Don’t forget why people are paying you

paying youWe had built the perfect decision engine

Everything was in place. We had created the perfect solution. All you needed to do was answer a single page of questions and our decision engine – patented and leveraging the latest in forward-chaining artificial intelligence – would spit out the product you were looking for.

Was there a real problem we were solving? Yes.
Was our solution actually solving the problem? Yes.
Was anyone buying our solution? Only a few.

We started with a clear sense of the challenge people were facing – this was back when digital PCS phones first entered the business market. Employees were buying nice phones with cheap plans and then running up the bill – and putting it on their expense reports.

And while we had built an engine to figure out what the right phone and plan combo would be perfect for all your various employees, traction wasn't happening.

Until the pivot. We didn't call it a pivot back then. We called it surviving.

The Insight

The insight we needed came from a prospective investor. We were sitting with KSL, who you may have never heard of. In 2004 they sold their recreation properties for 2.4 Billion. Yes, with a B. And here we were, pre-sale, meeting with a few of the key folks there.

They smiled at the amount we were raising and highlighted that it was not sufficiently large for them as a company. Any one of their folks could write that amount on a personal check.

And then one of the guys at the table made this statement, “Why would anyone want to pay  you to solve that problem? Wouldn't they just throw a bit more money at the problem just to make it go away?”

What he was highlighting was that companies would likely pay more for us to get rid of the problem than for us to help them analyze and resolve the puzzle.

Our Pivot

That's the day we took our recommendation engine and pushed it to the side. We built a procurement solution that automated much of the problem and saw 140 corporate sales in 2 weeks.

Talk about immediate traction – and for a higher price than we'd ever thought about charging for the personalized recommendations.

That was the day I learned that when people, companies or individuals alike, pay you – you have to get really clear on why they're paying you.

Yesterday's Conversation

I hadn't thought about those days and that meeting for a while. Until a call I had yesterday.

The person I was talking to was thinking about building a new WordPress solution for restaurants. He was thinking about this because he'd already had proven success building sites for restaurants.

Now, first of all, that's critical. This wasn't a guy who was just dreaming about building a Happy Tables competitor. He had sold several restaurants on their need for a web site and had built them their sites. He had also solved the recurring revenue problem and was charging them monthly. And they were paying.

So all in all, things were looking very good.

But the more I listened, the more I realized he was proposing a switch. In the first case, he had built the sites for the restaurants, and they were paying him to keep it updated. In this new idea, he would give them the tools to build it themselves.

See where I'm going?

Know why people are paying you!

Now he may go do it. And it may be a huge success. He has the kind of drive to pull it off.

But my caution to him yesterday is the same caution I'd give you – based on the lesson I learned fifteen years ago: know why people are paying you!

If someone is paying you to get rid of their web site issues – be them development, design, or content creation – don't assume that giving them more access to take care of things themselves will be a positive thing.

People pay for a lot of reasons

Now don't get me wrong, it's not like there's not a market for people to do it themselves. Lots of people out there want to try their hand at web design. You just have to know what segment you're focused on and deliver the value they're expecting.

If you're selling something, and people are paying you – there could be a lot of different reasons:

  1. People are paying you because they're scared of something.
  2. People are paying you because others are doing it.
  3. People are paying you because it makes them feel important.
  4. People are paying you because they have a direct need.
  5. People are paying you because they think they'll need it later.
  6. People are paying you because they feel like they're getting a deal.
  7. People are paying you because you persuaded them to.
  8. People are paying you because they've gotten used to it.
  9. People are paying you because you're not your competitor.
  10. People are paying you because you get rid of a problem.
  11. People are paying you because you're creating an opportunity.
  12. People are paying you because you're faster.
  13. People are paying you because the line for your stuff is longer.
  14. People are paying you because they thought you were someone else.
  15. People are paying you because it's someone else's money (and they don't care).
  16. People are paying you because you're right in front of them.
  17. People are paying you because you proved you're the best.
  18. People are paying you because you're the cheapest.
  19. People are paying you because it's the cool thing to do.
  20. People are paying you because they want to get close to you.

I could go on. But you get the point. There are a lot of reasons why you're getting people's money. Make sure you're clear about it so that your products align with their motivations and the money keeps coming in.