In searching for product/market fit (the right match between value proposition and customer segment) the product should be the last part you think of changing – not the first
That is shocking. I'm glad Steve said it clearly in those words, because I've certainly been believing the exact opposite.
And with that, I'm now more confused than ever by the whole customer development and lean startup way of doing things.
I'm trying to stop the needless and constant bad advice of "lets churn through every possible feature without understanding the entire business model." Doing so is a crutch. Tell me you understand your entire business model and that you thought through the rest of the canvas. Then start iterating the product.
A startup think through all the business model will run rings around those who simply think it's about features.
Wow, I had no idea that @sgblank himself posted here at HN. How awesome is that?
Tell me you understand your entire business model and that you thought through the rest of the canvas.
We (Fogbeam Labs) are certainly trying to get to this level. I've read (most of) TFSTTE four or five times now, and feel like I understand the process a little bit more each time through. Additionally, the more we talk to customers, the more we understand.
Probably my biggest "epiphany" lately though, involves "traditional" market research. Our first round of "friendly first contacts" interviews were very scattershot and unfocused... it was almost literally "interview anybody who will talk to you." Now, I've learned a lot more about how to research various industry segments, and learn about the statistical and demographic stuff (using Census data, Hoovers, etc.) and now we're starting to actually formulate real elements of our market hypothesis (eg, "manufacturing firms in NC with > 500 employees have problem X and our product solves problem X for them" or whatever) that we can go out and specifically try to disprove.
Developing the product in parallel with doing CustDev, with a very small team, has meant that we probably made our fair share of "typical engineer mistakes" (like building features that we don't actually know there is demand for), but altogether, I think we're on a good path.
If we ever make it big, we'll definitely owe @sgblank a tremendous debt of gratitude. Reading TFSTTE was such an eye opener for me, I don't even know how to describe it. :-)
People will change the pieces they understand. That means marketers will change the marketing, engineers will change the features, etc. If I don't understand channels, it makes pivoting to a different channel strategy really difficult.
I like the idea of there being an "order of operations" in what to consider changing, and I like it being based on "what brings money in" and "what keeps us from spending unnecessarily". Definitely something I'll put in my notebook!
I think you hit the nail on the head. And that raises the question - is Steve more keen on experimenting with the business model because he is more of a business/management guy than an engineer?
That advice mostly comes from the fact that most startups don't have any semblance of a business model. So, the only thing to tweak is the product in search of blowing up user "engagement" numbers.
But even with a business model, the product needs to evolve based on customer engagement and feedback, which sometimes takes us to a place we would have never imagined in our vision.
I don't think I understand your stance on when to put your visionary foot down and when to listen to customers.
Well that's so much harder than picking a group of consumers and then browbeating your staff to come up with every combination of features possible in hopes of snaring them. Even worse, it puts blame at the bizdev level rather than sales/eng. The externalizing machines (aka management) typically don't have the humility to tolerate that. /op-ed
With this discussion in mind, a concrete case study is "When should RIM have pivoted?" When should they have invested most of their R&D into a developer friendly ecosystem and committed to a well defined strategy like Samsung (a hardware company), Google (ad platform company) or Apple (hardware and content platform) company? I believe RIM is most similar to Apple, but would die a slow death from hardware development costs without the volume support, so should have pivoted and merged with NOKIA while both were strong to leverage RIM's enterprise software expertise with NOKIA's hardware development/manufacturing scale. The pivot occurs when you do the numbers and realize that to master both hardware and software is a rare feat of skill not worth embarking on unless you believe you can beat Apple at its own game.
Great post. Thank you. I think it also speaks to the importance of understanding the market for what you're building before you start. Just because a piece of software solves a problem doesn't mean there is a market for it. Some solutions don't translate into $'s.
Find a Brainstorm BuddyFinally, I suggested that he find someone he respects on his advisory board, who he was comfortable brainstorming with and would tell him when he has a bad idea.
That's good stuff. I think I've been guilty of falling in love with my own ideas at times. :-( I need to start doing more of this and leaning on our advisors more.
It is funny you would mention this, I've been on the advisory board for a couple of startups and find the ones who do this, actually bounce things off their advisers, are much more successful than the ones that don't. You brought your advisers on board, perhaps you offered them equity, use them for more than networking to other people!
I've acted as an informal advisor for a handful of "startups" (in the broadest sense of the word), generally on the technical side of things, but I have some business success behind me (often more than the 'founders').
Now... this might just be me, but I get asked for input, I give it, with rationalization/reasoning, and I get summarily ignored. Almost every single time. Certainly on any issue of substance. As I say, it may be me, or it may be the people I've chosen to give my time to. I think it's a mix of both, but... they tend to only want their ideas validated, not disproven or shot down. My answers in almost all cases are "it doesn't really matter what I say - or you say - you need to try the idea out, and get feedback from the data and customers (or non customers)". And I'm accused of not believing in an idea, or not having faith in people, or being too negative, or whatever. It's become dishearterning, as I generally wouldn't bother donating my time and talents to parties that I didn't think were worthwhile or had merit in the first place.
Additionally, while my successes have been modest, I've also got a wealth of failures and errors in my past to draw on, and it's truly sad to watch some people make the same mistakes I made 10 years ago. The difference is, I had no mentors or people to guide me 10 years ago - I would have loved to have had that sort of input to save me time, money and sanity. I guess some mistakes you have to make for yourself, perhaps?
Well, we aren't as far along as a formal "advisory board" yet... just a couple of informal advisors drawn from the pool of people I've worked with, or know from other organizations or whatever. Actually setting up a "proper" advisory board and starting to have regularly scheduled meetings and what-not is on the TODO list.
In addition to giving advice, another element of having an advisory board, that I was only recently introduced to, is this: If you get advisors who are, for example, retired execs who don't want to work full-time, but still want to be "in the game", they can be very valuable in terms of connections, making calls for you to their friends who are still in the business world, etc. I heard a story related once about a startup who wanted to pursue defense contracts, and they recruited a retired general to their board and he was invaluable in helping them navigate that world.
These observations are spot on, I just encourage you to actually use your advisers. They are there to help, sometimes a startup will recruit an 'impressive' person as an adviser and then think "Oh this is too small a problem to be bring to this person, I'm sure they are too busy." or any number of rationalizations. Don't do that. Let the adviser tell you if you're over stepping your relationship.
I had a startup partner who was like this. It was exhausting. The reason a-pivot-a-week is not the same as a lean startup is because with such rapid pivots there is no way your changes are based on data. It's not pivoting; it's just churning.
Steve comes close to saying this, but I think it'd help to take all these ideas and gush about them to someone outside the company. (He suggests an advisor; I'd say a spouse or a friend.) Once you get it out of the system and think about it for a few days, then talk about it with your co-founders/employees.
You know, pivoting is smart when you're doing the wrong thing, and it's dumb when you're already on the right path, but the path you're on is long and hard.
For example, if you're building yet another iOS Twitter client or instagram clone, pivoting to something else might make sense now that the big opportunities in that space are gone, but if you're building a new search engine like Duck Duck Go, a pivot a year or two ago into something else would have been a bad decision. The tricky part seems to be knowing when you are pushing towards a big opportunity that is hard to break into or when you are pushing towards a gigantic waste of time.
Pivoting when you're going nowhere is smart, pivoting when something gets hard could be a huge mistake. This reminds me a bit of Seth Godin's ideas about "the dip".
That is shocking. I'm glad Steve said it clearly in those words, because I've certainly been believing the exact opposite.
And with that, I'm now more confused than ever by the whole customer development and lean startup way of doing things.