Monday, April 13, 2015

Getting feedback from customers when security is an issue

This is the second of several early excerpts I'll be sharing from The Leader's Guide, a 4-color, 250-page, hardcover and digital book which will be offered exclusively through Kickstarter--according to my agreement with my publisher, Crown, the book can never be sold in stores. As usual, I'm leaving out important details like company names in order to respect their privacy while the book is still in early draft form.

The campaign ends on Wednesday, April 15--learn more about it here.

In its early days, REDACTED faced a challenge that will be familiar to many entrepreneurs: They wanted to build a product that the world has never seen before. But nothing like this product existed: just an idea. 

They knew the enterprise customers they were seeking would be highly interested in security and would never log onto a test site that was still in Beta and give up their data. The founders needed to find a different way to gather early feedback.


The importance of running experiments to learn more about customer behavior is one of the core principles of the Lean Startup. 

But what happens when you’re working in an industry where security and secrecy are vital—and customers aren’t exactly knocking on your door to participate in your tests?

I coached one team from REDACTED working on building a complex new technology for a market that is generally very secretive. Because they assumed customers would be unwilling to talk with them, the company was building their technology around market research.

Though the team was initially reluctant to set up meetings before they had a true understanding of what the final product would look like, eventually they agreed that talking to customers was important.

“Going out to sell the first MVP was daunting,” said one of the project leads, REDACTED.

“But once they got the hang of floating their MVPs with customers, these conversations were no longer daunting, they were really a lot of fun,” REDACTED said of his team. “The customer was really opening up and engaged in the process... It was really surprising the number of customers that opened up in a market that’s technically very secretive and very closemouthed.”

The team learned from their meetings was that their initial plan to invest millions of dollars and several years into developing REDACTED would have been a complete failure. Not because their idea wasn’t any good, but because they were engaging the customer much too late in their sales process.

“Ultimately, [our initial strategy] would have been a disaster,” said REDACTED, the team’s engineering leader.  “We would have had this great new product with all this development effort and... we wouldn’t have been able to sell [it].”

“It’s really a big deal,” he said. “In many cases, we’ve got people that are putting together product specifications for us that have 20-25 years of experience in the industry. Inherently, you develop leap of faith assumptions in that time period based on your knowledge of the market, your interactions with customers. But things can change and before you know it, you’ll be displaced, or customers will gravitate towards the next shiny object without ever telling you.

“Being able to challenge ourselves and look at that and ask ourselves ‘What can I do differently to validate our own assumptions, our own hypotheses?’ is really critical for us to become more open, more agile, and more innovative.”

Unlike many tech companies who can easily gather information about users who come to their websites, the company I mentioned earlier in this section had a journey that probably looked more like that of companies building hardware. 

Customers often would not be able to talk much about their work, so founder REDACTED had to get creative. He’d meet with potential partners who often wouldn't even tell him their exact roles. He’d present a demo of the prototype and ask customers if it would be useful. They’d tell him no, and so he’d ask them how they worked. 

They’d give him what information they could, he’d “code furiously” for two weeks, then share the prototype. He'd usually discover that while 95% of what he’d created was still useless, perhaps 5% was usable. 

Today, REDACTED is one of the most successful startups in the REDACTED space.

When you’re in those early stages of launching a product the world has never seen, REDACTED explained, all that matters is feedback. It doesn’t matter how you get feedback, it doesn’t matter if the people you seek don’t end up customers. 

“You need something to put constraints on what you’re building,” he said.

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