Beware the One-Stop-Shop Value Proposition

February 12th, 2010 by Max Gladwell · No Comments

When a business proposition tries to do too much for too many, it can tend to do very little for very few.

There are a number of principles we apply in shaping business ideas, models, and strategies. We’ve written about the importance of focus in terms of marketing. It’s also essential that the model and value proposition to be equally focused.

Quite simply, the best business models do one thing. They have a narrow offering with a broad appeal. You’re looking for the one thing that just about everyone needs or can benefit from. Flickr is a place to store, organize, and share all of your photos online. That’s the one thing it does, and it’s valuable to pretty much everyone. It’s not a one-stop-shop for all of your digital photography needs.

Then there’s Google. It does this one thing—search—that everyone needs. Yes, Google does many things and recently made another push into social media, but it only expanded after it’s search engine redefined the search market. Plus, Google only makes money on search, and most people who use Google only use search. In fact, there is a small percentage of the online population that has no idea what “search” means because they’ve come to know it as Googling.

The power of doing one thing that everyone (or a large percentage of everyone) needs is that you’re message is easily communicated, the market potential can be quite large, and you can establish deep and lasting brand affinities.

The way we organize brands is quite simple and inflexible. When you do one thing and do it well, that brand association can become deeply embedded in a consumer’s mind. This is the psychology behind first-mover advantage. It is an opportunity to create a unique barrier to entry for would-be competitors because you’re brand (and the one thing it represents) becomes embedded in the minds of the people in your market. It then becomes quite difficult to dislodge this brand once it’s been established. This process is currently unfolding in the social geolocation space.

A number of companies are fiercely competing for the “check-in”. That’s what Foursquare, Gowalla, Loopt, and others do. They enable you to check in to a specific location. Everything else about the experience revolves around this one thing. The winner will be the company that ends up owning the term “check-in” in the same way that Coke owns cola and Google owns search. It appears that Foursquare is on its way to becoming synonymous with the check-in, and it’s anyone’s guess whether this market will tolerate a second- and third-place player. So if you want to start a business in the geolocation space, it doesn’t make sense to go after the check-in at this point. But there are many other opportunities.

For example, Plancast enables users to broadcast their plans, complete with geographic coordinates. This startup is clearly in the social geolocation space, but Plancast’s one thing is sharing your plans with friends or anyone else who happens to be listening, such that they can easily join you by knowing the time, place, and nature of those plans. It’s not about checking in, nor is Plancast a one-stop-shop for event planning.

Are there exceptions to the one-stop-shop rule? Yes, but they are rare. Apple is a one-stop-shop. However, unless you’re Steve Jobs, the likelihood of success is much greater when you do just one thing that appeals to a lot of people.

So that’s the question you should ask about your business proposition: What’s the one thing?

Max Gladwell

Social Media, Geolocation, and Green Living

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