Hiten Shah on Choosing the Right Value Proposition

Defining Value Propositions - It’s Not About You

Louis: So let’s get started. Straight away, how do you. How would you define what a value proposition is? You have extensive experience launching products, updating them, side projects, et cetera, et cetera. But how do you define what a value proposition is?

Hiten Shah: Yeah, in short, I think it’s what one sort of entity, if you want to call it that, can do for another. And that’s it. It’s very simple. And the reason I would put it that way is because a value proposition can exist between any basically two entities. It could be an individual and organization. It could be an organization or organization, it could be an individual and an individual. And it’s basically the value that one sort of entity delivers to another. And the value proposition is how that sort of quantified, communicated, realized, etc. And you know, the, the typical way people think about this is your business has a value proposition for its customers. The way I think about it is that your, your value proposition for a business, a service one human to another, is what they’re getting from you that is of value to them. And when you think about it that way, I think it really defines, it defines what this means. And what it means is that it’s not up to you who’s giving the value, whether it’s an organization or individual, to the other person to be like, oh, here’s my value proposition for you. It’s actually more works the other way around where that person or that company, organization, group of individuals is like, this is what that other entity, organization, person does for me and this is why it’s valuable. And I think that’s the basis of a value proposition is this idea that it’s in someone else’s mind. It’s not in your mind, the one who’s delivering the value, it’s in the other, other party’s mind.

Louis: So it’s a generous, it’s a way to think about it generously. Thinking about your people first, what do they want? And you provide that to them. You don’t start with your, with you being self centered and think of your product. And now what is our value proposition? And let’s find people who would care about it. It’s really the opposite. Right. You think of those people first, what they care about, because that’s what they care about. It’s themselves. Right?

Hiten Shah: Yeah. If you don’t do that, then whatever value proposition you come up with, you’re kind of throwing darts against the wall and hoping something just sticks and it’s probably not going to hit the bullseye for sure. So you sort of think of it the other way and you think about these people and what their needs are. I don’t know. I’ve seen that in every single basically business I’ve started or business I’ve talked to somebody about. Like it doesn’t even matter what it is. It’s that there’s, there’s, there’s this sort of effect where like no matter what I say I’m doing for you, if you don’t agree, I don’t get to have your business, I don’t get to be in that relationship with you. And you could go all the way to dating, you could go to marriage, you could go to any type of business. This will work. Because the whole idea of a value proposition is it’s for somebody else, it’s not for the person who’s delivering the value. And what I mean by that is like my understanding of it as a person delivering value is only valuable if it relates to how I’m delivering value to somebody else or some other organization or whatever. And this is why this method works. No matter what industry you’re in, no matter, like I said, it boils down to even relationships. I think relationships are a set of value propositions to each other. And when they fall apart, it’s usually because some value is not met, some expectation of that value is not delivered on. And that’s it.

The Three Biggest Value Proposition Mistakes

Louis: Yeah, that’s when you know you’re diving very deep into a topic when you see it everywhere. You go back to first principles, right? Fundamental truth, which is the way I like to think. So it’s great to hear. So before we actually go through kind of a step by step on how to actually test value propositions, if you have a few in mind, and maybe how to come up with them in the first place, based on your experience, you said you have founded multiple very successful companies. You’re probably advising a lot as well, been in touch with a lot of people. What do you think are the top two other mistakes folks are doing when it comes to value proposition besides the main one you described there?

Hiten Shah: Yeah. Let me even give you an example from right now, if I may. So. So sure you said I said certain things about the businesses I started. In reality, you said it, I didn’t say it. So in a way, like, it’s really like what people get wrong is they don’t pay attention to basically this idea that, look, you said it, not me, and if you said it, it’s in your mind. So for example, you said that the businesses I’ve started have been successful. I didn’t say that. You didn’t even ask me if they have been right. Because if you would have asked me, I would have said successful. I don’t, I don’t really know what that means. I think I tried my best, you know, the teams did and we got where we got, you know, and here we are. Right. Like whether that thing is over or the thing is still going like that eye of the beholder is not me. The eye of the beholder is is you. So. So thank you for saying that. I think there’s some level of credibility maybe I have as a result of what’s in other people’s minds. But in my mind, I don’t know, because it doesn’t matter. So I think what people get wrong is they try to make up the value proposition in their own heads about what they’re doing, oftentimes because what they’re doing is something that they want to see exist in the world, and they haven’t really thought about whether. Whether it should exist to other people. I know this might sound like what I just said, you know, what we’ve been talking about, but it is a second point. The second point is it doesn’t matter what you think. It just doesn’t. So a lot of times people will come up with things and it’s just wrong because their whole idea of a value proposition is based on what they think about it. So if you ask me about my businesses, I would go into a lot of detail about them and what happened, but I would never use the word successful. But you did. So that means that. I’m not saying I should, but it’s just information for me, regardless of what I think. And I think that there’s a resistance oftentimes to what other people think about something of yours. And that resistance. Yeah, let’s.

Understanding Resistance to Customer Feedback

Louis: Sorry to catch you there, but I think you’re about to touch on it. Let’s talk about this resistance. Where do you think it’s mainly coming from?

Hiten Shah: A lot of places. I think it usually comes from some form of a reaction that you have to what you just heard, and whether that reaction is positive or negative, that’s really what sort of shapes your own ability to deal with what you’re hearing. I mean, this is one of the biggest problems with value propositions, which is when you don’t personally agree with what you’re hearing, and then you bias yourself towards what you actually want something to be when it won’t be that, because nobody’s saying it. So I don’t think if I said my businesses have been successful, that would be as powerful or accurate as someone else saying it. Because my definition. My definition of it because it’s mine is going to be different than yours. But what I really care about is your definition of it, not mine. And I think there’s a lot of aversion there to being able to see the truth about yourself or the truth about what you’re doing. And the main reason is you get invested in it. So the reason this happens is usually a really strong emotional investment in what you’re doing and what you want it to be, versus the ability to sort of. I like to call it, you go where the wind blows. So if the wind is blowing a certain way, kind of you go there. So a good example of this is like a lawyer who. Who’s really good at, let’s say, like, trademark law, and yet they want to do like, I don’t know, some. Some kind of. Some kind of like M and A. Yeah, they want to be an M and A lawyer. Right. That’s very different than trademarks. But they happen to be really good at trademarks and everybody knows them as a lawyer. That’s all about trademark. But they want to do M and A. So think about how much effort they’re going to have to put in to become known and good at being an M and A lawyer and known for it. Compared to the thing that’s the path of least resistance, where the wind is already blowing, which is other people consider them a great trademark lawyer. And it’s not to say that they shouldn’t be an M and A lawyer, anything like that. It’s just to say that, like, you have a position in people’s mind. And I don’t think you can talk about value propositions without thinking about positioning. And positioning to me is really like when a good service person, human being, whatever, has carved out a place in your brain. And that positioning is what I’m really sort of trying to figure out constantly when I’m sort of presented with a problem where we need to kind of figure out the value proposition.

Louis: There are ways, though, to. When you have tens of millions or hundreds of millions and a lot of time and resources to shape people’s minds, to make them start. Think of you as specific thing. Like, you know, there’s this massive, very trendy thing at the minute in SAS in particular, where everyone is talking about category creation, where you have to own a specific word, specific category, you create your own, and then. And then people start thinking about it this way. But again, from what you’re saying, it’s not the path of least resistance.

Why Category Creation Often Fails

Hiten Shah: Right.

Louis: Incredibly difficult thing to do.

Hiten Shah: Here’s the funny thing. Even that doesn’t work unless you’re able to carve out that piece of someone’s mind. And you won’t carve out that piece of someone’s mind by making up words yourself that don’t make sense to them. This is where category creation and this sort of hyped thing right now fails. It’s because it doesn’t really focus on a shift in someone’s mind or a whole construct in someone’s mind, your customer’s mind. If it doesn’t focus on that, you’re going to put a lot of effort into creating a category that might never take off.

Louis: Yeah, we remember and we see the very successful case studies of the few companies who nailed it, or seem to have nailed it based on a few metrics that we know about, while all of the others that have tried and burned, I would say at this stage, billions in total, haven’t succeeded. Right. So it’s this kind of fallacy of success. I’m going to forget the name of this particular bias, survivorship bias. But yes, it’s interesting. Okay, so you mentioned the second mistake. And before we go on into step by step on how to test value proposition, what will you think that the kind of the, the third biggest mistake or another mistake you see in this space?

Hiten Shah: Yeah. When it comes to value propositions, I think my favorite one, it’s related to the category creation is when, when people use words that are not actually, like, like they don’t, they don’t make sense, or sometimes they don’t make sense anymore. And so, for example, if you somehow got inspired by the floppy disk and you decided to talk about floppy disk right now in your value proposition, that wouldn’t make any sense. Nobody knows what a floppy disk is anymore. Even if you use as an analogy, you’d have to make sure you’re trying to attract people who know what a floppy disk is. Does my son, who’s 10 years old, know what a floppy disk is? I don’t think so. Maybe as a joke, Right. Maybe as this weird thing that, that he might have, like, found in my closet for some reason. Right. Or something like that. But at the end of the day, like, I think the mistake you make is like you have such a. If you’re the one creating the value proposition and you’re in the business, you have such a clear view in your mind of the market, the opportunity, the words. And what you might end up doing is end up using buzzwords and things like that that don’t make any sense to your actual customer. And I know my theme is going back to the customer, but really, like, value is about the other person, not about you. Value is about what you’re delivering. And so it is always going to go back to that. For me, no matter what pitfall I find the ultimate truth is that if it doesn’t land in someone else’s mind, it doesn’t really make sense. It’s not something that you should be pursuing even with category creation. Like, it’s almost like the category you say has to feel like you pulled it out of the customer versus a category that you made up out of thin air. And the best ones are not made up out of thin air. And honestly, a lot of the times you don’t even need your own category in order to be wildly successful.

Louis: Okay, that’s great. I think it’s a very good introduction into the topic and how to do it. And because you have this new company, use FYI, I’m pretty sure that there’s probably an example or two that you can pull from your experience there to build this value proposition.

The FYI Value Proposition Evolution

Hiten Shah: Right? I’ve got lots of examples. Yeah, that’s fine. I’ll give them from all three of my SaaS businesses that you said the two of them being, you said as successful. So sure, we’ll go from there.

Louis: I like how you challenge that and it’s true. It’s actually very easy to be kind of focused on the authority that you have, the following that you have, and just consider those to be successful. I mean, I’m in the space, so I know the companies you created and I know the impact it had. But maybe my definition of success is more like whether, whether it’s well known enough companies and maybe on your. In your head it’s completely different. It’s more you have creating them and all of that.

Hiten Shah: And that’s why in my head I’m just like, yeah, if he says so, sure, that makes sense. I mean, especially considering this topic. Right. Usually I let it go, but to me, like, to be frank, like, I don’t think those are successful. I think we could have done a heck of a lot more. Were they popular or were they popularized? Yeah, absolutely. I mean, but like, I don’t know, I feel like they’re definitely in both of those businesses, companies that were more successful than us by my definitions, which is also related to impact. But in terms of brand reach and stuff like that. Absolutely. But you know, in a way, like, I think it’s completely related to this topic because some of those businesses I’ve started have not been successful because of the value proposition. They’ve been successful because of just simply being at a good place, being very opportunistic about our ability to build the brand more so than being opportunistic about our ability to spread the value proposition.

Louis: Okay, that makes sense. And I appreciate you pushing back on this. It’s interesting to have this debate. So your latest company, your last company, FYI, the value proposition, or at least I would say the headline on the homepage is to find your documents in three clicks or less. Really simple, straight to the point. It’s very, very easy to understand it. And kudos to you because the homepage is actually extremely simple. You have your logo on the left, the main headline, the sub headline is actually a quote, a main call to action, which is to sign in with Google, which is quite easy to do. And then on the right you have a bunch of the apps that you kind of integrate with. And that’s pretty much it. Very, very, very, very simple. So anyway, let’s say you have someone contacting you with a product or service they’re planning to sell, right? And they want to know, okay, I want to define something that people will understand that will actually make them take action and understand what the value is for them. What is the first step that you advise them to take?

Step-by-Step Value Proposition Development

Hiten Shah: Yeah, so the first step that I would take is I would write out the options in your mind about the value proposition. And even if it’s long and long winded, just start somewhere and I would just keep going until I feel a little exhausted about trying to write the value proposition. And the reason I suggest that first is this is assuming you’re independent, you’re alone, nobody’s using your product yet, and you need to make something up from scratch. So I’m assuming I’m making those assumptions. If people are using your product, we can talk about kind of what that looks like. So this is a starting point for me. And early on, like the value prop we had for FYI before we kind of really tested, it was like search and organize all your documents in one place. And that’s not as compelling as find your documents in three clicks or less. There’s another version that it’s not as compelling because it assumes search and organize means I have to search, I have to organize, I kind of have to do all this work. And the whole thing in our market is people are tired of endless searches and endless sort of maintenance of organizing organization systems in order to just find their documents and find the things they need. And so if we, when we use that value proposition, it didn’t resonate as much. We didn’t get as high of a signup rate on our homepage simply because it was not crisp and clear and it was not actually a value. Searching and organizing your documents all in one place is actually not as strong of a value proposition as we had thought because of just what we believed about our business and what we did. From a very direct perspective, that’s essentially what we do. We actually do it automatically for you. But really the result is an interface that helps you find documents without actually having to search for that. Even though we have a search box. A lot of this has to do with. Are we able to deliver on this value proposition during that first sort of session after people sign up? So, you know, in relation to this, I think, like, I’m gonna. I’m gonna take a quick offshoot and say, okay, let’s say I was introduced to a lawyer, and it’s because I have a problem. Like, let’s say I really need an agreement made. And I introduced you to one of. One of the lawyers I work with in his firm. His name’s Joey. And I’ve worked with Joey for, I want to say, somewhere in the, like, 14, 13, 15 years range. He’s not the only lawyer I work with. And over time, I’ve referred many, many, many, many. I mean, to the point of being countless people to him. And when I introduce people, it’s usually in a way where it’s like, look, Joey and his firm are not one of the big law firms, and they’re very good at a few very specific things that I’ve learned over the years is what I like to use them for. One of the things is being able to evaluate contracts for partnership agreements and really make sure that they are fair and both sides are protected. In particular, if Joey’s my lawyer, that we’re really accounting for things that I don’t even think about when I think about those partnerships. And Joey’s able to do that faster and in a less expensive way than if I hired Fenwick or Gunderson or somebody like that, which are the bigger law firms. So the reason I mentioned this is, like, if I. If someone comes to me with this sort of problem where they need an agreement and it needs to be really good, and it’s like a partner agreement, I send them to Joey. I don’t have anyone else to send them to. Now, the reason I. Again, the reason I mentioned that is that word of mouth is now what Joey’s all about to that person I. I talked to and introduced Joey to. So does Joey get to change that value prop, like, in one call? No, Joey gets to deliver on that value prop in that one call, in that first call. How does he get to change that impression? He changes that impression if he wants to, as he does his work. Is he actually good at What Heaton said he’s good at after you hire him, that’s when you get to find out, is he good at other things? And can Joey kind of help this company with other things? Maybe. Is that what the company came to him for? Initially, no. Will the company buy something more from him later? Maybe. But what did they come to him for? So if Joey goes there and says, look, I’m really good at incorporation paperwork, I’m really good at helping you with fundraising with your term sheet, is this person going to believe him? Well, probably not in the beginning until he’s done a good job at the thing that they came to him for. So in our case, at FYI, there’s a lot of things FYI can do. But the thing that we know gets people in the door is the thing that you mentioned is on the homepage, find your documents in three clicks or less, and it has the right amount of curiosity and the right amount of alignment with what we can deliver on within the first session for somebody is this interface that’s automatically organized your documents. Even if I told you that, hey, this is an interface, it’s going to magically automatically organize your documents. You’re gonna look at me and be like, what do you, huh? What do you mean? How do you do that? And then I lost you already because you’re trying to wonder, how do you do that? Right? When I say find your documents in three clicks or less. Honestly, nobody wonders how we do that. Even though that’s a pretty strong value proposition. They just want it that bad because there’s a lot of pain here of finding these documents. I mean, as odd as it sounds, that pain is universal. I’ve heard it from every single person I’ve talked to. I could even tell it to my 10 year old kid. He’s like, yeah, I kind of get why people have that problem. Right? So, yeah. So my point here is like, you bring, you bring people in for one thing and then you get, you get the sort of right to do more for them if you’ve done a good job at that one thing. And one of the mistakes people make is they try to sell you a lot of things on that value proposition and then you lose them.

Louis: So I’m nodding like an idiot for the last five minutes, but because what you’re saying is incredibly important and exactly as you said just there, this is one of the mistakes I see being made all the time. Folks are so eager to show what they’re made of and what they can do for you, whatever the industry like you mentioned a lawyer, but it could be anything that they are kind of diluting everything they say and they add too much to it and they add buzzwords and it just becomes this. We do all things to all people and it just sounds. It doesn’t connect with me. While what you’re prescribing is really about, pick the one thing that you are excellent at that you know you can deliver pretty quickly, do the work to reach this value, and then the world is on your oyster. You can do other stuff, but keep it simple from the start and connect with the biggest pain they have that they can relieve as quickly as possible. Right?

Hiten Shah: Yeah. That’s why, like in the lawyer example, I know what Joey’s going to do when he gets on the call. He’s going to ask them about the challenge they’re having and he’s going to learn about it and he’s going to offer some thoughts that make them compelled to want to work with him because he’s going to deliver value related to the expectation I set with that person. That’s why he gets so many recommendations from me on very specific things because I know what he’s great at and I know when some founder or person comes to me when to recommend Joey and what for, and then I know he can deliver on it. So I look good, he looks good, and the customer that goes with him is happy because he did what they needed him to do, as I said it. And that’s value delivery. And the reason I kind of point that example out is like the majority of this value proposition stuff has everything to do with not just like, what I think about your service. It’s what I would tell somebody else about your service or your product or your business or you. I mean, think about even in relationships with the boyfriend, girlfriend thing, like, what is the girlfriend saying to her girlfriend about her boyfriend? Right. Her new boyfriend. Like. Like that’s what matters. Not necessarily even what she thinks. It’s what she’s willing to say to somebody else about the value. Basically, oh, he cooks for me. Or, you know, because of him, I go out in nature more and I love nature. And before I. He became my boyfriend or whatever, I started going out with him. I wasn’t doing that. Right. These are all like, values. And like, the boyfriend could be like, yeah, I just like nature. I don’t. I don’t know. Yeah, sure. But to that girl, it’s such a big deal.

Louis: Yeah. And that’s a simple yet super deep and powerful lesson there to keep it simple and the value proposition is in the eye of the beholder. In a sense. It’s like about you as you said on the start, it’s really about the way other people describe it. Now you mentioned the first scenario, which is okay, I’m thinking of a product or service and the first step you describe is let’s list down, let’s just come up with as many as possible. Even if they are paragraph long. Let’s just try not to exhaustion but until we are pretty tired of the exercise. Right? So that’s the step number one. What is step two? What do you do when you have a list like that?

Hiten Shah: Then you distill it down and you find the things that just seem simple. If you need to, you would ask somebody who doesn’t know anything about what you do or knows very little about the value, just like a best friend or whatever, a brother, sister, mother, whatever, and just see if what you tell them makes sense. So if I go, let’s say to my wife who doesn’t work on FYI, doesn’t really know much about it, to be honest, has her own problems, she runs crazy egg. So I’d be like, yo, I’m going to help you search and organize your documents all in one place. She’s probably going to look at me and go, huh, okay, okay. I mean, yeah, I got problems with it, but I don’t know what that means. I got problems with documents, but I don’t know what that means. One, we didn’t use the word find. That was a problem. It wasn’t simple enough. Search kind of implies Google. It doesn’t necessarily imply find your documents all in one place. It’s kind of confusing. It’s like what do you mean all in one place? How are you going to do that? Is it a search box? Which is what we used to get a lot. And so I would have already learned a ton of. By taking my somewhat, I guess like crappy value proposition or now I know it’s crappy. I thought it was really good in the beginning actually and testing it with somebody who is kind of outside of the scope of somebody who would actually use the product and then go find out like what they think. Right. And outside the scope meaning like I don’t expect her to use it. And then when I go to her and I say, hey, I’m going to help you find your documents in three clicks or less in comparison, it just is a world of a difference of like where now FYI sits in her brain. Even if like she doesn’t understand what it does or the interface or like she failed at signup, if she had. If she hears from somebody, somebody else that they have trouble finding documents, she’s going to think about us. Because it’s just so simple and it’s just so easy to understand. So what you’re really trying to do is figure out how somebody who knows nothing about what you’re doing, when they hear that value proposition, how did they describe it back to you? Do they understand it? Does it resonate with them? Because really, even if they don’t need it, if they can basically reference it or speak about it when someone else needs it, that’s really the power, that’s the simplicity you’re going for. And the reason I say that is, like, oftentimes the people who need it the most are not the people who actually you’re pitching, you’re pitching people who are gonna go talk to other people who need it more than, more often than maybe even they need it. And that’s what really gets something to spread. When that value proposition is so simple, it doesn’t just align with the people who need it. Also the people who don’t need it are able to basically spread the word about it. And that, that’s really what I’m looking for in that early on, those early phases, which is like, how can you make it that simple, that like somebody who understands it, who doesn’t need it, in a way that they could spread it to somebody who does need it?

Testing Simple vs Complex Language

Louis: Do you know one of the pushback I get on this to keep your value proposition extremely simple, using simple words to describe complex things in a sense or to describe a value is that it sounds, you know, not using buzzwords, not using complicated words, using them using very simple words. Like the value proposition you’ve been talking about makes us sound dumb, you know, like it doesn’t make it look super professional. We need to use more complex words. What do you say to that?

Hiten Shah: Well, that means that you’re, you’re basically making a lot of assumptions about the understanding of the people who come to your website. And I would say that, like, I wouldn’t make those assumptions about the words that they know or they don’t know or they understand or they don’t. Because a lot of times, like, people come into looking for solutions and they don’t even know the buzzwords. And so you make a lot of assumptions about someone else’s knowledge when you start using really big words or using like industry lingo. And industry lingo these days also changes over time as the world changes. So I think some of those things are super dangerous. So if you notice a lot of companies that if you look around like, and you kind of, you’re in tech and, you know, sort of, some of these companies, some of them used to say AI on their homepage. You go to those same companies if they’re still around. A lot of them don’t say AI on their homepage anymore. They don’t say AI, they don’t say machine learning, they don’t say anything like that. Another good example is big data. Every website used to say big data. No website says big data now. Not one I’ve seen in many years. Well, four or five years ago, even eight, nine years ago, so many websites said big data. But now big data doesn’t mean anything. Now AI doesn’t mean anything. AI is also a commodity, you know, in great part. Big data, anyone can have big data. So, so, so these things, like, they disappear over time. And that means that you’re going to be challenged with having to figure this out over and over and over again unless you get to some real fundamentals about how to describe what you’re doing. So I think, I think those are like some really good examples from tech, at least, where certain terminology was really hot and then it kind of disappeared. And this is kind of the evidence that, like, the more complicated you get or buzzwordy you get, the less longevity the statement has. Like this whole idea of find your documents in three clicks or less. Until that problem is solved, people are still going to resonate with that value proposition. And once that problem solved, it’s like, and if we really do a great, great job of solving it, yes, there’ll be other businesses that solve it like we do, but there’ll be other businesses that might even be able to say that. But until then, this value proposition can last as long as that’s a value proposition of our product. Like, of course we might change the value proposition of our product. That’s totally possible. Or the customer that we go after. So yeah, I think that’s the issue with buzzwords. I’m going to give another example. So back in the day, I had a company called kissmetrics. It was my sort of second software company that you would call successful. And, and for the longest time, we couldn’t really explain it on the homepage. And then one day I was staring at Google Analytics. So this company that I started is called kissmetrics. And we were basically some form of competition to what everyone uses, which is Google Analytics. And everyone uses it, everyone still uses it. They all sign up for it. When they have a website, there’s a little bit of erosion where there’s some other options, but nothing as popular as Google Analytics today. And hands down, it’s a free product. It’s from Google. It has Google in the name. I mean, this is like one of the most approachable, highly competitive sort of markets online, mainly because of what Google did by making it free and very generous as an offering. So for the longest time, we couldn’t figure out, like, how to position kissmetrics. But what we did is I started thinking about, well, what’s unique? What’s the thing that’s unique? So there’s a few things that were unique. One, unique. And this is, I think, a good way to come up with a value prop, which is what is truly unique. The problem with that ideology, though, is you have to actually what I call make sure you’re not smoking your own crack. And what you come up with is actually unique. Otherwise, this strategy will not work. And sometimes people are so caught up in what they’re doing that they can’t even figure out what’s unique about what they’re doing, or they think everything’s unique. I’ve seen that a lot. So basically we were trying to figure out what’s unique. And the biggest unique thing about. I’ll just get to the TLDR. Biggest unique thing about KissMetrics is the fact that we track people. We were able to associate the information when somebody’s an anonymous visitor to a website to when they become a customer. We’re able to know where they came from originally, even though they weren’t. They didn’t, you know, they didn’t pay, they didn’t put in their email. But once they put in their email, we were able to tie all that data together and then show you their whole customer journey. And this has become more and more important over time. We were literally the first company to do that as an analytics company. And so what we figured out on the homepage, I was just staring at Google Analytics’s homepage, and I was like, what would happen if we made it seem really familiar to Google Analytics? So the first shot I had was, all right, let’s go make it similar colors. Let’s go make the homepage similar colors. Cause this is a page that I know a lot of people see all the time. So we use kind of a similar orange, a similar blue. We put a person on the homepage, which I don’t think they had at the time. The Person was obviously staring at the button and the value proposition, because that’s what you’re supposed to do when you put people on a page. And, and then the statement we came up with was this, Google Analytics tells you what’s happening. Kissmetrics tells you who’s doing it. And that, I mean, I could talk to almost anybody that has even seen Google Analytics or heard about it, and they’re like, huh, you’re right. Google Analytics doesn’t show me who’s doing it. It just tells me like, kind of what pages are visited and where they’re coming from. Doesn’t tell me who they are, doesn’t tell me what they’re doing. And the whole shift there in the world was the fact that more and more sites were asking for emails. This is back in like 2010, so this is a while ago. And more sites needed to know who was doing what, not just what was happening. And Google Analytics, honestly, as a business, Google as a business cannot do that because you’re putting personally identifiable information to Google Analytics. And that was essentially against their policy. And now they might have tweaked a little bit of it, but it’s still not what Google’s known for. So once we did that, people were so intrigued that our signup rate increased. Our ability to explain what we do was clarified. And there were other value props. Like we were real time at the time, but Google Analytics wasn’t. We had like real time features. We had funnels you could build on the fly. We had all these other things that you could have said were unique. And we listed those out. But this is the one that everyone understood. This is the one that just worked like beyond, like anyone’s imagination once we came up with it. And a lot of the pushback originally on it was the idea that, oh, you’re mentioning Google Analytics on the homepage. I’m like, yeah, but here’s the thing. Everybody who comes to that homepage uses Google Analytics. So if we don’t mention it, we’re not taking advantage of that. And we have this huge opportunity to take advantage of that. So that’s what we did.

The KISSmetrics Positioning Success Story

Louis: Yeah, as an anchor. And so this is basically the intersection of what people give a shit about, like what they truly care about, the pain that they have, what is unique, truly unique about you compared to direct competitors or the status quo, like what people are currently doing to solve this problem.

Hiten Shah: Right.

Louis: And when you have the intersection of those elements, this is where the magic happens. It’s not only a value proposition that anyone could be Using it’s truly value what your product uniquely does against status quo and this one thing that you can claim your own, that people understand and that becomes super powerful, right?

Hiten Shah: Yes.

Louis: So you mentioned first step when you don’t have an audience is to list down all of those value proposition ideas. Talk to people, to normal folks, just let’s see if they understand it. How do they describe back to you? Do they remember it after 10 seconds, all of that. Now I’m curious because you started to hint at it. I wanted to know, to know more about it. Now let’s say I have a product or service that I’m selling already, I have customers, happy customers and whatnot. Is the approach different? How would you advise folks to actually come up with a strong value proposition that is unique even using maybe the information that customers hold in their head?

Using Existing Customer Words

Hiten Shah: Yeah, I think if you have customers and you can talk to them or you are talking to them, the best place to get ideas is their own words. So if they’re coming in and you know you have a welcome email and you ask them why’d you sign up? And they tell you, and then you ask them, what did you expect from us? Those are all like the typical kind of standard questions that are asked of customers in order to learn for purposes of product development, customer success, etc. But really the marketing can use this and use all those words and all that data and really figure out what words are they saying when they think about our product, when they describe our product, when they think about the market. And those are the words that you start sort of playing around with with your value propositions. It’s really that simple. And so one thing that we noticed with my sort of oldest software business that you call successful is I’m not going to let that go is Crazy Egg. And with Crazy Egg, back in the day, very similar to KissMetrics, we just had this business, this business, Google Analytics that was sitting there and was sort of popular and people knew it. So in this case like we didn’t say, oh, Google Analytics does this, we don’t do this, or we do this. Instead what we discovered is that we had like lots of people using the product super early. And what we discovered is something deceptively simple, which is when people described Crazy Egg, they would say things like crazy Egg helps me see where people are clicking on my website and we’re like, oh yeah. I mean it’s this tool, you put the JavaScript on your site and you can get a heat map for any page on your website. And at the time, this was very novel. This is not something that any other or many other products were doing. Google Analytics did not allow you to do that. I don’t think they do today even. And so we had a very unique position in the market from the get go because you could show someone a heat map on our homepage and just say, hey, here’s a heat map. You want it for your site? And everyone wanted it because like they never saw it before and they kind of already instantly assumed it was, that it was really valuable. We didn’t have to say much, but when we started really getting in, optimizing and learning, we learned that people kept saying, crazy Egg helps me see what’s happening on my website. Crazy Egg helps me see where people click. So at the end of the day, the thing we tested and went after and worked was this value prop that was basically see where people click.

Louis: And then, yeah, no, go ahead, go ahead.

Hiten Shah: No, no, go ahead, go ahead.

Louis: Let’s say, okay, we’re in a scenario, really powerful, yet simple scenario where folks are telling us the same thing. This is why I’m using your product. As you said, it helps me to see where people click on my website, seeing what people really do on my website or stuff like that. Now what if you are in a, let’s say saturated market where a lot of other folks are claiming the same, the same thing. Now, I’m not saying with Crazy Egg it was the case, but I’m just, you know, maybe another example, right? How do you then account for that? Right? We talked about the uniqueness a few, a few minutes ago.

Hiten Shah: You know, the truth is you don’t need to. If you’re going to your customers and figuring out what your customers say and then you’re reinforcing that with their own quotes, testimonials and words. So if I’m in a highly competitive market, it’s actually easier to get customers in a highly competitive market, typically, unless like there’s like one or two entrenched players and you just can’t unseat them otherwise it’s actually pretty easy because the, the need and the problem definition and all that has already been done for you by other people in the market. And so you start out with something that, that looks like the other companies and that’s fine, like there’s nothing wrong with that. You get customers as fast as you can and then you start learning where your unique proposition lies or what, what’s uniquely sort of differentiated with your offering. And if nothing is uniquely differentiated, then you just Reinforce whatever value prop your customers kind of bring to the table for you and say that you’re about. And you just reinforce that with the messaging, the testimonials and case studies. You just really go after it. And if, if that, if, if your, if the value that you have is similar to the value that some other competitor has, then there’s always some point that you’re competing on and you’re just really just hunting to find what that, what those few points are and making sure that you emphasize those over time. But it’s not something where like if I’m in a highly competitive market, I might not actually care about differentiating in the first place. While if I’m in a new market, the differentiator is basically all you have, right? Or not even a new market, but some something where you’re re segmenting an existing market or something, you have to, you have to kind of have some description that’s more unique, while if you’re not, then the uniqueness kind of almost can cause trouble because it can go away from what people understand about the market or what people’s expectations are. Like if you’re creating an email service provider and you kind of start talking about better deliverability, you’re going to have to prove that out that it is better deliverability. And the only way to prove that out is like with the stats of you against other competitors. The problem with a value prop like that is a competitor can probably improve their deliverability a lot faster than you can kind of, you know, get enough people to want to buy you for that exact value prop. So a lot of it has to do with, you know, this idea that can other people also have that value prop. And if they can, then don’t try too hard to make something up that they can’t have and then kind of become a very obscure solution in a market where you didn’t have to be. So the market dynamic type of market greatly determines your, your sort of posture and your ability to like, you know, frame what you do to the market.

Louis: From experience though, and what I’ve noticed time and time again is when you actually do the work of coming up with a simple yet powerful value proposition that actually uses customers world customer words that is simple, easy to understand. It’s very likely that most direct competitors are not doing it. They’re using complex buzzwords and you already stand out by just keeping it simple. Right? And that’s something I’ve seen time and time again in many, many different industries where it’s actually very difficult to Find two companies with the same value proposition targeting the same audience, you know?

Hiten Shah: Yeah, I completely agree with you. I don’t think people will believe us when we say that though. And I think that’s the problem.

Louis: Why not?

Hiten Shah: It’s something that sounds so good, it’s almost too good to be true that, oh, simpler works better, but simpler is hard. Simpler is hard to get to. And that’s why most companies don’t do it really well. That’s why you see all those buzzwords. Because simple is hard. And simple takes a lot of effort.

Louis: Yeah. And it implies trade backs. It implies saying no to most things,

Hiten Shah: saying yes to a few.

Louis: Right. And that’s tough for humans to do. We struggle with that. Okay, so just I want to touch on something before I ask you one or two last question.

Hiten Shah: Sure.

Louis: And by the way, it’s been great. Learned a lot. Thanks for challenging a lot of the things that people are thinking about the value proposition. Now you mentioned that you tested the value prop, for FYI, for example, recently. And you know, this one performs better. How do you advise folks to, once they have something that they feel is quite compelling, they use the words of the customer. How do you advise folks to actually test it in real life to see whether it’s better?

Five-Second Testing for Value Propositions

Hiten Shah: So there’s something called a five second test where you people see a page for five seconds and then you ask them like three or four or five whatever questions about it. And what you’re really trying to understand is did they understand it, what did they recall about it, what do they think the product’s about or the product can do for them? And so the first thing we do is we mock up a homepage, just the top part. We usually only do the top part in our pages, but that’s a different story. And show it for five seconds using one of the tools that does five second tests. Even if you go to five second test.com, you’ll see a tool that lets you do that. It does cost a little bit of money to use their panels. And then also usertesting.com has this option too, just to give to two kind of tools that we use pretty heavily for this. And we’ll go have 20 people give us their feedback on using a 5 second test on that sort of value proposition. And we might even do that for two or three and compare what people kind of remembered and what they recalled. Because the thing is, when you’re, when your thesis is like mine and it seems like yours around using simple words, any anybody should be able to understand it regardless of what you’re doing. Even like something really crazy, you know, some tooling for AI or machine learning, anyone should be able to understand it. And so it’s not really about the audience that you’re going after, although a lot of those tools let you target the audience specifically. So you could still sort of do it for niche audiences or whatever. And what we’re really trying to understand is like, do people basically like, do they understand what our product can do for them just by looking at that homepage and reading that value prop? And what did they say back to us? It’s just back to that whole thing. It’s about someone else’s brain, it’s not about your brain. So does someone else’s brain register what you think they should when they see it? And when we did this whole find your documents in three clicks or less versus the search and organize and all that, the three clicks or less than the find your documents three clicks or less just blew everything else away in terms of people’s understanding of what we can do for them and what they thought the product was about.

Louis: And that’s super powerful. And also I’ve heard before, the specific part that I don’t think I’ve ever heard is don’t worry too much about the audience you’re testing it with, whether it’s a five second test or another type of test of whether they understand it or not, because it should be understandable by anyone because you’re using simple words.

Hiten Shah: And that’s, that’s my philosophy and it’s done well for me. I don’t know if that’s everyone’s philosophy, but it’s my philosophy. And I think in a world of plenty, in a world where there are a lot of buzzwords running around and people trying to create categories, we kind of got to go the other way.

Louis: Yeah. And that’s why I like it. And I think folks listening got a lot of value from that as well. And it is your philosophy. That’s why you’re on the podcast. That’s what I want to hear from. I don’t want you to say stuff other people say.

Hiten Shah: I don’t like to say that anyway.

Louis: I know, I can guess. I can tell. So you, you, you ask customers, you collect our words, you come up with simple value proposition with simple words. You basically say complex things with simple words, make sure that people understand it, whether or not they are part of your audience. You do five second tests and, or similar technologies to understand whether they understand, whether they can remember Whether they can basically repeat that back to you, and then you pick this one and put it live, wherever it is, whether it’s on website or a physical environment or whatnot. Okay, Hiten, you’ve been a pleasure to talk to. Thanks so much for going through this step by step. I do have two last questions to ask you. The first one being, what do you think marketers or anyone listening to this podcast should learn today that will help them in the next 10, 20, 50 years?

Developing Marketing Taste Over Time

Hiten Shah: I think the thing that’s most valuable that I sort of learned over time is just like, just. Just start basically developing your taste. All of this takes like, this idea of having taste and this idea of having an ability to form an opinion and honestly a judgment about the things that you see out there in the world, whether it’s copy on a billboard or the name of a store or brand, the symbols, whatever, just start. Like, you have no excuse to not have an opinion about the things you experience in life. And that opinion and the way you think about these things can greatly shape how you think about your own sort of work when you’re doing some of these things. Even the way a lawyer communicates what their unique value proposition is can be greatly benefited by developing taste for marketing, taste for copy, being able to recognize when something really resonates, whether it’s with you or their hypothetical audience. So another thing related to that, I think over time you develop a method or a way to almost sit in the shoes of a brand’s target audience and really assess a value proposition based on the target audience, not you. And I think that’s a skill set where the taste is the word that comes to mind. You kind of need to find your way to have a taste for these different flavors of copy and styles and start forming your own opinions about them. That, I think is the most valuable thing I think almost any human being can do, because that helps you be really discerning about even the things that you buy, the things you read like, it’s. It’s amazing how accurate I can be when it comes to whether a value props going to resonate with the audience. I don’t even know. Just by thinking about the brand and who they’re probably trying to target or should be targeting and whether what they’re saying kind of would resonate with them. And it’s just from taste. I just have a taste for it. I just have a feel for it.

Louis: You know, I’m going to use a very, very bad example to describe what you’re describing. It reminds me In a book I read recently on psychology, human psychology, those folks who are paid to look at, if I’m not mistaken, chickens, butts or ducks or something like that, and basically looking at them and seeing whether they’re female or male. The trick though, they don’t fucking know. They can’t explain why.

Hiten Shah: That’s right, that’s right. That’s a taste. Taste. That’s why I call it taste, right? You got to have a taste for it. So it’s like, look, I’ve eaten a lot of pizza in my life. I got a taste for pizza, right? I could tell you what pizza I like. I like sauce on the side with my pizza. I can tell you why I like the sauce I make at home compared to any other sauce. I can taste sauce and tell you whether it’s tangy. I can probably tell you in some great part, some high level variety of tomato it was. But that’s taste, right? Like, it’s just taste. It’s like everyone knows what taste is. You know what you like, you know what you don’t like. And like, you just develop a taste for it. And the real move is when you can develop a taste for other people’s tastes that might not be your own. And that’s really a great marketer, in my opinion. It’s a great judge of other people’s marketing, other people’s value.

Louis: Props when you have empathy towards others. Yeah. And it takes experience, but I don’t think it’s something that you’re born with. I think it takes just fucking, you know, doing the work over and over.

Hiten Shah: Right. My grandpa was a very quiet person. I mean, you wouldn’t find another person that’s. That was more quiet, calm and unaffected by life. And the one thing I keep remembering is how when we were driving around, the words I heard from him the most were him almost out loud a lot of the time, under his breath, reading all the things that he saw on the billboards and the signs and stuff. And like, that just got in my head. So to me, it’s like something where it’s like, I think he was developing taste. He never really shared his opinion much on things, but like, I think he was developing taste by doing all that reading and just like processing it in his head. And like that. That’s what comes to mind for me when I think about this. It’s just like, just read and try to make a judgment and like, it’s okay. Like, I don’t mean judgment in a negative way. Just make a judgment of like, was that a good value proposal? Does that make sense to you? Would you buy that thing if you were in the market for that kind of product? Things like that? We don’t ask ourselves those questions when we look at these things usually, and I think anyone can do that. It doesn’t matter who you are or what your profession is.

Louis: Well, I think this is the best statement to end this conversation with Hiten. You’ve been a pleasure. Thanks so much for going through all of those examples and those learnings, and I know for a fact that listeners go a lot of value from it. So thank you.

Hiten Shah: Thanks for having me. Foreign.

Louis: And that’s it for another episode of everyone hates marketers.com thank you so much for listening. I’m super, super grateful. I’d love for you to consider subscribing to my daily newsletter Monday to Friday called Stand the Out Daily. I send very short, hopefully interesting, surprising, shocking, entertaining, meaning content to help you stand the fuck out. It’s at everyone hatesmarketers.com you can subscribe for free and obviously unsubscribe whenever you want. I’m just gonna read a couple of emails that I got recently as a reply. Zuma said, your content attacks the mind primarily, which is such a good thing because most of us are skilled at what we do, but we don’t have the courage to do it our way. Mark, who just subscribed couple days before, said, this is my first issue of your newsletter. Love it. Glad I subscribed. Brianna Said, I just realized this morning that my email habit is now to 1. Skim through the list. 2. Select all unread industry email except yours. 3. Delete and don’t think twice. 4. Quickly skim yours. Amy said, Also loving the new content that’s coming from you. It feels really lovely. Kendall said, I like your writing a lot. It really resonated so much out there. It’s good to touch the authentic. And Chloe said, where is the I love this email button? Brilliant. I hope you subscribe. You’ll be joining more than 14,000 subscribers at this stage, which is crazy. It’s the size of a small stadium. Anyway, thank you so much. See you. On the other.