The Five GAUGE Questions
The simplest way to get started with GAUGE is to ask yourself five specific (and mostly obvious) questions that map directly to the five factors. These questions aren't even a particularly great mystery any more, because I have been using them to kick off podcast interviews over the past year.
With John-Michael Scott, I started a podcast called BloxNexus to find and interview blockchain company leaders with practical, real world applications. Our approach was to first ask the five GAUGE questions, go deeper into the subjects we didn't understand, and then close on what we saw that was going to work.
Initially, I was just trying to understand my guests and their business strategy well enough to dig deeper. At some point though, it became very clear that the guests were distinguished by their ability to answer the questions. Those who understood their businesses had a much clearer story.
More than that, their stories had power. It turns out that some answers were better than others, and it became clear why over time. They were presenting their big idea within the context of the practical steps they were taking in the moment. That's the value of GAUGE as a framework. It helps us to include what must be included.
But how then does one answer the questions with power? For a new business or product or other such initiative, the following guidelines should be quite helpful.
1) What is the big problem you are addressing with your product / company today?
Well what is a gap if not an unmet need. For there to be a really big market, there must already be a need that drives massive spending. The problem exists where some buyers are dissatisfied with the solutions offered. If your product / company can satisfy these buyers it will turn that spending in your direction. Make sure that we understand the extent and character of their dissatisfaction.
2) What special capabilities do you bring to the market?
In other words, "What is your unfair competitive advantage?" There are two sides to this answer. The first part is simply to answer the question, why you? Tell us what special skills, resources, talents, intellectual assets do you have that no one else possesses. Help us understand why you aren't just going to whacked in the first year you are operating. With the second part of your answer, show us the steps you will take with your product and business model to build long term sustainable advantage. What strategic control can you gain, and how quickly does it kick in.
3) What is your unique value proposition?
Describe your value proposition at a high level, in the form of value points. These are the statements you make about your product that clarify where a set of features offer tangible benefits that add value to one or more identifiable buyer types. These should not be complicated though, three or four words for each one. When you share them with a potential customer, that person reaches over the table, grabs you by the shirt and demands that it be installed and delivered the next day. That's how you know it's unique and valuable.
4) What is the business or gain model that will sustain you?
Do you have revenue? Do you have positive cashflow? How long does it take to get there? How much money are you going to burn to get there? Some really big ideas are going to take years and large coin to play out. Your listener needs to know how long, or at least have some confidence that you actually do. Here there are numbers, but they aren't precise. For who actually knows what the numbers will be in 12 months, let alone five years. We want to know the scale of the mountain you are attempting to climb. It sets up our final question.
5) What have you done so far, and what do you plan to do over the next 12 months?
Your listener wants to know if they should keep listening. Are you going to rock this project to the end? Or are you delusional? Founders of successful companies get too much money to start their next one because investors who made money with them believe it will happen again. So few new products and companies make it through the gauntlet that the only proof of future success is past success. Since you probably didn't make your investors a $500M exit on your last startup, you will need to show proof of progress towards your goals. You will have set up objectives, delivered against them, and shown evidence that you can execute. Make sure we know that you know where you stand in the world.
Now that you have the outline, why not give it a try? Practice on yourself, or with a friend. Prepare yourself to answer the questions as they come to you, in whatever order. Prepare yourself to pitch, to get the attention of the next investor, customer, employee or advisor to your company.