Great ideas are born every day, and yet so many of those great ideas never turn into successful companies. I’ve talked about the Entrepreneurial Graveyard in previous posts – companies whose founders had great ideas but ended up in the graveyard because they focused on the wrong thing, or didn’t hire the right people for the team, or ignored the importance of establishing a company culture based on trust and respect. So much needs to happen between an idea and becoming a business. In this post I’ll share my experiences of building customer centricityinto a new company, because if you are focused on solving a measurable customer pain, you don’t need to worry about ending up in the graveyard.
Racing Against the Clock
Start-up companies are in a nearly endless race against the clock to be relevant: If you’re too early to market you lose, and if you’re too late — yep, you lose. Start-ups are in a race to find the ‘window’ between too late and too early, and then execute like crazy. And while this is easy to say in words, we all know it takes iterations and hard work.
In today’s start-ups, customers are involved much earlier in the product planning and development. What used to be ‘product management’ is now ‘pain identification,’ and working with targeted sample customers and users is critical. The best way to find that ‘window’ and to work through it is to talk to prospects early: get strong input on their business pain, get a measure of that pain without your product, clearly understand the motivation for solving that pain, and then continue to involve those customers as you develop the production version of your product. As a start-up, you must have customers who will fight for your existence.
A company’s relevancy in the market is measured by whoever is going to use what you’re creating. Success means building customer centricity into your company from Day One, and then work every day toward going to market with the customer in mind.
Today customers are involved much earlier in the product planning and development. What used to be ‘product management’ is now ‘pain identification’.
I was recently at an advisory board meeting with a company that’s been around longer than my three year old company, AppFirst, and this company still doesn’t have a production version of their first product in place. They’re “just about” to get early adoption customers to install, but they were confident they would deliver a product that would win over prospects and investors. I mentioned to them that their focus on both prospective customers and investors is not correct. I have found that if you keep everything focused on winning over the customers, your customers will win over the investors. When you make customers happy, you get investors, you get media attention, and you get more customers. You have to have customers who can speak to the pain you solve and who will, as I mentioned earlier, fight for your existence and share their passion for your solution with others.
“As a start-up, you must have customers who will fight for your existence.”
So with that race against the clock and your commitment to customer-centricity, what is the best way to choose those critical early adopters? First, you should be comfortable knowing that bad news will happen – your feature isn’t addressing a pain point like you thought it would. It’s a blow, but it’s better to know that early and then deal with it, instead spending time and money on building something that turns out to be below an acceptable minimum as defined by your customer.
Second, understand that you’re going to be interacting with people who have a great deal of their own work on their plate beyond your new product development and they may also have more bureaucracy in their world than your startup. I like to take this opportunity to test their ‘entrepreneurial- conscious’. Yes they’re busy with a bunch of projects, however time matters to all of us. We need to get this project measured out and underway, get to the milestones quickly, or none of us will succeed. If this kind of tactic doesn’t wake up their inner-entrepreneur, consider it a wake- up call to you: they’re probably not the right early adopter.
Hello? Is Anybody There?
Even when you’ve done everything right in your race against the clock: you understand the pain, have a way to measure it, have the right early adopters on board and are getting regular interaction with them, you won’t have access to them all the time. Even the greatest customers and partners who want to invest time and money in new things will sometimes just go dark. I have learned you need more of these test beds for a go-to-market than you think you do, and who you choose is really critical.
So what factors make an early adopter the ‘right’ choice? You want someone who understands what’s involved with working with your product so early. When I meet with potential early adopters, I show a slide with a picture of a famous chef such as Julia Child or Gordon Ramsey, and I ask the people in the room do they want to be in the heat of the kitchen, helping to pick the ingredients and plan the meal? If they are more interested in presenting the beautifully prepared platter or sitting at the table and admiring the meal waiting to be served, they aren’t the right people. There are risks to being in the kitchen – not everyone may like the ingredient you want and not everything gets into the final dish. Test the waters constantly to make sure your early adopting companies can live up to being innovative and committed. If someone would rather follow than lead, they aren’t the right person. You have to identify fast and furious in terms of your early adopters. You want people committed to taking part in the process. People who are not into a risk/reward scenario are not going to be good fits. If you have too many you won’t get anywhere. If you have just one but it’s a big one, what if it ends up not being the ‘right’ one? You can never afford to put all of your eggs in one basket. They key is to select firms that not only pass the “early adopter” tests but also are representative of your target market. Ideally you’d like for them to be so respected by their peers so once they are ready to tell the world they love your product their peers will care.
Working within that ‘window’ in the early days of a firm called Consera that was acquired by HP, we targeted three verticals – pharmaceutical, financial services and government — and we identified amazing people who lived up to ‘wanting to be in the kitchen.’ As you meet with and talk to people, you will find there are just those who are true innovators and who want to be one of the ‘cooks,’ and those are the folks you want in your test markets. They also tend to have a great deal of detailed measurement on the pain they are trying to solve which fuels their motivation to help you build your product right. Not only did we have brand name leaders in each of those verticals ensure we built a first product that had the right innovative foundation to buy upon launch, their reputation influenced many of their industry peers to enter into sales discussions following their lead.
Measuring Success: You need to ensure your customers life is significantly better with your product than without it!
The critical part of being customer-centric is solving your customer’s pain in a measurable way. People tend to buy things based on fear, on hope or on love. Are you hitting the market where someone is in big trouble? That’s a fear-based sell: your solution makes them audit-ready or gets them into compliance with a federal regulation. Those things have measure to them. Are you trying to sell a solution that automates tasks that are typically done by hand to make it fool-proof and eliminate human error? Are you hitting the market where someone is in big trouble? Have these customers articulated what hurts?
The other end of the spectrum is the love-based sell, which typically you earn over time. Think Apple products and the love and dedication of their worldwide devotees. You can certainly invest in doing something a certain way to win the love of a user, but it will likely be accomplished in increments. In the Apple world, they won over the creative space first and then created an aesthetic where people loved it. Believe me, Steve Jobs knew, as much as anyone that he had to execute quickly and win people over with things they had to have to succeed. Those advertising companies, artists, early adopters, what were they doing without a Mac and how long were they going to live with that pain? He had time pressure to get to market – with the right product, at the right price at the right time.
Regardless of a sell based on hope, fear or love, there are going to be internal arguments for more or for less, for this feature or that feature. The engineering group may say they’ve given you enough, let’s push it out. The marketing people may say it needs all these extra cool things. The bottom line is, none of those people are the final word. If customer-centricity is built into your company, you’ll know what is needed today, and what cool stuff can be added later. The final word belongs to the market itself.