Startups are making stuff no one wants. Here’s how we can fix that.
We’re living in the era of unicorns and big dreams; of explosive growth, hockey-stick curves, and constant acceleration. Besides having a noticeably specific vocabulary, these ideas obscure the reality that most of the startup industry is making stuff no one wants, because we don’t take time to understand people.
“No market need”
Forty-two percent of failed startups failed because there was “no market need” for what they were making. That’s what CB Insights found when they began reviewing the post-mortems of unsuccessful startup companies in 2014 (the project continues, and it’s definitely worth a read: https://www.cbinsights.com/blog/startup-failure-post-mortem/). These aren’t month-old garage projects. Their review includes companies who raised tens of millions of dollars, operating for years with dozens or hundreds of employees.
How is this possible? How does a group of people go out into the world, create a name and a product and a ridiculously soft t-shirt, ask investors for their money, and launch a thing they’re not sure anyone wants? It’s because we’re usually designing for our idea of people, rather than people themselves.
Creativity without purpose is super important for society — for artists, explorers, inventors, even scientists, who need to push boundaries without being asked what the monetization strategy is. But startups are supposed to be different. Startups are the jewel of modern economics. They’re transforming cities and rescuing the middle class and disrupting horrible things everyone hates like going to the DMV and having pizza delivered by human beings who could see you in your underwear. Most of them will fail, but those that don’t will be worth $1,000,000,000,000,000 and capture five trillion users, and the charismatic founder will be on the cover of Fast Company by himself wearing a hoodie.
Sometimes products really do catch on and catch fire, and we’re all using them, and they’re generating the kind of real value we care about, like jobs and the financial ability to have a doughnut shop on the company campus. But businesses don’t usually grow like that. It’s a long and hard and educational thing, and it’s impossible to know everything when you begin. Fortunately, it is possible to know whether anyone wants the thing you’re doing, before you start doing it. Many people call this process design thinking or human-centered design (we do too, and it’s a core part of our business), but the naming makes it alien. At its core, it’s about validating ideas by learning from real live humans. It just takes a little bit of curiosity.
How we design things for humans
At our 18-month-old startup, we’ve failed at a lot of things, from business to process to failing to stop rats from eating our refrigerator insulation. We’ve also succeeded, building a profitable and growing local media company in a year, because we started with a deep understanding of the people we wanted to serve.
The core of everything we do is community. Will a story we’re covering help people accomplish something? Why is an event special or useful to locals? How can we make a creative project for a customer something engaging for our users? If we have an idea for a new product or a feature, we think about our community first: have we learned enough to know it’s valuable?
Finding the right people
The first step in human-centered design is finding the right people. To make better things, we have to learn from people with open eyes and minds. We have to find real, live humans and seek to understand their needs, goals, behaviors, and ideas.
In our work we often use the “extreme user” method, which looks for people at the edge of the bell curve around a problem or product, because their needs and behaviors are more pronounced. (Stanford’s d.school has a nice summary of the approach). We also make stakeholder maps, which help us visualize a system and the different people and organizations within. Then we consider what we want to learn, and assemble a set of interviews, observations, and other explorations with the right people on the map.
Many teams work from assumptions of what their users are like, particularly when they’re starting out with limited time and resources. They make “personas” informed by stereotypes (soccer moms like to drive minivans!) rather than actual insights collected by listening to people.
All of us are contradictions; layers of conflicting behaviors that don’t make any sense, which is confusing at first. But we’re irrational beings. We’ve never made any sense. That’s why there’s a selfie toaster.
Think about the people you know: Someone who’s healthy 23 hours a day, but eats two cups of ice cream before bed. Someone impeccably neat, except for the dirty pans they leave in the sink. Someone who takes pride in reading Foreign Policy and telling you about it, but secretly spends an hour every day on TMZ.
Part 2: Asking questions and building good ideas
Startups that fail because of “no market need” are largely failing, I’d venture, because they assume people and systems work in expected ways. What I’ve learned from building our own company, and a lot of research and consulting before that, is that few things work the way you expect before you dive in. And that’s a delightful discovery, when you’re open to it.
In part 2, I’ll share ideas for how to explore what your users really want.
In the meanwhile— what users are you trying to understand?