Published in the San Diego Union-Tribune, December 9, 2019
The basic premise behind starting a company or building a product is to create something that someone needs and wants, and the best way to do that is to go out into the world and ask your future customer if he cares at all about what you have in mind.
This is the theme of Steve Blank and Eric Ries who are often credited as the progenitors of the Lean Start-Up movement, which is now used by many programs in our government. It is a matrix called the Business Model Canvas that focuses on the customer and the actual needs that should be addressed. What I love about it (I took the class a few years ago) is that it forces the entrepreneur to start with a blank slate and fill in the boxes with real interviews, data and use cases.
So, the first “They Should Have Taken That Course” award goes to Steven Holl, the architect of the new $41 million Queens Public Library at Hunters Point in New York. It is a stunning architectural masterpiece. Unfortunately, it has only one elevator, (that is not a typo — the number is one), lack of accessibility for wheelchairs and strollers and a bleacher section intended for children that is too steep and dangerous so that the children it was intended for cannot use it. Officials are now discussing how to retrofit and fix the building.
How does this happen? It’s simple. No one talked to the customers (aka parents and children). In the area of technology, this happens frequently. I see it when the geniuses come into my office with a new idea, product, device or platform. The first question I ask is: Who is the customer? They always have an answer — but then the second question is: Have you spoken to the customer — and not just one customer but 50?
The beauty of this model is it helps to avoid The Painful Pivot, which is what you are forced to do when you are at the end of your proverbial rope. Now compare this to The Proper Pivot, which is the one that is revealed to you by your customer who tells you exactly what he really wants after you come and show him what you think he wants. It is the epiphany that creates “product market fit.”
My little software company recently stumbled onto a semi-brilliant use case (let’s discount a bit for ego myopia). But the point here is that the idea came from an unrelated individual who found me on LinkedIn and asked to chat. Now come on, let’s be honest here — how many of my eager entrepreneurs would return that phone call? Nobody returns those stupid LinkedIn messages wanting to talk to you about something. But the trick here is — you don’t know what you don’t know, and I like returning calls if at all possible. One thing led to another, and within two months we launched a spin-out company with significant financing in place, using our core technology. The guy who gave me the idea was astounded that anyone would call him back. He was a domain expert in the area. He actually knew what the customer needed. And to top it off, he had tried for a year to work with the CEO of our No. 1 competitor and was unable to get a deal done.
In order to drive home the power of a phone call, I turn to Bradley Jacobs, the CEO of XPO Logistics ($17 billion in revenue last year). He is a serial dealmaker who has done one more than 500 acquisitions. He says, “In the first 50 to 100 deals, I made a lot of mistakes. I had a very low success ratio of closing because I foolishly spent a lot of time NOT calling back the sellers, paying too much attention to posturing, trying not to seem too eager.” His main focus in dealmaking now is to “attach a high priority to the quality of the people.” In the final analysis, that is always what you are buying.
Me, I love the phone. It is like a box of chocolates because “you never know what you’re gonna get.” I don’t have to make the candy; I just need to recognize the really good piece when it shows up.
Senturia, a serial entrepreneur who invests in early-stage technology companies, writes weekly about entrepreneurship in San Diego. Email ideas to [email protected]
Rule No. 638
“You rang?” — Lurch