Investors Are Not Customers

There’s something that really makes me cringe when I sit down with a technology company for the first time and they start telling me their pitch. When I talk to anyone for the first time, I always listen and ask lots of questions to try and have a full understanding of not only the goals but the potential pitfalls or holes in the business model. At some point however I always ask the same question: “have you validated this idea with potential users or customers yet?” Sometimes I am pleasantly surprised but most of the time I hear “no” or “our friends and family like it.” Those two answers are completely different and distinct and the focus of this blog post is about the first scenario. To speak specifically to this scenario about “no we haven’t validated with users;”  it’s not necessarily a problem if a company hasn’t validated their idea with users yet. Nothing has been built, it’s still just an idea, no risk no gain. It is a problem though, if this company tries to build a business on this one approach about this singular idea and furthermore is doing so because their investors have already bought into it.

Now, I’m not going to pretend that I know everything about getting a company funded and all the complexities that brings, but I  can speak as a UX practitioner and as someone who – for a living – helps companies in their early stages. One of the biggest and arguably most important things you can do to ensure that you’re making something that people actually want to use, is customer development. Talking to real people who will potentially use your service and figuring out if your idea will solve a big a pain point in their life or work.

Pay Me to Help You Fail

When the conversation turns to, “no we haven’t validated with users” the hardest part of  my job begins: to convince the people in the room why they should validate and test with users before deciding on how to execute their singular idea. It’s not so much that people aren’t accepting of doing validation, it’s that by enabling this process and as a result of this process, the key stakeholders must let go of their original idea to allow for the introduction of new ones. The phrase “fail early and often” comes up a lot in this part of the conversation as we talk about the fact that there are many different ways to execute this idea and part of the point of going through certain steps in the UX process is to eliminate the ones that aren’t working. This makes some people very uncomfortable, because one way that some people look at this is: “so we’re going to pay you to help us fail?” You could look at it like that but the reality is, the process is designed as such to help you figure out how to succeed as quickly as possible. Eliminating what is not working is naturally part of this process. Additionally, there’s a misperception that customer development is time consuming and expensive, which is quite the opposite. At any rate though, would you rather spend thousands of dollars building the wrong thing or would you rather save some of that money by invalidating approaches that don’t gain traction early on?

Do Lean, Don’t Just Talk Lean

The terms and concepts, “User Experience” and “Lean Thinking” have gained so much traction in the past few years but to a large extent they are still misunderstood. They are still buzzwords tossed around in conversations and in meetings. It doesn’t matter if you talk about how “lean” your company is, it only matters if you’re actually enabling a process that is lean.

Investors Need to Think Like UX Practitioners

Back to the point of this blog post, when I hear a company say “no we haven’t validated with users” followed by “and we can’t change our approach because our investors have already bought into it”  - that’s a big red flag and honestly, investors should know better! Even though, I understand that investors invest in companies because of their potential – it’s still unbelievable to me that some investors will give a company money based on a powerpoint presentation or an idea that maybe has been built, but has no customers or traction. I know this is not all investors and I do not mean to generalize, but I do know that this does happen. If some of these investors took a customer development approach to how they interact with the companies they invest in, we might just paint a very different picture.