Your Risk Threshold
It’s local election time, so everyone running for office in my town is excitedly cramming their election signs into the ground at busy intersections.
I feel like if you get these emails I don’t need to write any more. You saw that picture, nodded your head, kicked yourself a bit for doing what the people with the signs did, then pushed yourself to do a bit better with your startup. Sometimes a picture is that good.
But if you’re new…
Is there anything dumber than this?
Can you imagine the scenario where someone sees “Harris and Shackelford, New Voices. Real Change” while driving by at 35mph and thinks “yes! That’s what I need! New Voices and Real Change! I’m voting for them!” It’s the real life version of Seinfelds men honking at women bit.
And yes, I know that name recognition is useful in elections but that argument dies when there are 17 signs next to each other.
So, why are these signs in little clusters all over town?
Because humans are idiots. It’s kind of our thing.
When most people do something risky - and running for office and plastering your name all over town in a public effort to be chosen is risky - the sheer act of running maxes out our nervous system’s Risk Threshold. When it comes time for a distribution strategy (getting in front of people who you hope will vote for you), the Nervous System Rubber Band snaps them back:
“You already did this one risky thing, let’s chill on the risk for a bit, huh Harris? ”
And that’s why all the signs are next to each other. Someone didn’t even have the nervous system bandwidth to make their sign two feet higher than all the rest. Which is legal, I checked.
The corollary to startups is direct.
Your nervous system is already pissed at you for sticking your neck out and starting a business. You’ve already hit your Risk Threshold. And, to clarify, your Risk Threshold has absolutely nothing to do with bodily risk. It’s all about social danger. The equation is simple:
Riskiness = (How weird this seems to people I know) × (How public the failure would be)
Another way to think of it is the distance between what your nervous system has handled before and what you’re asking it to do in public.
So, when you’re thinking about the initial features of your product or how you’ll market it, you follow two unwritten rules that follow the riskiness equation:
If my competitors offer it, I have to offer it
If my competitors are there, I should be there, too
Your nervous system says: “We're already doing this risky startup thing. Don't make me also look weird by skipping the standard features or going where no one else is.” It's too much departure at once.
But, as you’ve probably guessed, the better approach is to predict what competitors will do because of the Riskiness Equation and to do the exact opposite.
This creates contrast, your single most important characteristic.
So, if your competitors have 4 core features, you should build a product that explicitly has none of them. It’s up to you to find the thing that offers new, unique value.
If your competitors all have free trials, maybe you’re paid only from day one. If they’re all on Instagram, you use Reddit or physical ads or cold calls. Whatever would jack up their Riskiness Equation is where you should be.
Don’t put signs on the lawn.
(And know how much constraint it took for me to not tear “New Voices. Real Change” to shreds. Sheesh. Problem language, Harris and Shackleford! Problem language!)