This is the second blog post in a series of 11 related to key lessons learned from the Mercury 11 start-up year as originally posted here.
Your killer insight into your prospective customer that causes them to activate a purchase action with you is the most important asset to develop in a start-up. In simple words, what you know about the customer that causes them to want to engage with you and spend money with you is the most important asset you have as a company.
I remember sitting around a Ping-Pong table in our super-cool office with a gnawing feeling in my gut that something was missing. We were well underway building a super-cool product. We had curated a super-cool team of top young talent. I asked the question, “what’s the most important thing that’s needed for success?”
The answers were filled with enthusiasm, as you would expect with people who are wired to be optimistic and fearless.
“Because we don’t quit! We have Grit.”
“Because we have a really smart team!”
“Because we are building a better product than what is on the market, and what is on the market is growing at an ungodly rate!”
“Because we have funding!”
I knew then and there that while those were all great answers and were partly true, the best reason a start-up has a shot at success is because they possess something unique, a level of depth and understanding the competition doesn’t have. Something so important that everything else would hinge on it.
That something is a killer insight about the prospective customer. If there is one book I’d recommend reading as a prerequisite for starting a new venture, it is Steven Blank’s book, “The Four Steps To The Epiphany: Successful Strategies for Products That Win.” It is a handbook of hard truth about building markets. Steve says, “most startups fail because they didn’t develop their market, not because they didn’t develop their product.”
In a rich start-up culture with low barriers to entry, it is possible to focus on quick-idea product development methods; see what sticks, abandon the idea, and go on to the next. But when funding dries up and VCs want to start seeing some real results, the only thing that will matter is how well you know the market your after and how deep of an insight you have. Unfortunately, “if you build it they will come” field-of-dreams thinking still dominates the start-up cultures in the shared tech spaces and coffee shops. Today, field-of-dreams methods are nothing more than a roll of the dice.
Until you have that killer insight, Do Not Pass Go, Do Not Collect $200 from VCs, Do Not Rent an office on Park Place. Go straight to jail and sit then until you understand the customer at an insight and human truth level.
First, a killer insight sits below the surface of a great idea. A great idea is like the tip of the iceberg and everything it sits upon and is under the water line is the insight.
Apple products are great ideas, but underneath each of them is a consistent and big insight about what their customers want in terms of design and functionality.
eBay is built on a killer insight about trust. They knew that what kept people from trading goods was the simple fact we’re taught from an early age to not trust strangers. They realized that if they could create “trust between strangers,” a completely new ecosystem of buying and selling could emerge. Without the rating system and methods for holding buyer and seller accountable, eBay would be another also ran in long list of on-line auction attempts.
Second, a killer insight feels natural, like it has always been there. It doesn’t feel quirky or counter-intuitive. What makes them hard to see is not because they are obscure (as sometimes they are hiding in plain site) but because they come from patterns we operate from that are intuitive. There are two great authors who have studied the patterns we all share in the human race that are worth reading and absorbing. The first is “The Art Instinct: Beauty, Pleasure, and Human Evolution” by Denis Dutton. Denis takes on a massive research project to study across generations and cultures how we as humans define beauty and if there are common patterns about beauty we all share. His findings are enlightening and provide a great framework for finding patterns to use in insight development today. The second book worth reading is British journalist Christopher Booker’s “The Seven Basic Plots: Why We Tell Stories.” His work took over 40 years to write and is a survey of world literature in search of the commonalities in narratives across the multitude of stories and tales we tell. He basically discovered all stories are variations of seven basic plotlines. I have found by studying these seven plot lines I can more easily see the patterns of behavior in the customer segment and get to the killer insight quickly.
Third, a killer insight is the wellspring for all ideas. I’ve had the opportunity of building and working with creative teams in the agency space all over the world. One of the big challenges is how to reduce the cost of ideation and increase the hit rate of coming up with a great idea for clients. Inevitably the answer isn’t in more brainstorming or more process or instituting more rigor.
On the contrary, the answer lies in the act of pursuing the insight. I’ve found time and again, great ideas reveal themselves in the pursuit of the killer insight or often in pursuit of solving a really tough problem. Great ideas don’t come from a cool creative process.
Great ideas spark from the picks and shovels of the people doing the hard work of getting to the core of the felt need and a deep insight about the target customer’s emotional drivers. The remaining creative work is to bring that insight to life but the hard spade work has already been done. Typical companies start with a problem then jump to brainstorming solutions. This is, again, a rolling-of-the-dice approach that is idea lead and not insight lead. If you take away one thing, it would be this, which is worth repeating, “Great ideas almost always reveal themselves in the pursuit of understanding the insight underneath the problem.”
Once you have a killer insight, everything picks up speed and the difficult part of creative ideas and what kind of product to build becomes much simpler and faster. The insight becomes the bedrock for A/B testing and finding the right creative resonance.
A great idea is the returning echo of a great insight.
Build conversion funnels and use A/B testing with custom landing pages in tools like UnBounce to measure the strength and resonance of that echo. Do lots of creative executions and let the customer’s actual behavior be what dials in the creative message. What this does by default is kill the “big reveal” creative thinking which is a Mad Men era old school creative process and completely inefficient and ego-centric. Even my old boss Kevin Roberts at Saatchi & Saatchi is saying “the big idea” is dead.
Lastly, the killer insight is the one fulcrum to pivot upon when ideas don’t work.
It is much harder to kill a direction, stop an investment, or have the courage to try a different idea when you are missing the killer insight. From my own experience and from the experience of my colleagues in the start-up world who sit on VC teams and Boards, the vast majority of new ideas today do not sit upon a solid fulcrum of an insight but are on the shifting sands of trends, fads, or are an echo from the vast entrepreneurial echo chamber of copy cats.
One of the most important and expensive lessons we learned was no super-cool (teams, office locations, equipment, branding, etc.) could out run the inevitable fact that at the end of the day, “it’s the insight stupid”.
If you would like to know more about how our team wrestled through finding and testing the killer insight, shoot me a note or contact me at amurray@mercury11.com
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