I was in a class once where the retired CEO of a very successful industrial company came to talk to us about building an outstanding business. He said something simple, but memorable, as he handed out a $2 bill to each of us: “A successful business is like a $2 bill – it’s rare, unique and has value.”
Rare
It’s all about supply and demand. Supplying a product or service that is hard to find means that people will be willing to pay more for it if they want it. Examples: Picasso painting, flawless diamond, Tickle-Me-Elmo on Christmas
Unique
Just because something is unique doesn’t mean that it’s also rare. People are willing to pay for unique products or services for a variety of reasons – to be popular, to enjoy the experience, to benefit from a combination of features, etc. Examples: iPhone, Ritz-Carlton, earmuffs with built-in headphones
Valuable
In business school they always talk about the importance of a “value proposition”. Here is the statement that every company should use (fill in the details) to describe its value to customers: For (target customer) who (benefits desired), (product/service) (key values delivered). Unlike competitors, (product/service) (competitive advantage or differentiation of values of importance to customers). If this is difficult for businesses to write, perhaps the value is missing or not high enough. Example: For athletes who want to be the best in their sport, Mimi’s Training Center provides a comprehensive training program. Unlike competitors, Mimi’s Training Center employs only experts who have more than 20 years of experience, including former Olympians, award winning sports psychologists and world-class practice partners.
OK, so this $2 bill analogy is one simple perspective about what it takes to achieve success, but it isn’t the only answer. Soft drinks aren’t rare and unique, but Coca Cola seems to be doing fine year after year. Nevertheless, these ideas apply to many businesses and they always come in handy whenever I think about my next new venture. I still have my $2 bill and might use it as a down payment one day when I invest in my own business.
