Why Startups Need to be Humancentric
Entrepreneurs are people who don’t have a shortage of ideas. They’re constantly devising new ways to create value. The very nature of their “idea-driven” personality has become their most significant asset and the most substantial liability.
The trouble with being an ideas-driven person is that we don’t take the time to run those ideas through the gauntlet before testing them thoroughly. We move quickly to our other strength – taking the concept from zero to one.
Clive Butkow shared a list of the Top 20 Reasons Startups Fail, and I found it incredibly interesting to draw comparisons to my experiences as an entrepreneur.
No 1: No Market Need
I’ve been down this road so often it’s scary. Launch day comes, and the sales plans are executed. We wait in anticipation and – nothing – or at least, not enough.
Coupled with this, we start to see that number six on the list is becoming a reality. Our research said people would pay for the product, but not at the price we could produce the product.
The small starting market we had, found the price too high, and we cannot find the market to generate our sales through.
At this point, I want to suggest a more in-depth dive into your research than “who is my customer.” Best practice talks about market segmentation, consumer research and persona development. While these are all valuable, they are not the endpoint we need. The endpoint is a buying customer – so the question I ask is “who is ready to buy this product” an even better one would be “who is ready to buy this now and wait for me to build it?”
I call this Audience Readiness and the best way to test audience readiness it to sell the product. The ultimate display of product value is when people part with money to attain that value.
In short: Make the sale in your research – don’t stop at an interested buyer. There is too much that goes wrong between an interested buyer and an actual purchase.
No 6. User Un-Friendly Product
It’s important to note that more startups fail due to un-friendly products than because of financing issues or investor interest. In my experience, I often watched a startup make decisions to forego well thought through user experiences in favour of rushing the development process and getting to market faster. I understand that rationale entirely – you need to get to market quickly. Still, the research is suggesting that you can’t bypass user experience for the sake of getting to market faster.
The trouble is that most user-journey processes take ages to implement. It’s precious time entrepreneurs don’t have. To tackle this issue, I developed a straightforward framework as part of my Humancentric Framework that helps you quickly generate a list of actions you can take to develop a more user-friendly project. My view is simple – go back to the people and build with them in mind. I don’t mean long laborious research surveys and focus groups with you and the customer (although that is always a good idea). I have three questions you need to answer that will immediately show you what your product means to people:
1) What do people need
2) What do people want
3) How do people interact
Considering all these questions helps you develop a simple action plan to build a product that people will intrinsically be happy to use. It’s not about designing an interface – it’s about creating a product people want/need to use in a space that they find comfortable and safe.
No. 8: Poor Marketing
I believe that marketing should be built in a way that it is not an expense to the business. That marketing is embedded in the product or the sales pipeline we create.
Growth hackers are the leaders in this philosophy (or they should be). Growth hackers are more interested in the sale than awareness. However, they leverage technology to exploit the networks, payment methods and communication tools of potential customers. They leverage these tools to create a process that as people use and experience the product, they are by default selling the product for the growth hacker. The most notable examples of this are how Mailchimp and Dropbox have embedded their marketing and sales directly into their freemium business models, helping them become very profitable businesses with a good customer base.
Most people don’t like spending on marketing because its expensive. It is essential then to build marketing into your product or to build revenue from your marketing to sustain the marketing for the long term and develop the right customer base for your products.
It’s much easier said than done.
Mike is the author of Humancentric, which provides a framework to explore the issues discussed in this article.