The more pitches I hear for potentially great new businesses, the more I’m concerned the founders are not paying enough attention to the single most important thing: their customers.
When I look at Channel 10’s Shark Tank I see many strong pitches from some very talented entrepreneurs with very innovative business ideas, but often they focus on the product or the technology
That is important, of course, but if you don’t have a perfectly clear understanding of the job your customer is trying to do with your product or offering, or with those of your competitors, then it’s likely all for nothing.
A fundamental aspect of business is customer centricity, and for very good reason. Look at the companies that are winning, the ones that are growing at incredible rates. The one thing they all have in common is a strong empathy for customer outcomes. They are solving problems for customers and making the customer’s job as effortless as possible.
I’ll give an example. It’s one that is currently being overused but that’s perhaps because it is very compelling. Look at Uber. In a two-sided marketplace they have managed to develop an understanding of the needs of both their driver community and their customers.
For me, Uber is my second car. I have used the service for five years and in nine countries. It is such a success because it’s reliable. It’s like running water; you turn on a tap and you know it will work. So it is consistent, and the transaction is effortless because you don’t need a card or a wallet or cash, you just take the ride.
On the drivers’ side it makes customers easy to find, it employs what was previously an underutilised source of revenue (their cars) and, with embedded navigation, the driver doesn’t even need to know their way around.
Understand the customer’s need
A recent Harvard Business Review article talked about the fact that businesses urgently need to understand the job their customer wants to do.
You might know I’m a 47-year-old American living in Melbourne, but that doesn’t tell you what it is I’m trying to get done. I interact with businesses to get my jobs done, and you need to know what those jobs are.
When you become a founder and you go on the journey of trying to pitch your business or build your business, you need to bake in the knowledge of the job your customer is trying to do.
So how do you best ensure a good understanding of your value to potential customers?
Ensure your DNA is a match
I spend a lot of time in the investment space. From experience I see that successful start-up teams contain three fundamental personas: hipsters, hackers and hustlers.
The hipsters are the cool design guys. The hackers are the people that can build stuff. The hustlers are the people that do everything else, including selling.
As a founder you have to be self-aware and know which one you are, then make sure the others are represented. Most often it is the hipster who has the strong customer empathy.
If a team is full of hackers they’ll build some really cool products but won’t be quite sure who wants them and why it might be of interest to anybody.
So my message for anybody pitching to the Shark Tank sharks, or to anybody else for that matter, is to demonstrate a real grasp for customer value. How will your product or service help the customer do a job better? What is that job the customer wants to do?
There’s a broader narrative here. When Prime Minister Malcolm Turnbull put innovation front and centre, one of the places where the message broke down was how we go from innovation to making a real impact. In other words, how do we make innovation a reality? How do we use it to solve real customer problems? That was never answered and I think that is a reason the message didn’t really resonate.
If founders can demonstrate the fact that they are solving real problems and that they are making people’s lives better, it then becomes very difficult for an investor to say no.
This year at the annual Dreamforce conference in October, Salesforce is offering many sessions tailored to entrepreneurs and small business owners. Definitely worth taking a look and if you can get yourself over there, it will be a trip you'll never forget.