From Cool to Dead Pool

I bet each of us could rattle off 10 applications or websites, web and mobile, that were hot today and gone tomorrow. What is it that makes a new app stick around for the long haul and what drives so many to the dead pool? Is it luck, a rock star management team, endless financial backing? It is the combination of a unique value proposition to the user and real revenue potential. You can get lucky and see a spike in user traffic from buzz on TechCrunch, you can have a ton of money poured into your business, but if the user value proposition isn't there or you don't have a viable self-sustaining business model you will be cannon balling into the dead pool very soon.

How do you know if you have a unique user value proposition and how do you combine that with a real revenue generating business model? A unique user value proposition should have a strong yes to the following questions.

1. Is there a real loss or gain that occurs for the user if they don't have a service like yours? Some examples; will they... miss their favorite band, be able to find old friends, be able to communicate in an emergency or have their website go down during peak usage.
2. Can the user need be filled easily and with a comparable quality through another source? This is the grey area. Every entrepreneur will say no, but the answer is almost always yes. You must challenge yourself to define what is truly different, why a user will choose you and stick with you.
3. Is this something people will share with others? Will they say, "you have to try google, it really makes doing research easy" "you should sign up for Facebook because you can find and keep in touch with so many old friends" "you have to get the iPod, you can actually listen to music and run with this little thing"

Don't fool yourself here. Everyone thinks they have a truly unique value proposition, but most do not. They have something cool, that is fun and will be replaced by whatever comes next two months from now.

This leads to the next test; do you have a real, sustainable business model. Can you make money, how much, how fast and from whom?

If you create value, real value then odds are someone will pay to target your loyal users or just to use your service. What that number looks like, how many will pay and how quickly is different for each industry, each market and each decade.

The two most important roles in a new company are the product manager and CFO. If you have an innovative, user-centric product manager and a tight-belted CFO you will give your business the best chance for success.