A Tale of Two Startups

A lesson in understanding your users

TL;DR:

  • The difference between a believable startup pitch and one that seems way off is when the startup demonstrates that they know their users and the addressable market.
  • When your target audience has different needs, it’s an opportunity to innovate. Don’t assume that every user will have the savvy to use your product.
  • Begin with a narrow value proposition that you can do really well. Without that focus it’s easy to lose sight of the user and make technology for technology’s sake.

The Tale

Startups must define and research their addressable market before looking for partners in the larger ecosystem. I’ve met with hundreds of them, and you’d be surprised how many fail to take this crucial step. For example, let’s look at how two startups approached the challenge of connected health for aging populations very differently. In one instance, the startup had clearly missed the mark in understanding their potential customer base. In the other, the startup used the unique qualities of this population to make a product that would truly serve their needs.

Our first startup pitched their idea to make everything an elderly person or caregiver needed accessible through a smart home device. Examples they provided were anything from summoning a repair person to reaching a medical professional, all using a voice-controlled smart home device. While there were several things wrong with this pitch (their value proposition was too big and they approached me before they even had a product — things to revisit in a later post), I’m going to focus on their dire need for user research.

The founder didn’t know this, but I had just spent the previous Sunday setting up an Alexa and Harmony remote system for my grandparents. As far as grandparents go they are pretty hip; they have iPhones and text frequently (they ❤️️ using emojis). A year ago, my cousin bought them an Apple TV… and it sat unused for a year. My grandparents enjoy watching shows on Netflix, but couldn’t figure out how to get to Netflix on their own. Someone always had to help them get to the home screen. My family decided that we could automate this process for them using a universal remote and an Echo (with a little backend coding so the remote had a specific Netflix button). Teaching them how to use the remote took some work, but the harder part was actually helping them learn the phrases like “Alexa, tell Harmony to turn on Netflix”. I kept asking myself, “wasn’t this supposed to be the easy part?” My grandparents are both around 80 years old, quite healthy, and have no signs of dementia. But try as they might, they could not remember the phrases. Today’s technology requires a clear voice and specific commands; my grandparents got frustrated when they were unable to do this. We ultimately had to write down the various command phrases and make a few copies so they could have them around the living and dining rooms. After all of that work, they still seem to prefer the physical remote (at least now they can get to Netflix on their own), but it’s still not the experience my family had imagined for them when we bought and installed all of these electronics.

I reflected back on this experience while listening to this startup make its pitch. I couldn’t help but think: what if my grandparents had a suffered stroke and couldn’t speak clearly? What if they had serious memory loss and couldn’t remember where the phrase sheets were? It was clear that this startup hadn’t done its homework. Connected health holds a lot of promise, but the population these devices or platforms are trying to serve has unique challenges to overcome. As luck would have it, a few weeks a later our second startup walked through the door.

As with the previous startup, this startup wanted to provide digital assistance in a smart home to the elderly, but they used a completely different approach. They focused on helping caregivers prompt elderly people to take medication or exercise. What was really unique was that the flow of information was completely different. Instead of elderly people having to use voice commands to search for information, this platform was set up for caregivers to reach out to elderly people. For example, I could send my grandparents a personalized reminder to take their medications. This company addressed a specific need of the elderly population without expecting them to be able to engage with the technology in a significant way (the younger and more tech-savvy caregivers did the technical heavy lifting). Clearly, this startup had tested its product with elderly people because they already had some traction in the market. It was refreshing to see a startup that had taken the time to research its target market and found a unique way to leverage technology to improve aging in place.

Any startup that comes in with concrete data for the who, why, and how of their product or platform is already ahead of the pack. For what it’s worth, large organizations are just as guilty of not doing this research, it’s just that they can bury their costly mistakes in other revenue. Pivoting is easier when you have the user research to help guide you in the right direction. Leverage user feedback to further innovate and provide an ever better product. Focus is the key to success; don’t expand to adjacent products or services until your flagship has strong market traction. Keep this in mind during a pitch too — nobody will believe that a startup can come in and solve all of their problems.

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