I recently had a meeting with two senior executives at a very well-respected firm located in Austin TX. These are my favorite kind of meetings: The topic of the meeting was how to do something together that makes a “Big Impact”. And, by Big Impact, we mean that this project would have a significant positive impact on their company, their specific area of the business, their clients and their client’s clients. A win that helps everyone up and down the line. Lastly, by extension, and unspoken, the Big Impact would also help advance their careers in this company.
So, now that the cards are on the table, how do we proceed? These are two capable executives who have successfully implemented projects throughout their careers. But, as they confessed, given they want to create a first in their industry: A webinar-based educational Path to Digital Savvy, they faced two challenges:
1. They were not the most Digital Savvy people to begin with; and
2. Building an educational product in the Digital Age is a new experience for them.
Now, the fun begins. As I told them, here’s the mantra for building anything – a product, service or company – in the Digital Age:
Think Big, Start Small, Scale Fast
& Always, Always Focus On The User Experience
Let’s break it down:
If you can describe the pain that people are experiencing better than they can, then these people are likely to believe that you have the solution. In a Digital Age, this connection between people and their problem, need or desire, can become pure gold. Further, the problem, at first glance, may appear simple or mundane. Think of the tech giants that started out solving a simple, sometimes, obscure problem or two:
• Facebook: People want to connect as groups without a physical gathering.
• Amazon: People want to conveniently buy books for less.
• Google: People want an easy way to find something on the Internet.
• Zappos: People want to buy shoes without going to the store.
• Netflix: People want to rent movies from their home.
• Square: People want to process credit card transactions anytime, anyplace.
• Twitter: People want to broadcast short messages at any time.
• Robinhood: People want to trade stocks without paying commissions.
What’s fascinating about these, and other digital companies like them, is that they leveraged solving a simple problem, need or desire into companies with multi-billion dollar valuations. Further, almost every founder on this list can tell stories about the dozens (or, in Airbnb’s case, hundreds) of rejection letters they received from venture capital firms. Despite this discouragement, these founders and their companies stayed true to their “Think Big” vision and that is why we are talking about them today.
One of the most insightful learning experiences for entrepreneurs is Eric Ries’ definition of a startup in his 2011 book The Lean Startup:
A startup is a human institution designed to create a new
product or service under conditions of extreme uncertainty.
Let’s be clear: Extreme uncertainty is the assumed environment for startup development. As such, Ries’ book outlines a process to resolve this extreme uncertainty by using a process of continuous experiments to create data that constitutes validated learning. These experiments are performed using a Minimum Viable Product (MVP), that is, the smallest version of the product that enables experimentation and valuable user feedback. By implementing continuous experiments through an MVP, the startup engages in a Build – Measure – Learn cycle to help the startup properly define the market need and how their product or service fits this need. Sometimes, the validated data tells the startup their original idea does not work, and that they should “pivot” to address a different need – as defined by validated data from continuous experiments using their MVP in a Build – Measure – Learn process.
Simply put, in any new venture, you do not know what you do not know. The result is that new products and services are best built under a cloak of humility. It is best to assume that even the best idea in the world – the surefire ‘can’t miss’ – will somehow transform once it hits the market.
Therefore, the goal at the early stages of building a new product or service is two-fold:
1. Keep the misses small – because, as they cost time and money, you do usually not get a lot of them; and
2. Learn from experiments, data and failure (yes, there will be failure!) what is the Product – Market Fit is and, just as important, is not.
Lastly, let’s talk about failure. Most experiments will fail. No one likes it, but it is an inevitable part of the startup process. The most important factor in evaluating failure is how it came about. Was it the result of a pig-headed “damn the torpedoes, I’ll show the world I am right” approach? Or, was it part of a systematic, carefully planned and calibrated process of continuous experiments and measurements that created valuable validated data? A pig-headed approach is highly problematic while a process of continuous experiments creates confidence that a management team is responding to the market in a clear, focused and logical manner. Guess which approach gains additional funding?
Today, the cost of a starting a company is often less than $5,000. There are several reasons: The Internet offers low cost incorporation services such as Rocketlawyer.com; low-cost branding services are available through fiverr.com or at brandroot.com; open source (free) software eliminates the need for large up-front software acquisition expenses and startup incubators and accelerators provide low-cost office space, community and mentorship to entrepreneurs. Meanwhile, the Cloud eliminates the need to buy expensive servers and the high cost of maintaining data center infrastructure and personnel. In fact, Cloud companies often give away free Cloud user credits to startups in the hope of retaining their business as they grow.
By far, the most significant of these advantages is the Cloud. There are two ways of looking at the Cloud. The first is the cost savings from no longer needing to build, operate and staff a data center. This benefit is valuable, but it misses the larger second benefit: A company can scale up its product or service at the turn of a dial on an Amazon Web Services (AWS), Microsoft Azure, Google Cloud or IBM Cloud dashboard. The expense, hassle and time commitment of building and expanding a data center is replaced by a flick of the wrist. This immediate and always available flexibility is the most important and dramatic impact of the Cloud.
What this also means is that, from a business point of view, a product or service (from a technology infrastructure standpoint) can quickly scale up from 10 to 10,000 to 100,000 to 1 million users. This means a person creating a new product or service – at an existing company or startup – should “Think Big, Start Small and Scale Quickly.”
ALWAYS, ALWAYS FOCUS ON THE USER EXPERIENCE
Now, these two executives and I have our plan: We will Think Big, Start Small and Scale Fast. Is that it or is there more?
Yes, there is more, and it is the most important step of all because it carries through all of the above steps:
Always, Always Focus On The User Experience
Here’s why: In the Digital Age, one must always remember that the Consumer is King. A competitor’s product is just a website visit away. So, the User Experience (UX) is the most critical piece of all. I often refer to the User Experience as the Digital North Star. As such, I built my definition of Digital Transformation in my book Winning in the Digital Tornado around the User Experience (UX):
The impact on people and business from prioritizing and elevating
the user experience (UX), through the convergence of enabling
information, social collaboration and real-time connectivity.
This means that people are invited to engage with the experience you offer, not brow-beaten until they submit. The risk to the user shifts back to the product or service provider. This means that the product or service is easy to sign up for, easy to learn, enjoyable to use, valuable or rewarding to the user and easy to drop if they are not satisfied.
Digital marketing employs a strategy called “content marketing”, which differs from traditional advertising.
Traditional advertising is repetition-focused. Think of a man standing on the side of the street all day long with a bull-horn to tout his product. In 1885, Thomas Smith wrote a pamphlet entitled Successful Advertising, which provides valuable (and still valid) insights into the human psychology behind modern advertising strategy. Mr. Smith walks us through the thinking of a person viewing the same ad each of the twenty times they see it until, after the twentieth time seeing the ad, they buy the product. These include:
The first time people look at any ad, they don’t even see it.
The second time, they don’t notice it.
The fifth time, they actually read the ad.
The tenth time they ask their friends and neighbors if they’ve tried it.
The twentieth time the prospects see the ad, they buy what is offered.
Back then, if there were ten steps in a process behind a product or service, you shared the first two or three and let the consumer buy the product to learn the remaining steps.
Now, using content marketing, the consumer is treated with more respect. A company places all ten steps into a PDF, video or webinar that can be downloaded or viewed for free by anyone potentially interested in the product or service. The goal is to build authority (that you are the expert in the area) and validation (that you can be trusted to deliver what is promised). The consumer is invited into a relationship with you and rewarded for their interest. Once authority and validation are earned, the consumer will then engage in a transaction with you.
However, Successful Advertising does not focus on what happens during the next twenty times the ad is seen after the person buys the product. But, in a Digital Age, this is a critically important part of the User Experience (UX). The goal, after the purchase, is to build advocacy for the product or service by the consumer. That is, the goal is for the consumer to start telling other people – in personal conversations and with posts on social media – how happy they are with the product or service and how great the company is to work with. This is the most valuable advertising of all – and it’s free!!!
With an approach that emphasizes Think Big, Start Small and Scale Fast combined with Always, Always Focus on the User Experience (UX), a new product or service is poised for success as goals and strategies are properly aligned to fit the development stage of the venture. With this alignment, the product development process is optimized and the probabilities of success are maximized.