Hi there -
Here is this week’s “1 principle, 2 strategies, and 3 actionable tactics” for running lean…
1 Universal Principle
“Stop talking to users.”
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Everyone says: Talk to your users.The underlying logic: Understand how to turn users into customers.
But this seemingly sound advice is actually doing your startup more harm than good.
Here’s why:
2 Underlying Strategies at Play
I. The goal of a startup is to make happy customers, not happy users.
20% is considered a “good” conversion rate from users to customers. This means that 80% of your users will never become customers.
The irony is that even they don’t know that, so when you ask them what they want, they make up stuff they think they want but don’t need, which sets you off on wild goose chases.
II. All happy customers are alike; each unhappy user is unhappy in their own way.
This is my play on the famous opening line from Leo Tolstoy's novel "Anna Karenina": “All happy families are alike; each unhappy family is unhappy in its own way.”
It gets to the core of why you should solely focus on customers to understand how to
- attract early versions of them (the right users) who go on to become customers AND
- repel everyone else.
There are fewer customers than users in any market. Focusing on customers means less work, more learning, and more payoff.
Here’s how to get started:
3 Actionable Tactics
I. Zero to one.
If you’re at the starting gate, you have no customers. So, who do you talk to?
Still not users of your product but customers of the closest existing alternative you’re competing against.
Innovation is fundamentally about causing a switch from an old way to your new way.
Then assess whether you can:
- switch unhappy customers of the old way to your new way OR
- attract unaware early versions of these customers (the right users) to your new way.
II. Land your first 10 customers.
Repeat step 1 to ensure it wasn’t a fluke. And, more importantly, to collect data.
While you may have strong instincts about your ideal early adopter (customer) profile, without evidence, this is still a hypothesis or guess.
Don’t prematurely narrow down, but intentionally cast a wider net to collect evidence.
III. Home-in and expand from there.
Patterns emerge quickly; just 10 “good” customer interviews are enough to build an actionable customer profile.
Remember: All happy customers are alike.
Your goal is to identify the right causal characteristics of customers that distinguish them from users.
Then, home-in and position your product for customers, not users.
That’s all for today. See you next week.
Ash
Author of Running Lean and creator of Lean Canvas
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P.S.
Similarly themed (bad) advice: Start with freemium to learn.
My advice: Start with premium (customers) before freemium (users).
