A long time ago, I read a book on metaphors. The name of the book now eludes me but the gist of the book was that metaphors shape how we think by affecting the analogies we draw. Depending upon the analogy, they open or close our eyes to risks and possibilities. They consciously (and unconsciously) shape our worlds.
Surely, to you, the higher echelon mortal1 reading this missive, this comes as no surprise. Language we use to describe something affects how we think and interact with it.
One of the more interesting things that comes out of being a buyside professional for 16 years2 is the evolution of the language companies use to describe themselves. Companies are living, breathing entities. It is not easy to compress everything about them into concise and compelling language.
And so, we fall into patterns…
One of the most abused metaphor over the last few years has been “X for Y”. You have seen it everywhere. You have rolled your eyes looking at emails from bankers and founders containing such exalted and witty punchlines as “Uber for Dog Grooming”, “Airbnb for Unwashed Underwear” and “LinkedIn for Ego Stroking”.
Each time an email containing “X for Y” is sent out Voldemort kills a unicorn3.
Now, as much as we might hate it, “X for Y” is a powerful shortcut. It is lazy and it is mostly disingenuous but it is a powerful shortcut. It takes a new company and ties it with the size and (potential) success of an established one. It explains and impresses.
It is most often a time bomb.
See, the “X” in the equation does most of the heavy lifting. X for Y suggests that the strategies and dynamics of X apply to Y. Now, hoodwinking investors with this is fine, if not strictly ethical. If one is naïve enough to be taken in by spiel, one probably deserved it. However, this becomes a much bigger problem if the founders and employees drink their own Kool-Aid and start making decisions and capital allocations based on the X for Y narrative.
A great example is an unnamed company (let’s call it Z) that wanted to be a “LinkedIn for blue collar workers”. People put money into it. Most of the investors were pretty sure that they were just taking a punt. The only slight, teensy little problem was that a few too many investors took the punt. That left Z with almost $30mn in funding. Z’s founder lost it a little and promptly embarked on copying LinkedIn’s strategies and marketing channels. Targeting High flying executives on Google/FB platforms makes sense for LinkedIn. Does that make sense for a blue-collar LinkedIn whose users most likely have feature phones?
You know where this is headed, right? A great bonfire of hopes, dreams and $30mn came to pass.
There is another version of “X for Y”. It is called “…with ABC”. A couple of years ago ABC was web3. Another year or so before that ABC was blockchain.
Today, ABC is AI.
And so, most emails landing with pitches are “automation with AI”, “wealth management with AI”, “fraud prevention with AI”, “customer retention with AI”, “cure hemorrhoids with AI” and so on4.
Now, let me clarify, I am by no means an opponent of AI. Used properly, AI is game changing. At least 3 companies in my portfolio are going to become insanely big because of AI and how they use the tech.
The problem is that this again warps the lens through which we view the opportunity. Anything “…with AI” gives the impression of something wildly exciting and successful, a paradigm shift, a technological watershed moment. It demands attention, breeds excitement and promises utopia. If there was ever a prize for conveying a lot with minimal words, “…with ABC” is surely in the hall of fame.
That said, the conciseness trade-off we make by using “… with ABC” can be as damaging as “X for Y”. It focuses on ABC. Anything “…with AI” tends to focus everyone on the AI, not on the problem you are trying to solve with AI.
Theodore Levitt is famously attributed having said:
“People don’t buy a quarter-inch drill. They buy a quarter-inch hole”.
In other words - people aren’t buying thingamajigs to solve their problems, they are buying solutions to their problems. Those two things can often be the same, but not always.
One of the key problems of the tech industry is that it overestimates the elegance/newness of the solution in estimating longevity. Sure, your first 5 customers will deeply care about your using “AI”. By the time you are at your 1000th customer, they just want the problem solved and they don’t care how you do it. If I were to apply the Crossing the Chasm model5 here -
The challenge then, is for founders and investors to use the “…with ABC” frame but not letting it warp their thought processes and decision making. It means staying focused on the what and not on the how.
But i guess, more than anything else, it means remembering that AI, or any other technology or business model, is a means to an end. It means remembering that the overwhelming majority of your future customers don’t care about how you solve the problem, but only that the problem is solved. What they will care about is how much cheaper, faster and better you do it for them.
And that can be difficult. How we describe a company informs how we think about a company. How you think about your business informs - consciously and unconsciously, in big and small ways - the decisions you make.
So the smart founder will use “X for Y” and “…with ABC” framings without letting them influence their thinking. The smart investor realizes that both these frames are momentum building gambits.
Further reading:
Where Mathematics Come From: How The Embodied Mind Brings Mathematics Into Being - Lakoff and Nunez
Metaphors We Live By - Lakoff and Johnson
Crossing the Chasm - Geoffrey Moore
Housekeeping:
As always, I look forward to hearing from you. If you liked this post, pls feel free to share this or subscribe to this newsletter using the links below. I try to write a 1000-2000 word essay once every 4 weeks or so.
Of course. All subscribers to this blog are higher mortals. It just wouldn’t do to have the proles in my readership.
Who has by now read a few thousand ways of companies being described. Holy crap, 16 years!!! I am old. But then, the rapidly growing bald patch on my head should have been a clue.
Real unicorns, mind you. Not small groups of little children shouting “look at my shiny billion dollar valuation”
Caught the last one eh?
Refer suggested reads