It is the central question at the heart of any business: why will someone buy this from us?
It doesn’t matter if you’re selling a thing, an experience, a brand, a feeling, or an economic widget, your customer has to decide that buying what you are offering is worth more than anything else they could buy with that money you are charging them.
It has to be worth more. It has to have value. It has to be the best option.
Before you think about anything else, you must think deeply about this and understand it at its very heart: your business must create value. You must know why someone is choosing your product if you hope to persuade someone else to choose that product.
Simon Sinek, the author of “Start With Why”, draws a golden circle with “Why” at the centre, with “How” and “What” as wider circles around that. If you know and always remember why you are doing something, you always know how you are going to do it, and then you will know what you need to do to achieve that. “What” and “how” follow naturally from “Why”.
It doesn’t work the other way around: knowing what you are doing won’t tell you why. Not knowing what you are doing will often lead you to doing the wrong thing. Most traditional business plans focus on those bigger circles, though, working on what the company is going to do, and how it will achieve that. If that’s what you spend your time thinking about, and particularly if that’s where you start your planning, your business will go in the wrong direction.
Starting your business model by understanding the value you create for your customers is starting with why. It may not be the “why” of why you want to do this (that’s worth asking yourself, but is a different question), but it is the “why” of why your customers will choose to try your business, and it is the “why” of why they will keep coming back to you.
Keep asking why, and you will understand your value.
Ricardo Semler, CEO of innovative Brazilian company Semco, views asking three “Whys?” in a row about everything you are doing as the way to achieve better understanding of what you are doing.
“The first ‘Why?’ you always have a good answer for. Then the second ‘Why?’ starts getting difficult. By the third ‘Why?’ you realize that, in fact, you really don’t know why you’re doing what you’re doing.” Semler says that by asking “Why?” three times, you start to get clearer about who you are and why you are here.
If you ask those questions about your business, you will understand why your business is here. If you ask those questions about your customer, you will understand why your customer is here. You will understand your value.
Try answering these questions before moving to the following sections in which we discuss the ways your company can create value for your customers.