No ever invested in a new business because of a number. It's always about the story. Telling that story quickly and effectively in a way that creates a connection-;ideally intellectually, but always emotionally-; is the key to success. Well-drawn and clearly demonstrated analogies are among the most powerful tools in this process.

Of course, it's also easy to lard it up and overdo it so you end up not "selling" anything. We see this high concept idea every day in the movie business where each new pitch is the next Top Gun with a twist or an animated version of To Kill A Mockingbird.

Buzzwords, brands and tech jargon are other tools we use as comparative shorthand for more complicated explanations. They can certainly save some time, but they can also lead you and your listeners pretty far afield quite quickly. They aren't a substitute for actually thinking through and clearly understanding what the underlying processes and mechanisms are that you expect to drive your business and why and how they work. As a leader, it's especially important to understand that your words matter and have consequences. If you're impatient, flippant or just not careful and considered in your language, it's very easy to lose credibility with the world in general and especially with your team, customers and investors.

Not too long ago, everywhere you went you'd hear why some early startup was the new "Uber of...." whatever and why this NUber was just as likely to succeed. This pitch quickly became a tired tale and eventually turned into a bad joke because the alleged parallels in so many cases made no sense at all.  One size, one approach and one methodology NEVER fits all.

Interestingly enough, at the moment, while he tries to pick up the pieces of a totally busted IPO, the CEO of Uber is telling everyone who's still willing to listen that Uber's the next Amazon, which is just another unfortunate example of trying to pile on to someone else's story and their success. Who wouldn't want to be sitting in Jeff B's shoes these days? But it's becoming clearer and clearer that there's only one Amazon and Uber isn't even close to ever being No. 2. Uber may have built and mastered some impressive tech around logistics and geography, but real businesses are still required to eventually make real profits and Uber isn't in the same universe as any of the main platform guys who are continuing to print money.

So, if the Amazon analogy won't cut it, how about latching on to another buzzword or two to try to make your case? In the recent S-1s for both Uber and Lyft, the pair constantly alluded to the idea of "network effects" and how their business models so aggressively and effectively exploited the exponential "flywheel" benefits of building larger and larger two-sided networks. These claims turned out to be mostly BS and maybe the market actually figured this out as well along with the non-economics of their basic business models.

The truth is that there are NO clear network effects at all in the ridesharing business. In fact, the larger the network of drivers grows beyond a certain level that assures their ready-and-rapid availability to the riders, the less money each driver makes. That means the more likely they are to either quit or become a dual driver for the competition as well. The gig economy is nothing but poison for the giggers, even if it takes them a little while to figure that out and bail. Most workers in the gig economy leave within a year. And if life wasn't tough enough for the drivers, the National Labor Relations Board just ruled that they are independent contractors and not employees, which doesn't bode well for all the pending lawsuits seeking better wages and benefits.

In addition, there's a tipping point after which the potential improvement in driver response time (because there's a driver waiting on every block) actually adds no value to the end user's experience although it does dramatically increase congestion and pollution. Frankly, we all need at least a little time to get our acts together before the driver shows up.

Similarly, the more users there are for a particular service, the more demand there will be for a ride in crunch times, the more likely that there will be surge pricing, and the less attractive the overall experience becomes for each user. As with so many things, saying doesn't make it so. Getting bigger isn't necessarily the same as getting better - especially for the little folks.

Another phrase that's fraught with peril - especially for startups - is "product/market fit". The idea that there comes a day when all the planets magically align, the dogs are all eating the dogfood, and all is right with the world because you're achieved product/market fit is a fleeting fantasy because it suggests that you've reached a plateau where you can take a break, catch your breath and prepare for the next marathon. You should only be so lucky. As our politicians regularly show us, it's almost always too soon to declare victory.

The truth is that it's a dangerous illusion and a temporary respite at best because the customers never sleep, and their demands never cease to grow larger and larger. It's a "What have you done for me lately? world. Your customers' expectations, desires and requirements are perpetually progressive, and the changes never end.This means that the product or service dimensions and even the size, scope and characteristics of the market are in constant flux and continual need of enhancement, improvement and change.

The present has never been a more temporary state. There's no finish line when you're building a new business and, of course, the competition is always running right behind you and very happy to take advantage of any breaks in your momentum. So, while it's always important to briefly celebrate the milestones and the team's successes - large and small - you can't take your eye off the ball or your foot off the accelerator and relax. Finding product/market fit is fine, but it's only a step in the journey and a waystation along the path.

 Bottom line: None of us has the luxury of Humpty Dumpty, who said to Alice: "When I use a word, it means just what I choose it to mean - neither more nor less." In our lives and businesses, words usually have pretty clear meanings and often serious consequences. Be very careful what words you use because you may be eating them some day.

Published on: May 22, 2019
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