Beware of the Word "Interesting"

by Evan Shore (republished from his personal blog)

Towards the end of our conversation, Jeff Immelt patted me on the back and said, “Interesting.” After I probed further, he continued, “It’s a good idea, and I think I can see the benefit. I just need to think more about it.” I wondered, as I did during the past several conversations with potential customers, how I could advance from hearing “interesting” to “interested.”

CONTEXT: CUSTOMER DISCOVERY INTERVIEWS

Several months ago, I set out on a quest to understand the specific pain-points that corporations face when it comes to Innovation. I interviewed the CEOs and C-Suite executives of over 40 companies. Most executives identified the same problem: “The single greatest challenge for us is identifying and executing innovations outside the boundaries of our business models.”

I had a vision for a new type of open innovation intermediary that stemmed from my exposure to IDEO, Innocentive, Gen3 Partners, contests like GE’s Ecomagination Challenge, and other platforms that enable corporations to externally-source ideas and IP/technology. I hypothesized that implementation, not ideas, was the main hurdle that corporations faced. I envisioned an intermediary that would enable corporations to use open innovation techniques to effectively crowd-source the execution of new businesses (not just ideas) that fall outside the scope of their capabilities and focus. This is the idea that Jeff Immelt thought was so “interesting.”

WHAT DOES THE WORD “INTERESTING” MEAN?

Interesting means you have not yet found product-market fit. Someone on the GE team commented, “Interesting means it just passed the laugh test.” It means “intellectually stimulating, but I don’t feel in my gut exactly how this applies to me.” If you hear the word, your idea resonates logically with your audience and is likely a novel idea, but they are still processing the information in their heads. You are not speaking with a “mission-critical” customer desperate for your solution, and the value proposition of your offering is not yet specific, tangible, and easy to blend into the audience’s current way of doing things.

WHEN POTENTIAL CUSTOMERS SAY INTERESTING…

1) Check to see if you are speaking with the right person.

In some cases, I was not speaking with the people directly responsible for innovation or growth strategy. Therefore, they did not feel pain points directly, and our conversations occurred just on an intellectual level.

2) Pivot using the Innovator’s Cube.

Three things must be aligned to achieve product-market fit:

1. A firm understanding of the problem-to-solve (pain points)
2. Specific selection of customers (ranked on degree of problem severity)
3. Products/services with a clear value proposition specifically addressing these problems

The word “interesting” indicates that you have not yet found the right box on the Innovator’s Cube:

3) Target different customers or segment your customers more specifically, looking for indications of “must-have” rather than “nice-to-have.”

At first, I did not know who my initial customers would be. I actually started to characterize firms based on whether the word “interesting” was said in the interview.

I discovered that the degree to which customers 1) have a problem, 2) realize they have the problem, 3) are actively looking for a solution, or 4) have access to a solution depends largely on both their size and stage in the lifecycle of their product(s). Fast-growing entrepreneurial firms were so focused on growing their core that they did not recognize any problems. Larger firms generally had the capabilities to manage multiple business units and therefore execute out-of-the-box businesses through Clayton Christensen’s “Innovator’s Solution” (create a separate business unit to explore new territories). The only potential customers who did not say “Interesting,” but rather “Got it. I need this” were those who managed mid-sized firms with declining growth. I hypothesized that because these firms did not have the experience or bandwidth to set up their own “separate group,” these firms would be the “earlyvangelists” for whom Crowd-Sourcing the Innovator’s Solution would be “mission critical.”

4) Probe deeper for customers’ pain points.

“Interesting” means the person does not see how your product fits with their needs. I found that asking CEOs to tell stories about their experiences with out-of-the-box innovation was a helpful way to initially define pain points, and later to qualify potential customers. I usually heard “interesting” when customer needs did not match up with my product vision. After hearing “interesting,” I knew I could gain valuable information that could be useful not only in selling to them later on, but also in determining if they had any “must have” pain points that I could address with a different product.

5) Ask for their concerns.

Even if the product does address their specific pain points, potential customers might say the word “interesting” if they perceive that the proposed solution may create secondary, undesirable consequences.

Some sources of resistance that I encountered involved: IP protection, cultural and organizational barriers to open innovation (e.g., not-invented-here syndrome), the potential to reveal strategically-sensitive information to competitors, an unwillingness to allocate time or resources on initiatives outside the core businesses, an insular sense that “we are already innovative,” a value-claiming mindset resistant to sharing some value with other players in order to grow the pie, and whether corporations have the vision to tightly define out-of-the-box problems for others to solve. All of these issues were usually resolved after additional discussion but may have accounted for the high frequency of the word “interesting.”

6) Refine your product vision, and build a prototype.

Eric Ries said, “You should sell your product before you build it.” However, simply describing my product verbally resulted in a number of “interesting” responses, as people had difficulty envisioning the product. I built prototypes to communicate the vision more tangibly. As I learned more about potential customers’ pain points and probed into their objections (i.e., why my product does not solve their problems), I pivoted around different product permutations.

Three of the four iterations of my product vision included:

1. An incubator for corporate innovations,
2. A website that aggregates corporate contests (such as GE’s Ecomagination Challenge and Avery Dennison’s website for idea submissions), and
3. A consulting firm that facilitates Collaborative Innovation among corporate clients, entrepreneurs, and other institutions (discussed below).

Presenting these ideas using websites and PowerPoint decks provided valuable conversation pieces for my interviews.

Each product iteration had its own set of hypotheses about how to solve problems for particular customers. For example, the contest aggregator solves the problem that smaller corporations may face of not garnering enough participation/awareness for their innovation challenges (in addition to the overarching Innovator’s Dilemma problem). GE does not feel this pain point acutely because it has the prestige and size to garner enough submissions for its Ecomagination Challenge. Therefore, Jeff Immelt’s reaction to this particular idea was that it is “interesting.” By contrast, some of the smaller firms I spoke with said, “My firm is facing this exact issue. I like this a lot.”

WHEN POTENTIAL CORPORATE PARTNERS SAY INTERESTING…

The hurdle to overcome “interesting” when pursuing partnerships is much higher than attracting initial customers, because it is not their problem that you are trying to solve. Instead, potential partners view the partnership as a potential opportunity, rather than the resolution of a pain point.

1) The proposed business model must fit snugly into the operations of the potential partner.

I pitched one of the large consulting companies to start its Collaborative Innovation Practice based on this concept. The business model I had initially envisioned conflicted with its fee-for-service consulting model, and I heard the word “interesting” in my initial meeting. It was tempting to remain firm with my product vision, but I felt it was important to leverage the firm’s client base and saw alternative models for implementation. I pivoted the product concept to still deliver on the desired customer value proposition, but in line with the consulting firm’s business model. I did not hear the word “interesting” in my next meeting and the idea is now gaining internal momentum.

2) There is a higher hurdle for minimum viable product quality. The final presentation to senior management of the consulting firm included a fully-baked plan for implementation, including exact service offerings, points of accountability within the firm, and expected client pricing structures. This hurdle could potentially limit the ability to pivot once approved internally but was necessary in order to have a chance of implementation.

3) Involve a champion at the partner firm whose role and personal motivations are aligned with your business.

I involved someone very early on in the process who had credibility with senior management, knew how to navigate the politics of the firm, and whose interests were fully aligned.

I would appreciate your feedback on this blog post, as long as you do not tell me it is “interesting.”

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Launching a Tech Venture, One Iteration at a Time

by Rosemary Kendrick & Aleem Mawani

It’s been, well, a very rewarding semester working on Rewardly.  As we reflect on the main tools we employed this semester—merchant interviews, business model generation, generating mockups, and developing a prototype—we have a few takeaways we’d like to share.

First off, when it comes to interviewing local businesses, be prepared to throw enough darts.  Local business managers are tough to pin down with understandably ever-shifting schedules, so we found ourselves juggling a bunch of cancellations and rescheduling.  It’s helpful to remember that the customer discovery process is a sales process: you start with a lot of cold leads, eventually secure enough interviews, and then ultimately score a few letters of intent.  A corollary to the throw-enough-darts mantra is the realization that you don’t know what you don’t know.  It’s hard to predict which local businesses will be the most helpful to talk to, and it’s even harder to anticipate what insights will emerge.  This is particularly true in the diverse landscape of locally-run shops.  So don’t spend too much time calibrating who to target: just get out there, get in front of business owners, and listen.

With experience, we learned what made the best pitches and meetings.  Often, having a letter of intent signed was a particularly big barrier for local businesses.  Managers varied in their familiarity and comfort with signing what seemed like an official contract.  We tweaked our strategy accordingly and approached the letter of intent as the end goal of a long sales funnel.  Some of the most useful questions we asked were incremental, along the lines of ‘what would you need to see next in order to sign this letter of intent?’  Additionally, with our meetings—and likely any sales process—a product demo speaks louder than an idea.  This is certainly true when you’re a startup trying to tackle the initial customer acquisition hurdle (we imagine it might be different for algorithm-based tech startups).  Our initial concept-based interviews were extremely useful in generating feedback, but our most promising conversations started when we were able to put a product in front of businesses.  The prototype was very rough, with many features and mechanics ‘faked,’ but it was nonetheless an extraordinarily powerful communication and sales device.

This leads to an even larger takeaway about the entrepreneurial process.  Throughout HBS, we often hear that cash is king, but we propose that in some tech startups product is king.  For a startup at Rewardly’s stage, pitching to investors (at least to non-seed investors) was not the best use of time.  Most meetings became coffee chats and yielded few concrete next steps -- the time would have been better spent just building and refining the product.  This is especially true for a startup with first-time founders.  It may be that entrepreneurs with deep domain expertise, an all-star team, or a strong track record can gain much more traction with investors early on in the concept stage. 

As we learned more from our customers and our product, we spent a lot of time refining the business model.  Like so many other steps in the startup process, we found that business model generation was an exercise in prototyping: expect a lot of iterations.  But perhaps more interestingly, we realized that we first needed to reframe our goal.  Given our wide range of potential customers, one size didn’t fit all.  Providing a suite of different payment options was key to meeting the wide array of small business needs.  More established businesses often preferred the regularity of a budgeted monthly flat-fee, whereas newer and scrappier business wanted a pay-as-you-go, performance-based plan.  All local businesses, given their relatively small size and budgets, insisted on a risk-free introductory option.

Building the product is the next step for Rewardly.  We were able, though, to complete wireframing and product prototyping this semester, and we learned a lot in the process.  Our wireframe evolved from a low-fidelity product (paper sketch) to a higher-fidelity rendering (a professionally designed mockup).  When it came to our first interaction with the designer, we discovered that it was important to be specific about the goals and agnostic about the exact details.  The professional designer had a toolset of specific methods; what they needed from us was a clear articulation of the goal of each page and the type of work we wanted completed (e.g. user interface exploration versus graphic design).  Once we had a first cut of the designed wireframe in hand, we could then go back and forth with the designer, incorporating feedback and tweaks through several iterations.

All the steps we took with Rewardly this semester—through interviewing, business modeling, product prototyping, and wireframing—reminded us of the power of iteration.  As hackneyed as that may sound given lean startup mania, it is important to reemphasize as it is distinct from much of what we learn at HBS.  Business school often focuses on the end-points, the funding pitch, the polishing, the analyzing.  But with Rewardly, we learned that the first step in starting a startup is often, well, just taking a ton of steps, and seeing where the customers, product, and business lead you.

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Lean is for Wimps

by Lorin Pace & Iris Guerra

In the new era of all things lean, fat gets a bad rap. Even the terminology is loaded; in the U.S. we are facing an obesity health crisis like nothing we have faced in our nation’s history. Of course no-one would want to be ‘fat’ when the term has such a negative connotation. But when did ‘fat’ become the only alternative to lean? What about medium or athletic builds? Painting a picture of two polarized options and demonizing the other is a storied psychological tactic for building momentum around your own philosophy. For better or for worse, Eric Ries has done a great job of depicting epic failure as the product of the ‘other’ approach. And he has a point. It IS senseless to build a product no one wants, and no one is a better example of that than Ries himself (he did it!) and he knows how painful it is to pour your heart and soul into something that ends up being discarded. Ries would have you believe that not only can you apply the lean startup method to everything – but you should apply the lean startup method to everything.

One of the cornerstones of Ries’ lean startup method is the notion of the Minimum Viable Product (MVP). In Ries’ own words, “The minimum viable product is that version of a new product which allows a team to collect the maximum amount of validated learning about customers with the least effort.” It sounds like a helpful, leveraged approach, and it is, but we’d like to slap a warning label on this product:

1. Don’t prioritize validated learning by gambling with key customer relationships. We found rather quickly that warm leads are absolutely critical for winning the business of large enterprise customers, regardless of how far along your product is. Warm leads with large enterprise customers in ideal segments are rare. Even if you have a brilliant concept, while you’re learning about what these customers truly value, you are exhausting much of their valuable time. Don’t expect them to hold their breath while you quickly iterate on the product that you figured out that they actually do want. They may not have the patience to re-engage with you. Had you been more prepared, you might have just landed a huge customer. 
2. If you are constantly validating your gut, the guy who doesn’t may beat you to market. In the wake of the Bush presidency and the ultimate failure to unearth weapons of mass destruction (WMDs) in Iraq, the notion of the ‘gut’ is almost as unpopular as ‘fat.’ Trusting one’s ‘gut’ is synonymous with making whimsical decisions based on mood and temperament. The reality is quite different. The ‘gut’ refers to the part of our brain known as the ‘limbic system.’ The limbic system assembles powerful elements of memory and feeling and association that can distill complex patterns of information into a singular decision path. It can be very powerful and trusting such hunch-driven decision making has produced many of the greatest successes in the history of entrepreneurship. It might not work every time, but startups rarely do. Overly handicapping your gut with too many feedback loops can be just as risky as the alternative.

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Le Petit Prototype: From Little Questions to Big Ideas

by Riva Bakal, Emily Kramer, Namrata Patel

Eric Ries told us on the first day, “launch early and launch often.”  But, what can and should be done before launch? How do you think about Ries’ advice for an early-stage product (something that’s not even ready to launch)?  For our fledgling mobile application, the iterative approach really took hold in customer discovery interviews and usability tests.  We learned first hand the power of talking to users, customer-centric hypothesis testing, and “launching” with paper sketches and wireframes.  Users may not always know what they want and can’t tell you exactly what product to build; they can, however, share potential use cases and latent needs, ultimately describing exactly what the market looks like.

We started the semester with the plan to build a mobile application from scratch.  With lots of app ideas floating around, we whittled our way down to one: mobile safety.  The first version of Checkmat.es was born.  The application aimed to make students safer by keeping them in contact with friends or parents in the event of an emergency.  Aside from creating a product, the process taught us about applying lean techniques to startups in their nascence.

Having a Hunch

As classic founder-users, we brainstormed use cases initially based on our experiences as college students.  We certainly had a hunch as to how the app would work, but how could three HBS students who all attended college in Cambridge, MA – Harvard, MIT, and Tufts –really understand the safety needs of students in diffuse urban campuses or sprawling state universities?  Having a hunch is great for the beginning phases of development, but customer interviews kept us from assuming that everyone had the exact same needs as us, from falling victim to confirmation bias, and from building an app that served the needs of a small minority.  

Talking to Users Early

There is no good reason to wait for high fidelity prototypes.  Talk to users early.  There’s a temptation to “wow” users with an aesthetically pleasing, fully-baked prototype, but in reality, you can’t let users anchor to a prototype. Thinking creatively and expansively about the problem is paramount.  Wireframes were more than sufficient to coax such feedback from users and validate or challenge our hypotheses. In the early hand drawings, we sketched out the core interactions and use cases.  We transferred those onto an iPhone outline and created buttons and messages with the basic PowerPoint tools.  PowerPoint then gave us enough flexibility to make quick modifications to the wireframes, especially during the usability tests.  A high fidelity prototype doesn’t give you the flexibility you need to act quickly on what you hear.

User discovery interviews also revealed the importance of privacy to users.  We were surprised by users’ false concern that the app would track users’ location at all times or automatically push notifications to parents or campus security.  While we had designed the app from the beginning so a user can self-select an appropriate contact, we had underestimated how much this concern could prevent user adoption.  Users latch onto preconceived notions of how things have worked in the past or how they think they will work.  Though we reframed the interaction design to emphasize privacy and choice, these interviews helped us understand the real needs and preferences of our users, rather than just the features they need in our application.

Keeping it to the Minimum

We also learned that “minimum” is the key word in minimum viable product.  Jamming the app with additional ‘bells and whistles’ confuses users more than anything.  Clean design tugs at their intuition so that they can see how to navigate through the product on their own in order to capture its value.  We took the design advice that “in anything at all, perfection is finally attained not when there is no longer anything to add, but when there is no longer anything to take away” to heart[i].

Minimum also doesn’t mean cheap.  Development estimates for Checkmat.es ranged from $7.5 to $10k.  “Lean” necessitates bootstrapping and hustling to find resources.  If we had a do-over, we would apply for MVP funding.

So, What Does Lean Mean?

We were scrappy and process-oriented.  We tried everything that we could to push the product forward without throwing tons money at it.  All the techniques we deployed – user discovery interviews, usability tests, and a minimum viable product – were geared towards testing whether our product met the users’ market.  At each juncture we reflected on our initial hypotheses and revised our approach.  While luck may be another way to get there, customer-centric hypothesis testing is more of a sure-fire way of building something that people care about.

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[i] Antoine de St. Exupery. Wind Sand and Stars. Trans. Lewis Galantiere. New York: Harcourt Inc

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Customer Discovery and Survey Research: Lessons Learned

by Emeka Oguh

Customer Discovery. I learned that customer discovery interviews are a very efficient way to capture the voice of the customer and assess demand for your product. I learned that I needed to develop an elevator pitch describing the purpose of my project when reaching out to interviewees. If interviewees were unclear on the purpose of my call they were hesitant and guarded on how they answered questions. I learned to phrase questions in the language of the customer. This is a simple but very powerful tool that helps create dialogue and increases the quality of the conversation. I learned that asking open‐ended questions instead of direct questions provided me with a lot of insight into things that I had never thought of. I also learned the effectiveness of warm leads, as interviewees were more willing to share information when introduced by a mutual friend than when cold called. When I did not have a warm lead to a person, I learned that flattery, e.g. reading their literature and complementing them on their writings, also yielded interviews.

Survey Research. I learned that survey research provides very compelling statistics on growth trends, customer preferences and changes in market demand which can help drive your product and sales lead focus. I quickly learned how to prioritize and filter out irrelevant data when analyzing survey research. I learned that conclusions drawn from data usually involve a level of creativity and assumptions, and to always check the underlying assumptions involved in research. Lastly, I learned how I present my research is just as important as what is being presented and to put data in a format that is easily understood by my audience.

Other Skills. I learned other skills that will be helpful when dealing with the ambiguity of searching for fit in a startup. I initially approached the company with the objective of wanting to get experience working at a startup. However, through a series of back and forth conversations discussing our shared and compatible interests it evolved into something more than that. I wanted to get experience in business development, develop interviewing skills, and see how deals were made. The company was interested in acquiring data on the product launch market, and a better understanding of how CPG firms valued social media. Together we developed a project that satisfied all of our interests. I learned that by identifying your compatible interests you can create an opportunity in a startup for yourself. I also learned how to negotiate deliverables work hours and compensation. For my field study I negotiated 4 hours of on site work and 4‐6 hours of off‐site per week as well as free coffee and lunch for compensation. Very useful skills to have as look for post MBA startup opportunities.

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