How Black Should Your Box Be?

The Black Box

Magic happens here.

“Why don’t they make the whole plane out of that black box stuff?”
–Stephen Wright

The last company I co-founded was based on open source software. For those of you who are not familiar with software, open source means that anyone can see the actual code that was written to make a given program. If you wanted to see all of the programming behind Apache, the software that is the infrastructure for most of the Internet, for example, all you need to do is download Apache, and you can see if for yourself. Try doing that with, for example, Microsoft Word. You can’t. They are what is called closed source, or proprietary software.

Thus, the conundrum we faced was how can we make money from software where everyone can see the code base? The answer was to provide services based on that software. Anyone could download the software and install it, but getting it to do specifically what they wanted was a different kettle of fish.

We excelled at solving the harder problems, the ones where people threw up their hands and said “I give up.” Once they reached that point, they called us.

Therefore, it was in our best interest to get as many people to install the software and solve the easy problems so that they would get to the hard problems and call us.

But, there was a line that we didn’t want to cross. We didn’t want, as part of our marketing efforts, to solve difficult problems that people would otherwise pay us to solve. Doing so may have increased our credibility, but it would have also cannibalized potential revenues.

In any company that provides a service or a product that is not intuitively simple to solve – in which case, you’re either competing on price or convenience – there is a fine line to walk between making it appear so simple that nobody is willing to pay you for what you offer because it’s perceived to be so simple and obfuscating information with jargon and dense phrases to make you seem like the smartest person on the web. My friend Paula Pant calls this peacocking. Err on the side of peacocking and you risk coming across as either a pompous so-and-so or as such a gearhead that nobody wants to work with you. Neither is a description you want.

How much should you reveal, and how simple do you want to make it appear?

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The approach that we took was to demonstrate how to solve general problems, but never to solve someone’s specific problem. We wrote blog posts and spoke at conferences, and my partner even co-authored a book that still provides royalties four years later. We’d address commonly encountered errors and problems and show how to solve them. The presentations and our content demonstrated code snippets at specific, important points – the “a-ha moment” – but would make assumptions and skip steps along the way to that crescendo of solving the problem.

If someone in the audience asked how to solve a specific problem in their own instance, our stock answer was for them to see us afterwards to discuss a consulting engagement on how to solve it, unless the problem was so general in nature that many people would encounter it and could work through the solution without much effort.

In creating content and making presentations, we lived by one motto:

Don’t give away the special sauce

Whatever it is in your business that causes people to hire you rather than hire someone else, that’s what I define as the “special sauce.” That is what you must preserve as sacrosanct, because once you give that away, you’ve provided others with your competitive advantage to use as their own.

However, just because you can’t give away the special sauce doesn’t mean that you can’t demonstrate its effects and outcomes.

  • Case studies. Show how what you did created life-changing results for your clients. Demonstrate this in a quantifiable way. Don’t just say “Susie’s life was better after I used my ‘SuperRelaxant™ MindMeld’ on her.” Instead, give specific results, such as “Susie’s blood pressure dropped 20 points and she ran a marathon 30 minutes faster after I used my ‘SuperRelaxant™ MindMeld’ on her.” The more specific and dramatic the result is, the more you want to focus on it.
  • Testimonials. While I, as a Registered Investment Adviser, am prohibited by the SEC from providing testimonials, that doesn’t mean you shouldn’t use them to their utmost. Blow away clients and then get testimonials from them. Make sure that, in gathering the testimonials, you have their permission to use the testimonial on your marketing literature. Plaster testimonials everywhere. Testimonials build trust. You want your potential customers to see someone else’s story, think “that’s just like me,” and see the results that those happy clients got from working with you or using your product.
  • Perform benchmarking studies. If your product is 73% faster than your competitor’s product, then put them through benchmarking studies and show in an undeniable fashion how yours performs. Highlight the areas where what you have outclasses what your competitors have. Don’t shy away from making comparisons. But, don’t pull such a smoke screen that you don’t acknowledge where the competitor does well too. If the competitor beats you in something, acknowledge it. Even go so far as to tell your potential customer that if they’re looking for a feature where your competitor shines to go to the competitor. It will add credibility to your claims and it will prevent you from having dissatisfied customers.

There’s one other area your communication should focus on.

Solve the “why” but not the “how”

You want your potential customers to understand why they need to use you. They need to see the benefits. Speak to them in terms of emotions and pain, and in eliminating that pain. No matter who the purchaser is, emotions play some role in the buying process. If a potential client doesn’t understand why they need to be taking action, they rarely will.

Communicating why to a potential customer doesn’t mean sugar-coating everything in flowery, syrupy language. It can be as simple as explaining a problem, the solution, and the benefit. But, if you’re not giving your potential customers the reasons why they should commit to buying, they won’t move their image from you as “an expert in [X]” to “an expert in [X] who can help me solve this problem.”

How do you balance establishing authority and not giving away the farm? How do you convince people to pay you rather than assuming everything should be free? Let’s talk about it in the comments below!

About Jason Hull, CFP®

Jason Hull, CFP®, is the Chief Technology officer of myFinancialAnswers, an online comprehensive financial planning service.