Estimated reading time: 14 minute(s)
So…. How do you create a great USP? The short answer is….. Slowly, through iterations.
But…. And this is critical….. If you don’t have data to back up your USP, you don’t actually have a USP.
If you’re declaring your USP and you don’t have data to back up with you’re saying, you’re just making it up.
That doesn’t mean you’re wrong. Everyone guesses right on occasion. What it DOES mean is you don’t really know.
Where do you get data with which to design and test your USP?
From prospects and customers. By talking to them.
There is a GREAT section on how to do this in the book Running Lean. The title of the section is Systematically Test Your Plan.
First, Organize the Work into Problems and Solutions
I think this idea is one of the many gems in the book Running Lean. While you’re working to figure out what the market wants, from which you’ll create your USP, it’s helpful to think in terms of Problems and Solutions and to organize your work accordingly.
Problems are what people out there in the marketplace have, that you’re going to solve.
Solutions is how you solve them. Of course, this includes you being paid for products and/or services.
This exercise in figuring out what the market needs require flexibility and an ability to declare when you’ve run into a dead end and need to try something else. For this reason, your work teams should be very small. No more than 3 people.
Create a Problem Team that talks with prospects and customers to develop beliefs about where they’re hurting then devises experiments to determine if those beliefs are right, then defines products and services the market needs.
The Solution Team builds and deploys those products and services.
There is of course much interaction between the two teams as this is an iterative process.
Initial Goals are Speed, Learning, and Focus
The initial work is to turn beliefs into testable hypothesis, design tests, and run the tests. Most beliefs will not pan out.
I’m sure at some point you’ve heard the term “Fail fast, fail often”. This is what it refers to. The goal is not failure, but learning and focus. If an experiment shows an initial belief was wrong, it was wrong. Let it go.
Design Small Experiments
Experiments can (and should) be small and cheap. When the people who started Dropbox were testing their idea, they wrote just enough software to create a screen share video showing how Dropbox works (even though it didn’t).
After thousands of people added themselves to the Beta notification list, they THEN built the software.
Hypothesis Must be Falsifiable
A bad example of a hypothesis is “Industry experts will recognize the value”. A much better example is “Within 30 days of X event, 5 industry experts will mention us via social media”.
This is All Part of Proving Your Market
If you wish to obtain financing for your early stage business, you need to prove to potential investors that there is a marketing and you know how to service it.
Create Accessible Dashboards
This is actually a large topic in its own right. It may even be a future blog post, but for now, focus on the main ideas:
Focus on The Customer Factory to avoid Vanity Metrics that don’t matter
Separate data collection from the data display
Accept that the free analytics platforms (i.e.: Google Analytics) won’t do
The Main Questions
There are a few questions that are very fundamental to your ability to extract your USP out of the minds of your customers and prospects.
Bear in mind, you might not like to hear what they say. They may say they have needs you’re not meeting. If this occurs, you need to “flip the framing”. It’s not that they have needs YOU’RE not meeting, it’s that THEY have needs that aren’t being met.
This is an opportunity for you to adjust your USP (and possibly your business focus) to meet them.
When you interview customers and prospects, ask open-ended questions. Questions that are too focused tend to narrow the thinking of the person the question was put to. Don’t do that.
Ask very opened ended questions like “Relative to products of type X, what do you want from them that you’re not getting?”.
Where Do They Hurt?
We all want to stop the pain, whatever it may be. So you need to find out where they hurt.
What works poorly with their current solution?
What do they want out of their current solution that isn’t there?
You get the idea.
How Do You Fix This?
This not a question of how YOU (the entrepreneur reading this article) fixes this. This is a question that you (the entrepreneur reading this article) asks the person you’re interviewing.
If something is not right with some product or service they use, clearly they need something. How do they best meet that needs considering the drawbacks of their current solution?
If they’re doing some weird convoluted workaround that is a pain, they clearly need a solution. If they’re not, maybe they don’t really need it. After all, they’re living without it now.
Who Else Fixes This?
This is not a question for the person you’re interviewing per se (although sometimes it is) but rather is a question for YOU to research. What products out there meet their needs (ease their pain)?
This is part of you doing competitive research, which IS part of you developing your USP.
This article is part of a series
In case you’re interested in learning more, this article is part of a series of articles. To read the lead article in the series, select the link below.