March 27, 2018 5 min read

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When we talk about the “Goldilocks Syndrome,” we’re referring of course to the familiar fairy tale in which the little girl Goldilocks breaks into the home of the three bears and decides that one bowl of porridge is too hot, another too cold and the final one just right.

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This same burden often faces startup service firms. They focus either too narrowly on product offerings or, conversely, too broadly, trying to be all things to all people. Yet, finding the mix and amount that is “just right” is the challenge.

It’s completely understandable why companies, especially startups, suffer from this syndrome. When you’re new, you need revenue. And you’re willing to get it from almost any source. That’s why it’s difficult to turn down clients that don’t fit your business model. But, expanding your services too much may dilute your brand or lead to a condition we learned the hard way — brand schizophrenia.

We ourselves fell into the Goldilocks trap when we first started our consulting business. Our messaging was completely unfocused and suffered from brand schizophrenia. We would tell people we worked with both large and small businesses; offered strategy, finance and HR assistance; and provided individual coaching to executives, small business owners and even to teenagers.

After all, we had successfully raised three of our own, right? In fact, we were a mess. When a wise marketer pointed out what we had done, we stopped and refocused our messaging.

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Goldilocks Syndrome: Case study #1

That effort paid off, and today, we mentor startups for our local small business development center (SBDC). We were recently assigned a startup company that itself was suffering from the Goldilocks Syndrome. The owner told us that his company provided a small-to-medium-size (SMS) business platform that he had developed to help small businesses interact with their customers. He wanted our advice on how to attract more clients for this business.

That sounded fine, but when we looked at his website, we found that the first and second pages advertised several different service “packages” that included web design and development, social media and content marketing and SEO services.

The owner even offered accounting and booking help. It wasn’t until the third page of his website that he actually outlined his SMS services. It was very difficult to cut through his messaging to find out what he actually wanted to sell.

Our advice: When you’re first starting out, before you put effort into attracting customers, establish your value proposition. Ask the first question every business must be able to answer: “Why should a potential client buy my product or services rather than those of my competitors?”

Your answer will be what differentiates your offerings and determines your value proposition. You need to be able to explain your value proposition very clearly and quickly. If you can’t, you have work to do. Continue to narrow and refine your thinking until you can. Once you can articulate your value proposition, you’re ready to take your message to your potential clients.

By the way, narrowing your value proposition doesn’t mean that you can never offer your expanded list of services. Once you have an established client relationships, you may be able to offer those additional services. As we explained to our mentee, once you have an SMS customer, you might suggest an improved website or additional social media or content marketing as an add-on to that customer’s marketing strategy.

Case study #2

The Goldilocks Syndrome can work the other way, as well. Sometimes your product/service package is too narrow to lead to success. Another mentee of ours had an idea for a business through which he would offer training for a very narrow segment of the market — wilderness first aid. That is his hobby and his passion. He is an expert.

And, while he could quickly explain his value proposition for his market segment, the math didn’t work. Specifically, once we figured out how much he could reasonably charge for his classes and how many students he could attract, the numbers just didn’t work. He would never reach his goal of replacing his corporate job’s salary.

Our advice: This is a scenario in which you should ask our second question, “Is there a segment of the market that would appreciate what differentiates your product/service offering, and is it large enough to support your business”?

If answer to each question is yes, terrific. If not, you need to enhance and expand your product offerings. In our mentee’s case, he is expanding his business to include guided backpacking trips and other training classes.

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When you are starting out, you may find it easy to fall into the Goldilocks trap of having too many or too few product/service offerings. Too many may dilute your messaging and lead to brand schizophrenia. Too few offerings may make it hard to generate enough revenue. It takes work, but you can find the right mix by asking the two questions listed above. Once you have done that, you are ready for our third question, “How will I take my message to the market?”