😲 Unique Bragworthy Proposition

Learning why UBP is more important than USP for a product to grow and how to leverage the Delta 4 framework.

UBP >>> USP

Well, if someone asks how to run a business, most would reply to jump in with a huge amount of funds, put out an ad and start selling the product. But that doesn’t gonna work in the 21st century. Consumers are much smarter than you think. Then how to sell in this new millennial world?

The trick is Growth without ads. This was put forth by CRED’s founder Kunal Shah a few years back. He extensively calls it the Unique Bragworthy Proposition. Oh, wait! What’s that? Well, you have definitely heard about USP (Unique Selling Point). USP is the essence of what makes your product or service stand out from your competitors. Although this is gonna be essential in kick-starting a business, but to sustain it in the long term, this is not gonna be sufficient.

So we need UBP. What is UBP?

I wanna put this in layman’s language. How did you discover the Notion app? Was it through ads? A big NO right?

Someone in your circle or society would have bragged about Notion and you eventually came to know about it. When humans discover a very efficient product, they tell everyone about that product (brag about the product), in fact, they get social currency by sharing that. So this is what UBP means and this leads to organic growth of a product/company without any ads.

The Delta 4 framework

Well, the substantial problem is how to identify an efficient product. So let’s take 2 scenarios. You are hosting a small party in your house on a Saturday night and you need a bucket of biryani for dinner. One way is you can go to the restaurant directly and takeaway (the older way) or order them via Swiggy/Zomato. On a scale of 10, how do you rate these 2 scenarios on the basis of efficiency? Taking the average, the first one would have scored ~3 and the second one would have scored ~8. The delta (difference) is 5. So whenever a product has a delta greater than 4, it is an efficient product. Hence companies like Swiggy and Zomato came up with a delta 4 idea and they are beating the inefficient model of takeaways.

Finding a product greater than delta 4 is the only way to beat the inefficient products. A lot of things can explode like mentos in the diet Coke when you find a Delta 4 product. If you want to deep dive into this watch the full video of Kunal Shah here.

How do companies profit?

This "Delta>4" framework has 4 stages and each and every product has to cross these 4 stages to start making profits.

1. Cash burns - This is the 1st phase where a company identifies a major problem in society and tries to provide an efficient solution to it and by doing they need to burn a lot of their pockets. So when Jio launched, they identified Internet sustainability in the market and they spent nearly 1.5 lakh crores for setting up the infrastructure, free sim card, free calls, and free internet. Jio did everything to maximise the number of its users not even bothering about profits. Why does a company need to provide freebies or exclusive cashback? This is done in order to increase their customer base.

2. Habituation - So once we started using free internet via Jio, we got so habituated that we forgot about recharging or topping up our mobile balance. Another similar instance is the transfer of money via Gpay/ PhonePe. We got so habituated that we forget the presence of banks and we instantly transfer cash in seconds.

3. Irreversibility - This phase is where the consumers get used to the new normal and they won’t even give a second thought to going back to the inefficient product. A classic example would be Ola/Uber. Would you ever go back to the conventional way of booking cabs or go down your streets to find an auto or a taxi? Never right? This is the power of identifying a delta 4 product which makes the users never ever go back to the past system making the product irreversible.

4. Profitability - This is the gold mine phase for the companies. A lot of products are in the 3rd phase such as CRED, Google Maps etc. That is why they are providing their services free of cost and they are forcing their users to get too attached to the product that the consumers won’t turn back to the conventional system. Once, the companies are ready with their required customer base, they would start charging their users. For instance, I think Jio was providing free internet for about 12-15 months. Once they were ready with the predicted customer base, they started charging the users.

So I am gonna ask you one thing - Have you switched back to BSNL or another service just because Jio started to charge you? No right? This is the UBP framework. This framework is now been adopted by major giants like Reliance, CRED, Ola, Uber, Zomato and Gpay.

Brace yourselves because a lot of products that you are using for free right now are just because they are in the 3rd phase. Once they jump to the 4th you might need to start paying them. One such prediction is Gpay because as of now as per RBI rules, UPI transfers are not supposed to be charged because of the digital India initiative and Gpay is yet to cross the 3rd phase. Once it is done, get ready to pay the transaction fees every time you are gonna transfer money. But companies like Spotify, and Netflix have already crossed the 3rd phase and they are in the 4th phase. That's why they give a trial period of 7 days and after that, they start charging.