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Ma2: Guessing Before Feedback On guesses vs. feedback, audience vs. customers, words vs. deeds.

Air date: Tuesday, 20th Oct. 2020, 09 : 35 AM Pacific/US.

Clarification

In Margin 1, we said Margin is 'probably not for you'—but our meaning wasn't clear. It's because Margin will be unprepared remarks by an unprofitable business, which presumably narrows our market considerably. But market segmentation is often a good thing.

1 TOPIC: Guesses before feedback Feedback

Customers have the information that businesses need, but it's hard to get.

Businesses that don't seek and get such feedback will die, eventually.

The paradox is that you can't get feedback from customers, which you 'need', before you have customers.

Reis makes this point:

"Before new products can be sold successfully to the mass market, they have to be sold to early adopters. These people are a special breed of customer. They accept—in fact prefer—an 80 percent solution; you don't need a perfect solution to capture their interest."1

Norris makes this point:

"There is a very big difference between someone entering their email and someone paying you each month for a product. I've consistently discovered that once I launch a product, on page conversions go down. It's easy for someone to enter their email to be notified. It's much harder for someone to sign up, try, and use a new service."2

There's a no-man's-land between your idea and your first customer, and between your first customer and profitability. Until you have customers, you're guessing. Ries calls some of these guesses 'leaps of faith', which need to be tested ASAP. You can't test everything

You are the experiment. Your life is a one-time event.

Spending time on guesses

It's easy to know in retrospect whether your time was well spent or not. It's hard to know in the moment, or in prospect.

There are myriad stories of wasted (business) time. In the beginning, and at other times, you just don't know.

Side note: guessing and intelligence

Guessing is a very interesting sidelight on (natural) intelligence. See Barlow.3 He gives the illustration of a dog learning to correctly guess that certain sounds are the refrigerator opening. More on this to follow in Retraice.

You want to be intelligent

You want to be the most intelligent entrepreneur, don't you? Watch your guesses.

Entrepreneurs everywhere

Even in established companies and positions, being some kind of entrepreneur is preferable.4

Audiences are not necessarily customers

Customers are always an audience, but audiences aren't always customers. Twirl a sign on the street, you get an audience. But customers?

It's different when you turn your audience into a product (as in advertising models). They're still not customers, but they're no longer at risk of being moot—as they are when they pay attention to you, but don't pay you. That said, attention is a kind of currency, by some definitions. Ries5gives four kinds of currency: time, money, skill and passion. His 'time' would correspond roughly to attention.

'Adding value'

At Retraice yesterday, after Margin 1, the rest of the day was 'adding value', a ruined termed.

Ideally, you love and live your business

Norris:

"You should be more excited about Monday than you are about Friday. If that's not the case, there's a good chance things aren't going to work out."6

Even burdensome process fixes are lovable. Liker makes the point:

"The right process will produce the right results."7

So loving the results means, ideally, automatically loving process work.

Of course, business can be done, and done successfully, without love.

What audiences say vs. what they do

An audience will say one thing, and do another. See Dan Norris's harrowing examples.8

How to listen to customers

Listen to what they do, yes. But to do that, you need well-designed experiments.

2 TODAY: more QC

We're improving what can be improved about the first segments, without breaking the process for future segments.

The details you miss—bubbles

Beware the details you miss, which can cost you audience and customers. The Internet is a shopfront.

Example: stickers in windows—and air bubbles.

Customers know what you want to know

Consciously or not, they know what they do or don't like about your business. But they generally can't or won't tell you. You have to get that information, one way or another. It's a recurring problem.

Know about color theory.

References

Barlow, H. B. (2004). Guessing and intelligence. (pp. 382–384). In Gregory (2004).

Gregory, R. L. (Ed.) (2004). The Oxford Companion to the Mind. Oxford University Press, 2nd ed. ISBN: 0198662246. Searches: https://www.amazon.com/s?k=0198662246 https://www.google.com/search?q=isbn+0198662246 https://lccn.loc.gov/2004275127

Liker, J. (2004). The Toyota Way: 14 Management Principles from the World's Greatest Manufacturer. McGraw-Hill. ISBN: 0071392319. Searches: https://www.amazon.com/s?k=0071392319 https://www.google.com/search?q=isbn+0071392319 https://lccn.loc.gov/2004300007

Norris, D. (2014). The 7 Day Startup: You Don't Learn Until You Launch. Dan Norris. ISBN: 978-1502472397. Searches: https://www.amazon.com/s?k=978-1502472397 https://www.google.com/search?q=isbn+978-1502472397

Ries, E. (2011). The Lean Startup. Currency / Crown / Penguin Random House. ISBN: 978-0307887894. Searches: https://www.amazon.com/s?k=978-0307887894 https://www.google.com/search?q=isbn+978-0307887894 https://lccn.loc.gov/2011012100

1Ries (2011) p. 94.

2Norris (2014) p. 49

3Barlow (2004)

4See Ries (2011) e.g. p. 253.

5Ries (2011) p. 215 and p. 298 (note).

6Norris (2014) p. 189.

7Liker (2004) p. 87.

8Norris (2014) pp. 50-51.