers can sign up new customers more easily, at lower cost, and can achieve higher usage than with plastic cards that are often left at home.
So what? Research shows that 93 per cent of retailers that offer loyalty or prepaid cards want to expand membership, while some 60 per cent feel the main reason customers don’t join programmes is that they have too many cards already.
Also, 95 per cent of people with more than three loyalty or membership cards are either “interested” (60 per cent) or “very interested” (35 per cent) in Taggo.
Who cares? Any retailer with a membership programme. There is also a large market of smaller retailers that cannot justify having their own card, as people will not carry a card that can only be used in one or two stores.
Why me? I have been in this industry for 25 years, linking payments, loyalty, real-time marketing and point of sale systems. I have launched several startups and published two payment strategy books and numerous articles. Taggo is a very personal creation.
There will be some 50 startups congregating in Singapore at web technology event Echelon 2010 in June — all asking these questions and looking for answers. As you watch and listen, try to see how each company provides its own answers to “So what, who cares, why me?” and “Vitamins, pain killer or caffeine?”