The following transcript identifies why it is vitally important to keep your business model simple with Thrive15.com founder and US Small Business Administration Entrepreneur of the Year, Clay Clark! This training highlights why Thrive15.com is considered one of the best business schools in Florida!
Clay Clark: Today we're going to be talking about your business model and specifically how if you can't keep it simple you're going to lose. The idea is keep it simple because if you can't teach it to a third grader you're going to lose. A lot of people I meet all across the country they ask me for business advice and they have a very complex business plan, a complex business model and at the end of the day I can sit with them for 20 minutes and I still have no idea what they're talking about.
In fact I've done that before. I've started a business idea that is so awesome that I can't explain it to a human and the problem is the humans are the people, as a general rule, who buy products and services. So potentially other life forms could buy them but not at this point in American history. So what you need to do is you need to make sure that you can explain your idea on a very simple level. So today we're going to teach you the complex system of turning your big idea into a simple easy to explain concept that a third grader can grasp and therefore people would buy and people would invest in your business ideas.
Remember at Thrive15 we all believe that knowledge without application is meaningless. So as you're watching today's episode you owe it to yourself to ask yourself what do you need to do to apply these principles in your own life and business, otherwise today's episode might be more meaningless than driving out of time to save money on gas.
All right, we're talking about business modelling and specifically we're talking about keeping it simple. There's a lot of ridiculously long business books about how to start a business and we want to keep it simple because if it's not simple people can't buy it. If a customer doesn't know what you sell and doesn't fundamentally understand what you're talking about they can't buy it. I'll give you an example. Few months ago, a young man comes into my business and he begins to tell me about his business. He talks. How long does he talk? He talks for over 30 minutes. True story. At know point did I have any idea what he was talking about.
So he says, "On my business what we want to do is we want to fundamentally change the way that people communicate through the platform of blah blah blah." 30 minutes later I still don't know what he's talking about. I talked to one guy about six months ago and he says, Our company, what we want to do is we want to help provide loans for companies that can't get loans. And I said, "Great. So are you like a bank?" "No, we're more of a mid level, we're kind of a conduit that introduces the companies to companies that can't get funding."
"So your company introduces banks to businesses that can't get loans, so you're like a broker?" "No, we like to consider ourselves as more of a ... On a global scale we're more of an education service that helps moderate this difficult conversation between banks that want to lend and companies that cannot get financing." I'm like, "So you're a consulting company." "No, we're really more of an ..." And I'm just like, "Stop it. I have know idea what you're talking about at any point." I couldn't understand what he is talking about. We do not want to do this.
When we're trying to start a company we want to keep it simple and we have to keep ourselves accountable to this rule. If you cannot explain your concept to a third grader, my daughter approaching that age, if you can't explain to a third grader then your business idea is terrible. You need to be able to explain it to a third grader. If you can't get to it and explain it thoroughly within a three minute window of time you lose.
So rule number one to help us communicate simply our idea to investors and potential customers and help us actually start a business that works is we have to have our elevator pitch or some people call this a three minutes version of your company. So example, what is Thrive? Thrive provides web based edutainment for entrepreneurs. Or if I'm going to expand, Thrive provides web based and video based game of gamified entertaining education for entrepreneurs. That's what it is. Web and video based gamified entertaining education for entrepreneurs.
One responds is, what does that mean? One, it's on the web. Two, we teach you via video, three, it's gamified, you get points instead of grades. It's entertaining and it's educational. It's gamified edutainment. Okay, I get it, that's elevator pitch. So if you have a big idea right now you're going to have to explain it to somebody in a very simple way. Now I'll give you an example, I've got one client I worked with, you've got to visit this guy's website, it's pretty neat. It's called Elephant In The Room, full disclosure, I am an investor in this company that this called eitrlounge.com. It is a haircut business, hair for men. He says, "No, it's not a haircut, it's more of an experience.
Curious about what else can be found on Thrive15.com? You can learn how to start and grow your business for a fraction of the cost of business schools in Florida!
Elephant In The Room, this is what it does. It provides grooming for the modern man who's looking for an experience and not just a haircut. What does it do, it provides a grooming experience for the modern man who's looking for an experience and not just a haircut. On his website he articulates it better than I'm doing now but he can quickly explain that, hey if you're a modern man and looking for experience, if you're looking for a hot towel treatment or a straight razor shave or if you're looking for something more luxurious then this is where you're going to be pampered. Elephant In The Room is for you.
Now if you want a quick cut and a cheap cut from the cheapest price possible that's not your business because he's focusing on what, the modern man who is looking for an experience, not just a haircut. That's what he's doing. That's the quick explanation of it.