‘We recently conducted a long survey to our clients. The response to a single question was so insightful that we changed the complete architecture of our cloud monitoring platform.’ Dario Peña, Founder of Nubity
Business gurus have been around since the beginning of business. And yet, despite playing the same role, the way we consume their wisdom and advice has changed dramatically, both for the good and for the bad. Before, you would buy a copy of ‘The Path to Excellence’, read it cover-to-cover in two weeks only to wait months before you would again hear from Tom Peters. In today’s 24/7 news cycle, business gurus’ prophecies have taken over all forms of communications. You can literally spend day-in and day-out reading @pmarca @sama or @levie thinking out loud online. You can take to the shelves where every other week a startup guru has published the next “Best Seller”. In short, business media has turned into a never-ending carousel of an indispensable advice after the next. As if this wasn’t enough, almost everywhere in the world you can participate in conferences and workshops where local rising stars reiterate what these tech celebrities are thinking out loud.
We receive more founders overflowing with start-up wisdom from experts in Silicon Valley than founders genuinely experts on their customers. Nowadays, knowing your Silicon Valley alphabet is a lame commodity, however knowing your customer can be a powerful source to a competitive advantage. Work to become an expert on the problem you are solving rather than an expert on how people in Silicon Valley come up with solutions. Where to start?
First: Who. Before launch, the first thing to becoming a customer-oriented startup involves identifying a group of potential customers. You need to have good hypothesis on who you are solving the problem for and who will be the first to try your technology. Age and income ranges are not only not enough but can bias your analysis. Start thinking about lifestyle and cultural aspects first. Describe other products they are currently using. Are they Uber or Carrot users? Are they Android or Apple users? Are they fans of Barcelona or Real Madrid? Once you have your first customer cohorts the analysis becomes different. Describe your fans, your most frequent users. Analyze their Facebook, call them on the phone, build regular surveys to learn everything about them. Create personas that your team can understand and recognize. Expect to put in many hours but it is definitely a fantastic investment for your company. Awesome investors will appreciate this.
Then why. Despite the success of the design thinking approach, not much thought is given by founders to why customers behave and make the choices they make. Without answering that question, all your data is just surface-based just like sizing an iceberg from a boat at a distance. Be ready to learn insights that even your customers are unaware of. Sometimes you cannot ask them directly. Answering the ‘why’ is tougher than assigning the 25 to 65 age bracket because it requires a skill set of psychologists, philosophers and sociologists rather than MBAs or Engineers. Answers involve feelings such as pride, happiness, fear and love. It requires a high level of awareness and empathy.
Finally where. Now that you know the ‘who’ and the ‘why’, you have probably adapted the product and have found a good market fit. To scale, you need to know where to find your most profitable customers i.e. low CAC, high repeat and long lifetime. If you know your customers well, you know what social media platform they prefer, what TV show they never miss, where they work, shop and relax. Don’t forget it is not only about finding them but finding them at the right time. You should not only think where but when to engage them to catch their attention smoothly and consistent to your brand. Despite the challenge to set them up, member get member programs have been great tools to find your best potential customers. Nail a member get member model and you nail your customer acquisition. People tend to be around people similar to them that are found in similar places.
So if you feel the need to understand how you go from 0 to 1 you can listen to Peter Thiel on the way to work. The rest of the time should be spent engaging your customer. I assure you the latter will get you to 1 faster.