It’s All About The Customer

A few years ago, Paul Graham Co-Founder of Y Combinator wrote a post on startup failure. In it he explains:

In a sense there’s just one mistake that kills startups: not making something users want. If you make something users want, you’ll probably be fine, whatever else you do or don’t do. And if you don’t make something users want, then you’re dead, whatever else you do or don’t do.

This has absolutely been our experience. At the early stages of a startups development, the number one source of failure is building something that no one wants. While this may seem surprising, the reality is that many unsuccessful entrepreneurs fall in love with their solution before they realize that it’s a solution searching for a problem.

This isn’t simply limited to first-time founders. No matter how smart the founding team is, in aggregate, the market is simply smarter about what they want.

Typically at this point, someone points out the Henry Ford quote: ““If I had asked people what they wanted, they would have said faster horses.” Independent from the fact as our friend Patrick Vlaskovits pointed out that it’s not actually something he said, here is the bigger point: customers are experts at understanding their problems. Entrepreneurs are experts at solving those problems once they understand them.

However, having your product solve a real problem is only step one. The next step is to make sure you product is positioned in a way that your prospective customers understand. This is an often under-valued but essential step in the marketing your product.

For example, years ago one of us worked with an entrepreneur we’ll call Phil (to protect the innocent) who had invented a computerized feeder for dairy cows. This specific service saved dairy farmers money and increased a cow’s milk production by 15%.

Over the last few years this so called “agtech” has become a hot area of focus for startups. Unfortunately, at the time he invented his software, marketing software to farmers was still a nascent industry.

As a little more context, Phil secured a distribution deal with a dairy equipment company based on his invention. Upon completion of the deal, his first step is to visit dairy farmers with salespersons from the dairy equipment company. An excited Phil bounds into the dairy farmer’s home ready for his first sale.

The dairy farmer is sitting at his kitchen table having coffee. He sees Phil dressed in a suit and carrying a brochure about his new invention. After introductions, Phil goes through his sales pitch explaining how the product works and how it will save feed costs and increase milk production. It is all based on an algorithm linked to the age of the cow and where the cow is in her lactation cycle. It is highly scientific and backed up by several university studies. The glitzy brochure highlights all the features and benefits.

Phil asks the dairy farmer, “Are you ready to purchase the computerize feeder?” He tells the dairy farmer he can finance the transaction over 24 months, all the time realizing the savings in feed and extra revenue from more milk production.

The dairy farmer looks at Phil and says, “Son, you don’t know much about me do you?” Phil shakes his head indicating he does not. The dairy farmer looks at Phil and smiles. He says, “ You did not realize I was dairy farmer of the year in this county last year. I got there because I know how to feed dairy cows. I don’t need no computer to do it. I have 35 years experience and my dad a highly successful dairy farmer and he did need a computer either. “ He goes on, “I tell you who needs it. The below average dairy farmer.”

Phil is a little shaken, having thought this would be an easy sale. He justifies not selling his first dairy farmer on the farmer’s unique skills.

Undaunted, he calls on his next prospect. To his surprise, he gets a similar story. After talking to 10 prospects, each indicates he is an above average dairy farmer and knows how to feed his dairy cows.

Phil knows this isn’t true but the ego and image of the dairy farmer is at stake. While the scientific evidence is on Phil’s side, the attitudes of the dairy farmers inhibited his ability to sell his computerized feeder.

Unfortunately, the county Phil was visiting in Texas was not unique. All through the country he faced the same story. What started out as a great product idea failed.

While Phil’s invention delivered real value to the customer, no one was able to communicate that value in a way that the farmer appreciated. Ultimately, the business wasn’t the success all involved had hoped for.

What is the key lesson? Understanding the customer at a fundamental level is critical to marketing a product successfully. Phil did not understand his customer deeply enough. He knew his product did provide key benefits to a diary farmer, but he couldn’t position in a way the farmer would appreciate.

You may think the computerized dairy feeder is an idiosyncratic story. It’s not. It is the norm. Having a great product is that solves a problem is a critical requirement. But so is learning how to position the product in a way the customer will grasp the benefit being described.

You need to understand the customer at a deep level — understanding their problems, attitudes and behaviors.

If you want to learn more about Figuring Out What Customers Want for your startup, you can download our free two-page worksheet here.

Thanks for reading! If you enjoyed it, hit that heart button below. Would mean a lot to us and it helps other people see the story.