Ask an Expert: What is Your Secret Sauce?

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Q: Steve – I am going to make a long story short because I think it is important to share. Having been in business for 20 years, what I have learned is that you have to differentiate yourself somehow from the competition. Everyone today is so obsessed with social media. Blech! Do something different people!


A: Let me share a story: One summer about five years ago, when the kids were off at summer camp, my wife and I decided to head down to Mexico for a long weekend. I had read about a cool little fishing village on the coast that sounded idyllic and we wanted to check it out. And so we did.

The place was as nice as advertised, with several great bars and food options, but interestingly, I found myself in the same little restaurante every morning. And we weren’t the only ones. The place was always bustling with locals and expats alike.

Why was that? Sure, they had great huevos rancheros, and I love that, but it was also something else.

The restaurant was the only place in town that offered free wi-fi.

Indeed, throughout the town there were flyers for the restaurant that prominently mentioned the free wi-fi factor. People came for the wi-fi and stayed for the food.

That little restaurante figured out what so many of my small business brothers and sisters miss, namely, that if you want to succeed, you have to set yourself apart from the crowd. There was no shortage of bars and restaurants in that sleepy little beach town, and it would have been easy (if a losing proposition) for the owners to compete on price or food or whatever. But they figured out something different, something that set them apart from the rest.

They had a secret sauce.

You remember the old McDonald’s commercial, right (I’m dating myself here!):

“Two all beef patties, special sauce, lettuce, cheese, pickles, onions on a sesame seed bun.”

In business parlance, “secret sauce” has come to mean that thing that you do that is unique, different, and special. When a VC looks to invest in a startup, they will look at many different things, including the financials, the entrepreneur, his or her team, and yes, their secret sauce.

Often it is the secret sauce that will compel an investor to jump onboard.

Andy Bechtolsheim wrote out a $100,000 on the spot to “Google, Inc.” after getting a demonstration of the search engine’s capabilities when it was still a Stanford gradate school project in 1996. (Fun side note: Sergy Brin and Larry Page were unable to deposit the check for several weeks because they had not yet incorporated the business at that time.)

When I share the secret sauce secret with small business people, often they are intimidated. They worry that they have to be like Google or Amazon or something. That is not what I am saying at all. What I am saying is that you need to figure out what your version of free wi-fi is. That’s it.

What is it that you do – or could do – that is unique, different, and special?

Here in my town, there is no shortage of organic markets. But one of them has a tagline, “The friendliest store in town.” And heck if they aren’t. For us it’s a two-fer: We get great, fresh food there, and they are indeed quite nice about it (they better be given the prices!) For them, the key is that they know they have a lot of competition and so instead of competing where they may not win (price, selection, convenience, whatever), they changed the equation and compete in an area where they are strongest. Their “friendliness” is their secret sauce.

So that is today’s assignment. Don’t play on someone else’s turf of location or lowest price or whatever. Play the game on your home field. Think about what it is that you do that is different, what your secret sauce is, and brand your business around that.

And if you offer some great huevos rancheros too, all the better.

Today’s Tip: I received a lot of positive feedback about my recent article on how the principles of famed UCLA basketball coach John Wooden can help any business. If you would like to see for yourself, there is an authorized training curriculum available. You can find it here at