Strategy: You do what?! : The Importance of describing what you do effectively

With Fintech moving so quickly, one area many technology companies struggle with currently is explaining what they actually do.

While perfecting a crisp definition of your function might seem like a ‘nice-to-have’ to sort at some point (no rush), it is a dangerous or even deadly problem if left unsolved.

Why deadly?

Attention spans are plummeting and humans, faced with the daily deluge of information, increasingly are programmed to filter things into ‘relevant’ or ‘not relevant’ buckets at breakneck speed. If you can’t be neatly put into the ‘relevant’ bucket in 80 seconds or less, guess where your prospective customers will put you by default? You got it! They’ll move on and never spare a thought for you again. Game over!

Make sure what you actually do is instantly understood.

Use existing categories to describe what you do…

Businesses strive to prove their solutions are differentiated, but it’s one thing to have a demonstrably different solution or USP to your competitors; quite another to try and create an altogether new category. Having a unique value proposition helps to win deals, but existing in a category that has no common definition or understanding makes it hard for any prospective customer to figure out whether you are an additional cost, or competing for budget assigned elsewhere. This is a massive trap I see companies fall into time-and-again.

If there are industry-standard definitions for what you do, use them! Don’t try to get clever by creating new words for things that already exist as a way to differentiate. You will only create intellectual overhead for your prospects that will stand between them and understanding your offering.

Depending on what your technology does, you can (and should) still leverage existing definitions and categories that your prospect is already familiar with. Here are 3 examples of how this can be done.

#1 Define yourself inside a category

By clearly associating yourself with a category, you are entering that market and competing for those dollars. It’s true that this does make for more direct competition, but more often the benefit from being easy-to-understand outweighs any negativity associated with having to differentiate.

A great case study here is Monday.com. The tool was primarily a project and task management SaaS. However, the budget for these tools is much less than other categories. They have repositioned some of the functionality as a CRM. In doing so they are leveraging a definition that is already created by Salesforce. Although there is much more competition in this category, there is also more demand in a mature market. They can still offer a very different approach and flavour of CRM to capture their niche.

Educating a market on something wholly new takes time, and money. If you’re a young company with limited runway, you may run out of cash before you can educate the market. Associating yourself with existing categories allows you to slipstream on the work those competitors had to do to ‘warm’ that market up.

#2 Position Adjacent to a category

You might be an additional layer of technology that didn’t previously exist, but if you describe how you sit relative to other known and familiar components, the prospect will understand better. Furthermore, it provides a platform for you to describe how you interact and drive additional value with these adjacent components. E.g we connect to, and enhance, these components either side of us.

#3 Borrow terminology relative to sub-functionality of other categories

If your technology exists in one of the spaces where the lines are being redrawn and standard categories redefined, you can reference yourself against a smaller set of sub-functionality that is already associated with that category. e.g we provide the ledger of a core.

How do you know when you have it right?

The problem for founders are that they are ‘inside’ the problem. Spending all day, every day with the solution OF COURSE you know what you do. That’s not the test. The test is sharpening the language such that your prospective buyers will be able to near-instantly understand you.

You could ask your friends outside the industry how clear your website is, but if you’re a domain-specific technology they aren’t a good example either. One of the best tests is to either ask peers in the industry to play back your value proposition as they understand it. Or, ask potential employees to do this as part of the interview process. These two groups will provide you a good view of how clearly your signal is being transmitted as both are representative of the foundational knowledge you should assume of your target customers.

If you're unhappy with your messaging, website, or client-facing materials, we offer project-based guidance to develop and sharpen your messaging.