Your customer is the bottom line

There are many approaches towards building a healthy startup business that will take off, grow end endure during both good and more challenging times. But honestly I cannot think of a better one than to treat your customer as the bottom line.

The math behind it is simple: Every time you delight a customer by solving her problem and giving her a delightful experience more than worth the money, she’s paying, she will stick around. And not only that. She will also be advocating your product and brand to those she knows or comes in contact with who are experiencing the same sort of challenges as the ones, you helped her solve in the first place.

When I think about it there is actually no real viable long term alternative to this approach. Of course there are numerous other ways you can optimize for growth, gain initial traction and stretch your available funds to last a bit longer, but over the longer term? Don’t think so.

The problem with a lot of more tactical approaches towards building your bottom line is that they are inherently short term. They may put a band on the sore or enable you to play through the pain barrier, but they don’t fundamentally cure or fix anything.

You will always be in the need to come up with new approaches, new tricks, new creative ways of doing things, and chances are that the positive effects of these things will vane over time. And then you’ll really just be playing catch. All. The. Time.

So focus on the customer and delighting her. Make that the primary outcome of everything you do in your startup. If you’re looking at doing something that cannot be directly related towards a positive contribution to this outcome, think hard about whether you need to do it. Be tough on yourself. And eliminate all necessary distractions in order to focus on – you guessed it – delighting the customer.

If you’re looking for proof that the approach works, look no further than to Amazon and its founder Jeff Bezos. He is notorious for always wanting to put the customer and customer satisfaction first. Often to the extreme and – sometimes, I would argue – to the detriment of his own team. That’s more than dedication. That’s obsession. But the results speak for themselves.

Of course your not Jeff Bezos, and your startup isn’t Amazon. But there are still things that you can do in your everyday operation to put the delighted customer left, front and center of everything you do.

You can start by really taking customer success and support seriously. Stop looking at it as a support feature, you need to have but don’t really invest in. Invest heavily in it. Put some of your best people there. Give them the mandate to truly listen to customers and feedback, and allow them time and space to turn that feedback into thoughtful suggestions for things your startup can do on the product side in order to further delight customers.

That’s not to say that you should just go with any whim and whichever customer yells the highest about something they may think they want or need or something they want you to remove. Far from it. But it is about keeping an ear to the ground and maintain a balanced approach to listening in that will help synthesize the most crucial nuggets back into both your product and everything surrounding it.

Your product will most likely be all the better for it. It will delight customers more and help attract new ones. And it will fuel the success of your business and your bottomline in ways that nothing else can.

(Photo by saeed karimi on Unsplash)

Solve my problem, please

Normally, we’re used to seeing startups looking to solve the problems of their customers.

But lately, I have realized that there is actually quite a lot of startups, who are essentially asking their customers to solve their own problems.

I typically see it in outreach emails asking me to go to a service or a product and do something specific; update something, try out a new feature or something of that nature. And it’s all perfectly fine.

But it also sends a signal that something is off; something is less than ideal. We have encountered a problem or a challenge on our end, and you, our dear customer, should ideally help us fix it.

Essentially, what you’re often communicating in this way is a shortcoming. Something you didn’t get right in the first place, and now you’re looking to compensate or perhaps even fix the issue.

You could of course argue that there is no other way than outreach to tell about new offers, features etc., and to a large extend, you would be right about that.

However, I could also make the argument that if you had a truly sticky product that your customers were so habitually using they knew it inside and out, they would find out these things themselves, and there would be little need to do outreach to already existing customers.

In summary: When your need to do outreach to your customers is on the increase, ask yourself where in your product or service, your core offering may be broken or less than ideal.

That is the problem, you should solve. Yourself.

(Photo by Michal Matlon on Unsplash)

Reframing “How Might We…”

In my previous agency job I spent quite a lot of time working with the Google Design Sprint methodology, and I even got to a couple of moments of fame, when I both ended up teaching the methodology at the Danish Technological Institut as well as running a sprint for Google themselves.

There were – and are – a lot of great things in the Design Sprint methodology, which when applied in the right way can really bring ideas, conversations and work in general forward.

One of them is the “How Might We…”-question. It is a very elegant way of reframing a problem into an open-ended solution mindset, you can actually use as the foundation for working on fixing that problem.

There is one issue with the question though IMHO: It is not really good at framing the context of the question being asked.

But maybe there is a simple fix for that which makes the question even more powerful to ask? And not only for Design Sprints but for general conversations about vision, strategy and “What’s next?” for our company?

What if you started your “How Might We…”-question with a statement of fact to set the context?

Like: “Since we now have a sales model that works for other peoples products, how might we best introduce our own private label offerings?”

Or: “With maturity reached in our beachhead market, how might we go after the next vertical to grow our business?”

By doing it this way, you not only provide context to the open-ended solution oriented question. You also create a strong sense of why it’s important – almost “do or die” – for you and your team to spend precious time on looking to solve the problem.

And it will eliminate time wasting from those that will always be asking “Why?” whenever you try to introduce a new important project and leaving them with no or at least very little opt-out from stepping forward to help in coming up with the future solutions.

Essentially it underscores the “We” part of this collaborative proces. Which I think is key to the exercise and – done this way – a significant booster to get you set for a concerted, co-operative effort.

(Photo by Camylla Battani on Unsplash)

Beware changing models

Can you start out with one type of business model and then transition to a new one without facing huge challenges?

The question is a valid one. And the answer is probably “No” in most cases. And it is worth exploring a bit further, as it’s often a topic that comes up when I meet with founders.

The issue with wanting to change the business model is that what I need and want as a founder and business owner is not necessarily the same as my customer needs and wants.

Let me a simple example from my own life as a customer:

When I order a case of wine from my preferred ‘wine pusher’, I expect it to be an interesting wine from a wine maker, I would otherwise never have heard of and at a reasonable price. Like I am used to.

I do not expect to get an offer for a wine they have produced themselves together with a chef, I have never heard of (even though it probably says something bad about me that I don’t). As I got the other day. And immediately decided to decline.

Why?

Because it broke the fundamental ‘contract’ I have with my regular supplier: You find regular wines from little known places that I can then get a good offer on. That’s the model, I have signed up for. You DON’T try to introduce your own brands into the mix, because that deviates from our ‘contract’.

Could I be more forgiving here and just try it out? Absolutely. And I fully expect that many of their customers do so. Otherwise they probably wouldn’t do it. But I think it goes to show how challenging it can be to make changes to your fundamental value proposition and business model.

I think you need to be very aware of this. Because while it may be tempting to try to change your business model to introduce new revenue streams, cut costs, increase sales, boost your bottom line or whatever, you won’t succeed in it if you’re out of sync with what your customers are expecting.

Don’t ever take even your loyal customers for granted.

(Photo: Pixabay.com)

Dangerous cuts

There is an element of truth to the argument that when asked to make something better it is just as viable to remove something as it is to add more. Albeit harder.

Having said that you need to be careful when you remove something and perhaps even cut back in the process:

First of all you’re relying on your teams ability to change habits and remove the same processes or elements as you suggest. Habits are a tough thing to change so don’t count on it being super easy.

Second, you’re banking on an increased ability to focus on what matters while leaving everything else aside. It is a bit tied to the above, but it still says something about the mental state of your team once you have made the change. It needs to be the right one and persist.

Third, by cutting you’re also in a way removing future options. You’re banking on making the right cuts in order to where you need to go from here. What if the underlying assumptions are wrong and you need to move in a different direction again? Will you be able to?

The above is not so say that it’s a bad idea to innovate by cutting. You just need to be fully aware that if you go down that right, the decision to do the cutting will be by far the easiest part of the transition.

(Photo: Pixabay.com)

Corona thoughts, part 3

It seems to me that a lot of the people who are starting to advocate economic considerations ahead of health-related ones during this pandemic, are some of the same people who were the least prepared for a sudden halt in economic activity. I don’t blame them for wanting to get back to normal ASAP – we all want that to happen.

However, I still think we need to spend time after this is over on the things, we have learned from this. Maybe we should consider whether some of the business school books should be reviewed and refined. Overly complex supply chains, ‘Just in time’-principles and over-optimization of the daily business operations managing cash on a shoestring suddenly seem like brilliant ideas now than they seemed to be just a month ago, right?

I continue to find it shocking (and then, not really for the above reasons, ed.) that otherwise successful and well-run companies can crumble within a week or two. It seems like a lot of businesses were already in essence on major life support as it were, and if the corona pandemic hadn’t pushed to the very edge of the cliff, it was a matter of time before something else would.

(Photo: Pixabay.com)

Stay manageable

Yesterday I met with an former colleague who stepped down from a C-level job to essentially become a landlord renting out spare rooms in his house and making a nice flexible living doing so. It was very inspiring – and surprising.

We took a walk, and he ‘walked’ me through his business and how he operates it. How he essentially tests every little twist and turn with his guests in order to figure out what works and what doesn’t. And how he always keeps his eye on the operational aspect of it all making sure that the operation is as automated as it can get and relies as little as possible on him actually being there to take care of things.

The operational aspect was mindblowing; always staying one step ahead thinking about everything making sure that what you do is manageable from an operations point-of-view – not making it too complex in the process. The idea is fascinating and intellectually stimulating, and I think there is a lot of value to be had there for start-ups by thinking along the same lines to make things efficient, reduce burn-rate etc. I will definitely be working more on that.

(Photo: Pixabay.com)