Customer Development


Got Customers, Part 2: The One in Which We Save the Startup but Lose Our Souls

Got Customers, Part 2: The One in Which We Save the Startup but Lose Our Souls

A couple months ago, I wrote about how we built MightyBrand without ever talking to potential customers about what we were building and whether they’d use it. Fortunately, a wise advisor offered us the cure of Customer Development before the disease was terminal (that’s what great advisors do for you!). So off we went.

Our advisor was actually very active in this area for us as well, both talking to people he knew about our product and connecting us with other companies who might be potential users of our service.

The big conclusion we got from the customer development process were that most companies were far too early in their social media marketing efforts to need a dedicated monitoring solution.

Shit.

However, as we continued to research, we found a bright spot: agencies. Marketing and PR agencies were actively looking for a solution like ours, really liked our product, and had money to spend on it. In fact, we consistently got feedback from agencies that we were charging too little relative to the other options in the market.

Elated at having finally identified a set of eager customers willing to pay for our service, we set to adapting our product to their needs and pursuing deals. Over the next month or two, we landed a couple decent sized agreements and were well on our way to being profitable before the end of the year.

During this time, we started seeing a few things about our new direction that concerned us, but we were following the Customer Development playbook to the letter, so we pressed on.

However, it was right around this time that Ben flew out to San Francisco (he lives in CO) and we sat down to do something important that we had neglected up to this point: figure out our mission and values. Ben and I have very strong beliefs about business and what we want this company to be. We’ve been very strongly influenced by the Virgin empire and what Richard Branson has created. We felt that it was important to define our own vision and commit it to paper. Over the course of a week, we spent time talking about the future and discussing what we want to grow this company into. I’ll talk more in-depth later about what mission and values we came up with, but suffice it to say for now that we’re passionate about helping companies create authentic and personal connections with their customers.

Having come to some valuable conclusions during this process, Ben flew back to CO and we went back to work on landing deals with agencies. It took us a few days to figure it out, but we finally realized that what we were doing was pretty much in direct contradiction with the mission and core beliefs we had just come up with. Here’s why:

  • As you can imagine from our name, creating a strong brand is very important to us. But we were creating white-label platforms for the agencies, which means our brand was effectively invisible.
  • Our passion is to especially help small businesses and startups learn how to use social media to engage with their customers. We started the company because the existing players were way too expensive for small companies. Raising our prices to match the market price took away a lot of what made us special.
  • I’ll have a lot more to say about this later, but we fundamentally disagree with the agency approach to social media, and what agencies are doing to the medium. Our passion is helping companies connect directly with their customers, not helping agencies convince companies to outsource that connection to them.

Having realized this, we spent a couple days talking about it, and we decided to immediately shift our strategy to reflect our mission, which meant a) no more deals with agencies, and b) examining our pricing and product features to ensure that we’re headed in the right direction. We also changed our Customer Development efforts to be more focused and targeted so that the information we’re getting informs our mission, rather than flailing about with no purpose. We’ve spent the last few months making some large changes to better reflect both our mission and the lessons we’ve learned from our ongoing Customer Development efforts. We hope they pay off, but at the end of the day, our big realization was that we’d rather try and build something we believe in and fail than build something shitty that makes money. YMMV.

One of the common comparisons I hear is between Customer Development and “vision-driven” development. But after our experience, I’m not sure that these have to be in conflict.┬áCustomer Development is an incredibly valuable tool for learning *how* to build your company so that customers want what you’re selling, but it can’t tell you the *why*. It can’t give you the heart and soul of your company for you. It can’t tell you what you care enough about to make the sacrifices you’ll have to make. And it can’t tell you what will make you happy if you had to do it for free.

Only you can do that.

Image thanks to Al_fred

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