- Entrepreneurs are everywhere.
- Entrepreneurship is management.
- Validated learning.
- Innovative accounting.
- Build-Measure-Learn.
Rightfully so, there are tons of opportunities for new businesses as well as chances to improve the existing ones. With that said, you don’t just rely on ideas. Everyone has those. No one buys ideas. But people will buy vision, and vision requires management. Lean startups cater to customers and rely on their knowledge of the market, the sensory awareness of what is really happening and where it might lead you. Being lean means cutting the superfluity and focusing on what works best and is the most sustainable. Building an MVP as a means to measure the success of the direction taken, evaluate, and test the future product, is another maxim.
The core of every Lean Startup pillar is learning. We gauge progress on the amount of things learned about the innovation rather than the amount of new work created. (quote by Kelly Schreiber)
The main goal of every startup is to turn an idea into a product, deconstruct the response, and then learn whether to switch gears or keep grinding. The one biggest thing a successful startup strategy should gravitate to is to accelerate that customer feedback channel.
What Facebook killed for all of us
Remember Zuck’s quote on why so many people were giving Facebook their personal information? “They trust me. Dumb fucks.” Well… there goes our trust. This had to happen at some point. With all the harassment net neutrality has taken, with all the cyber force bullshit and fake news, we are no longer protected by the freedom of the internet. The good people online will be trampled down by whoever and the ones on the fence will stay the fuck away.
In the land of doubt and suspicion that the web is rapidly becoming, digital startups have to rediscover the channels they get their feedback from.
Information is the air for the startup. But what are the lungs?
The good news is, everything you need to know is still out there. Even though tapping into those sources becomes harder, it’s vital for entrepreneurs to know where to look. Marketers suggest there are three major channels of customer data that have to be taken into account when running a business with a digital aspect to it:
- Intrinsic data
- The “big brother” data
- Customer/competitor “shoes” data
Intrinsic data
The intrinsic data is the actual knowledge you get directly from your customers or your target audience. There is no other way then to get out there and watch and listen to the people who shape the market you are on. There are stories of successful CEOs who started from the bottom and there is always a certain charm around them. Like there is always a charm a bartender has when you find out they actually own the place. It’s the first-hand experience with the customers and the product that makes a difference.
The reason why corporations with all their resources enter a market and lose to a smaller company or an indie startup in following or useful exposure is because they analyze the numbers. Numbers certainly don’t lie, but are they telling you what you really need to know?
Metrics, A/B testing, webvisors, and surveys are not inside data. They are the effect, not the cause.
Analytics is good to see what is going on and how. A/B testing is good for justifying why a certain thing is better than another. Surveys and ratings might give you a clue of the general sentiment. But none of these metrics tell you why you are doing the way you are doing. To evaluate your ideas based on the unmistakable experience, you must be open to the real first-hand data coming straight from the source – your customers. You certainly need the numbers, but it’s important to not get caught in a loop of fixing the idea that is inherently wrong in the first place.
Any business executive has to be in the fields sometimes to maintain the crucial attachment to their customers.
Image credit: Oliver Sin
The “big brother” data
This data channel aggregates all sorts of data coming from customers, industry in general, and competition. This massive flow of data has to be congregated from different sources and media. Including the internet, analytics, social media (not Facebook), market research data, competition analysis, A/B testing, sales data, surveys, etc.
The big brother data channel allows you to keep track on what is really going on on the market, where the trends are heading, how competition affects the changes, and in a way, helps you forecast the future of the market. In conjunction with your business analytics, this channel gives you a clear perspective on how your revenue relates to the market strategy selected, as well the scope of expectations.
However, it’s important not to get carried away by analytics and research data. Digging in the past is good but focusing on the present and future is vital.
Image credit: Seth Eckert
On the importance of big data
Most companies did not realize they were sitting on a goldmine of valuable data. Until recently when business technology started turning massively to artificial intelligence and machine learning. Before, there were no instruments to surf the data abundance of which there was plenty. Every customer is a voice in the choir of your business success. Being able to distinguish each and every voice is the key to understanding the behavior of your users and predicting it.
This is how big data can affect business opportunities:
- Leverage offline data. Web analytics utilizes digital data for the most part, however, there are multiple physical and offline data channels that can be incorporated into your business analytics.
- Analyze sentiments. If you are running social media accounts of your brand, you are familiar with the hashtag and the amount of customer feedback, reviews, testimonials, etc. behind it. Analyzing the sentiments of feedback is crucial for planning.
- Personalize service. Doing business online today is being in a constant race for competitive advantages. Personalized service is one of these advantages. Customer preferences, interests, behaviors can be collected and analyzed using big data algorithms.
- Utilize AI. Chatbots and narrative UIs are one of the hottest trends in today’s web. Machine learning based on the abundance of user data is capable of letting users interact with your platform by generating relevant content. Constant access to valuable data and correct ways of handling it helps build productive solutions and create a better experience.
Customer/competitor “shoes” data
Being a business owner automatically puts you into a category of a different user or a superuser. We tend to believe customers see what see and feel pretty much what we feel. However, the time you spend working on your product or service makes a significant impact on how you perceive it. It’s extremely important to retain a customer perspective and be able to have an unbiased view of the industry in general, your own brand, as well as all major competitors.
Analyzing competitors and their resources can help you distance yourself from your own agenda and become more universal in your judgment.
As the owner of your business, it’s natural for you to have a different perspective, at the same time, there aren’t a lot of things which have the same therapeutic effect as asking yourself “Why should I buy products/services from this company and not that one?”
At the end of the day, the business can only support itself for so long. Existing in today’s market means being extremely sensible to the responses you get from your customers who all have a voice. Remember H&M’s 2018 controversy? Imagine what would most of the Abercrombie & Fitch controversies would be like today…
Image credit: Fede Cook
Data channels coalesce. The poker analogy
Most companies utilize one channel in a more or less sophisticated way, some rely on experience and intuitive approach to strategizing marketing and design. There are those who combine streams of data due to their specific needs. We believe, entrepreneurs can benefit greatly from using a relevant modern approach to dealing with information instead of neglecting it or relying on short-term goals.
Like a professional poker player, a successful entrepreneur does not rely on luck, they rather utilize a materialistic approach to putting whatever comes their way to its proper use, and it is not just the cards.
Your cards are your intrinsic data. Critical for the game, no doubt, simply because without your intrinsic data, you just won’t play. Or play something on your own, then you win something from your own, don’t you? At this point, no matter the quality of the hand, you need it to stay at the table.
The “big brother” data. This is the ruleset, the books on strategy, the tutorials, analytics, stats, and youtube channels covering the sport. You can play without it but will it be as effective if at all? Hardly. In a game where the stakes are high, you want to be as prepared and educated as possible. With equally good hands at disposal, the one who wins is the one who is more knowledgeable.
The competition data. The ability to read your opponents and the table is arguably the most important skills to have. If you can watch the game while making balanced decisions and the right judgment, you are learning patterns. Recognizing these patterns will sufficiently reduce the tension over your further actions.
If your cards are known, the game is transparent, and your competitors’ actions are predictable; what on Earth can stop you from winning the game? All the games.
Image credit: Damian Bilski
Build the cult of information
Data is all around us. If you are running your business, you are most likely to be aware of the data sources you need. However, what you do with the data after you collect it is the main thing. Lean startups have to master the skill of converting the information they get from their customers into a somewhat valuable commodity.
Some enterprises only appreciate the good news and neglect the criticism by dismissing the users who issue complaints and suggestions. Being stuck in a loop of “yes men” is nothing but a gradual path to demise.
Any response from your real users is a precious gift that has to be heard, investigated, and picked up on.
If your sales are up by 10%, it’s important to understand why not 11%. If you are up in user retention rate but cave in on CTR, it is more important to understand why you cave in than legitimize any one-legged growth.
By utilizing all the available data channels, you can absorb as much information as possible and put it to use. Information is the entrepreneurial fuel and it has to be cherished, even the bad news and the painful criticism. In the words of Jocko Willink: “GOOD.” Your app downloads dropped? Good. Tweak the app. Your e-commerce website is slower than the competition? Good. Get another engine. Your leg fell of? Good. Good. Good.