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I came across a post the other day from Stewart Butterfield that brought a little smile to my face and really had me nodding my head. It was a memo that was sent to the team at Tiny Speck, the makers of Slack, recently.

It outlines the classic trap for start-up tech companies – not being focused on a market and selling the features and not the benefits. It is no different for Kiwi tech companies. They will have a product or service that is cutting edge, new or something that will really help the end user – saving time, being more efficient etc. But more often than not, they will be talking about the features and a lot of technical aspects of their product or service.

Here’s a piece from Stewart’s memo which really sums up this point:

“We are unlikely to be able to sell “a group chat system” very well: there are just not enough people shopping for group chat system (and, as pointed out elsewhere, our current fax machine works fine).

What we are selling is not the software product — the set of all the features, in their specific implementation — because there are just not many buyers for this software product.

However, if we are selling “a reduction in the cost of communication” or “zero effort knowledge management” or “making better decisions, faster” or “all your team communication, instantly searchable, available wherever you go” or “75% less email” or some other valuable result of adopting Slack, we will find many more buyers.

That’s why what we’re selling is organizational transformation. The software just happens to be the part we’re able to build & ship (and the means for us to get our cut).

We’re selling a reduction in information overload, relief from stress, and a new ability to extract the enormous value of hitherto useless corporate archives. We’re selling better organizations, better teams. That’s a good thing for people to buy and it is a much better thing for us to sell in the long run. We will be successful to the extent that we create better teams.”

So what Kiwi tech companies need to do is have a think about what benefits their customers are getting from using their product or service. Look at some of the players that are dominating their market niche and see what they’re doing right. Because at the end of the day, people will buy your product not for what it is, but for what it does for them.

To read the full memo, click here.

 

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