In my previous post I talked about startups in cyberspace and startups in meatspace, and how each domain brings its own advantages and its own difficulties. To briefly recap, cyberspace is usually very cheap in terms of deployment and in the best cases offers such an incredible Return on Investment (“ROI”) that almost any business model can get funding, no matter how irrational the business case. I used the sheep-goat dating website as an example.
Meatspace, on the other hand, is not forgiving of mere ideas — a tangible world product either works or it doesn’t. High tech certainly sells, but the long path to success and high likelihood of failure for many meatspace products (particularly in the medical space) creates real reluctance for money sources to invest.
Given the above, while a business aiming to play in either of these spaces must offer a compelling story, the form of that story will differ depending on the intended regime. Perhaps an obvious statement but, in my extensive experience, not one that small companies seem to understand.
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Cyberspace Storytelling
I come from a meatspace background — B.S., in Biochemistry, Ph.D. in Biology/Molecular Biology and several esoteric postdocs. That said, I have plenty of respect for cyberspace businesses, and even though I poke at them quite a bit, I’d be the first to say that success in this domain is anything but straightforward.
As I’ve already said, barriers to entry in cyberspace tend to be much lower than in meatspace, therefore storytelling for cyberspace products usually has particular foci that hammer out brute-force superiority versus competitors. Website design no longer provides this, nor does the sudden identification of an unmet need ‘twixt two hitherto unconnected groups (the sheep-goat dating website example). So storytelling for cyberapps pretty regularly emphasizes quick market capture, rapid expansion of customer base, and direct and secondary tie-ins that keep that base on the platform and revenues flowing in from someone. You know, the Facebook model, billions of users, lots of captured eyeballs via Russian bot spread salacious stories, tie-ins to and monetizing of … whatever Facebook is tying in to and monetizing these days.
There are two lessons here: 1) you have to tell a strong story of how your model has built-in brute-force power and 2) you have to make sure you circle back to this story as it plays in terms of a barriers-to-competition component. People may be more willing to bet on cyber because of the potentially incredible ROIs, but they still want some real comfort zone as to how you can beat out the competition, especially since cyber’s easy to enter.
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Meatspace Storytelling
Meatspace products usually are easy to sell in terms of barriers-to-entry, certainly high-tech real-world applications present as being resource- and skilled-worker-intensive and, consequently, not easily subject to competition. On the other hand, meatspace is hard, and practitioners tend be too in love with their technologies and not focused enough on the product that’s just viable enough to get the requisite customer base — the Minimum Viable Product (“MVP”) as it’s called. So there’s a lot of skepticism towards ideas in this domain as to whether they’re really thought out in terms of actual market and correct configuration.
Regarding market, these days it seems very hard to get a meatspace company funded without significant Voice-of-Customer (“VOC”) data, and in future posts I’ll talk a lot more about why this is a great idea in theory but often suspect in practice, especially if it’s a mechanical implementation of the “Lean Startups” model of “Just talk to 100 people” idea. The quick preview is that there are customers and then there are Customers, and a company has to be careful to distinguish between those they simply report because they talked to them (“customers”) and those they talked to who really fall into the group of potential buyers or instigators of buying (“Customers“). Put a 10 year old boy (or, these days, girl) in the first category when presented with an actual killer robot product (plasma cannons, AR15 attachment, etc.), put the parents in the second category.
“Correct configuration” is important, in that there’s a two stage process that is critical in meatspace: 1) make sure your product has real appeal for a large enough customer base and 2) make sure your product isn’t so laden with unneeded/unwanted features that it’ll never make it to market (technical problems in implementation) or will cost too much for people to buy it. The first factor is essentially a restatement of the market requirement, but from the point of view of the product configuration, the second is a manifestation of the love for engineers engaging in too much engineering.
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Summary
To give a quick summary, there are cyberproducts and there are meatspace products, and for that matter there are hybrids of the two. All have storytelling requirements, but the storytelling for each has different emphases and different audience requirements.
Never forget that last bit, it’s not what you think is cool, it’s what plays to your audience. This recognition isn’t everything — audiences can be 100% idiot-containing, and any business has to balance what people want to hear and what they need to hear. But if it isn’t everything … well, it’s still an awful lot.