The Evidology Group Blog

Are You Talking to the Right Customer?

I’ve been building up to this blog for a few weeks now, and I have to get something off my chest. I can’t tell you how many B2B tech companies I’ve met with that get this wrong. Deadly wrong. So wrong that it can – and in many cases has killed companies. How do you pick a target market? Here are three common high-risk approaches that we run into all the time: First-Past-The-Post: Try a few different segments in parallel based on gut feel. See which one gets traction. Then double down on that segment. Trial and Error: Try one segment. See if it gets any traction. If that doesn’t work, try a different segment. Come One, Come All: Go after all segments at once because, after all, everyone will want our product. All these approaches consume a lot of precious time, brain-power and money, undermining the confidence of your employees, Board and investors. Instead, I encourage you to take an evidence-based approach supported by a structured decision-making framework. This doesn’t have to be heavy-weight, but I assure you that investing in a well-informed decision up-front will pay dividends down the road. Let’s explore how to use the SPADE framework that we introduced in our last blog and overlay Evidology’s evidence-based framework. Situation We need to decide which market segment to target with company resources We need to decide two months from today We want to select a segment that is friendly to new technology adoption and has similar technical requirements to adjacent industry segments. We don’t have any year-1 revenue targets from our first segment but we do want to: (a) learn, (b) harden our product in a real-world environment, and (c) secure good reference customers. We want revenues of at least $1M in year 2 from that lead segment. (Note that it doesn’t have to be a big market, just an accessible market at this stage.) People Responsible: VP Product Management Approver: CEO Consulted: Marketing Manager, CTO, VP Engineering, CEO, Advisor/Mentor Informed: All staff, Board of Directors. Alternatives Hold a brainstorming meeting to lay out possible target markets and a description of each segment. List examples of possible friendly companies that are representative of each segment Define the assessment criteria you’ll use to evaluate each segment Complete the Customer Canvas and Conversation Plan Collect real-world evidence for each segment via customer interviews. Decision Regroup the Responsible and Consulted individuals to summarize findings and make a decision based on the assessment criteria Bring the recommendation to the Approver and walk through the approach and findings. Explanation Communicate the methodology and conclusion to the Informed parties. It could take anywhere between one and three months to collect the necessary input from stakeholders across the various market segments. The customer conversation process will help create a relationship with potential lead customers which, in turn, will help propel your sales/partnership journey and the validation you need for your next financing round. For more on our Evidence-Based methodology and help securing your lead customer, please contact the Evidology Group.

June 2, 2020

How Do You Make Better Decisions Faster?

Life as a Founder or product owner is filled with daily decisions to test your leadership – each could make or break your business. In this blog, I’d like to share an excellent framework for your most important decisions. Next week, we’ll talk about how you can apply this tool in a GoToMarket context. In my previous companies, we had a favourite expression that the quality of the decision was directly proportional to the quality of the debate. Stay factual and share your perspective in a respectful and trusting environment – never ever let the discussion get personal. I’m a particular fan of Gokul Rajaram’s SPADE framework that he created many years ago while at Square. It’s simple, easy to apply, and it touches on the important aspects of leadership such as consultation and communication. Moreover, it’s structured enough that you can easily build it into your company culture. In retrospect, we had been following a very similar approach ourselves, in our companies albeit not as formalized. Gokul has conveniently productized the SPADE framework in a handy SaaS offering, that allows distributed organizations to improve their decision-making. SPADE is an acronym for Situation, People, Alternatives, Decision and Explanation. Let’s look at each of the five steps. (I should point out that I’ve made some minor modifications to Gokul’s framework and have simply highlighted those changes with an “*”.) Situation* The start of every decision is a question that needs to be answered such as Which market segment should we pursue? What should we name this product? Set a deadline so that decisions don’t drag on Spell out your criteria to measure success (targets, metrics, objectives and constraints)* People Responsible: Who is responsible for the decision and the execution of the decision? This person typically leads the SPADE process Approver: Who is ultimately responsible for approving the decision? According to Gokul, “Typically, the approver does not vote down the decision itself, rather they veto the quality of the decision” Consulted: Who has a perspective and valuable input that should be included in the decision-making process? Informed: Who should be informed of the decision-making process and outcome* Alternatives Brainstorm to generate a comprehensive set of feasible alternatives For each alternative, list out the pros and cons. Be quantitative and draw on evidence wherever possible. Draw on relative benefits such as High/Medium/Low and consider weighting based on importance Explore ways to mitigate the risk Consider assigning probabilities to possible outcomes for each alternative* Decision Form a recommendation by presenting the alternatives to the team, asking for their feedback and taking people’s input into consideration. On contentious topics, a private vote may be effective Run your recommendation and the process by the Approver Explanation Hold a Commitment Meeting with key stakeholders to communicate the decision. It is paramount that once a decision is made, everybody supports the decision and the whole company pulls in the same direction Prepare a 1-page outline that summarizes the SPADE behind the decision and communicate it to those tagged as “informed” in the People step I believe that tools such as the SPADE framework can help you make better decisions faster with stronger buy-in from your whole team and your Board. Incorporate a decision-making framework like this into your company culture and I think you’ll find your business will be better for it. For more on our Evidence-Based methodology or for help on your Sales and Marketing strategy, please contact us directly.

May 26, 2020

How Do You Make Decisions?

As a Founder or Product Owner how do you go about making decisions? This isn’t so much a philosophical question as much as it is a question of the processes, culture and values of your organization. Although the statistics are rather imprecise, the probability of success for a new business can be intimidating. We believe the overwhelming root cause can be traced back to two fundamental and closely related reasons: Faulty assumptions about the customer Poor decision-making processes used by the leadership team So far, this blog series has spoken at length about the customer discovery process and the importance of partnering with your customers to understand why, what and how they buy. Learning about your customer is a key theme we’ll continue to explore in future posts, but I’d like to take a brief hiatus and turn our attention to how you make decisions. Evidology is a compound word we created to highlight our belief in the importance of an evidence-based methodology as a foundation for your business. Do you have an important decision you need to make? Perhaps it involves your Go-To-Market strategy, lead market segment, product strategy, whether (and where) to pivot, financing options, or human resource management. How you collect evidence and make an informed decision with imprecise information is a daily challenge for you and for others in your organization. Lean Startup Fundamentals Without a doubt, the Lean Startup movement has had a profound impact on innovation for entrepreneurs across industries. It has steered Founders and product owners to develop solutions that closely align with customer requirements, controlling cost and risk along the way. Central to the Lean Startup methodology is an iterative process starting with a hypothesis, testing it, refining it, and actioning it. For some, however, the blinding pursuit of speed and agility has warped the Lean process into a startup culture with quick decision-making and a fix-it-later attitude. Sadly, for 99% of startups, later never comes. The most important aspect of the Lean Startup approach is too easily lost. Going back to the fundamentals: it’s about running an experiment, collecting results, then taking action based on an analysis of those results. This process makes for better decision-making and increases the probability of a successful outcome. The Evidology concept validation framework we’ve discussed in this blog series is a case in point. It starts with collecting evidence to support and refine the hypothesis summarized in your value proposition. This evidence, captured in the Customer Canvas, not only gives you the framework to make effective decisions, but it helps you build a customer rapport to further test and refine your solution and make better decisions faster. Difficult decisions deserve a framework. I hope you will enjoy this fascinating topic and that it, along with our concept validation process, will make a meaningful difference to your business. For more information, please contact the Evidology Group.

May 20, 2020