Three assumptions we got totally wrong with our startup – StartupSmart
I’ve been speaking a lot at events and in articles about customer validation. The point of customer validation is to understand exactly who your customers are and what they want your product to do and achieve for them.
So it’s fairly ironic that I did close to zero customer validation with my own recent startup – employee six question pulse survey system, called 6Q.
In my defense, we were building it for ourselves first with the hope that someone else may want to use it. The very first vision was pretty well just that; build something we would use and find useful, and maybe others will dig it too.
Hence the lack of customer validation.
Sure I asked a few other business owners I knew if they would use it, and sure enough, they all said yes. That’s all I needed to do, right?
Well, it turns out there were a number of assumptions I made which turned out to be totally wrong. That’s the fun thing with tech startups; changing the product, or pivoting entirely if you have to.
So, rather than another article on the web about some great idea and then sudden fame and fortune, I want to share with you a few of our failings to drive home the need for customer validation no matter what you’re building.
Where 6Q came from
First, let me paint a picture for you. The main business I’m in as a digital agency based in Perth. I founded Bam Creative back in 2002 with a napkin sized business plan. It pretty well said;
- Have work/life balance
- Make money
- If you hire, be a good boss
So, in keeping with point three, I’ve spent the last 14 years building the right kind of culture with the team. We’re 14 people in an open plan office, who are professional yet transparent with each other and our clients.
So transparent, in fact, that I often get given feedback that I should be unhappy about. I’m not though; it’s important to know how the team are feeling so we can address it.
One of the things we do is have a weekly face to face individually. The two managers meet each team member, and find out what’s going on with them; how their productivity is, what their happiness is like and how we can help them hit their goals.
So this is where 6Q is borne from; the idea of scaling a weekly face-to-face with a team of dozens makes this an impossible feat; perhaps a survey tool could emulate much of this.
So knowing all this and assuming this was typical in most Australian businesses, we set out to build 6Q. There were three assumptions out of the many we made that totally didn’t hit the mark.
On reflection we should have known but our lack of customer development meant we believed these to be true.
- We assumed our main customer base will be small to medium companies
- We expected most customers to be Australian
- We assumed most employees will be happy to complete non-anonymous pulse surveys
So, how are they wrong? Let’s look at each of these assumptions, and show what was wrong about them and what we’ve done to adapt.
1. Our main customer base will be small to medium companies
Small to medium organisations care more about their employee happiness and feedback, right? The big companies already have their enterprise 100 question heavyweight survey systems and don’t need ours.
Turns out that’s wrong. Whilst SME’s do care about employees, the big guys do as equally. In fact, the majority of signups for 6Q have been in the hundreds or thousands of employees and they see 6Q as a complement to their other surveys.
Our original plans and pricing page had various plans running from 20 employees to 200. We quickly adapted by changing the ‘enterprise’ plan name to company, and adding plans for 500 – 3,000 employees, as well as a message if you have more employees to contact us for custom pricing.
We never had any form of team segmentation; the system just showed all employees. That’s great up to 50, however more than that, it became burdensome. We since launched segments, so they can break organisations down to location or teams and added employee search and pagination, so you see 20 employees per screen.
2. Most customers will be from Australia
We have contacts and clients mostly in Australia, so why would someone on the other side of the world be interested in our humble startup?
Wrong.
We did a soft launch to gather some customers in small amounts before opening to a wider audience. The first 100 customers rolled in within a fortnight, and represented 25 countries. In fact, Australia came in as the fifth most common place.
We made sure we tweaked the messages throughout the UI and emails to not include Australian slang or local terms and we did a lot of navel gazing to see if we should change our system and blog from British English to American English.
3. Most employees will be happy to complete non-anonymous surveys
This was the biggest assumption of ours, which drove the product. I enjoy an open honest workplace, so surely everyone else does too, right? It’s just common sense.
I was very, very wrong.
Sure, managers and leaders in every country believe their employees will speak up because they asked them to. It’s far from it though – without the right culture, employees are reluctant to speak openly. Our culture works, many others don’t.
We added an option within days of launching last March, to choose between individually identifiable responses, and anonymous. To further the aim of protecting employees, we also added a message on the first screen of the survey, to highlight if the survey is anonymous or individual, and we won’t share any identifiable information, should the survey be set to anonymous.
No matter how many assumptions you make do your best to test them all in your customer validation stage. Ask prospective customers exactly what features they want, and explain how you imagine your product working, and ask for brutal feedback.
Be prepared to shift with the customer needs. If we hadn’t done the changes required to overturn my idealistic assumptions above we would have had a tough time selling our product to anyone.
Most of all, learn from your lessons and share them with others.
This piece was first published on Ideas Hoist.
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