Got customers? How we almost sunk our startup before it started.

Got customers? How we almost sunk our startup before it started.

Brace yourself kids, because this is a tale of unrequited love, interminable woe, and eventual redemption (no, it’s not about high school). But the redemption doesn’t happen for awhile, so pour a double whisky and shut the blinds so no one mocks you for your tears.

I’ve already written about how MightyBrand started, so I’ll summarize in this post by saying that in early 2008, we got the idea to build a platform for monitoring social media and helping companies engage with their customers. This seemed like a great idea to us, and we had a lot of code from a previous project that we could repurpose for the cause.

The project didn’t seem too huge or overwhelming, so we started building. We coded throughout the rest of 2008 and watched the project grow more and more complex. We eventually launched in January 2009 and waited for the world to recognize our genius. And surprisingly, they did. Sort of.

The accolades started coming pretty quickly after launch. Fellow entrepreneurs and industry insiders told us that our product blew away much more expensive products built by large, well-funded teams. There was talk of valuations in seven-figures, early acquisitions, and astronomic growth projections. Heady stuff for two guys with no money, experience, or connections who had started a company in an industry they didn’t even know existed.

All the pieces were falling right into place. Well, almost all the pieces. We still didn’t really have any customers. We were a bit perplexed, but undaunted, and proceeded to spend the next few months adding product features, refactoring code, writing automated tests, and doing pretty much anything to avoid facing the fact that apparently no one thought our app was worth paying for.

Fortunately, we managed to stumble our way into a great relationship with an advisor, Michael Berolzheimer, who gave me a copy of Four Steps to the Epiphany, a book by a professor named Steve Blank, about something called Customer Development. The book’s title and the fact that professors tend to write the most boring books in the world made me suspect that I’d be better off propping up my monitor with it than reading it. But out of respect for Michael, I decided to at least try.

Remember that double whisky I had you pour? Yeah, well, I should have had one of my own on hand for this book. With horror, I read as Steve described the exact approach we had taken with selecting our idea, building our product, and launching it to market, and how it usually leads to market failure for almost everyone who tries it.

I’ll let you discover all the ins-and-outs of Customer Development for yourself, which you definitely should, unless you enjoy failure and ridicule. The basic idea that we completely neglected is this: talk to your customers before you build the product.

We never talked to our potential customers. I know, it’s ridiculous. It’s embarrassing. But seriously, in the nine months we spent building this complex product, we never once sat down with a potential customer, asked them what their needs were, showed them our product (or mockups), and asked them if they’d use it, how they’d use it, and what they’d pay for it. Not once.

How could we be so stupid? I’m really not sure. In our defense, most startups do this. They make very little attempt to get out of their office and go talk to customers and show them what they’re working on. They don’t sell the product until they’ve built it. And as a result, they usually find that there are no customers for what they’ve built, or the customers aren’t willing to pay what the startup thought they could charge.

I think this widespread lack of customer development is due to three factors:

1. It’s more comfortable – Many technology founders are more comfortable working on the product than knocking on customers’ doors and talking to them about their needs and how their product can meet those needs.

2. Investors don’t require it – This may be starting to change, but there’s a lot of startups out there that have been funded based on the strength of the team, or the idea, or a prototype, or whatever. How many VCs want to see a Customer Discovery report based on dozens or hundreds of interactions with potential clients? Hopefully more than a couple years ago.

3. It’s emotionally risky – I think this is the real reason at the root of it. Deciding to start a company is both hard and unbelievably exciting. The emotional rollercoaster has to be experienced to be believed. And it all revolves around this idea that you have for a product or service that will make people’s lives better, and hopefully make you rich in the process. Every time you talk to a customer about your planned product and they tell you they don’t need it and wouldn’t pay for it, you get a little bit closer to having to face reality and realizing that this startup or product isn’t a good idea. And since it’s your baby, you avoid that reality as much as you can.

So what happened next? Immediately after reading the book, we determined that we were going to correct our course and fix this issue, so we mapped out a plan to do customer development right. Unfortunately, we missed something really important that led to our second big mistake with this company, but I’ll talk about that in a later post. In short, we’ve done pretty well this year, but we still have a long way to go to reach the vision we had for this company when we started, which I’ll also talk about in a later post.

For now, I want to encourage you to read about customer development, both the book and some of the excellent resources out there on the subject. And since we’re always interested in understanding our customers’ needs better, please contact us about MightyBrand and how we might be able to make our product better fit your marketing and social media engagement needs. We really do want to hear from you this time, I promise.

Thanks to Aamir Virani, Jesse Meyer, Luke Fretwell, and Alexis James Waggoner for reading drafts of this post.

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