Customer Interviews: Spend an Hour to Save a Minute

Written by Sean Murphy. Posted in 1 Idea Stage, 2 Open for Business Stage, 3 Early Customer Stage, Customer Development, Lean Startup, Rules of Thumb

For customer interviews we have a rule of thumb that if an hour or research saves a minute early in the conversation it’s a good investment.  When you look at the list of questions you have prepared to learn about the prospect’s business and their needs, it’s easy to say to yourself, “I am really busy I can just ask these at the start to ‘set the table.’” But there are significant risks with this approach.

Preparations Cuts Risk Of Customer Interviews Ending Prematurely

While the interview may be nominally scheduled for 15 minutes or a half-hour and may run an hour if it goes well the first six minute or so  are critical to communicating that you have done your homework on their situation and their needs. If you start to ask questions that are already published on-line you can appear lazy or unprepared. If you can do research on a prospect in advance, it’s worth spending an hour to save a minute in the conversation. You can even start the conversation by saying “when I prepared for this conversation here is what I learned about your firm” and give a brief summary of what you know about their situation.

It’s OK to say “I see on your website that you have hired four people in the last three months, how has that impacted …” or “I read a profile of your firm in the San Jose Business Journal Book of Lists, have you grown beyond the 12 people listed in February?” This shows that you have done your homework and don’t want to waste their time but need to confirm some of the key facts that may bear on their needs.

Information Sources To Consult Prior To Customer Interviews

  • Do a thorough review of the prospect’s website.
  • Search for any articles in the last two years at least to see what kind of press coverage they have received.
  • Review the Linkedin profiles for the firm, the person you are talking to, and anyone with similar titles or in the same department.
  • Review on-line postings in relevant forums for the industry.
  • See if they have a blog, a twitter account, a YouTube account, and similar social media sits that are often used for business purposes.

Six Questions That You Normally Have to Ask In The Conversation

  1. Prospect’s description of the problem in their own words. This is rarely more than a sentence or two and capturing the essence in their own words is key.
  2. High level description of current work process or work flow in their own words. This forms the basis for any delta comparison or differentiation of your solution.
  3. Any constraints they mention: if you hear the same ones multiple times you will more than likely have to satisfy them.
  4. How they will tell that a new solution will leave them better off: this is different from asking them to specify the solution, it’s asking for “future state” or the end result they would like to achieve.
  5. What else they have tried to do to solve the problem: probe for why they were not satisfactory.
  6. Key metrics or figures of merit they would use to evaluate a new outcome.

Closing Thoughts

“A month in the laboratory can often save an hour in the library.”
F. H. Westheimer

Entrepreneurs seem to divide into two camps:

  • those who want to have a conversation immediately, and
  • those who are quite content to research for months as long as they don’t have to talk to strangers.

Striking a balance is the key to maximizing your learning from a customer interview. Effective research prior to the customer interview allows you to

  • Ask better questions
  • Provide evidence of your commitment to developing a mutually satisfactory business relationship
  • Detect when your prospect is leaving something out or perhaps coloring the situation too much. You are not a stenographer there to capture whatever they say without reflection, but if your only source of information is what they tell you then you risk “garbage in, garbage out” in your product plans and MVP.

Related Posts

Q: Side Payment Requested In Negotiation

Written by Sean Murphy. Posted in Rules of Thumb, skmurphy

Q: We have been in customer discovery for a few months and have a situation in a negotiation that I am not sure how to deal with. A decision maker at a potential customer says he believes that our product can help but it’s not addressing a burning problem. The wrinkle that I have not encountered before: he says he would like to pursue this idea on his own so he wants us to compensate him for the ideas he is bringing. Any advice on how to look at the situation or how best to handle it?

Some Questions to Consider:

  • Who owns the ideas that he gave you?
  • Has he disclosed them to his company?
  • Are they his ideas or the company’s property?
  • Have you signed a non-disclosure either with him personally or with the company?
  • Did he give you the ideas freely or did he ask to be paid before he disclosed them?
  • Are there patents involved or does he plan to patent them?

If he is asking for a personal payment made to him, and not to the company, but it’s something you plan to sell to his company then you are walking into an ethical minefield. If he plans to pursue them himself it’s probably better to let him go on his way and talk to other folks who are not conflicted.

Act As If Everything You Do Will Become Public

As a rule of thumb it’s best to act as if everything that you do will become fully know to all of the parties involved or affected by your actions.  This side payment request does not sound like it would pass that test the way that you have described it.

If his company is not aware of the fact that he has ideas for improving internal processes or workflows and he is trying to sell them to you there are some potential conflicts there.

Normal Negotiation Flow For New Technology

Normally what would happen is that they would disclose to your their needs, specific ideas for functionality and perhaps implementation options, constraints that your solution  has to observe, and other relevant factors. You would either develop a custom product that is their property (work for hire) or you would develop a product you could sell to them and to others. The product might be sold at a discount to them to reflect their contribution, they might ask that you not sell it to named competitors for a a period of time (6,12,24 months).  In the first case you would be developing a custom implementation, in the second case you would be developing a solution that they would like to become an industry standard–perhaps after enjoying a temporary period of advantage over competitors–and they want to spread the cost of development across many players in the industry.

You Normally Don’t Make Side Payments

You don’t normally make side payments to individuals. One exception might be that the other party wants to leave his current job at your prospect company and come to work directly for you. But you want to be very careful about making payments to employees of firms or government agencies that you are trying to do business with. The employer may view it as a bribe or kickback. This is also true for offers of stock or stock options in your firm and payments to relatives or entities controlled by the employee but not part of the prospect company.

Related Blog Posts

  • Honesty In Negotiations
    I always assume that at some point in the future the folks I am negotiating will know the full truth of the situation and that very few secrets remain that way for long.
  • Building a Business Requires Building Trust
    Working with bootstrappers sometimes puts us on teams that are in desperate circumstances. Where they are able to translate time pressure and resource starvation into a bias for action from a change in perspective they often succeed–or at least move beyond the current crisis: success, like the horizon, is an imaginary line you can approach but never seen to cross. But where they use it as an excuse to take shortcuts that abuse prospects trust we sometimes have to part company.
  • The Lucky and the Wise
    It can be hard to assess whose advice to take about your business. One reason for cultivating at least a kitchen cabinet of informal advisors if not a more formal advisory board is that a diversity of perspectives can normally provide more insights into opportunities, risks, and options for managing them. Advice from a lucky entrepreneur tends to be very specific and suggest a “copy exactly” model, a wise entrepreneur will offer principles and several alternatives with one or two approaches recommended as most likely to succeed or least risky.
  • Treat Social Capital With The Same Care as Cash
    Trust Doesn’t Scale, It’s Knit by Aligning Actions With Prior Commitments

Arun Kumar: 9 Lessons Learned Bootstrapping Kerika

Written by Sean Murphy. Posted in Rules of Thumb, skmurphy

I interviewed Arun Kumar in 2012 on his experiences bootstrapping Kerika. It’s a long interview but really gives you a sense of his journey as an entrepreneur, his insights into the future of global teams and how they will collaborate, and a candid list of lessons learned. Here are nine key take-aways that he offered in that interview from bootstrapping Kerika since 2002.

Nine Lessons Learned Bootstrapping Kerika

  1. Don’t spend too much time on market research.  After some point, you are not discovering anything new; you are just hearing the same points being rephrased in different ways.  Move faster into building your first couple of versions.
  2. If the feature is really important, it’s not free. Be very careful about what open-source products or libraries you incorporate into your own product.
  3. Watch users where possible; don’t rely upon them to tell you what they are having difficulties with.  People often don’t articulate problems if they think they will look stupid in doing so, and sometimes people don’t even realize what problems they are having.  With face-to-face contact and conversation you can find out what people want to achieve, which is often different from what they are complaining about.
  4. Users will use your product in ways you never considered.  That’s a good thing. Even if that particular use case wasn’t the one that you envisioned originally, that’s an opportunity not a problem.
  5.  You can’t push on a string: when you are trying to find your product-market fit, you need to find a use case where someone is pulling on the other end.
  6. You will almost never fire someone too soon.
  7. Get all the details right.  Concepts are great, but execution is what matters.
  8. There are no instant successes: every successful company has a revisionist history that makes its founders look unusually brilliant.
  9. You can fail by misfortune, but are unlikely to succeed by chance.

Related Posts

 

Ten Mistakes Early Stage Bootstrappers Often Make

Written by Sean Murphy. Posted in 2 Open for Business Stage, 3 Early Customer Stage, Rules of Thumb, Silicon Valley, skmurphy

Over the years I have moderated several hundred Bootstrapper Breakfasts (since starting them in Silicon Valley in 2006). After doing a hundred or so and working with many clients who were bootstrapping I came up with a checklist for common mistakes bootstrappers and bootstrapping teams make in their first year or so.

  1. Leaving Your Assumptions Implicit: Not Writing a Customer Development Plan
  2. Believing that Anyone Will Want Your Product: Not Targeting a Specific Buyer
  3. Confusing the User (or the Audience) with the Buyer/Customer
  4. Believing Your Product Will Sell Itself (Looking for Smarter Prospects)
  5. Developing the Full Product: Not Selling the Smallest Piece Possible at First
  6. Not Focusing on Break-even and Profit
  7. Expecting Too Much Too Soon: Not Planning for “Target Practice”, Iteration, and Improvement
  8. Confusing VC with Customer: Going for (2% of) a Really Big Market
  9. Expecting the Same Control Over Prospects and Team Members as Your Code Base (Single Founder “No Compromise” Mindset)
  10. Treating the Business Like a Hobby (Thank God for Significant Others, Recently Deceased Relatives, and Crappy Day Jobs)

Five additional challenges that also need to be navigated

  1. Managing different aspects of your identity at personal, family, and business level.
  2. Understanding the emotional connection required for a successful business transaction: mission, brand promise, and  logo.
  3. The networking etiquette in Silicon Valley: cards, introductions, how to get acquainted.
  4. Making the transition from selling to friends to selling to a strange
  5. Making the commitment to a business footing: licenses, structure, tracking expenses (and acknowledging that now you can fail).

Adapted from a talk I gave in August 2009 at the San Francisco Bootstrapper Breakfast.

Matt Wensing On Making the Transition to Growth

Written by Sean Murphy. Posted in Founder Story, Rules of Thumb, skmurphy

Stormpulse has gone from an idea bootstrapped on founder savings and credit cards, to a project funded by friends and family rounds, to a small business strengthened by angel money, to a company that’s raised “meaningful” capital (our last round was just over $2 million). Here’s what I’ve learned since I’ve been able to leave the ‘drowning and can’t work on the important things’ mode.
Matt Wensing in “What I’ve Learned Since Raising Capital

Matt Wensing has been bootstrapping Stormpulse since September of 2004 (“What Have I Been Doing?!“) He offers some short thoughts on what he has learned since raising capital and I wanted to highlight four:

Small for the sake of small is as bad as big for the sake of big.

Small for the sake of small is letting the desire for control or other perfectionist tendencies trump everything else.

The question isn’t “Stay small or go big?”
It’s: “Is the vision scalable & worth scaling?”

This is a key insight that most entrepreneurs overlook in their calculations of whether to seek funding. It’s not about whether you need it, it’s whether the plan merits and requires it.

Existential: Walking around the office, hearing other people having conversations that used to only be in my head.

If you want to scale up your business you have to share information and context and allow other members of your team to be able to have an informed discussion with you about risks and issues. And ultimately to have some of those discussions without your participation. As Hugh MacLeod observed,  “scaling your business is all about having more people solve more problems for you.”

Define a great box by defining where to play and how to win; encourage in-the-box innovation.

To harness the team’s creativity define the business model and key objectives and let them experiment and explore strategies and tactics to accomplish them.

See also Matt Wensing’s “Bootstrapping Stormpulse” posts : Part 1 and Part 2 and his Mixergy interview “Free to Fee


I think the key breakthrough he made was the realization that his clients didn’t want a weather map they wanted actionable suggestions predicated on an analysis of what they could do to mitigate risks against an identified asset base. He was selling against “the hapless weatherman outside in the hurricane” but it wasn’t his real competition.  In December 2013 he rebranded it “Riskpulse” with the following goal:

Stormpulse Inc. becomes Riskpulse in response to customer requests for deeper risk management solutions. Because Stormpulse had a history of integrating disparate data sources and tracking rapidly-shifting factors in weather for business continuity professionals, it was uniquely positioned to develop a broader system for the whole supply chain.

Tony Schwartz: Notice the Good, Cultivate Good Habits, Slow Down, and Do the Right Thing

Written by Sean Murphy. Posted in Rules of Thumb, skmurphy

Tony Schwartz wrote a  great post on “Turning 60: The Twelve Most Important Lessons I’ve Learned So Far.” Here are my top four from his list (original numbering preserved).

2. Notice the good. We each carry an evolutionary predisposition to dwell on what’s wrong in our lives. The antidote is to deliberately take time out each day to notice what’s going right, and to feel grateful for what you’ve got. It’s probably a lot.

I think this is a clever way of saying count your blessings, but a good habit to cultivate however you phrase it.

7. The more behaviors you intentionally make automatic in your life, the more you’ll get done. If you have to think about doing something each time you do it, you probably won’t do it for very long. The trick is to get more things done using less energy and conscious self-control. How often do you forget to brush your teeth?

There is a lot to be said for breaking out of the routine and “thinking outside of the box” but the more useful default activities you can turn into habit the more you can concentrate on what’s really important. Three useful business habits for you to consider:

  • Carry a pen and paper or 3×5 cards to capture thoughts, insights, and suggestions from others.
  • Make a list and work it. Less useful for exploring but essential for finishing. This is a habit I learned from my first business partner, David Woodruff, at Woodruff & Murphy, Decision Systems Associates. He always carried a clipboard and pen everywhere so that he could plan the day and work the plan. It was a habit he had picked up managing  small construction projects but it has broad applicability.
  • Always debrief at the end of a project. Ask for feedback and volunteer self-criticism before offering your suggestions to others. Especially when things have not gone well and you would rather sweep the wreckage under the rug.

8. Slow down. Speed is the enemy of nearly everything in life that really matters. It’s addictive and it undermines quality, compassion, depth, creativity, appreciation and real relationship.

I find this to be very hard by the middle of the day. Forcing myself to measure twice and cut once is easier in the morning than in the afternoon when I often I feel behind.  The right decision, especially where people are concerned, is critical. I try to meditate twice a day and take at least a short walk  to clear my head in the late afternoon. This is very counter-cultural for Silicon Valley and startups, it’s an overlooked source of effectiveness as a result.

10. Do the right thing because it’s the right thing to do, and don’t expect anything in return. Your values are one of the only possessions you have that no one can take away from you. Doing the right thing may not always get you what you think you want in the moment, but it will almost always leave you feeling better about yourself in the long run. When in doubt, default to calm and kind.

We always try to put clients first and make sure our partners get paid when we do. Bootstrapping a startup is a very difficult way to make a living and may of our clients find it to be very stressful from time to time. I try to remain empathetic since i have made most of the mistakes that I see them making or hear them recount. But I also try and be as honest and direct as they can tolerate, explaining what I see as the key facts in  a situation, and courses of action that they should consider.

 

Don’t Waste Time Painting Tom Sawyer’s Fence: Proving Someone Wrong Is A Poor Motivator

Written by Sean Murphy. Posted in Rules of Thumb, skmurphy, Startups

Ben stopped nibbling his apple. Tom swept his brush daintily back and forth – stepped back to note the effect – added a touch here and there – criticised the effect again – Ben watching every move and getting more and more interested, more and more absorbed. Presently he said:

“Say, Tom, let me whitewash a little.”

Tom considered, was about to consent; but he altered his mind:

“No – no – I reckon it wouldn’t hardly do, Ben. You see, Aunt Polly’s awful particular about this fence – right here on the street, you know – but if it was the back fence I wouldn’t mind and she wouldn’t. Yes, she’s awful particular about this fence; it’s got to be done very careful; I reckon there ain’t one boy in a thousand, maybe two thousand, that can do it the way it’s got to be done.”

“No – is that so? Oh come, now – lemme, just try. Only just a little – I’d let you, if you was me, Tom.”

Mark Twain “The Adventures of Tom Sawyer”  Chapter 2

In “You Can’t Do It is a Powerful Motivation” Rand Fishkin recounts accurate advice he receive and ignored:

  • “You can’t build a big company in the SEO space,” said plenty of business people I talked to. “Stick with consulting–it’s what you know and you’ve got a great brand.”
  • “You need to hire a head of product and build a product team.”
  • “You can’t build a search engine sized web index on $1 million.”
  • “Don’t try to raise money now – you won’t get any.”
  • “The self-service / web app model is wrong. You need to build an enterprise sales force / charge more for your product / create embedded software so it’s not so easy to quit.”

Most of this is implementation advice from folks with considerable implementation experience. No one was arguing about customer need, except perhaps the last one is about value proposition. He needs to turn this into a positive narrative. The Germans have an aphorism: “Stubbornness is the energy of fools.” He should reframe this as a persevering focus on his prospect’s needs.

Sam Walton suggested an approach Rand might consider in his ten rules for building a successful business:

Rule 10: Swim upstream. Go the other way. Ignore the conventional wisdom.
If everybody else is doing it one way, there’s a good chance you can find your niche by going in exactly the opposite direction. But be prepared for a lot of folks to wave you down and tell you you’re headed the wrong way. I guess in all my years, what I heard more often than anything was: a town of less than 50,000 population cannot support a discount store for very long.

Related:

Ten Principles for Trust and Integrity from Adventures in Missions

Written by Sean Murphy. Posted in 1 Idea Stage, 2 Open for Business Stage, 3 Early Customer Stage, Rules of Thumb, skmurphy

I have come to believe that morale or esprit de corps is the critical resource for a bootstrapping team. With it they can persist, blending freelancing, consulting work, customer discovery, product development, sales, and customer support.

The simple view is that you can just focus on one thing at a time–develop a product, market it, refine it, scale up–and that a few iterations will get you there. The reality for most is that it’s much harder and requires perseverance as a team.

The teams that persevere bring complementary skills and shared values to a common effort sustained by trust, shared vision and joint accountability. The first ten principles from  Adventures in Missions focus on trust and integrity,  offering some useful guidelines for building and maintaining trust:

  1. Integrity in an organization is built by developing trust.
  2. Trust is the glue that enables a team to function well.
  3. Trust is built over time through competence, commitment, and care.
  4. Trust is built as we preserve and build the significance of others.
  5. Trust is built through bearing each others’ burdens.
  6. Trust is built through a rapid response to communication.
  7. Trust is built through humility.
  8. Trust is built through personal contact.
  9. Trust is diminished by sarcasm and criticism.
  10. Integrity means making and living up to commitments.

See also “Entrepreneurship is the Launching of Surprises” which explores George Gilder’s essay “Unleash the Mind” and contains this insight that I think I am building on in my focus on morale as the key resource in a startup:

“America’s wealth is not an inventory of goods; it is an organic entity, a fragile pulsing fabric of ideas, expectations, loyalties, moral commitments, visions.”
George Gilder

Four Principles From Jonathan Wang’s “Start-Up Black Ops Creed”

Written by Sean Murphy. Posted in Rules of Thumb, skmurphy

Jonathan Wang penned the Start-Up Black Ops creed, here are some extracts I want to use a website started on the belief:

Every entrepreneur will, at some point along their journey, find themselves at the bottom of a big, dark pit–seemingly alone, surrounded by nothing, and without a way out.  That is the unavoidable norm when it comes to starting and running your own business. It is only at the bottom of this hole where you can learn and develop the skills to get out…and in doing so, you learn just how difficult entrepreneurship is and what it requires of your will and patience to succeed.

Wang offers four principles

1. You are not alone – the process is equally difficult and sucks just as much to the next person.

I think it’s very important to network, to reach out for advice and assistance, and to understand that bringing something new into the world is always a challenge.

2. You can be creative – desperation will force you to try things you have never done before.

In “Innovation Needs Starvation, Pressure, and a New Perspective”  I explored Dave Snowden’s  perspective on Culture and Innovation;  he identified three  necessary, but not sufficient conditions for innovation to take place:

  1. Starvation of familiar resource, forcing you to find new approaches, doing things in a different way;
  2. Pressure that forces you to engage in the problem;
  3. Perspective Shift to allow different patterns and ideas to be brought into play.

Of these, I think “a shift in perspective” is the most important. At a certain point pressure enables a shift, but as it continues to build it can extinguish creativity.

3. You don’t give up – you always ensure yourself a fighting chance when you at least try.

Not giving up is not the same thing as doing the same thing over and over without variation. “Try try again” is good advice only if you vary your approach. One way to avoid giving up is to develop a plan for alternative approaches before “Plan A” fails.  You can always update it based on what has not worked, but having a backup plan (and a backup for your backup) allows you to avoid the problem of “I cannot think of what to do next” when you are under the most pressure. In “Customer Development and its Discontents” I covered three common failure modes for engineering-driven companies as they approach the challenge of marketing and selling their product:

  • Get out of the BatCave: don’t try and figure it out without talking to prospects and your current customers
  • Test and measure: don’t rely just on your intuition, form falsifiable hypotheses
  • Iterate frequently: update your plans based on results to date, don’t be guided by the “Little Engine That Could” and keep trying the same thing hoping for a different result.

4. You will fail (not once, but many times) – you are better for it and will emerge smarter and stronger

For this to happen you need to conduct both pre-mortems, anticipating problems in advance, and periodic after actions  (also called post mortems, retrospectives, or lessons learned).  This also informs your customer’s perspective, as I noted in “The Technology is Nothing Without the Team

Most bootstrapping firms start out by delivering a service, or at least wrapping their product in a thick protective blanket of consulting to protect their customers from any sharp unfinished edges. And if you have ever used a product too early you know that the jagged edges of tomorrow can scratch some pretty deep wounds that are slow to heal and may leave impressive scars on what was once a promising career.

This is why early customers look hard at the people in your startup: they know that the technology cannot be divorced from the team and that how you respond when your product is producing unsatisfactory results is the most important question they have to answer. Because,  as Gerald Weinberg advises, “nothing new ever works ” and sooner or later you will have to respond.


See also “Three Take-Aways from Jonathan Wang’s Talk on Jaio Sports (Hardware Startup)

Bootstrappers Turn Time Into Resources and Possibilities For Customers

Written by Sean Murphy. Posted in 3 Early Customer Stage, 4 Finding your Niche, Rules of Thumb

I am a huge fan of Neil Perkin’s blog  “Only Dead Fish” and his two newsletters: “Your Weekly Dead Fish” (archive) and “Fraggl.” I followed a link from his post on “Complexity and Simplicity” to a thought provoking presentation by Possible Health on “Our For Impact Culture Code.

Here is my take on some key concepts from the deck  (emphasis in original) that would benefit bootstrappers –as well as “non-profits.” I have added my observations in italic:

  1. “Non-profit” is a legal structure, not a way of doing things. And we don’t believe that we should define ourselves in the negative. Instead, we exist to create impact.
    Observation: bootstrappers are often motivated by a desire to make an impact (in addition to a desire for autonomy) and have to focus on impact as a way to prove credibility and establish their firm as a viable alternative worthy of consideration.
  2. We treat efficiency as a moral must.
    Observation: in the non-profit world this avoids the trap of excusing poor and/or inefficient execution because you are working on a “good cause.” For bootstrappers it’s second only to impact for viability.
  3. If building effective healthcare systems for the poor were easy, everyone would do it. We do this work precisely because it is labeled as “impossible” by many.
    Observation: you can substitute “effective healthcare system” for whatever you own Big Hairy Audacious Goal (see “Building Companies to Last” by Jim Collins for more on this term). Bootstrappers have to work in riskier and more challenge environments because established firms are less willing to invest effort when markets with a clearer return are accessible.
  4. When your outcome is impact, time  is a terrible thing to waste.
    Observation: as I have outlined in the Chalk Talk on Technology Introduction, prospects use their estimate of your “time to impact” as the single best indicator of the amount of risk in your solution. Days to weeks beats months to quarters.
  5. When you’re working in the world’s most challenging environments under constant uncertainty, the way to maximize learning is to minimize the time to try things.
    Observation: any environment with high uncertainty is challenging, running smaller experiments minimizes the cost of failure and speeds learning.
  6. It’s everyone’s job to turn time into resources and possibility for our patients.
    Observation: all that bootstrappers have in the beginning is their time; if they cannot create an impact and a sense of possibility in prospects they won’t prosper.

Related Startup Culture posts:


Update June-28-2014: Guillermo Marqueta-Silbert (@guillemarqueta) tweeted a comment to the effect that the exchange rate for entrepreneur hours to impact was a function of entrepreneurial skill. I think this is a great insight and suggests a more nuanced understanding that it’s not just trying anything but trying things that flow from a deep understanding of customer situation and needs, competitive landscape, relevant technology alternatives, and market evolution. In an OODA Loop formulation–Observe-Orient-Decide-Act–the key differentiator that expertise brings is a richer and faster Orientation to the situation.

Reflections on Startup Conference 2014 in Redwood City

Written by Theresa Shafer. Posted in Community of Practice, Events, Rules of Thumb

“Not everyone who is worth knowing is famous.
Not everyone who is famous is worth knowing.
You meet your community of practice,
those who can help you see the adjacent possible,
in line waiting for the famous.”
Sean Murphy (inspired by Elia Freedman’s “Accidental Meetings“)

The conversations I had with individual entrepreneurs were the best part people of the Startup Conference 2014. 2,000 entrepreneurs, VCs, and met in Redwood City on, May 14, 2014. I talked to a number of folks and had several conversations that were far better than any of the presentations I sat through.

I came away with a couple of thoughts on networking.

  • Focus first on understanding the other person’s situation and what they are trying to accomplish. This enables you to share useful and directly relevant information and to ask for insight and assistance that they are more likely to be able to offer.
  • Trust develops over time: smiling helps, listening closely can require effort in a crowd but by giving someone your clear attention you encourage them to have a serious conversation.
  • Make a note to jog your memory of the conversation. I often use either a their business card or a 3×5 card, use your smartphone or tablet if that’s easier.
  • You can only make connections if you first listen carefully and understand their story.
  • If you meet someone at an event don’t skip talking to them if you have the opportunity. Serendipity is always at work but is only possible if you make the effort to have a conversation. It’s hard to predict where things will lead.
  • If you intend to talk to a speaker rehearse what you want to say and get to the point in 15-20 seconds. Exchange cards if you want to follow up. Especially if there is a line get to the point and limit yourself to 30-60 seconds. If a minute leaves you with the strong impression that they would like to talk more go back to the end of the line and let others have a chance to talk briefly before engaging in an extended conversation.

“All great work is preparing yourself for the accident to happen.”
Sidney Lumet

Corinne Roosevelt Robinson: Focus for Effect But Look Beyond Your Own Special Interests

Written by Theresa Shafer. Posted in Rules of Thumb

“Nothing is as difficult as to achieve results in this world if one is filled full of great tolerance and the milk of human kindness. The person who achieves must generally be a one-idea individual, concentrated entirely on that one idea, and ruthless in his aspect toward other men and other ideas.”
Corinne Roosevelt Robinson in chapter 1 of “My Brother Theodore Roosevelt.” 

This passage is actually about her father, Theodore Roosevelt Sr.  She continues:

“My father, in his brief life of forty-six years, achieved almost everything he undertook, and he undertook many things, but, although able to give the concentration which is necessary to achievement, he had the power of interesting himself in many things outside of his own special interests, and by the most delicate and comprehending sympathy made himself a factor in the lives of any number of other human beings.”
Corinne Roosevelt Robinson in chapter 1 of “My Brother Theodore Roosevelt.”

Good advice for entrepreneurs: you have to focus for effect, making hard choices to drive a project or product forward. But if you are only interested in yourself and your own needs you won’t have much of a life.

Kent Beck and Don Reinertsen on Value of Storytelling

Written by Sean Murphy. Posted in Rules of Thumb, Video

What follows is an exchange on twitter between Kent Beck and Don Reinertsen on Dec 12-2013 about their experiences as speakers at the Lean Startup Conference 2013 that I thought was worth preserving.

Kent Beck (@KentBeck) Dec 12: The beauty of teaching through storytelling is that the listeners’ lessons aren’t limited by the storyteller’s imagination.

Donald Reinertsen (@DReinertsen) Dec 12: And, as in the old story of a donkey carrying a load of books, the payload can sometimes be more sophisticated than the narrator.

Kent Beck (@KentBeck) Dec 12: Good thing I don’t mind being a donkey :)

Donald Reinertsen (@DReinertsen) Dec 12: I rather enjoy it. Such moments permit one to unintentionally deliver an unexpected, and unreasonable, amount of value.

I did a roundup of speakers, videos, and blog posts from the Lean Startup 2013 if you are interested in learning more about their presentations or others. Don Reinertsen also has a number of good presentations up at InfoQ a “Beyond Deming” video at Lean Product Development Flow.  Here is his talk from Lean Startup 2013:

Kent Beck’s talk from Lean Startup 2013:

Tools vs. Methods vs. Policies

Written by Sean Murphy. Posted in Demos, Rules of Thumb

What’s interesting about digital tools for information work is how frequently they are born from a specific ideology: someone thought work should be done in a certain manner, they found no tools to support that method, so they set off to build their own tool that presumes their ideology is true and best. Thus, we get another to-do app, Twitter client, or project management app.

Everything that’s made has a bias, but simple implements—a hammer, a lever, a text editor—assume little and ask less. The tool doesn’t force the hand. But digital tools for information work are spookier. The tools can force the mind, since they have an ideological perspective baked into them. To best use the tool, you must think like the people who made it. This situation, at its best, is called learning. But more often than not, with my tools, it feels like the tail wagging the dog.

Frank Chimero in “No New Tools

For a while I was fighting with the auto-correct features built into various content management systems after I enabled “Correct Spelling Automatically.” It had seemed like a great idea given the number of typos I produce, but it would not let me enter words easily that were not in the built in dictionary and often miscorrected a typo to the wrong word. Better to go back to red squiggly lines under a word that it cannot find in the dictionary. The word “bootstrapper” comes up a lot on this blog, always with red squiggly lines (which can mask when it is misspelled).

Entrepreneurs try to design software tools that make customers lives easier. But it’s hard to avoid assumptions about “the right way” or “why would you ever want to do that” from creeping in. It’s not uncommon to visit a customer who has been using your product for six months or so and have to repress the urge to say “you are using our product wrong!” and instead say, “Wow, that’s an interesting use for our technology: what led you to apply it this way?”

IT organizations developing tools face a double whammy: their own built in assumptions and the end user trying to bake policy into the tool so that it cannot be used to violate policy. I remember watching a demo of a new in-house scheduling tool a few years ago and one of the features was that the schedule was always feasible. You could not overcommit anyone’s time or assign them to competing projects on that theory that people cannot be in two places at once and we should make plans based on extraordinary efforts. Good as far as it went but it rendered the tool useless for planning (which was about two-thirds of the motivation, time tracking was the other primary goal) because you could not enter a preliminary plan and see where it was infeasible. You could enter a plan with slack and underutilized people or equipment, but you could not temporarily overcommit and then shuffle assignments to make it feasible.

We had this same conversation with a recent BeamWise prospect: they wanted the software to prevent any invalid configurations from being designed. Our suggestion was that it was useful to know how much margin/overlap you had between conflicting elements instead of simply knowing that two or more items would not fit together correctly.

I am not advocating for accounting systems that don’t add expenses correctly or tax software that does not produce a correct return. But one of the advantages of software is that it allows you to investigate hypothetical configurations and alternate futures. Think about how you can enable exploration of a design space as much as validate that what is being designed is correct.


Related blog posts

Here are  a few on BeamWiseTM

Legal Advice: Start With a Plain English Agreement That Covers Key Deal Points

Written by Sean Murphy. Posted in Rules of Thumb

I am not an attorney. This is not legal advice.

Back when i had a real job at Cisco a few years ago I managed a webmaster who asked me to debug a problem with javascript embedded in the HTML for a page they had written. As we dug into about 30 lines of javascript it became clear that it was three sections from different programs with inconsistent variables names that had been glued together. The webmaster understood how to write good content and basic HTML and had viewed the javascript like a poem, assembling different stanzas from other pages in the hope they would form a coherent whole.

True story.

When I tell software engineers this story they often laugh. And then they realize that I am telling them the story because they have assembled a contract from different legalese they have found on the Internet in hopes of creating a legally binding and coherent whole.

I have seen firms give away the rights to their software because they didn’t understand the legal meaning of certain phrases they copied from a contract they found on the Internet.–this a true story that happened to a client a few years ago. The other side was happy to sign because they understood what “work for hire” meant, and happy to enforce it later.

Nobody likes spending money on attorneys, entrepreneurs are not alone in this regard. But you can always put a budget on their efforts (one rule of thumb is to spend 1% of the contract value on a legal review if you are bootstrapping) and ask an attorney to give you a prioritized list of risks. Many of the things that large firms pay attorneys to worry about are not worth spending attorney time on for an early stage startup.

Focus on key risks, not every risk. Also understand that to some attorneys ‘doing nothing’ can represent the least risk, but to a bootstrapper doing nothing means your runway keeps getting shorter. Doing nothing and taking no risks for long enough gives you the opportunity to ask for your old job back.

Find an attorney who is comfortable working with bootstrappers. Ask other bootstrappers who they use if need be.

Start with a plain English agreement that enables a meeting of the minds: it can just be a bulleted list of key points. If you are not an attorney do not attempt to write “legalese.” It just sets you up for signing a contract that you have drafted but don’t really understand.

A plain English document affords the layperson (non-attorney) substantially more protection and is always more useful as a starting point. Even if the other side starts with a contract take the time to reach agreement on key points in plain English so that you can tell whether you are negotiating substance or style when you involve your own attorney.

 

Discerning the Future

Written by Sean Murphy. Posted in Rules of Thumb, Silicon Valley, skmurphy

Robert Pirsig in his afterward to the tenth anniversary edition of Zen and the Art of Motorcycle Maintenance.

This book has a lot to say about Ancient Greek perspectives and their meaning but there is one perspective it misses. That is their view of time. They saw the future as something that came upon them from behind their backs with the past receding away before their eyes.

When you think about it, that’s a more accurate metaphor than our present one. Who really can face the future? All you can do is project from the past, even when the past shows that such projections are often wrong. And who really can forget the past? What else is there to know?

Ten years after the publication of Zen and the Art of Motorcycle Maintenance the Ancient Greek perspective is certainly appropriate. What sort of future is coming up from behind I don’t really know. But the past, spread out ahead, dominates everything in sight.

I feel a sense of “the future coming up from behind” more and more.  When I worked in semiconductors and later networking I used to be able to rely on Moore’s Law to see at least a decade into the future. For the last thirty years Moore’s Law has always had ten years of life left in it; we will probably be saying that on the other side of the Singularity. But now it’s hard to see what trends can be relied on to continue.  I spend more time now trying to discern the likely trajectories of various technologies and businesses but I have much less clarity.

“We build up whole cultural patterns based on past ‘facts’ which are extremely selective. When a new fact comes in that does not fit the pattern we don’t throw out the pattern. We throw out the fact.”
Robert Pirsig in “Zen and the Art of Motorcycle Maintenance

It’s also hard to separate the harbingers from the outliers and to compensate for blind spots. That’s why they are called blind spots. Rejecting disconfirming evidence is another way that blind spots are preserved.  When I started this business I knew that I was going to focus on Silicon Valley startups and work primarily face to face with clients. In the first year that I started I handed my card to an entrepreneur and he said, “You need a Skype address on this card.” I didn’t agree.

Of course I was dead wrong.  Today more than 1/3 of our clients are “out of region.” And while we meet and work face to face with many clients, most of our interactions, even with Silicon Valley clients, are on-line in Skype, wikis, shared edit documents, and other virtual collaboration environments.

“A person filled with gumption doesn’t sit around dissipating and stewing about things. He’s at the front of the train of his own awareness, watching to see what’s up the track and meeting it when it comes. That’s gumption.

[..]

The gumption-filling process occurs when one is quiet long enough to see and hear and feel the real universe, not just one’s own stale opinions about it. But it’s nothing exotic. That’s why I like the word.

You see it often in people who return from long, quiet fishing trips. Often they’re a little defensive about having put so much time to “no account” because there’s no intellectual justification for what they’ve been doing. But the returned fisherman usually has a peculiar abundance of gumption, usually for the very same things he was sick to death of a few weeks before.

He hasn’t been wasting time. It’s only our limited cultural viewpoint that makes it seem so.”
Robert Pirsig in “Zen and the Art of Motorcycle Maintenance”

So if I can’t see what’s coming how do I maintain my gumption? I focus more on conversation and real time collaboration, to reacting intelligently to events, and to spending more time making sense of recent events–facts–rather than trying to predict. I spend more time trying to cultivate peace of mind to prevent overreaction: I find meditation, fasting, reading all very helpful in maintaining perspective.

“Peace of mind isn’t at all superficial, really. It’s the whole thing. That which produces it is good maintenance; that which disturbs it is poor maintenance. What we call workability of the machine is just an objectification of this peace of mind. The ultimate test’s always your own serenity. If you don’t have this when you start and maintain it while you’re working you’re likely to build your personal problems right into the machine itself.”
Robert Pirsig in “Zen and the Art of Motorcycle Maintenance”

Serenity as a ground state allows you to react more rapidly and more intelligently: first because you overlook less and second because you are less likely to overreact.

“The ultimate test is always your own serenity. If you don’t have this when you start and maintain it while you’re working you’re likely to build your personal problems right into the machine itself.”
Robert Pirsig in “Zen and the Art of Motorcycle Maintenance”

I guess one thing I have gotten better at compared to a decade ago is admitting mistakes–to myself and to others–more quickly. Self-deception is an “own goal” that blocks debugging a situation. And prevents you from seeing the recurring problems you are causing yourself  and others.

“Sometime look at a novice workman or a bad workman and compare his expression with that of a craftsman whose work you know is excellent and you’ll see the difference. The craftsman isn’t ever following a single line of instruction. He’s making decisions as he goes along. For that reason he’ll be absorbed and attentive to what he’s doing even though he doesn’t deliberately contrive this. His motions and the machine are in a kind of harmony. “
Robert Pirsig in “Zen and the Art of Motorcycle Maintenance”

It may be as useful to determine what’s not likely to change, what will still be true in five or seven or ten years as what will be different.

Four years ago I speculated that the twenty teens were going to be less about new inventions and more about changing the design of jobs, business processes, and business models to take full advantage of what’s already been invented. I am not saying that we don’t need more innovation, just that we have not adjusted our business practices to take advantage of what’s already here.

The Likely Consequences of Entrepreneurship Require Perseverance

Written by Sean Murphy. Posted in 1 Idea Stage, 2 Open for Business Stage, 3 Early Customer Stage, 4 Finding your Niche, Rules of Thumb, skmurphy

Justin Kan (@JustinKan) wrote “Startups Don’t Die They Commit Suicide” in 2011″ (mirrored on his blog here)  reflecting on what he had observed and learned as a serial entrepreneur. It was reposted on the Philly Startup Leaders list earlier this week which led me to write the following comments mixed with excerpts from Kan’s post.

Startups die in many ways, but in the past couple of years I’ve noticed that the most common cause of death is [when] founders/management kill the company while it’s still very much breathing.

I think this is right, two key requirements for building a business are team morale–shared vision, enjoyment of working together, hope for the future–and cash flow. And morale can get you through periods of poor cash flow  more than cash flow can compensate for poor morale and team dynamics. I think a lot of teams lose their “gumption” and give up.

Long before startups get to the point of delinquent electricity bills or serious payroll cuts, they implode. The people in them give up and move on to do other things, or they realize that startups are hard and can cause a massive amount of mental and physical exhaustion — or the founders get jobs at other companies, go back to school, or simply move out of the valley and disappear.

I think bootstrappers are in some way at less risk for this because they know it’s going to be hard, although perhaps not how hard.
A lot of times the founders don’t maintain their health and energy and cannot weather a setback or analyze their situation with enough emotional distance: debugging your startup requires peace of mind

Often the root problem can be traced back to a lack of product traction — it’s rare to find people willingly quitting companies with exploding metrics. But one thing that many entrepreneurs don’t realize is that patience and iteration are critical in achieving product market fit.

Keeping a ‘captain’s log’ or other journal can give you a place to vent your frustrations–and let them cool for later analysis–jot down your fragmentary insights for later revision and recombination, and allow you to look back at earlier crises you have managed and problems solved: record to remember, pause to reflect. We have worked with a couple of Finnish teams and they have a great word “sisu” that is the Arctic version of gumption.

Overnight successes might happen fast, but they never actually happen overnight.

I think a lot of the desire for overnight success  is driven by trade press accounts of young millionaires who clean up the real story to make it seem simple and inevitable. I have met a number of entrepreneurs who think that one deal or one relationship will be the point of departure for a rocket trip to the stars. That’s always the way the success narrative is cleaned up and presented, but the reality almost always–barring a few lottery ticket winners–involved a lot more hard work and the slow accumulation of many small insights, decisions, and advantages.

On the other hand, happy people don’t normally start new companies: as Sramana Mitra has observed, startups are founded by mavericks, iconoclasts, dropouts, and misfits.  In fact, I think Barry Moltz is right: you need to be a little crazy.

Still, I think morale at an individual and team level is a key resource, and the teams that persevere seem to be more driven by the thought of proving a new idea right than proving  former co-workers, bosses, or  relatives wrong. While 0roving folks wrong can be the start–bold action coupled with frank expression has inadvertently launched many a deeply felt entrepreneurial career–it’s rarely what sustains an individual much less a team.

“It’s only after you fail once or twice and learn to rely equally on thought, analysis, and anticipation–in addition to speed, talent, and execution–that you can really call yourself an entrepreneur. ”
Barry Moltz in “You Need to Be a Little Crazy

The Intelligent Pursuit of Happiness

Written by Sean Murphy. Posted in Rules of Thumb, skmurphy

An interesting talk by Arthur C. Brooks which is also summarized in a New York Times opinion column “A Formula for Happiness“ (mirrored at AEI)  He recounts research that identifies the key drivers for happiness

  1. Genetics
  2. Big life events
  3. Choices

The bad news is that first two account for about 88% of baseline happiness and are not under your control. So, what choices can you make that influence the remaining 12%? Brooks suggests:

  • Faith: thinking about the transcendental, the things that are not of this world, and incorporating them into your life.
  • Family: having solid family relationships; the things that cannot and should not go away.
  • Community: cultivating important friendships and being charitable toward others in your community.
  • Work: marrying our passions to our skills, empowering us to create value in our lives and in the lives of others.

What’s interesting is that money increases happiness only as it moves people out of poverty. More income after reaching the lower middle class does not seem to have a big impact on happiness, which is worth considering when you are counting on a multi-million dollar payout from an acquisition to change your life. A study of lottery winners showed them to be slightly less happy a year after winning the lottery than they were immediately prior to winning.

He elaborates in “A Formula for Happiness

Along the way, I learned that rewarding work is unbelievably important, and this is emphatically not about money. That’s what research suggests as well. Economists find that money makes truly poor people happier insofar as it relieves pressure from everyday life — getting enough to eat, having a place to live, taking your kid to the doctor. But scholars like the Nobel Prize winner Daniel Kahneman have found that once people reach a little beyond the average middle-class income level, even big financial gains don’t yield much, if any, increases in happiness.

So relieving poverty brings big happiness, but income, per se, does not. Even after accounting for government transfers that support personal finances, unemployment proves catastrophic for happiness. Abstracted from money, joblessness seems to increase the rates of divorce and suicide, and the severity of disease.

Which as Brooks points out aligns with:

“Happiness lies not in the mere possession of money; it lies in the joy of achievement, in the thrill of creative effort.”
Franklin D. Roosevelt

This matches my experience watching a number of folks become very wealthy in the 1990-1994 time frame at Cisco. For the most part people who were happy stayed happy and people who were not found new ways to use money to become unhappy. When I hear entrepreneurs talk about how happy they will be when they cash in I am reminded of those days. If I had to pick one thing Brooks’ analysis ignores, it’s the need to invest time and effort in health and fitness so that you have the energy to be able to support and enjoy your family, take part in your community, and pursue meaningful work.

 “To pursue the happiness within our reach, we do best to pour ourselves into faith, family, community and meaningful work.”
Arthur C. Brooks “A Formula for Happiness

Ten From Paul Zappia’s “29 Ways To Stay Creative”

Written by Sean Murphy. Posted in Rules of Thumb, skmurphy

Paul Zii's 29 Ways To Stay CreativePaul Zappia  (@PaulZii) aka “Paul Zii” blogged a great list of “29 Ways to Stay Creative.” Here are my top 10 from his list (shown at left) with some comments added.

1. Make Lists. To Do Lists, Shopping Lists, Things to Try, Experiments to Run. If only for the pleasure of crossing items off you complete.
2. Carry a Notebook Everywhere. Or at least a stack of 3×5 cards.
3. Try Free Writing. This is also called “Morning Pages” it’s a way of overcoming perfectionism and writer’s block by writing for ten or twenty minutes every day.
9, Listen to New Music. I find music can unlock my creative juices, but I would add read new authors, especially in long form–books and magazine articles–to provide more new ideas.
12. Get Feedback. Ask for written feedback, thank folks when they provide it and act on it.
13. Collaborate. I have increased my output and quality of results in the last two years by finding “creative workout buddies” to work on projects.
16. Allow Yourself to Make Mistakes. Varying your approach allows you to stumble on to the “adjacent possible” instead getting stuck in a rut.
18. Count Your Blessings. Helps me get my mind off of what I don’t have, and reminds me to thank folks I have enjoyed collaborating with in the past.
24. Create a Framework. I try to take a systematic approach to projects and plan for recycling or remixing intermediate building blocks between projects.
29. Finish Something. Probably the hardest thing for me to do these days.

 

Here is a video of Paul Zappia’s list created by To-Fu Design (@tofu_design)


For more on Paul Zappia see

Product Market Fit Metrics

Written by Sean Murphy. Posted in 5 Scaling Up Stage, Rules of Thumb, skmurphy

Q: I am considering metrics for an add-on new product launching in a well established company that  makes equipment to test electrical cables (for the last 29 years). We are introducing a new product that is an add-on to existing products (it is only useful if used with the existing product). This is a project that was pushed by our founder and has been developed for the past year. We were able to get a little bit of feedback along the way from customers but not much.

I recently moved into the product manager  position and one of the things I am trying to do with this project is set some metrics we can use to judge the success or failure of the project–something we have not really done before. This cheap product is not designed to make a lot of money itself, but the hope is that because of this add-on product we will be able to sell more of our main product. To that end I’m trying to come up with some way to help judge if that is really happening or not.

Below is what I have so far as possible options for key metrics to watch after we launch the product:

  • Total units sold (I see this as one of the least useful, but it feels like it has to be there for completeness)
  • Total Orders (i.e. how many companies are ordering them – goes along with units sold but tells more of the story)
  • New Customer Orders (Orders from first time customers – sign that we won business because of the new add on)
  • Orders with main product (These are orders from existing customers, but for new equipment with the add on)
  • Orders without main product (These are orders from existing customers without new equipment – implies retrofitting)
  • Repeat orders (Orders from customers who previously purchased the add on – implies they like the add on)
  • Website Interest (Individuals who navigate to the information page – implies right marketing message, compare to sales numbers)
  • Win/Loss Mentions (Number of times add-on product is mentioned as a influencing factor in a successful sale)

My questions are:

  1. Are these actionable metrics?
  2. Will these really provide me insights into the success of the project or help me to know when we need to change something?
  3.  Do you have better suggestions for metrics? Which are the best to focus on?

A:  At a high level, there are two sources of sales growth for an existing product:

  1. Selling more units to current customers (perhaps because they find additional uses for your primary offering or your add-on removes a blocker or dissatisfier for use in new areas).
  2. Selling units to new customers who have not purchased from you before. Here again you should look for attach rates – how often was the secondary offering included in the offer.

I think the metrics you outline are well thought out and would enable you to assess whether or not the addition of the new product is either driving greater adoption in existing customers or adoption by new customers. Here are two additions to consider:

  • Measure not just first order but a re-order from a new customer as a rough proxy for satisfaction in the same way you measure re-orders from existing customers (or split re-orders as from established or recent customers)
  • You don’t mention customer satisfaction or net promoter score; you might want to include those in your assessment (in particular if you can do a “before and after” to judge the impact of your add on offering).

One thing to probe for in conversations is what do current (or new) customers stop buying, stop doing, or stop wasting as a result of buying your add on. What are you replacing or substituting for (either with the primary product or the combo product). That might give you some additional insights into the total value of the combo offer (old plus add on).  This is initially more qualitative but you may be able to create categories or metrics as you continue to engage. See “The Early Bird Already Has The Worm” for some additional suggestions on this.

One final thing to consider would be to create a bundle that can be purchased if you can message for a category of customer applications/needs/use-cases that would benefit directly from the combo. In the beginning this could simply be bundling into the same shipment but if there is enough distinct demand it may be worth considering creating a single package or an integrated product that blends the combination. The theory here is that over time the retro-fit orders will subside and customers will either order the single or the bundle but not the add on stand alone if they understand it’s value for one or more applications.

Taking a step back the real question is what to design next, not whether to kill the add on product or not. The development costs for the add-on are sunk. Putting it a different way, you should have a consistent approach for evaluating whether to kill/obsolete/end-of-life any of your products that you are applying on a regular basis depending upon average or expected product lifetimes. Your competitors are hard at work attempting to obsolete your products as well as their own. Detecting when they have been successful or planning for how to beat them to the punch is worth doing systematically.

Proving the founder/owner wrong conclusively (or right) may be a less valuable use of your time than addressing the real issue: what are the top problems you need to solve to continue to grow your business. If you can, get the founder to expose the thought process and the data and customer stories that were examined or formed the context for designing the add on. See if there are additional insights for new products to be investigated. Also, I would not be too quick to discount practices in a company that has lasted 29 years: your firm is undoubtedly doing a number of things well and you want to take care not to break what’s working as you instrument the product management process and potentially start to kill products.

If you spend all of your time trying to measure decisions that were made before you took the role it’s not as useful pushing for additional conversations with customers, non-customers (who you believe might buy from you), your sales team, your support team, and channel partners. As a product manager you need to help the firm determine where to invest engineering/design efforts to address key opportunities. Of these the harder conversations to target are with non-customers (either  ‘no longer customers’ or ‘never were customers). See “Non-Customers Are Where Important Changes Often Start” for some more on this.

I think the original question points up the need for an ongoing assessment of “product/market fit,” even by mature or established firms with established products. Here are two related posts that suggest the search for a scalable business model does not have a finish line, all businesses must revisit this challenge periodically:

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