{"id":1593,"date":"2012-11-07T17:50:55","date_gmt":"2012-11-07T17:50:55","guid":{"rendered":"http:\/\/intercom.com\/blog\/?p=1593"},"modified":"2020-07-30T13:04:04","modified_gmt":"2020-07-30T12:04:04","slug":"asking-questions-versus-giving-advice","status":"publish","type":"post","link":"https:\/\/www.intercom.com\/blog\/asking-questions-versus-giving-advice\/","title":{"rendered":"Asking questions beats giving advice"},"content":{"rendered":"

Advising any business is hard. I’m hesitant to do it. It’s all too easy to give bad advice, which steers companies in the wrong direction, all based on my whimsical throwaway idea shared over coffee.<\/p>\n

New software companies are volatile and unpredictable. They don’t need to make a profit to sell for tens of millions of dollars. Sometimes the more money they’re losing, the more desirable they seem to be. So as a rule I rarely advise people on what they should do. I don’t know what they should do<\/a>. Instead I try to ask good questions in the hope of creating new ideas for them to consider, and new places for answers to fit.<\/p>\n

This article is based on a talk I used to give called Business Experience Technology, or BXT for short.<\/em><\/p>\n

Pick Three<\/h2>\n
\"desirable<\/div>\n

The first question I ask (though sometimes I just ask myself) is an easy one: is this viable, feasible, and desirable?<\/strong> The answer has to be yes on all three counts\u2014no two are enough. In fact, pick any two, and you\u2019ll think of a start up that failed because they missed the third. That said, a few will have become successfully unsustainable companies<\/a>, or had lucrative acqui-hires. This is why advising companies is hard.<\/p>\n

Can you execute on this idea?<\/h2>\n
\"three<\/div>\n

If the idea is viable, feasible, and desirable then the next question is “Do you have everything you need to execute this?”. Borrowing from Bill Buxton, I use a three-legged stool of business, experience, and technology. A company needs talent and creativity in all three areas.<\/p>\n

The Business of Business<\/h3>\n

Milton Friedman is famous for saying that “the business of business is business”<\/em>. The key questions I ask start-ups here are simple things like: Where will you make a profit? How can you increase it? How will you reach your customers? If their answers mention things like two-sided markets<\/a>, or viral distribution<\/a>, I’ll ask more specific questions to help them be sure they actually understand how those concepts work. I look for unconventional ways they can make money, as there are so many overlooked opportunities here. Innovative business models are fascinating. Here’s an example from Amazon:<\/p>\n

\"Amazons<\/div>\n

This above slide (from Jared Spool\u2019s Design Treasures from the Amazon<\/a>) shows how Amazon use a negative operating cycle to sell you a product they\u2019ve yet to even pay for themselves. Dell subsidise their hardware costs by selling advertising space on the desktop. The more ads they sell, the more they can subsidise, which in turn lets them sell more adverts, which in turn lets them, well, you get the idea. Products like Dollar Shave Club<\/a>, and Manpacks<\/a> highlight the benefits of looking for less conventional business models and how they can succeed.<\/p>\n

Price is about more than revenue. Price controls behaviour. Gerald Weinberg’s “The Secrets of Consulting<\/a>” lists out many rules of pricing, the first two of which are relevant here:<\/p>\n