Overzealous Customer Centricity
Problems in Dreamland zeroes in on the operational reasons once promising startups melt down - and how to avoid it. This is perfect for founders, leadership teams, or anyone in a highly cross functional IC role (Chiefs of Staff, product managers, biz ops, etc).
The second meltdown trigger: overzealous customer centricity
Customer centricity wasn't always the obvious way to build a winning startup. When Jeff Bezos published Amazon's first shareholder letter as a publicly traded company in 1997, it included some concepts that were considered radical at the time, with statements like "focus relentlessly on our customers" and an entire section on how to "obsess over our customers."
These ideas were seeping into the startup mainstream in the late 2000s when I was at redbox (they inspired us to create our first executive level customer experience role, unifying product, marketing, and partnerships) but they didn't really gain near universal traction until after the launch of Marty Cagan's Inspired (first edition) in 2008. It took customer centricity from a concept to an operating model that product teams could implement. I embraced it enthusiastically while I was at RetailMeNot in the early 2010s.
Customer centricity works. It has minted many a unicorn, and even a few decacorns. One of the most public adherents is Brian Chesky of Airbnb. The very first episode ever of Masters of Scale (Do things that don't scale) is fascinating, and focuses in on the merits of "handcrafting" experiences early on and aiming for "11 star experiences" (5 stars is too modest if you want to redefine or create an entirely new segment).
The internet is also littered with counter examples, of those who refused to focus on the customer (anyone remember the Microsoft Zune....? No? There's a reason for that).
But now I can't even remember the last time I walked into a startup that didn't at least claim to be customer centric, and in most cases those claims are backed up by a frenzy of customer research activities.
But from that enthusiasm a new problem has emerged that shows no sign of abating - overzealous customer centricity.
This is when nearly every department - marketing, sales, product, design, CS, business intelligence, etc - claims to speak for the customer, to have some type of unique insight that no one else has (often guarded jealously), and is comfortable using "the customer" as a way to get what they want. Sometimes with an ulterior motive, sometimes not.
It's not even accurate to call this customer centricity anymore - maybe customer multi-polarity is more appropriate. Because when this happens, there is no center, there is no unified and shared understanding of what is true about the customer (or what we agree to be true).
This fracturing is exacerbated if your startup is suffering from the affliction of silos and civilizations.
Have you been in a meeting recently where someone said, "we talked to customers, and what they want is [x]" and almost immediately someone else chimes in and says "no, when I talked to this customer and that customer they said their problem was [y]" and then before there's a pause yet another person breaks in and says "no, no, no the data says what they want is [z]."
That's a problem. You have a problem.
So how do we solve overzealous customer multi-polarity and return to a place of centricity?
Let's step back. Why do we aspire to be customer centric in the first place? The first Amazon shareholder letter frames it up nicely - it's to make better decisions that generate durable long term value.
But, we can't make better decisions when there is no shared model of who the customer is, how they make decisions, what jobs your product is doing for them, and the like. The lack of a shared understanding causes confusion and isn't a neutral factor, but actually a heavy negative. It slows down the speed of decision making dramatically and lowers the quality of the decisions made.
To get back to a shared model of understanding the customer - reestablish the centricity - three things must happen:
Understand why different teams or individuals who speak for the customer have a different understanding of the customer - they have different methodologies.
The simplest and most common breakpoint is quantitative vs qualitative methods. Quant types (BI analysts and the like) tend not to trust anything that isn't hard numbers. To them, qualitative = soft and squishy = I'm just listening to someone else's opinion dressed up as customer insight. Qualitative types (design researchers and such) tend to believe that the hard data can't tell you much about the customer's emotions or mental models, and that is where the real actionable insight lies.
But the schism goes deeper than the top level quant vs qual argument. There are digital advertising experiments, focus groups, market research surveys, customer interviews, prototypes, generative research, usability testing, A/B testing, sales conversations, win/loss analysis, mystery shopping, customer service tickets, social media chatter, customer success quarterly reviews, escalations and save conversations, cancellation notes, events, customer roundtables, etc (and it goes on). They all tell us something useful about the customer.
Which one is right? None of them. They are all different perspectives and lens that tell part of the story about the customer, but alone are not enough to really understand the customer fully.
Note - this is not to imply that you need to implement all these methods. Only some will be appropriate for your customer, product, and scale. The amount of times I've seen early B2B startups waste a bunch of energy on A/B testing only to realize they don't have anywhere near the scale to get to stat sig quickly makes me want to punch myself in the face. But I digress.
Someone needs to be accountable for synthesizing these different perspectives. This can be anyone, anywhere in the org, as long as they have several critical skillsets:
They are fluent in multiple customer research languages. At the most basic, they must be able to speak quant and qual. They don't have to be able to conduct both types, but they have to be able to assess the validity of the methods and interrogate the results for veracity and reliability.
They are respected cross functionally and have high informal influence. They will be representing the work of others, and must be seen as not having any ulterior motives except to represent the truth about the customer to the best of their ability. It is often useful to have this be someone is who is not making decisions based on the data, to limit chances for bias.
They must be excellent communicators - written, verbal, group, one on one. They will be influencing and teaching. Even if you synthesize, if no one understands, it will not drive better decisions, and it's all for naught.
Communicate, communicate, communicate. These synthesized understanding must go beyond the executive team. Too often there is a readout on customer insights to the leadership group, then a lazy assumption that this knowledge will auto-magically percolate throughout the company.
If these challenges ring true, and you want to set up a customer centricity program - vs just chaotic customer zealousness - contact the Lemonade Stand.
Problems in Dreamland is a five part series:
Overzealous customer centricity
Lack of... squirrel! ...focus. Seriously, focus.
Stumbling over the second act
Who's the boss... really?
