One of us recently worked with a startup that had a truly differentiated offering in cyber security -- certainly a hot area. The team had solid credentials, including some former Department of Defense folks, a CEO with experience in such key areas as risk, insurance, and finance, along with eager, talented coders who could work for days on end, fueled by the quixotic combination of energy drinks and organic snacks. And they had enough funding to keep them going for 18 months.

But a couple of months ago, they were swallowed up by their key investor. The startup's problem: The company made the critical mistake of marketing itself on its aspirations and potential, rather than on its actual capabilities and current offerings. They were going too far and too fast, and in doing so, they forgot a key aspect of service design: The design of a service has to include the ability to delivery it.


No Proof Points

In other words, they were presenting themselves to potential (and actual) customers the same way they were to potential (and actual) investors. Smart as the people involved in this venture were, they couldn't see the problem in pitching services they weren't yet able to offer and for which they had no proof points.

"But we know this will work," top management would say. "This will make us really stand out to clients." Whatever the killer capability was, the senior executives couldn't say exactly when they would be able to offer it. (And they weren't any clearer with investors when it came to looking -- unsuccessfully -- for the next round of funding.)

We don't pretend to be marketing experts, but we do know that in order to sell a service, you have to be able to deliver it. Unlike a product, which can sit in a lab or in prototype form, services don't exist until they actually happen. They are about activity and participation from both parties. If clients -- or potential clients -- can't experience the service for themselves, it might as well not exist -- and it's almost impossible to convince potential customers to buy it.

Misdirection

A key principle of service design is "Don't surprise and delight your customers. Just delight them." In our context, delight is about delivering on your promise to customers. You're doing yourself a disservice if you misdirect customers by drawing attention away from your sweet spot.

Another key mistake: not really thinking about the needs of the customer. Their potential customer base was large: insurance companies, financial services firms, any business worried that its intellectual property had been compromised. Their worries are in the present and ongoing; promises about future solutions to other problems don't provide the level of assurance companies are looking for.

It's very tempting to get caught up in the dream, but if you can't deliver, wake up.

Published on: May 12, 2017
The opinions expressed here by Inc.com columnists are their own, not those of Inc.com.