Monday, January 26, 2015

What's Your Problem?

What's Your Problem? Business
Does your business sell Oxygen, Aspirin, or Jewelry?

What's your problem?

This is the question you need to ask your business.

To put it more gently: what's the problem you're trying to fix?

They say that every successful business sells one of 3 things: oxygen, aspirin, or jewelry.

Oxygen is something everyone needs -- it's solving a big, universal, urgent problem whose demand remains steadily high.

Aspirin relieves pain -- it solves a painful problem that many people experience in reaction to a specific situation.

Jewelry is luxurious -- it makes you feel special; it's a nice-to-have, yet it's nice enough that people are willing to pay a premium for it.

Entire industries can fall into these 3 categories.

"Oxygen" industries: utilities, accountants, funeral services, etc. These industries have reliable demand. 
"Aspirin" industries: doctors, tutors, dry cleaners, plumbers, etc. These industries get sporadic, ad hoc business in reaction to a specific problem. 
"Jewelry" industries: massage therapy, resorts, designer clothing, spas, etc. These industries tend to be seasonal and fluctuate with the economy.

You get the picture, right?

Let's look at it another way. Within a given industry, can companies succeed by tackling different problems? Yes!

For example, in the food industry:

  • Oxygen: Stop & Shop. Everyone needs to eat regularly, so go here to stock up on necessities.
  • Aspirin: Bodegas. You're hungry and you need food close by, right now.
  • Jewelry: Whole Foods. You don't need to buy organic, fair-trade persimmons, but you can and do.
What's your problem? Food

Or coffee:

  • Oxygen: Folgers
  • Aspirin: Dunkin Donuts
  • Jewelry: Starbucks
What's Your Problem?

Or even water:

  • Oxygen: your municipal water
  • Aspirin: a bottle of water at a convenience store
  • Jewelry: Perrier
What's Your Problem? Water

You can try this exercise with pretty much any industry and start to notice how different companies position their product to solve one of these 3 problems. 

It also becomes very clear why certain companies succeed: they decide which problem they're solving and they stick to it. Imagine if Perrier wanted to be carried at rest stops. Or if Stop n Shop charged $30 for grass-fed organic steak. It wouldn't make good business sense, because their branding is aligned to fight one problem. More than that, they problem they choose dictates when, where, how, why, and who they sell to.

So what's your problem? Pick one. Solve that one problem like a champ and don't lose focus.

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