With most startups I talk to who are preparing to pitch for cash, I ask them to factor in a certain amount of spending for user learning. They almost always resist. The reason for this is multi-pronged:
- The genuine lack of interest in the consumer and serving them (as discussed). Growth focused, not product-user focused.
- The fact that it’s very difficult to get statistically-significant research results on a startup budget. This is a problem the eco-system needs to someday solve with marketplace disruption. Most research firms charge corporate prices which is a barrier. Cost-effective, reliable results are hard to come by. I’m sensitive to that.
- The startup eco-system, because of its collective lack of business experience, has chosen to not tap into the wealth of knowledge many of us have, in favor of inventing its own principles. One of these is what we call “A/B testing”. Because it has a name, it’s official and credible, apparently. We learn by testing so we’ll eventually figure it out. This process does have a place but there is significant over-reliance on this method. There is a huge dark side to this approach. It starts with the fact that A/B testing is effectively guessing, and that’s a dose of realism that some don’t want to acknowledge. When you label it that way you can start to understand that guessing can be expensive and take a long time. You never know if you are optimized, just if current approach is better than the last. In the meantime, you are out there spending money and time, alienating as many consumers as you acquire for all the times you guess wrong, while more importantly, competitors are given opportunity to pass you by.
On that last sentence, it’s important to understand that the cycle time for startups to scale up and learn has shortened dramatically in even the last few years. So, when there’s a marketplace opportunity, you have to move super fast or you get passed…or somehow, the opportunity dissipates. The best way to do that is to invest in knowing your end user really well on the front end, so that when you launch, you rocket forward instead of hoping to fiddle your way to some degree of success over time.