Customer Feedback Rocks

Why guess what people want, when you can ask them and know?

A team of engineers from a big corporation recently pitched me a device that helps you take the perfect selfie. They planned to market ‘the smart mirror’ to women, so I asked what women thought of the product. They replied that they’d asked a colleague and she liked it.

I took a deep breath. The moment was a learning opportunity. I may have gotten a little poetic on the topic of knowing your customer. On the practical side, I got out my phone and gave them a few people to call. One of them was Simone Moelle, an influencer I know in Copenhagen.

Time spent in reconnaissance is seldom wasted

They started our second meeting by telling me how many women they had asked for feedback, that their data indicated men take more selfies than women, and that Simone, the influencer I told them to contact, had taught them a lot. It was amazing what a bit of customer feedback could do.

Our discussion changed from “why do this?” to “how can you turn this into a big business opportunity?” It was a completely different discussion, made possible by knowledge about the customer. You can argue for or against options based on data. Informed assumptions can replace guessing.

Data is key

Some of this data had been harder to get than others and it taught several interesting lessons. Their cold calls to Swedish influencers went unanswered. I assumed influencers would pick up the phone when a big corporation called, because there might be money to make. The only reply, however, came from the Dane to whom I had introduced them.

The team knew plenty of women. Plenty of women work at their company. They’re not the first product team to forget to include the user in their process. It was good to see was how quickly they corrected their mistake. People are capable of change.

Invest in people, not products

You don’t have to watch a lot of “Shark Tank” to see why people say, “invest in people, not products”. It takes a lot of hard work to turn an idea into something people will buy. That hard work involves correcting a lot of mistakes, like forgetting to include the user in the product development process. You need to know how to make and correct mistakes.

For some, asking for feedback is hard

They brought their prototype to our third meeting. We were in Sweden, so I asked the obvious question. Yes, the mirror was from Ikea. I asked the obvious follow-on question, whether they had contacted Ikea’s product development people just up the road.

Five minutes later, one of the team admitted that his wife worked for, you guessed it, Ikea’s product development team. Based on the team’s prior performance, I have faith that their next pitch will include feedback from a certain furniture company.

Misunderestimating Women Has a Price

A tale of opportunities missed – and what we did about it.

I prefer to work with people I like, and I really like the team behind Hooves (hoovesapp.com). There’s no guessing where Hooves will end up, but they work hard, have a great idea, and the last year has been a lot of fun. They also happen to be women, so last year I taught Hooves not to smile.

Ninety percent of mentoring women in startups is the same as mentoring men. The last ten percent is not. I don’t have to mentor men on how to deal with investors who don’t take them seriously because they’re men. I don’t have to mentor men on how to present their product or service to investors who don’t understand men.

Misunderestimation is a common mistake

Alina and Suvi, the two founders of Hooves, fit a lot of our stereotypes about horse people. Both are young, female, outgoing, and blonde. Danes would call them ‘hestepiger’ – or ‘horse girls’. A lot of investors they met dismissed them to talk instead to introverted young men with glasses or overconfident fast talking salesmen types.

We changed the pitch

Just before the summer, we changed two things in their pitch – their focus and their delivery. Many pitches spend either too long on the problem or focus too specifically on their initial solution. The first Hooves application matches people who own horses with people who want to ride horses. The big opportunity the company presents, however, is digitizing an industry more than three times bigger than golf. That’s what they pitch now.

They also changed how they pitch

The world expects women to smile, so Alina and Suvi stopped smiling. You don’t have to be Harvey Weinstein to be a jerk to women. Too many investors of both sexes we spoke with referred to Hooves as the “horse girls”. A wardrobe change to black helped, but I think the big shift came when they stopped smiling.

Now people listen

My data is limited, but an investor recently said that half way through his meeting with Hooves he started wondering what he had done wrong. “They’re so serious”, he told me. I let him in on the secret and he nodded. Hooves are getting more meetings and, as of this week, have raised half of their next round.

Investors have been throwing money at golf concepts, because they know it’s a rich sport and it’s one they play. Hooves isn’t about innovating part of a sport, it’s about making lots of money and that’s what they pitch. Plenty of people seem to be able to find the opportunity in imperfect pitches, so why couldn’t they see the play in Hooves?

Stand back, the ladies are coming through

At an investor event where the pitching companies got access to the stage an hour before, I watched them practice their pitch over and over while other presenters just wandered around. They knew exactly where the sightline was between offstage and on stage and when the audience would first see them. They work harder.

Life is short and we spend a lot of time at work. I prefer to work with people I like. These ladies are kicking it.

Show Them The Money

It pays to know more than one language: Speak numbers.

I hosted a case competition called the CBS Finance Competition a while back at Copenhagen Business School and it was an eye-opener. The case was the Danish manufacturer Danfoss and the focus was their acquisition of startups. Two things stuck out: it was a boys club and it was all about the numbers.

It’s a pickle party

Do not confuse the society we want with the society we have. All twelve of the participants in the competition were white men in dark suits. There were only two women in the first two rows of the auditorium. Both worked in HR. All of the men wore dark suits, except for the professor, who wore a blue blazer, and a member of the Danfoss merger team, whose suit was gray.

Plan for today. Change tomorrow.

By all means be depressed by the current gender-gap and work to change it, but plan based on fact, not aspiration. Danfoss is an impressive company and they’re socially engaged, but facts are facts. If you’re looking for a corporate acquirer, know that the odds are overwhelming that you’ll be talking to a white man who studied finance. The ratio will change in the future, but plan for the ratio that exists now.

Your focus isn’t their focus – and this makes sense

Startups often focus on team and product. Most corporate investors focus on the numbers. They are buying for very specific reasons and usually have very specific KPIs. They may be how many customers you have or the size of the markets to which your product will give them access.

Like the jury in the competition, you’ll most likely be talking to finance people. Their degrees, surprise, surprise, are usually in finance. The exceptions work in an environment dominated by finance. To them, your product is not something that does A for B, but something that can generate X revenue over Y time. Know how to talk their language.

It’s all about the Benjamins

I ran into an old friend shortly afterwards who used to run an accelerator. After a year off spent working for a corporate, he had spent a couple of months helping a handful of his companies raise money. It had gone well. Why? He’d spent a year working on the other side of the table from the startups.

“You can talk about team and product,” he said, “but it’s all about the money.”

 

Be Different

Sometimes you need to break with the herd

I’m a big fan of different. I like different types of food. I like different types of music. I like living in different countries. I also like mentors who take different approaches to a problem.

As well as being a mentor, I run mentor panel sessions. Mentors don’t take to managing much, and some sessions go sideways. One of the toughest mentor situations I’ve ever seen involved two people who I really like.

There’s a storm coming

Five years ago, Navid was an entrepreneur. We humans are flock beasts and his company was one that we saw a lot of five years ago. Their platform helped small stores connect with customers by helping them advertise, sell, offer discounts, and more. Their journey was an all uphill battle.

Cometh the hour, cometh the man

The other person was Peder. He’s an ex-corporate finance guy who did well with a startup he founded and now he’s an active mentor. I introduced them to each other at a mentor session where a panel was going to try to help Navid solve his company’s problems.

Game over

The meeting was brutal. Navid was late. His presentation was not good. Worst of all, none of it was really his fault. Most people who try Navid’s concept, and there have been a lot of them, find out that it’s incredibly hard to execute. The two-hour session ended after just an hour with the panel unanimously declaring that the company should close.

Startups are personal

Navid was crushed. A lot of the feedback had been personal, some of it unfairly so. The session had been hard to manage. ‘Tough love’ has its place, but sometimes mentors try harder to impress the other mentors than to help the startups. Peder used the final round of feedback to reset the mentoring session and fix the balance.

This will be hard, let me help

Peder zigged when everyone else zagged. Six mentors in a row said that Navid should close up shop. Peder agreed and then pointed out that Navid now faced the task of telling his team that the game was over. This was going to be tough, Peder said, and then he offered to help Navid with that conversation.

Sometimes people need more than tough love

It was the first helping hand had anyone had offered Navid since he walked in the door. The panel had scented red meat and gone for it. Yes, the concept was flawed and everyone including Navid knew it. The panel did him a huge service by getting him to see it was time to cut his losses. But now he needed a little humanity.

Startups are about people

Peder saw the person who was going to have to tell his co-founders they had to close the company and offered to help. It was a big moment. You could see almost everyone in the room lean back in recognition of the kindness in the gesture and think,

“Damn, I wish I had said that”.

”All Your Bases Are Belonging to Us”

Relationships fail. Breaking up can be ugly. Get a pre-nup.

I recently went through a founder bust-up of my own. As a mentor, I’ve seen hundreds, and I disagree with Tolstoy. He famously said that all happy families are alike, but each unhappy family is different. I think founder bust-ups are banal in their similarity.

Founding a company requires faith and founder alignment. No amount of preparation, however, can predict or replace the experience gained from events. Some relationships survive events. Some relationships grow. Other relationships do neither. Be prepared.

Dating vs. Being Engaged vs. Being Married

Everyone needs to be clear on which status applies. I’m an enthusiast. This can be dangerous, so I have a partner, Peder, who keeps me on the straight and narrow. Peder made sure we all were just dating. We talked a lot about what it would take for us to tie the knot with the other guy and how to quantify the decision. KPIs work the same way that the concept of breaking distance does, so you can stop or change direction in time to avoid a crash.

“Get a pre-nup”

We advise founders to write pre-nups. Like Peder, one of my recurring concerns with the project was probably always that we saw the business differently from the other guy. In this, we were completely normal. It’s utterly common for one person to be more invested in a relationship than the other. The trick is ensuring that there isn’t a major imbalance.

Things didn’t work out

It didn’t go the way we hoped. The concept we had hoped to map from the other guy’s city to ours proved to need a lot of adjustments. The list of compromises both sides had to make got longer and longer. The other guy started handing out ultimatums.

We all want to be respectful and mature, but…

Founder bust-ups are usually emotional, much like romantic bust-ups. We said something along the lines of “it’s not you, it’s me” and “let’s just be friends”. Perhaps unsurprisingly, that didn’t go over so well.

Game over

Our friend was furious. He immediately blocked our email and social media accounts. He demanded all the assets. The situation was just like founder bust-ups everywhere. It could have been a big mess. The fallout has been minor, however, because we kept our breaking distance.

Lessons learned

As a mentor, it’s good to have first hand experience and to occasionally renew old lessons learned. It was interesting to be in the middle of something we see startups wrestle with all the time. We never reached the pre-nup stage, because we never became full-fledged co-founders. There was plenty in the break up, however, to remind us why an agreement on how you manage a founder-split is a really good idea. It’s good advice to take and to give.

“They Didn’t Do As I Said!”

Action shot of me facilitating an investor panel and explaining what not to do.

A pitch doesn’t have to be perfect to work

Startup mentors spend a lot of time giving pitch advice. The advice given spans everything from format and content to delivery and even personal wardrobe choices. Some of the advice is good and a lot of it is not, but in defense of the well-meaning mentor, it is worth noting that the target – the right message delivered the right way to the right audience – can be hard to hit.

“Thank you for a really good pitch…”

Take for example, a pitch I heard recently while running an investor panel in Gothenburg, Sweden. The pitch was awful, and yet it really caught the panel’s attention. The pitch was vague. It was long on the problem and short on the value created, but Swedes are unfailingly polite. Each investor started their feedback by saying ‘thank you for a really good pitch’, before asking some rather revealing questions.

The first investor said he didn’t understand the product. The second investor agreed with the first and said that she didn’t understand the business model. The third agreed with her predecessors and said that she didn’t understand how the product was sold. The pitch looked like a disaster.

Sometimes ugly works

The fourth agreed with all of his colleagues, but then said that he wanted to meet with the company after the session. Why, you ask? Because they had 10,000 B2B customers, that’s why. He said he wanted to know what the customers understood that the company had been unable to explain to the investors. The other three investors all agreed.

Traction is king.

“Your Value Proposition is Unclear”

0iijeltgvzm-marc-guellerinThere are many ways to be a mentor, but basics are easy. Try to help and don’t be a jerk.

It’s almost Christmas as I write this. A few miles north of where I sit, my namesake is checking his list to see whether each and every one of us has been naughty or nice. Most of us could do with some help on the nice side, so if you’re a mentor, remember the first rule of mentoring: Don’t be a jerk.

We like being right
I meet loads of people who call themselves experts. A surprising number of them are actually quite knowledgeable. Quite a few of these even manage to translate this knowledge into something that provides value to others. Many, however, don’t help at all.

Translating knowledge into words that can be communicated, understood, and applied is hard. The temptation to play the know-it-all is overpowering to some. Far too many of us can’t help ourselves. We feel the need to prove we’re right. Our quick tongues can’t resist the urge to put down or ridicule. Our desire to help loses to a need to be recognized as clever.

Any fool can point out the problems
Too many mentors think our role is to point out all the problems. Entrepreneurs know startups are hard. If they don’t, time will teach them soon enough. They may have missed some nuances or completely missed something vital, but when they come to us, almost all of them come for help.

They’re looking for answers
They need help getting stuff done. They need solutions. There’s nothing wrong with helping them identify the problems, if that’s the phase they’re in – or if they’ve missed something big. Usually startups have a specific pain. It may be assistance in pinpointing where exactly they need help, but then they need the answer – or our advice on where to find it.

Answers that help, delivered so they can be used
Too many of us spend more time tearing down than building up. The American practice of sandwiching bad news in between good may seem superficial, but it can make advice easier to absorb and accept. Entrepreneurs are touchy about their startups.

Sometimes it’s not all about you
Half an hour of being told you’re an idiot makes people defensive and unreceptive to new ideas. Who knew? Sometimes dialing back the criticism makes it easier for us to make our point and provide help that makes a difference. No matter what your approach, follow the first rule of mentoring. Remember that we’re here to help. Don’t be a jerk.

One Plus One Equals Three

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Mentoring can be a lonely business. If you’re not matching your mentors in pairs, you’re missing out.

Pairing mentors is a straightforward way to give mentors value beyond what they get from meeting one-on-one with startups. Mentor programs are ten a penny these days and programs have to stand out to get the good mentors to commit. Most programs struggle to explain the value their mentors – and often struggle to provide real value in practice. Pair mentoring is a powerful, but often overlooked tool.

Why pair your mentors?

Networking is an oft-listed benefit for mentors, but few programs do it well. It’s one thing to get to know each other over a drink at a mentor event. It is something else entirely to share a mentoring experience – and more professionally relevant than playing golf. Pair your mentors to help them get to know each other. Let them show off what they can do to each other as well as your teams.

Matching your mentors binds them to each other and to your program

It’s a powerful thing when your mentors say, “we met as mentors for X”. It’s even stronger when their common experience isn’t just tied to the teams, but to each other. The answer isn’t more barbecues or more beer. The answer is letting them to work together.

Create commitment

Pairing with other mentors to work with your teams can help drive commitment on a practical level. It’s one thing to cancel on a startup no one knows and another to cancel on a fellow mentor who you know.

Create connection through common experience

Team-building consultancies have known for years that making people do something together that is hard builds bonds. Some of it is cognitive dissonance: we often put greater value on things that are hard. We also tend to value things our peers value, and a second mentor at your mentor sessions can make a big difference in how your mentors experience your sessions.

Your mentor sessions can give mentors something meaningful, especially because they’re built on professional experience with more direct relevance than a building a two-rope bridge or paddling a canoe. The company they help may actually succeed. The lessons they learn may be directly applicable in their work.

Let your mentors show each other what they can do

We all know people who talk a good game over a beer, but then give vanilla mentoring advice. Any fool can tell someone their value proposition is unclear. Give your mentors a chance to show each other how good they are at explaining the options in a term sheet. Let them show each other how they improve a pitch.

Meaningful “In Real Life” experiences are always in short supply. Let your mentors show their skills and you’ll be giving them a unique opportunity. It will help them, your startups and your whole program.

Make the Introduction Instead of the Argument

Introductions are often better than advice

”Don’t touch that!”

”Why not?”

”It’s hot. You’ll burn yourself”

”How do you know?”

Giving advice is usually rather straight forward. Explaining why the advice is valid and should be followed is often the bigger task. Sometimes the best advice a mentor can give a startup is an introduction.

Why should I listen to you?

It’s a good question, and frequently, my answer is ”Don’t”. My network is big enough that I almost always know someone who knows more about what you just asked than me. The same goes for most good mentors.

You want to start a business tracking boxes for moving firms? I know a handful of companies that do that for the retail and delivery industries. Ask them for advice. You want to talk about raising money from Investor X? Let me introduce you to these three companies that have them as investors.

Is your question about legal, accounting or IPR?

Math ain’t just adding and subtracting. There are lots of accountants, but only some of them understand startup accounting, let alone startup investments. IPR is about way more than filing patents. Your copyright may be filed correctly, but making the competition care is another matter.

Lawyers come by the dozen, but only some of them understand startup term sheets. It’s sad to see lawyers aggressively trying to gain every advantage possible for investor clients. They don’t seem realize that an unequal deal does their client no good when it removes the startup’s motivation to work hard.

Some startups are hard to reach

Sometimes it’s not worth the fight to beat knowledge into someone’s head. Sometimes they need time to let the wisdom seep in. Sometimes the best way to get someone to see something is to change the messenger. And sometimes, someone else’s answer is not only better phrased, but just plain better.

Make the introduction instead of the argument.