Most companies, whether it’s a Fortune 100 organization or a 50-person startup, are faced with the same problem: How do you account for what your customer wants, today and tomorrow?
Last week, Alpha’s CEO Thor Ernstsson gave a presentation at the UX & Product Management Case Study Conference in Salt Lake City, Utah, to discuss how organizations are hindered by their inability to make quick and data-driven decisions.
Thor founded Alpha five years ago to bring the capability of collecting data to anybody with an assumption or question. He found the existing tools too slow to quickly answer questions around innovation, research methodologies, and product management tactics, and he was determined to find a way to reduce the barriers to understanding customers.
Everybody here is a consumer, as well as a product manager or product owner or researcher, designer, or developer.
How do you avoid being incumbent?
Thor shared a story of a recent test run on the Alpha platform, which gauged the most common poor experiences that customers have with companies. The top of the list, likely to no one’s surprise in the audience of product management professionals, included car dealerships, cable companies, healthcare companies, airlines, and credit card companies.
Almost all of them suffer from the same issue: Trying to disrupt the market, but guessing at what their customers need and want.
If you understand why people do something, why they say something, you understand how to change it, how to fix it, how to work with it, how to give a better experience. And what you’ll almost always see is basic human things. It’s not that there’s evil people working in car dealerships. They’re just heavily regulated and they’re incumbents by the strictest definition of the word. And they’re just doing things the same way they’ve always done them. And it just happens to be that they’re not doing it for your benefit, and you suffer as a result.
It’s about testing your assumptions – as fast as possible
To get inside customers’ heads, you have to constantly verify assumptions, Thor explained. Even if your instinct tells you you’re doing everything right as a business and have nothing to change.
Because it’s about your future business, not your current one. Continually refresh what you know about your future customers and run some experiments.
Think about it: If you don’t validate assumptions and run tests, another company will. And then you run the risk that they’ll learn faster than you, or better than you, or completely wipe you out with an easier service or a better product.
Being able to move fast, being able to learn fast, being able to execute in any way is really the key. And then being able to understand how the things you’re doing tie back to the customer, why they tie back to things that matter, and how you can iteratively validate? That is so important.
Expect change and be ready to iterate
If you build a five-year product roadmap based on assumptions, you presume to have all the answers. But what if everything you think you know about the market is wrong? Not that it was always wrong, but that it is wrong today. That is a very possible reality in today’s fast-paced, digital world.
The baseline does change, and it’s hard to acknowledge that when you’re in the middle of the work, Thor said.
If you rely on assumptions that are false and you don’t iterate, and you don’t look at the data, you might wind up going down the wrong path.
You need to disrupt your assumptions before they disrupt you. Thor illustrated this point with three examples:
- Facebook Portal: “When you guys saw Facebook Portal for the first time, was anyone brave enough to think that it was a good idea? Somewhere in a room they decided ‘we need to put a camera in everybody’s home because people think we’re so good on privacy.’”
- Snapchat Spectacles: “This one is interesting, but a complete failure. They were trying something new, trying to be innovative. But again, as incumbents, it just passed them by. So then what you’ll see are these signals. And these signals are now lagging indicators.”
- Amazon: “Amazon is not coming up with excuses for their Fire phone. It was a huge flop. They turned that into Alexa. So, all of the efforts in engineering they’ve put into something that completely failed on paper is now potentially the future of the entire business.”
4 takeaways for understanding the customer
Thor went on to share four learnings that he’s found universally useful when it comes to understanding the customer.
The customer is always right
If there’s a problem, it’s not their problem. It’s your problem, because your job is to make it as easy as possible for customers to engage with your product, get value from your product, share your product, and use your product.
If there’s a problem, adopt a learner’s mindset.
“You figure out what the barriers are internally from question to insight. How long does it take to go from an idea or question to data that, at least directionally, shows you if it’s right or wrong? Because if that’s measured in weeks or months, you’re effectively dead. Because others can do it in days,” Thor said. Don’t rely on luck, he says. Rely on a learner’s mindset and the right tools.
Look internally at your organization
Identify the barriers, blockers, and bottlenecks. What tools are being used? What are the resources? Figure out how to retool your organization so the whole company can drive decisions. There are always barriers and hurdles and a lot of ‘no’ at organizations. The answer to the hurdles: Find the customer, put a stake in the ground around them, and work backwards from what they want.
Look at what must be true for your product to be successful
A lot has to line up to create a good customer experience. And the negatives stand out much more than the positives. What are the assumptions that are critical to the success of your product? Before experimenting, identify them. Make a list of them. And then, most importantly, test and validate them.
“The plan that you wrote, you spent all night on, even your two week sprint plan or your five year product roadmap pretty much by definition, it’s wrong,” Thor said. “I don’t think I’ve ever seen a five year plan of anything that worked, because there are so many things that go into it, there’s so many assumptions. And execution in year three depends on year two. Execution in year two depends on year one.”
Shift to outcomes and objectives that you can measure against
Instead of actions and activities, focus on metrics that matter to the business, like traction and outcomes.
The full presentation is below.