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In 1884 P. T. Barnum led 21 elephants over the Brooklyn Bridge to prove that it was stable. Today, in the face of doubt about new technology, we might create a live stream of PT Barnum’s elephants. Risking life and limb on a cable supported bridge would be deserving of a Red Bull sponsorship! It’s a useful reminder of the constant need to show what is possible long after we might be comfortable with the idea.

There is a lot of existing guidance on understanding and finding consumers and business customers, which we won’t repeat here. One thing we will note is that your messaging about public benefits is something that must be tested. We often meet founders who assume that people care a lot about public benefits such as emissions reduction. While many consumers do care, that doesn’t mean those benefits will be their motivating factor in buying from you.

We’ve found that customers are motivated by comfort, savings, fun, and many other factors. Public benefits may be a very pleasant afterthought for them, and that’s not a problem. Whatever the motivation for their purchase, the aligned goal is to get more of your solution out into the world. This is why we encourage founders to be okay with sneaking public benefits into their products or services.

Having clear public benefits frequently means that there will be multiple different organizations or individuals who benefit from what you’re building. This usually means you will be able to choose between different potential first customers.

For example, Rachio began by focusing on how to save water by creating a smart irrigation controller. When they began, municipal water systems could understand the potential benefits of their product, but it was hard to deploy enough devices to demonstrate those benefits. Ultimately the team at Rachio was able to convince consumers of the benefits from control, savings, and even a whole new category of pranks (such as spraying squirrels or kids in the yard). After a few years, Rachio deployed enough devices that they no longer have to prove their product’s efficacy to water utilities.

Another example is 1concern, which models risk associated with earthquakes and water. Insurance companies are interested in these models, as are first responders, real estate owners, and citizens. 1concern opted to work with local governments and first responders, in spite of alonger sales cycle. Not only can first responders use the models to save lives, they can also help to make the models better in real time. Though, 1 concern chose to begin there, they’ll have other opportunities to work with businesses and consumers in the future.

HARDWARE BUSINESS MODELS    |    SELLING TO LOCAL GOVERNMENTS

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