So many start-ups come from a position of “look how great my product is” but, once demand has been shown, any product can be copied given enough time and resources so, at best we only ever have first mover advantage. Instead we should focus on building enduring customer loyalty. How is it then that great companies do that? They focus on what they stand for; not what they do
Simon Sinek, in his Golden Circle principle, talks about “People don’t buy what you do they buy why you do it” but, how does this work in practice? The first thing to know is that people make decisions emotionally first and rationally second so; we must make an emotional connection first. The way to do that is not to talk about the product. There’s only one place a customer discussion that leads with the product will end, and that’s a discussion about price! We need them first to get what we believe in, our cause, why are we doing this and why should they care. Once the emotional connection is made benefits and features have their place in the second or, rational part of the decision. It is though crucial to realize that the rational part is about justifying the emotional decision and rarely changes the outcome. Approaching customers in this way means they are not just customers; they are advocates!
We have to then start with a belief, not a state of mind so we can’t start with what we do and work back; it doesn’t work. This is the inside-out principle of Why, How and What in the Golden Circle. The way this works is that Why is a belief, How is the action we take to realize the belief and What is the result of the action. Simply put it’s How we get Why into What we do. It is essential to do this because it’s What we do that’s in contact with the market; it’s what people see. If Why is not visible in What we do people won’t see it. Sinek calls this building a megaphone for Why
First then we have to understand how we get to Why, our belief, and there are two things to know. The first is Why always comes from one of the founders; it is what they believe in. Now, I commonly hear founders say, “This is my Why and this is the company’s Why” and it’s important to realize there is no such thing. The founders Why and the company’s Why are one and the same. The second is that Why is not about the future, it’s not even about the present, it’s all about the past. It’s the upbringing and life experiences that the founder has had that make them who they are; that is what we need to expose. If our company is differentiated by the founders belief it’s impossible to copy and because no two people are the same we are by definition unique
Now we need to get Why into What we do, these are our Hows. They are a set of instructions that define the way we work; they are the principles, procedures and processes that define us. As a result Hows must tell us how to act. For example “We want to be innovative” is not a How. We need to know what innovation looks like, how do we act when we’re being innovative? The way to think about this is to imagine explaining to an employee how we do innovation, that’s a How. Finally, we have to define What we do. There are three elements to What: Emotional, Social and Functional and they are in order of importance. Remembering What is the result of our actions, the Hows, we need to define the way customers will to feel about us, the Emotional, the way other people think about them, the Social, and finally what things do we actually do, the Functional. In this way we will ensure we know the emotional connection we want to make with customers and why that will appeal to them
Once we understand all of this it has to go through everything we do, consistency is key to making an emotional connection with customers. That also goes to our employees, they need to get it too, because there’s one thing for sure if our employees don’t know Why, our customers have no chance