Archive for April, 2013

Quotes For Entrepreneurs–April 2013

Written by Sean Murphy. Posted in Quotes, skmurphy

You can follow @skmurphy to get these hot off the mojo wire or wait until these quotes for entrepreneurs are collected in a blog post like this one at the end of each month. Enter your E-mail if you would like Feedburner to deliver new blog posts to your inbox.

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“Hope begins in the dark,
the stubborn hope that if you just show up
and try to do the right thing,
the dawn will come.
You wait and watch and work:
you don’t give up.”
Anne Lamott

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“When you need it, it’s to late to start building it. This goes for all kinds of capital, and no one accepts an IOU for social capital.”
Torbjorn Gyllebring (@drunkcod)

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“Usually zero product adoption isn’t because that one feature wasn’t added but rather that the problem wasn’t properly understood.”
Asif Khan Mandozai (@asifmandozai)

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“Not being able to govern events, I govern myself.”
Michel de Montaigne

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“In my opinion dividing work into small, but different, batches (eating elephant one bite at a time) should not be called iteration. My reference case for iteration is Newton’s method: improving your solution by repeating an operation on improved approximation of answer.”
Donald Reinertsen (@DReinertsen)

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“If at first you don’t succeed that’s one data point.”
Randall MunroeResolution

More context:
If at first you don't succeed that's one data point.

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“If there’s a common thread between endless startup failure stories, then it is “we talked to a bunch of people who said they’d spend money on this” and when push came to shove said people didn’t actually spend money.
We’re not failing, but even from a (modestly) successful startup perspective, the vast gulf between “people who like to talk to you as if they will spend real money” and “people who will actually spend money” is painfully apparent.”
onan_barbarian on Hacker News

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“There is no such thing as simple. Simple is hard.”
Martin Scorsese

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“The difficulty lies, not in the new ideas, but in escaping from the old ones, which ramify, for those brought up as most of us have been, into every corner of our minds.”
John Maynard Keynes  from “The General Theory of Employment, Interest and Money” (1935)

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“Don’t think of it as failure. Think of it as time-released success.”
Robert Orben

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“To see takes time.”
Georgia O’Keeffe

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Conway’s Law For Startups: Attack a large firm at an interstitial between two or more business units.”
Sean Murphy in Conway’s Law: the Co-Evolution of Business Organization and Product Design

More context from  “How do Committees Invent” where Melvin Conway’s observed what come to be known as “Conway’s Law.”

The basic thesis of this article is that organizations which design systems (in the broad sense used here) are constrained to produce designs which are copies of the communication structures of these organizations. We have seen that this fact has important implications for the management of system design. Primarily, we have found a criterion for the structuring of design organizations: a design effort should be organized according to the need for communication.

Another formulation of Conway’s Law is that communication problems in an organization will be manifested in their finished products. One example of this is from Tracy Kidder’s “The Soul of a New Machine” has a scene where Tom West, the leader of the Data General effort to develop a 32 bit mini gets a look at the VAX, DEC’s competing machine:

“Looking into the VAX, West had imagined he saw a diagram of DEC’s corporate organization. He felt that the VAX was too complicated. He did not like, for instance, the system by which various parts of the machine communicated with each other; for his taste, there was too much protocol involved. He decided that VAX embodied flaws in DEC’s corporate organization. The machine expressed that phenomenally successful company’s cautious, bureaucratic style. Was this true? West said it didn’t matter, it was a useful theory.”

Conway’s Law for startups: Attack a much larger competitors at “interstitial opportunities” that will require two or more divisions of a larger firm to collaborate to be able to compete with you.

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“The growing good of the world is partly dependent on unhistoric acts; and that things are not so ill with you and me as they might have been, is half owing to the number who lived faithfully a hidden life, and rest in unvisited tombs.”
George Eliot in Middlemarch

h/t Emily Esfahani Smith in “Relationships Are More Important Than Ambition

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“Passitivity starves opportunity killing her in no less a direct way than deliberate action, but it often goes unnoticed and without question.”
Torbjörn Gyllebring (@drunkcod)

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“Whats the biggest thing that makes you better? IQ, education, health, experience, determination, other people? I suggest: having suffered.”
Ed Weissman (@edw519)

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“Creating a new theory is not like destroying an old barn and erecting a skyscraper in its place. It is rather like climbing a mountain and gaining new and wider views.”
Albert Einstein

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“Beware how you take away hope from any human being.”
Oliver Wendell Holmes, Sr.  in his valedictory address to medical graduates at Harvard University (10 March 1858)

More context:

You can never be too cautious in your prognosis, in the view of the great uncertainty of the course of any disease not long watched, and the many unexpected turns it may take.

I think I am not the first to utter the following caution: Beware how you take away hope from any human being.

Nothing is clearer than that the merciful Creator intends to blind most people as they pass down into the dark valley. Without very good reasons, temporal or spiritual, we should not interfere with his kind arrangements. It is the height of cruelty and the extreme of impertinence to tell your patient he must die, except you are sure that he wishes to know it, or that there is some particular cause for his knowing it. I should be especially unwilling to tell a child that it could not recover; if the theologians think it necessary, let them take the responsibility. God leads it by the hand to the edge of the precipice in happy unconsciousness, and I would not open its eyes to what he wisely conceals.

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“Be content to seem what you really are.”
Marcus Aurelius

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“We can be knowledgeable with other men’s knowledge, but we cannot be wise with other men’s wisdom.”
Michel de Montaigne

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Ignorance gives one a large range of probabilities.
George Eliot in Daniel Deronda (1876) [Text on Gutenberg]

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“Speakers who talk about what life has taught them never fail to keep the attention of their listeners.”
Dale Carnegie

h/t  John Zimmer “Quotes for Public Speakers #129

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“Fairy tales are more than true; not because they tell us that dragons exist, but because they tell us that dragons can be beaten.”
G. K. Chesterton

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A triplet of quotes from Matt Barcomb (@mattbarcomb) on projects, programs, and portfolios.

“A group of people is not a team and a group of projects is not a portfolio.”
Matt Barcomb (@mattbarcomb)

“A program is a group of related projects working towards a similar end goal.”
Matt Barcomb (@mattbarcomb)

“A portfolio should strategically guide the use of capacity for
organization objectives.”
Matt Barcomb (@mattbarcomb)

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“There are no secrets, only information you don’t have yet.”
Adam Curry

h/t Steve Mays

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“Shallow ideas can be assimilated; ideas that require people to reorganize their picture of the world provoke hostility.”
James GleickChaos: Making a New Science

Hiring A Startup’s First Sales Person

Written by Sean Murphy. Posted in Customer Development, skmurphy

Gabriel Weinberg is a serial entrepreneur (latest startup: DuckDuckGo), an insightful blogger, and quality contributor to Hacker News. He is writing a book on how startups get traction due out this summer that includes interviews with folks like Patrick McKenzie, Jimmy Wales, and Paul English to collect lessons learned from a variety of perspectives. I was delighted when he approached me to take part and found it to be a very thought provoking conversation.

The full transcript is available at “Sean Murphy on the First Dozen Enterprise Customers” (with a related comment thread at http://news.ycombinator.com/item?id=1671852) here is a long excerpt devoted to hiring your first sales person.


yegg: At what point do you advise bringing in a sales person?

skmurphy: If you’ve made between a half a dozen to two dozen sales and  you’ve got a sales presentation that you know works.  If you’ve got a way to target prospects: you understand if they answer yes, no, or a number to these six questions, you know half the time they are likely to buy.  You don’t necessarily win half the time, but you’ve got a reasonable presumption you can create value for them.

Then you know you can fire a sales guy if it’s not working because the problem is him or her, it’s not your product or process.  What often happens is that the founders add a sales person before they can manage the sales process. They think somehow that guy is going to take his rolodex and solve all their problems.  They have to get–at least one member of the founding team has to get–good at understanding the customer negotiation process, and what’s going on there, so that if the salesperson is bullshitting them, they can call them on it.

This is nothing against sales people: they have a critical role to fulfill. Most successful sales people won’t come into a situation that is too early because they can’t make that much money.  If the product doesn’t work well, if you can’t tell them “Go talk to people like this, look in your rolodex and find all the left-handed tuba players that used to live in Cleveland”, then they can’t make money, and they don’t like that.

yegg: For your typical engineering founding team, do you advise one of them to develop these skills, or go find another co-founder, or what?

skmurphy: Most of the time at least one of the folks is more outgoing and is willing to get out there and to take part in the process.  If everyone on the team believes that they can stay in the BatCave and use Google AdWords to make their money then they better have a product that matches that profile. It is typically not the products at the price points we are talking about, where we’re offering an annual license that costs of anywhere from a thousand to fifty thousand dollars a seat, where deal sizes are in the twenty-five thousand to quarter million dollar range.

There are other markets where the founders don’t have to as outgoing.  You had Patrick McKenzie on; his whole business model is B2C: he and I are on different planets.  That doesn’t mean that I am right and he is wrong or he is right and I am wrong.  We are just going after very different kinds of markets: I want to be very clear that I am talking about business-to-business software sales.

yegg: Is there a typical person on the side, e.g. title, that you are dealing with?

skmurphy: It’s typically a mid-level person who has got a real problem.  It may be a first-level manager, may be a senior contributor, it could be someone in the finance, it very much depends on the product.  When we help sell medical workflow products we call on very different people than when we help  sell legal services automation or computational chemistry tools.

But ordinarily, it’s somebody who is one level or two levels up in the organization; they’ve got enough perspective on the problem and on the organization to understand what’s going to be involved in bringing change to the organization.  As we work with them they may take us up the hierarchy to sell more senior folks.

We don’t tend to start at the top unless we are calling on a very small business in which case you’ve got to call on the CEO or one of the key execs because no one else can make any decisions.

yegg: Suppose you hire a salesperson. How do you approach that process–do you hire just one to start?

skmurphy: Yes, start with just one. And hire someone who wants to sell, not a sales manager who wants to hire sales people and manage them.

Sales guys are very expensive, but you have to realize that if they can’t make money then they can’t make money for you. They face a learning curve process on your product:  you’ve got to develop real sales training material, which is different from the customer material that you’ve already got developed.

You’ve got to be able to teach them how to sell your product.  Now, you don’t have to teach them how to sell–how to navigate a customer hierarchy or coordinate a sales process or orchestrate a sale.  You are not giving them sales training in the abstract, but you need to give them training on how to sell your product.

For example: what does it mean when the customer asks this question; what’s our standard pricing and discount structure, how can you disqualify a weak prospect so that you focus on strong prospects.

yegg: Do you typically advise one of the engineers to become a pre-sales engineer in this stage?

skmurphy: Ordinarily, they are going to have to.  We also go on sales calls, my partners and will also go on sales calls in Silicon Valley. And we will do ride-alongs on webinars or telesales.  We can help with this. It’s less stressful to be sales engineer than the sales person. But both people are involved in the sale, they each have to be able to read the situation and improvise to assist the other.

The biggest challenge that a CTO or a technical person faces in that setting is because they’ve developed their product with a particular perspective, they will sometimes tell the customer, you know you are using my product wrong, stop doing that.  And, sometimes they’ll almost say those exact words.  And, the reality is many times the customers “misuse of the product” is actually where a bigger market is.  Maybe they are only using three of the seventeen features, but they are creating more value and you’ve got to be alert to that possibility.

yegg: The salesperson that you hire first–presumably you want them to have domain expertise. Are there other parameters that you are looking for as well?

skmurphy: In the markets we operate in we like them to understand what’s involved in an orchestrated sale.  The early sales are still going to remain complex; it’s not going to become a transaction for a while. So, you need somebody who has done that.  It may be someone that has ambitions to be a sales manager, or may have been a sales manager who was willing to take a step back for a year to be able to then help you build a team.

One other mistake we see folks make, not so much the bootstrappers because they just don’t have the money, but we’ll see teams with venture funding that will hire a VP of sales, two sales managers, four sales people.  They don’t have training materials; they haven’t figured out how to manage a process; and they create this train wreck and they burn through a lot of cash.

yegg: So in either case (bootstrap or venture), you’re saying you should definitely start with one person, get the process down, and then bring in more people.

skmurphy: Yes, and referring to your earlier question about titles, there are going to be a few titles you are going to be calling on. You would like to know that this salesperson has called on those kinds of people, and perhaps has some in their rolodex.

yegg: Let’s back up to the founding team. What typically will the founding team consist of to maximize success probability in this arena?

skmurphy: Two to five people, engineers or scientists that have got relevant work experience in the domain or the industry that they are trying to sell to. It’s okay if only one of the two or two of the five, or one of the five has got domain knowledge because sometimes bringing people from different fields is useful.

Outsiders can create strategic surprise because they bring things that work from different fields to this new field.  It’s not a requirement that everybody has worked in the field you are trying to sell into, but if no one on the team has worked in the target industry or field then you may be missing so much basic context that you just can’t get there.

yegg: Do you see that in real life? Entrepreneurs seem to do that a lot–approach an entire new industry looking for problems and hoping they can solve them within it.

skmurphy: I think that is good for an “Act Two” where you’ve got a proven solution in a primary industry.  I think as a startup trying to make your early sales in a new industry, I think the credibility problem can be very, very challenging.  The only way we’ve seen that work is where you are able to very quickly ask the right questions and demonstrate some capability that people can see the benefit for themselves.

There is also a shibboleth effect: you may not be aware of how people in a domain use certain words in a way that is very different form their everyday use or understand jargon or terminology that only has meaning in the industry. You may mispronounce words, use a term the wrong way, or misunderstand someone. This will put a prospect very much on edge and suggest that you don’t know what you are talking about.  Sometimes there are dialects, especially in a very early market, and people from different companies or traditions will use different words to mean the same thing. So you also have to appreciate that and not try and correct the prospect.

Ordinarily we suggest people start with something they know pretty well, and then branch out.  Now, the other way to do that is to bring somebody else onto the team that knows the domain you are going after really well.  So, just to be clear, I am not saying that the entire team has to have deep domain expertise, but if no one on the team does, it can be very hard.

yegg: What else am I missing about this process?

skmurphy: I am giving you an astigmatic perspective, distorted by our focus on bootstrappers in B2B who typically have a decade or more of experience.  We do work with younger teams but even there at least one has a couple of years of domain experience. Other markets work very differently from what I can observe. We are fans of Steve Blank’s “Four Steps to the Epiphany” which is fundamentally a B2B model.

I think one thing that we tell founders that seems to be the most baffling for them is “We are not going on a sales call, we are going to have a conversation; we are going to be genuinely interested in the person’s problems and learn more from them.”  The teams that tend to be more successful are motivated to solve the problem as much as develop a particular tool they’ve got today to solve it.

For example, whatever you start out with in January of 2010, by the middle of 2011 your solution is going to evolve considerably.  Too often there is “better mousetrap” thinking: the entrepreneur believes he has this fist-sized chunk of kryptonite in his trunk, and people with Geiger counters will find him in a parking lot and buy a piece. It doesn’t work that way.

I think the other challenge that new entrepreneurs have trouble with is that it’s as much about self-improvement and developing new skills as it is taking what you’ve developed and finding a market for it.  I mean it’s a very difficult journey and you have to change if you want to continue along it.

yegg: How long does the process of getting the first stage of customers typically take?

skmurphy: Let’s assume for the moment that we are doing some amount of rehearsal before the conversation; that we are making small modifications to the one-page or to the material, later on it becomes maybe an eight-slide deck, ten-slide deck at most. You can do maybe two of those a day if you are working really hard.

Realistically, it takes a while to get on people’s calendars.  You are really trying to talk to people that are legitimate proxies for who is going to ultimately buy it from you. So, that may take two to three months to have those conversations, learn from them, and be where you are.  And, there are sometimes ways to accelerate that by going to what we call target-rich environments, by going to the right conferences, by going to the right places where you can talk to lot of people.

But in the very beginning telling the same story to ten people is a lot of times less efficient in the long an than if you took the time reflect on the interaction, and make small improvements. You lose that ability to learn and adjust if you try and go too fast.

yegg: Would it be then fair to say that the first year is about securing those first few customers and getting it working on-site?

skmurphy: That is a reasonable timeframe: six to eighteen months to have a couple of customers really in production and some testimonials. Part of the reason why we so tolerant of consulting is that it allows you to sell a mix of things and your product gradually takes over the mix.

yegg: Then roughly, by the end of the second year, you would expect to have defined the sales cycle quite a bit, and potentially hiring a sales person at that point?

skmurphy: Yes, it can vary but somewhere between nine months and eighteen months, if you’ve been able to close business,  you can definitely start to interview people and to look to bring someone on.

There are also ways to leverage partners as intermediary.  The next step up sometimes can be your product actually works well with other products.  You’ve got customers in common; they find it advantageous to bring you in because you solve problems that then create opportunities for them.  So, there is also the possibility of other kinds of solution partners or channel partners.

yegg: In the channel partner case, are there any particular gotchas or ways that you like to frame those agreements?

skmurphy: So a pure sales channel is actually harder to bring on then individual salesperson.  You should bring on an individual salesperson first because you’ve got the sales training problem magnified by a factor of ten or a hundred.  Whenever you are negotiating those agreements, figure out how you are going to get out of them; figure out what constitutes good results and how do you terminate if it’s not working. Spend some time up front on how both sides are going to keep score on the agreement.  Be careful of exclusivity: if they want exclusivity, there is going to be some kind of guaranteed payment or guaranteed revenue stream.

So ordinarily we would see some kind of solution partner or somebody else that can help, then a single sales person, from there you may add a second sales person, you may look for channel partners.  A lot of companies end up in the four million dollar to ten million dollar level, and if they’ve got a recurring revenue model then one or two sales guys can keep it going.

yegg: On the bootstrapper side, is there a particular way you look at this as the right time to raise outside money or not?

skmurphy: When you go to raise money you need to be able to explain to investors how you are going to pay them back.  If you really are held back by an inability to take advantage of the opportunities you’ve uncovered, if you’ve got a real recipe for making your business work and how to scale sales up, then that is a good time to raise money.

But, if you are running out of money and you can’t meet payroll, and you can’t quite figure out who you’ll sell to next, taking six months out trying to raise money will probably kill you.  I mean a lot of people that are running out of money think that finding investment is the answer, and that is almost never appealing to an investor.

yegg: Putting that in the context of the cycle we’ve been talking about, it seems you’d be raising money when you’re a little further a long, i.e. after the first few customers and you’re ready to bring on the first sales person?

skmurphy: Sure, it’s legitimate to seek investment to be able to pay the sales guy if you have a proven sales process one of the founders can manage. A brief detour on commission only sales people: it seems like it’s a way to save money, but in general you don’t get their full attention and it doesn’t do you a lot of good.

yegg: And how much would you price an initial sales person?

skmurphy: As a base, again Silicon Valley, recessionary times, I mean might be 5k a month, might be 4k a month–depends on the person sometimes, a little less.  There might be a non-recoverable draw of that much again for the first three months.  The real challenge is you’ve got to be willing to fire them within sixty days, ninety days if it’s not working out. And, you’ve got to have a plan for how you are going to evaluate how good they are, and go on to the next person if this guy is not working.

yegg: And that would presumably be you’ve set aside some leads, you send them on those calls, and see what happens?

skmurphy: It’s still a team effort, you go with them; you keep a close eye on them.  It’s very different from an engineering hire where you can look at the guy’s code and make an assessment of what’s going on. Sales is primarily improv.  You can look at the proposals; I mean there is some written content, but one of the founders has to be going on the sales calls.

yegg: But ultimately, even if you like what they are doing on the calls, if the business isn’t closing, it is probably time to look for someone new?

skmurphy: Well, the presumption there is that prior to bringing them on, you had been reliably closing business. Now, reliably closing business may mean it still takes you six months from the time you first talk to the person to close the deal.  The sale cycles can be long, and I am not saying you’ve got to fire somebody in ninety days if they haven’t closed a sale, but you should be able to see bona fide progression markers pretty quickly.  You are moving from initial calls to customer supplied data to evaluations to final proposals.

I am not a fan of “probability of close” metrics. I like to see sales milestones that are tangible: the prospect has to have done something in the last two weeks to indicate interest or progress in making a decision.

Vision Is Critical But Avoid The “Field of Dreams”

Written by Sean Murphy. Posted in 2 Open for Business Stage, 3 Early Customer Stage, Customer Development, skmurphy

The Field of Dreams model or “build it and they will come” is a variation on the mousetrap trap “build a better mousetrap and the world will beat a path to your door.” What follows are a excerpts from pages 251-252 of the paperback novel  Shoeless Joe by W. P. Kinsella that was the basis for the movie “Field of Dreams.” They neatly summarize many of the worst and most self-limiting beliefs that doom startups to an early dissolution.

“I’ve had a dream. I know how things are going to turn out.”

Any new venture has to start with a vision that energizes the founders. And if they knew how hard it would really be, how far they were from making things turn out to match their vision, perhaps no one would start a company. It’s not the action of a hard headed realist. While you need a shared vision and shared values to form and motivate your team it has to be  subject to ongoing verification and refinement based on the unfolding situation and what you learn about “the facts on the ground.”

“Listen! It will be like this…” […]

Where you can get into trouble is not wanting to explore not just the edges of your vision but the critical assumptions you made.

“It will be almost a fraternity, like one of those tiny, exclusive French restaurants that have no sign. You find it almost by instinct.”

If you conceive of your startup as so exclusive and of such high quality that no marketing of any kind will be required, just word of mouth, you ignore the need to boil your value proposition down to a simple message. There is clear value in having satisfied customers who evangelize your product or service but assuming you don’t need any marketing or messaging is a recipe for continued obscurity and oblivion.

“The people who come here will be drawn…” He stops, searching for words “Have you every been walking down the street and stopped in midstride and turned in at a bookstore or a gallery you never knew existed? People will decide to holiday in the Midwest for reasons that they can’t fathom or express”

If you cannot list the paths that prospects will take to find you and specific reasons why they will investigate time in exploring your offering then you are just fantasizing. Looking for generic “early adopters” or “firms that want to be innovative” is a sign that you have do not have a clear hypothesis for the specific value your solution will offer a prospective customer.

“They’ll turn off I-80 at the Iowa City exit, drive around the campus, get out and stroll across the lawns, look at the white columns of the Old Capital Building, have supper at one of those tidy little restaurants, then decide to drive east for a while on a secondary highway.

If the situations that you anticipate that your prospects will find themselves in are unrelated to a particular pain or need you can address then you have too large and unfocused a vision and too little real empathy for your prospects. Wanting to do a “Big Data” offering or to “attack the cleantech market” makes you fully buzzword compliant  with other startups but doesn’t really give you any assumptions that you can test or refine.

“They’ll turn up your driveway, not knowing for sure why they’re doing it, and arrive at your door, innocent as children, longing for the gentility of the past, for home-canned preserves, ice cream made in a wooden freezer, gingham dresses, and black-and-silver stoves with high warming ovens and cast-iron reservoirs.
“‘Of course, we don’t mind if you look around,’ you’ll say. ‘It’s only twenty dollars per person.’ And they’ll pass over the money without even looking at it–for it is money they have, and peace they lack.”

Four very dangerous assumptions

  1. Prospects are willing to explore your website for more than a minute even if they cannot see something that they can use.
  2. You can sell ads without investing the effort to characterize your visitors and determine who will pay you for their attention.
  3. Because your team finds your product concept compelling it must be the case that what you have is so intrinsically compelling that you don’t have to develop a real model for the value that you offer–and to set a price that reflects that value.
  4. People will pay you for an abstract or fuzzy set of benefits.

“They’ll watch the game, and it will be as if they have knelt in front of a faith healer, or dipped themselves in magic waters where a saint once rose like a serpent and cast benedictions to the wind like peach petals.”

There is a spiritual component to any task or business, but it’s there because you want to offer real value and have authentic relationships with your customers, suppliers, employees, and partners. Even if you are offering medical care or cleaning up the environment or preserving a neighborhood for the next generation you have to earn a profit if you want to continue. That means that customers will need to gain tangible value from your offering and pay you more than it costs to provide your product or service.

“You talk a good dream,” I say to Salinger.
“I dream of things that never were,” says Jerry.

There is always a place for vision and spiritual values in a business. Few if any firms can survive long without it. But profit that flows from providing something customers pay for is also necessary, as is the continual exploration of customer needs and the ongoing testing and refinement of all of your business model assumptions.

Related Articles and Blogs

 

16 Quotes on Customer Development From Asif Mandozai

Written by Sean Murphy. Posted in Customer Development, Quotes, skmurphy

I have been following Asif Khan Mandozai (@asifmandozai) on twitter for several months now and thought I would curate a set of is best quotes on customer development for posterity. He is consistently practical and insightful.

If your customers just want to go from point A to point B. Build them a go-cart not a Ferrari.

Good idea for an initial offering, and an absolute requirement for any minimum viable product (MVP).

Design is NOT everything. Consider products in the market customers pay for which solve STRONG problems but lack good design.

Customers will forgive you on bad design if you are solving a strong enough problem.

There’s a difference between STRONG problems and BIG problems. One is around pain level and the other around market size.

I like his “strong problem” formulation where the gap or delta between current results and outcomes that your product or service can offer is large.

Always look out for problems on the periphery of the main problem you’re addressing where competition may be much lower.

If your prospects repeatedly show interest in something unrelated to what you are validating – swerve & follow what’s really bothering them.

Let your customers guide what your product must become by showing you the problems your product must address.

Be guided by where your prospects are telling you to focus your efforts.

Innovation is like fire – It’s magical until it’s understood. When understood, it becomes accessible to everyone. Value shifts to execution.

Be careful of “lighting the way for your competitors” by being unprepared for the need to continue to refine your offering and improve the quality and speed of your execution once you start to gain traction.

“The whole world” is NOT a good answer when you are asked “Who is your target customer?”

You find your thousandth customer only after your hundredth & your hundredth after your tenth. Your tenth after your first. Start there.

Even one customer is an achievement – go find out why they paid.

Find out the story behind why they selected you. That requires a conversation. Here are three related blog posts

“It’s a great sign to see when your prospects get emotionally charged when talking about problems or solutions.”

Conversely a lukewarm response or little emotional involvement or energy around a problem probably means that either the problem isn’t very important or your proposed solution is not seen as providing much value.

“The calm before the storm is always riddled with assumptions.”

If you cannot think of a dozen things that might go wrong or that you need to understand better you probably aren’t thinking about your customer’s situation hard enough.

There’s a big difference between Users, Customers and Channel Partners. Who are you really validating with?

Customers pay you, they are the only ones who can validate an MVP.

Don’t be afraid to tell your customers you’re still in early stages and need their help: serve and learn.

I think this is better done with a “we are just getting started so we are going to try harder” rather than using it as an excuse for  poor performance. Most startups that fail run out of trust before they run out of money. Social capital is more important than financial capital in the early market.

“Usually zero product adoption isn’t because that one feature wasn’t added but rather that the problem wasn’t properly understood.”

Zero product adoption often involves targeting the wrong customer or trying to engage with a poor message that obscures the value of your offering.

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