What's come to my mind as I've thought about these is the coolest product in the world is worthless if you can't connect with a buyer, and, conversely, the minimum required product may be much smaller than you think it is and the level of finish required may be rougher than you expect. Many companies spend countless hours on building the most amazing widget with the assumption that the customers will flock to them, only to be disappointed. Other companies put out something barely distinguishable from cruft, yet they maintain a loyal following. The difference is in the approach to developing customers, or in building a tribe.
Story Time 1: Starting with Customers
We were selling a web content management system for colleges. We initially tried to OEM a product from a partner, but that product failed to meet the needs of our market in so many ways, so we decided to build.
For a variety of reasons, we were actually able to freeze most of the market for nearly two years while development went to work. During that time, we were working very closely with a small set of customers who understood the problem and wanted to be at the bleeding edge of solving it.
As we started to get closer to the release, we brought in new customers to this group. Our initial customers had told us what would resonate with the type of customer we wanted to sell to. With this set of customers, we were able to test that resonance. I was surprised at how strongly this group of customers supported us. We had a small group of customers that were talking positively to other potential customers about our product, and they hadn't even seen it yet.
A Doomed Product?
Release came and, to be completely honest, the quality was...hmm...abysmal seems fitting. We pushed something out the door that we knew wasn't ready, but we were a year late and the market that we had successfully frozen was thawing rapidly.
A poor product, a year late, sales and services not ready for the release, a product manager leaving the company, competition increasing and maturing. Certainly the product was doomed, right?
Our Customers Make Us Succeed
Amazingly, no, it wasn't. It was not an easy year after that release, but we had invested enough in our customers that they wanted to make sure we succeeded. They gave us every opportunity to make things right, continuing to be positive voices for our product even when going through pains caused by us.
Yes, it was in their own interest for us to succeed at some level, but none of these early customers had invested so much in the product that they couldn't have pulled back. Instead, because we focused on really understanding the target market, engaged very deeply with that market, and committed personally to them, we built real relationships. We were leading a tribe and the tribe wanted us to succeed.
Story Time 2: Platform as a Service
I don't have the complete history on this one, as I wasn't there the entire time. I will paint as complete a picture as I can, however. I was not involved with managing this product; I watched this from the proverbial side-lines.
This product was one of the coolest products I've worked with. Even now, I think about what these guys are doing, and I'm impressed. Leveraging the move to the "Cloud", this company is building a web-based development environment. Imagine an environment where you can build incredibly interactive web applications (including drag and drop, dynamic lists, and all sorts of other AJAXian goodness) all within your browser. Now, take it one step further, and imagine that the cool app you just built could be versioned and deployed to the web by clicking the Deploy button. Very impressive stuff, and it really worked!
Build It and They Will Come...Right?
"Yelling at the crowds" is what Seth calls it. We were really good at doing it. The press knew who we were, and they liked us. We talked to a lot of people at trade shows. We gave away a lot of shirts. We even had a podcast. Oh, and we had a freaking amazing product. Surely people would be beating down our door, right?
Lots of people would come check out the product. They'd sign up for an account, tinker for a couple of hours, and disappear. Not very encouraging.
Managers Will Get It!
Well, developers are a religious lot with deep convictions in their development tools, so we'll go to their managers. How could their managers not love the value proposition we are selling? Hire a business dev guy (not calling it sales because we're not an enterprise software company and we will not have a sales staff) to help guide companies in and hire a program manager (oh, hi, that's me) to guide them through and back out again.
We have some luck talking to big names and some luck developing some software for no-names. We have no luck getting big names to try developing (much less buying anything). The no-names are companies so small or project so insignificant that nobody cares. Those companies are there because they are getting custom software for free. Huzzah!
A few months later (a long time at a start-up), and the company suddenly gets a LOT smaller. A month later, and it gets even smaller (oh, bye, that's me). Over the next six months, it continues to get smaller. But this technology is freaking awesome! What happened?
Turns out, we never knew who our customer was. We were so busy building a cool technology that we didn't stop to figure out who was really going to pay for it. Everybody in the company was an engineer, so we didn't need to go outside the company to figure out what to build. We built what we would use (well, not quite, but that's a story for another day). We just kept telling ourselves that every developer is our customer; it's a big pool, so we'll be fine..
For two years, the company was heads down, building an awesome technology, but never stopping to figure out who was going to buy it. They drank their own Kool-aid to the point that they knew people were just going to flock in. All they would need would be a gentle nudge in the right direction. All of their energies were focused inside the company.
Where Did They Go Wrong?
We could talk a lot about the specifics of this case and what went wrong. I think it would make a fascinating case study and maybe one day, I'll sit down with the founder, the CEO, and a few others, and make such a case study. Not today, though.
Instead, we'll paint with a broader brush and identify a few key points:
- Focused Inwards on Technology: It is a great technology, but they told themselves that too many times. They turned all their energy inwards to build it without ever vetting that they could sell it or understanding whom they would sell to. A technology is not a business. Even the employee balance in the company reflected this with well over 50% of the company in engineering.
- Didn't Build a Tribe: They never built a tribe around their product. This product had some unique constraints that made it very hard to build a tribe around. Even today, I'm not sure who the right customer is. If you can't answer that question, you don't have a product. If you don't have a product, you don't have a business.
- Features Weren't Focused: Because there wasn't a targeted customer guiding the development, features weren't prioritized to sell to that customer. Instead, they were prioritized based off of the importance to the technology.
Like I said, I don't know all of the history that lead to this outcome, but I did see the outcome, as of the end of last year. I hope they've addressed these issues, because if they haven't, I would question their ability to succeed.
Wrapping It Up
My experiences are anecdotal, I fully admit. However, they are illustrative of larger patterns that have been documented many times by many people. These are the stories that caused people like Steve Blank and Seth Godin to write what they did.
It is easy to get wrapped up in the product for the product's sake. Doing so is a recipe for disaster. Whether you call it customer development or building a tribe, the end result is that you need to understand who is laying out the cash and why they are willing to do that. Once you do that, you will understand what you need to do to lead them, whether there are five or 500 customers in your tribe.