“How would Bill Gates have gone on Dragon’s Den?”

by Daniel Batten on March 9, 2010

You hear it all the time : “what is unique about your business”, “what is your key differentiator?”, “what is your USP?”. (unique selling proposition). I have a fundamental belief that this question is asked too early too often, and it steers companies in the wrong direction.

I decided to give this a road-test this on the wealthiest man in the world at the time

Imagine this interview “The Young Bill Gates on Dragon’s Den”

Dragon: “So Bill… boy are those big glasses. Anyway, what is your USP?”

Bill: My what?

Dragon: (sigh) Your Unique Selling Proposition. Not a good start Bill.

Bill: “Well, we have seen that these things that people use to do complex mathematical equations on and play games on are one day going to be on every desktop on the world.”

Dragon: “People?” That’s a little broad isn’t it. I don’t see “people”. I see other geeks like you. Anyway, what do you call these things?”

Bill: “Its a computer”

Dragon: “You need to think of another name – that’s not sexy enough. People won’t buy something that computes. There will never be mainstream interest. What is so unique about you anyway even if people would buy a geek-niche plaything with an unsexy name? And are you going to make computers. ”

Bill: “No, we are going to get whats called “software” that helps these things run better”. Its not a physical thing that exists like a table or a chair.

Dragon: “And you are going to write this stuff you say doesn’t actually physically exist?”

Bill: “Well we thought we would leave it to others to write good software, and then we would copy it.”

Dragon: “And do it better?”

Bill: “No, we thought we would copy it and do it not as well. After all you don’t have to be great to be bought”

Dragon: “You mean that the functionality wont be as good, but it will be a great user experience?”

Bill: “No, the functionality and the user experience will be not necessarily be as good.”

Dragon: “OK, so you want to create a product no-one is asking for, give it a name no-one will buy, create something – I mean buy something and resell it through a licensing agreement, promote something that is not unique, get to market second with something that is not as functional and not as easy to use.”

Bill: “Exactly. Isn’t it a beautiful vision. But we will win, because we will get a licensing deal with the biggest computer company in the world that gives us royalties every time the thing is sold. They will sign the agreement because they don’t think it’ll ever be a big opportunity. And then we will have a monopoly. We will sell our product cheaper, and it will be good enough. Then using the operating system, bit by bit we will use profits from that to gain a monopoly on the applications that people build to run on the operating system.”

Dragon: “That’s the funniest thing I’ve heard all year Bill. By the way, what did you say your degree was in?”

Bill: “I dropped out”

Dragon: “And what market validation have you done?”

Bill: “Well, we just have this gut feel – and I’ve seen the future and …

Dragon: (rolls eyes). Get a real job kid.

So what’s my point. The point is, you don’t have to be unique to succeed. You don’t have to be best. You don’t have to have a degree. You do have to have a great business model, be a visionary, have conviction verging on madness, and commercial savvy.

Too often I hear investors ask the same batch of questions. “What’s your USP” is a standard one and then decide in unison not to invest if the answer is not good enough. This screens out good companies with a bad questions. Asking a startup what its USP is can be like asking a teenager “what do you want to be when you grow up?” Some will know, others will not. But as one VC told me “80% of companies that succeed fundamentally change their business model.” The point is, things change – USPs, business models, products, the market, everything. That’s why the team, the business acumen, the vision and the conviction is so important.

So at the start of your company – focus on being the same. That is a revolutionary concept I know, but I’ve seen too many companies try to be unique before they even learn the basics of business. Its like trying to play jazz before you know “ba ba black sheep”, or trying to play “Stairway to Heaven” before you can strum “Smoke on the Water”. Or trying to write “Helter Skelter” before you’ve written “Love Love me Do”.

Get really good at being the same first. Then once you are out of the lab and selling your wares, your customers will reflect back to you what is unique about you. Then make that into your USP which is your accellerant in phase II. But trying to work out your USP too early results in fantasy, and stems from ego.

Get good at being the same. Then worry about USP.

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