Lesson #4: Do Your Homework and Get Candid Feedback
This week I'm going through Pragmatic Marketing training. One of the core things we have been talking about is getting data to support your assumptions on the market, use cases, etc. In my first startup this was the main failure on the business side. We made a major assumption on how the sales model would work. We didn't get sufficient information to either support or refute our assumptions about how people were willing to buy this type of product.
We did some early work with a free tool and got lots of information, but we did not dig enough to truly understand it's implications. We built an online store and assumed that people would buy with credit cards. We didn't have enough info to realize that people were going to want to buy significantly more units at a time than we original assumed. Even more importantly, enterprise customers want to talk to someone in order to buy a product that was over $500. We spent significant time and money to create an online store, integrate it into our back end systems and enable the licensing for this method.
This was a painful issue because it impacted our ability to get wins but the fundamental issue of not making decisions based on data is really an issue that can be seen throughout many organizations. People operate on gut, not on facts. That's great as long as your decisions work out the way you expected. When they don't work out that way you really wish you had some data.
Data is not enough
You need to get people's candid feedback. In our situation, we were a "skunk works" part of the business so most of the exec team did not feel ownership for the decisions we were making. We would present our plans and no one would challenge assumptions that they would have otherwise if they had been directly affected by it. You have to be critical of the data you get so you have confidence in what you have. This is a great quote that Steve Johnson had in his Pragmatic Marketing training this week.
The great thing about fact-based decisions is that they can overrule the hierarchy.
Jeff Bezos - Amazon.com
There is a balance. Don't get to analysis paralysis. Get enough information so you can get a prototype or v.01 out the door. Then you will gather real data on what people think, rev it, and keep moving forward.
What do you think? Is data a critical part of your decision making process?