Instant and Ongoing Value

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Instant and ongoing value.

Reduce the pain for customers to try and adopt your product, because pain is the single biggest barrier to adoption. You need to demonstrate enough gain, quickly enough, to overcome it. We talk about it as the gain-pain ratio. In the middle sits what we call inertia risk, the switching cost: “I’ve already got something similar, it’s a pain to switch, doing nothing is easier, maybe the alternatives are good enough, and I don’t want to risk a big license fee on a startup.” That inertia keeps people from trying things.

Your job is to create a value proposition that overcomes the pain: new revenue, savings, saving time, saving the cost of hiring, competitive advantage, reputation, whatever it is, enough to overcome the pain of discovering, trying, buying, implementing, deploying, and owning your product. And if you can do it instantly, it is incredibly powerful.

Rapid payback. How many of you have downloaded an app and deleted it within two minutes? That is what we are trying to avoid; we want instant gratification. In the enterprise it translates into rapid payback: people do not expect instant gratification, but they expect payback within three months ideally, certainly within six to nine, and not greater than twelve, because beyond that you are outside their budgeting cycles. We call it time to value, and sub-three-months is great in the enterprise because it makes cost modeling and payback easy to justify.

Pagos AI. An enterprise software investment I made, and it hits all the SLIP elements, baked into its DNA. The founder was an early employee at Braintree, a giant payments company owned by PayPal, and he built a company out of all the dozens of things customers complained about that PayPal could never get around to fixing. If you are a big e-commerce company like Adobe or Ticketmaster, you have ten different companies processing your payments around the world, and no way to analyze all that data yourself. Pagos aggregates it and does analytics and fraud detection. And the sales guys can onboard you in a phone call: “Give me the encryption key to your payment provider,” and their first demonstration is ingesting all your data into the product over the phone so you see it in dashboards, literally instantaneous. That is easy onboarding, low initial cost (close to a freemium model), instant value creation because people deploy right away and start saving money and detecting fraud, and it supports all the payment platforms, so it plays nice in the ecosystem.

Startup secret: self-proving value. If your product is about improving a process, provide the proof as part of the product. Pagos baselines the results of these payment-processing companies, and once the product is installed, you start to see how you are performing against benchmarks. The really good companies build this in from day one: they take a baseline the moment the product goes in (“here’s how much storage you were using, here’s how much we’ve reduced it and your cost”), so the value is measured for the customer right there, and they cannot even avoid seeing it. Now there is no question about whether you are delivering value; it is shown to them. It is almost self-documenting, and it helps enormously with your business case and your justification. Analytics and surfacing reports that prove value right out of the gate are a fantastic thing to build in early.

Ongoing value. Make sure you are delivering value on an ongoing basis, not a one-and-done: increasing revenue, reducing time, driving competitive advantage. And in the consumer world, ongoing value means people simply cannot live without it.

Breakout: streamlining time to value. One example from the room: “I’m working on a book for parents of children with learning difficulties who struggle to learn to read. We developed and tested it with professionals who work with these children, and we want to turn it into a book for parents. To make the value instant, we thought about coupling the book with an app so parents can test their children, see where they start and how they progress, understand whether their child is at a different pace than others their age, and it also gives us evidence the book is actually working.” Bingo: that is exactly it.