Removing Bias and the Founder Ego

Straight to you from Denver, Colorado, this is Precursa: The Startup Journey. We share the ins and outs of building a tech startup from inception to launch to revenue and beyond. If you’ve ever wondered what building a startup from scratch really looks like, you’re in the right place. With full transparency and honesty, we reveal it all about Precursa on our ride from idea to exit: the wins, the lessons learned, and the unexpected twists and turns.

Hey everybody, how’s it going? Welcome back to Precursa: The Startup Journey. So we release these on Fridays. I actually record them on Friday mornings. So if I sound like I’m a four pack a day smoker ever it’s because I don’t drink coffee and Friday mornings are really early. Okay. So before we get into what I want to talk about today, I wanted to follow up on something. Last episode I mentioned the question that was asked by one of the big guys in product-market fit that’s related to asking people the exact question. I don’t remember how I said it last week, but, uh, the exact question is asking people, how would you feel if you could no longer use the product and the gentleman who discovered this and who has, you know, sort of politicized or, uh, democratize this whole thing, Sean Ellis, I cannot believe I couldn’t remember that off the cuff, but it was Sean Ellis. And basically he found that the magic number for product-market fit is about 40%. So if you have less than 40% of people responding to that question, how would you feel if you could no longer use the product. If less than 40% are responding, very disappointed, then you’re going to have a very difficult time getting traction. Why that’s a magic number? You know, what else might have led up to his discovery of that? We don’t know, but it’s just very interesting. And so, as we’re talking through product-market fit, it’s one of those that I just find really fascinating. I found it on LinkedIn a couple of weeks ago, and today I remembered Sean Ellis. So that’s the follow-up from last week. Okay. So I had this question get asked of me, right? Cause we, we talked about how we launched the website last, last week. It was a big week for us. We’re about, oh, less than a week away from launching our ad strategy. You know, Google, Facebook, LinkedIn, you know, digital advertising to start driving traffic to our landing page. You know, and this is April and understand, we’re not gonna be launching until September. So that’s a good five, six months potentially, depending on, you know, what happens with it, launched time frames change, maybe it’ll be earlier. Maybe it will be later. We don’t know. So somebody asked me does going live early, meaning like the way that we have put, you know, building a list and getting, getting the name out there and socializing what we’re doing and building up that momentum. Does that get you noticed more and potentially allow for you to be steamrolled by competitors more than, and say waiting until you’re actually ready to launch, to launch a landing page and start building a list and then building up that momentum. The answer is maybe with a question mark at the end of it. But the bigger concern is not launching, is not putting it out there early, not getting that early traction, which is getting a sign-up list. Understanding who are the people, what do they think about the idea? Are they resonating with it enough to give you their email address, which is actually, you know, I’m putting the term expensive in quotes, but that’s actually a really expensive form of traction, right? If you could pay as little as a dollar for an email address, that would be amazing. And that’s the ultimate goal. But in the beginning, it’s really not like that. I think we talked about that in the last episode, but this goes back to the stealth mode myth. Okay. Which I know we talked about, but this is another cut at that, which is a lot of people think I want to stealth mode develop, maybe even I’ve done product-market fit. And I feel pretty confident about that, but I’m going to stealth mode develop, and when I launched my product will be the day that I launch ads. The problem is you have nobody to launch to you’re launching to an empty internet. Now we launched to basically an empty internet with our webpage last week, right? Until we start driving that traffic through social and through advertising, et cetera, et cetera, we’ve basically launched to an empty internet as well, but it cost us about $2,000 to launch an empty internet for our webpage. It’s going to cost us a lot more than that to get to product. We don’t want to launch a product that we’ve spent $250,000 on to an empty internet, and then start working on building up traction. If we build up traction, leading up to our launch, then we actually could have, we will have not could, we will have sign-ups the very first day that we’re available, which means day one there’s revenue to be we had. If we wait, we don’t know how long it’s going to take us to gain traction. Now we’ve spent $250,000 wanting to make revenue with the possibility of making revenue, but only then doing all of our testing to find out where is our audience and how do we find them? And how do we write ads that resonate with them, et cetera, et cetera. Now, in that five or six month time, does it give my a heads up what I’m doing? And maybe they can beat me to the punch. Eh, maybe. Am I really that worried about it? Nope. Because competition, isn’t a bad thing. Competition means there’s a problem here. It’s one more signal that there is a problem and other people are trying to solve it.

06:18

And in fact, investors get nervous when you tell them you’ve got this brilliant idea that’s solving this big, huge problem, and you have no competitors. They get nervous because they’re like, well, why not? Did someone try and fail really badly? Could we find that person and talk to them? Has nobody ever tried this? So my answer to that question is maybe comma, but not enough for it to stop me wanting the early traction because all along the way we’re spending money to get to launch, right? And we’ve done the product-market fit work that we’ve talked about. We’ve talked to over 200 people, 200 entrepreneurs. We know what we know about the problem. We know what they say about the problem. We know how to message it in a way that not only will Google ad words pick it up, but our people are talking about it the same way we’re talking about it. Or I should say, we’re talking about it the same way our people are talking about got it. But the opportunity to validate that traction at any point in time, along the way I can stop spending money, if I realize I’ve done, I’ve gotten something wrong. I can stop. I can take a step back. And for me, actually, if a competitor were to start to advertise that they were going to come out with something similar because of the traction that we get over the next five to six months, any point during that time, that would be further validation for me. And I would have no problem with the fact that it happened and while I was building my list. So I hope that that gives you a little bit more context. It’s a little bit about the stealth mode myth. It’s a little bit about not pretending or not living in the fantasy that you’re the only one who’s going to come up with something. It’s not even giving into the idea or the thought that the first to market is the most important thing. Maybe it is. Maybe it’s not. There’s a lot of data for that argument. There’s a lot of data against that argument too. The reality is it’s who solves the problem best in a way that resonates best with users. And that’s the company that’s going to win every time. So that’s what I’m looking for. I’m not worried about what other people are doing while I’m doing that. Does that mean I get crushed by, you know, somebody who comes in and can afford to spend a hundred million dollars on marketing. Maybe. But I still feel like what I’m doing. I’m doing it really well. I have a lot of proof in the market and I have a lot behind my name and my process that proves I get results. So yeah. So that’s my answer to your question.

09:03

All right. So to continue the discussion that we’ve been having around product market fit, talking to people, designing interviews that get at what is the real problem, how do our people experience it? And what do they say about it today? I want to talk more about how do we remove bias? How do we talk to people effectively? And then how do we understand the data that we get out of these conversations? So the first piece of this is removing bias. So you’re going to, we designed an interview and we retooled and refined it so many times. And a lot of times I ended up in a conversation with someone where I realized we’re having a conversation. That’s very easily a product-market fit conversation for Precursa. If I just change the way that I’m asking the questions. So how do you remove bias? And why is that even important? Right? Removing bias is primarily important because we have, if you think about scientific method, we’ve all taken some form of science in school, right? And you’ve done an experiment. And the whole thing that scientists talk about is when you build a hypothesis, you have to understand enough about your hypothesis to be able to test the right inputs and outputs. But then you have to look at it with an objective eye and be willing to say, my hypothesis is right, or my hypothesis is wrong based on the data that I get. If as a scientist, scientists, highly, highly value, the ability to remove their own biases and their own assumptions from the work that they do. If we don’t have the ability to do that in this process, then we’re only going to see what we want to see. And we’re going to miss the clues and the cues that are given to us by our target end user. Sometimes it’s as small as well, we could have built some better marketing language or, you know, advertising language, if we would just have listened to the words they actually used and use those words. Sometimes it’s bigger than that. Sometimes, you know, I’ve seen people go through this process and in the past process of data review, they’re telling me, yeah, this is, we seem like we’re totally on the right track. And I’m looking at their actual interviews and going, and, um, I’m seeing a pivot here and listen to the words these people are using and listen to how that keeps coming up over and over again. And if you are not willing to see where you’re off or where you’re wrong, you won’t be successful. So remove bias is important because we have to be able to look objectively at the data that we’re working so hard to collect. And we have to be able to ask objective questions that allow the people we’re talking to to answer them in a way that is honest and authentic. Because here’s the other thing that happens if I inject bias and say like, don’t you think it’s a huge problem for entrepreneurs that most people don’t understand product-market fit or how to get it and they have to learn it the hard way. I am inserting not only my belief, that that that’s true, but I’ve even asked the question in a way that prompts them to want to agree with me, right? People are pleasers, they want to make you happy. They want to answer in a way that’s going to make the conversation feel connected, and feel like we have a point on which to agree and we can move forward from there, right? Because people are always looking for connection. We have to remove that desire or that underlying implication that agreement with me is what will please me in order to get them to open up and say what’s real for them. So what I’d rather say is what do you think, think about the process of finding product-market fit as an open-ended question, then be quiet and let them talk. And they might ask me some follow up questions and for some things that are like, clarifications like somebody might say, well, what do you mean by product-market fit? Even that one I would say, well, what, what do you think? I mean, when I say product-market fit, like what does product-market fit mean to you? Right. Because maybe we’re level setting, but for the most part, and maybe they’ll ask me a question, you know, that’s easy enough to answer. Like that’s a bad example and I’ll think of one at some point, but if it’s something that I can answer where they say, Oh, you mean like our friend who built a company and you know, never could get traction. That that’s what you mean. Right? Yeah. That’s totally what I mean, what do you, what are your thoughts on that? Then that’s a sort of a clarifying thing, but I’m more interested in what is sparked in their mind, because remember as much as I’m removing bias, I still have to use words that help me set context with them. And sometimes even my words can contain a bias that I’m not even aware of in terms of what it elicits in someone’s mind. So when they ask me a clarifying question, if it’s not something that’s simple and sort of just indicates to me that a yes or no lets us know that we’re on the same page, I want to know what did that spark for them. Right. And that’s, again, how we can take something that could still have some bias necessarily in it and remove the bias by saying, well, what does that mean to you? Or what did you think when you, when I, when I said that or when you heard that or how do you define it that right? The point is we want to ask a lot of open-ended questions. Okay. So rather than this is not a survey, you’re not sending out a Google survey to as many people as you can get to respond. Because again, there’s an inherent bias in a Google survey, which is, here’s the question I’m asking here are the possible answers and it doesn’t allow for conversation. It doesn’t allow for back and forth. We want conversation at this point, there are plenty of times where a Google survey or survey monkey gear, whatever is a very incredibly useful for honing and refining and narrowing in or focusing in on a particular area or another. That’s not what we’re talking about here. What we’re talking about here is having a conversation that allows for movement and flow and walking a path and choosing forks in the road in a way that is very unique to a conversation. So in order to do that, open-ended questions, we don’t want to insert anything into the question that presupposes an answer. Okay. And what I mean by that. So for example, I’m really bad at crafting the wrong side of this. I know it when I see it, but I’ve been swimming in this water for so long that most of the time, my mind is working on, okay. How, how do I want to ask this question in a non-biased way from the beginning, but I’m going to give it a shot here. Okay. And this is on the fly. So, you know, this is what the journey looks like, folks.

15:49

So let’s say for Precursa, we have a conversation. We say, man, we really love this idea of the smart checklist. We’d really love to be able to find out from people, you know, how important is it for them that, you know, is it that they can look at where they’ve been and look at videos that they’ve already done or revisit their exercise answers and be able to see what’s coming? Like, is that timeline kind of view important or is a checklist view more important where I can kind of see where I am? Like, how important is all of that? What’s underlying all of those things has to do with the emotional journey and understanding how much progress have I made? How well am I doing? And how far along am I on the journey? Like, am I getting close? Are we there yet? Kind of answering the, are we there yet question, which is just another way of asking, now what? So in order to ask that question in an unbiased way, I would look at something like how important- I don’t even like how important, but I’m going to walk it through and then I’ll go back and fix it. But like how important is it to you that you be able to measure and understand your progress in an objective way as you go through the program? Okay. So that, that might be like the very first place I would start. And then I’d probably retool that even more to say what’s most important to you in completing a program. Maybe that would be it. Like, what are the most important aspects of completing a program for you in getting all the way through it or something like that. Do you see what I’m saying? Like how, the more we refine it, we’re taking out supposition and we’re taking out things that are inherently about our idea or our solution and turning it into, I want to know how you think about, okay, I really want to finish this thing. What does it take for you to actually finish that thing? What does it take? And anytime I ask a question, I’m making it open-ended. I want it to elicit more than, than a few word answer. So if somebody responds with, well, yes. Or if they’re like, well it would be ABC. Then I want to say, why. And why is your friend? Because why not only asks people to dig into their motivation to see what else comes out and what other language they might use, but it also speaks to motivation. And especially when you’re building something that is going to ask people to change their habits and spend money to do so potentially, you want to understand their motivations, because we need to build something that is okay, more motivating than my motivation for apathy or whatever it is that I’m doing today. Okay. So this is how you remove bias and that’s why removing bias is important. And when we do that, we get real answers. To be fair, about 20% of the people that we talk to, I would say it wasn’t more than that. It might’ve been a little bit less, but we’ll go with 20% about one in five was like, yeah, I know that there are things out there. I know that there are like, one of the things was, I know I could work with you as a coach. I know I can work with you as a consultant. I know that there are tools out there that I could spend money on, you know, 30 bucks a month, 50 bucks a month, whatever. But I feel like I should be able to do it myself. So I’m just gonna, it doesn’t bother me to, to waste a little time and money. What does a little mean, was one of my follow-up questions when I heard this. But you know, it doesn’t bother me to waste some time and money on finding out things from clients, because I just want to get out in the market and be doing the thing and own the business, right? That’s a viewpoint. I mean, it is a viewpoint, whether or not it’s valid is probably dependent on your own perspective on what it takes to create a successful business. But there are people who are successful at doing that. I’m not going to pretend like over here at Precursa we have some monopoly on, on product-market fit or a process or anything like that. I just know that our process delivers results that save the majority. So, so here here’s really my commitment in building Precursa right now in the venture capital world, in the VC world, VC investor expect to lose money, expect to lose, expect 9 out of 10 companies that they invest in to be losers, to lose money or to fail or to, you know, whatever that is, expect nine out of 10 to be losers. So the one has got to make up for all of those losses of the other nine plus be a big enough win that it was worth putting my money in for five to seven years. That is a ridiculous statistic. It’s ridiculous. It should be that at most one out of every 10 companies that we’re investing in fails. Why is that? Not the case? Well, Crunchbase tells us at least 42% of those fail because nobody wants what they’re building. That’s a preventable problem. So if we say 42% of nine, so let’s go with four of the nine. So we’ve at least prevented four of the nine failures from ever getting into that pool 40%. That’s the whole reason. So do I want more competition in the space? Yeah, of course I do, because I want this conversation to be the other way around 10 years from now. I want 10 years from now when a company fails that a VC firm invested in, they all look at each other around the boardroom and go, well that’s weird. What did we miss? What did we do? What happened?

21:48

I want that to be the norm, not this we’re throwing money like spaghetti at the wall, hoping that something sticks, knowing that most of the time, we didn’t even stick the spaghetti in the pot of water. And guess what? Dry spaghetti don’t stick to the wall. So I’m ranting a little bit, but I’m saying that because I want you to understand just like Precursa, isn’t the end all be all only solution as much as we would love for that to be the case. Facebook isn’t the only social media company. It’s not even the only multi-billion dollar social media company. There’s Twitter, there’s YouTube, there’s LinkedIn. There is room in the market for alternatives and for multiple perspectives. So when, you know, 15 to 20% of the people that we talked to tell me, well, I’m just willing to go for it and hope for the best, or, you know, I trust my own Googling skills or it doesn’t bother me. Great, like there’s room for that in the market. And some of those people will be really successful because it’s just who they are. Right. What we’re doing is trying to say for the 80%, the average in the market, we want you to have the opportunity to be successful at the thing that has the best shot of making you successful. Because if you waste too much time and money and energy and creative power and get, you know, wear yourself out trying to build something that never actually has a shot of success, you may never do it again. You may never try again and something will probably be lost for the rest of the world in that there’s a purpose you’re you might be supposed to fill that you’re not. So understanding what doesn’t follow our opinion, being able to, to remove the bias, to get those answers authentically and in a real way, because we aren’t sending indicators to people that, Hey, if you answer this way, it’ll make me really happy, but actually getting interested in what’s going on on the other side of the table with the other person and their viewpoints on this. And listening to all of it, which is part of the data analysis. That’s the thing that’s going to lead us to know, do we have something or not? Do we have something that’s going to get us traction? That’s going to overcome a problem. That’s big enough that people will spend money and change their habits to use it. So that’s bias. That’s why it’s important.

23:45

I’ve talked a little bit about how you talk to people. This is a conversation I want you to do 10% or less of the talking. Like literally, I don’t want you adding a lot of exposition. I want you listening. I want you asking probative questions. I want you paying attention to what they are telling you so that you can ask follow-up questions and follow rabbit trails and figure out are they actually trails? Are they rabbit holes that are like, Oh, well that doesn’t go anywhere. Let’s go a different direction. You have to be paying attention in order to do that. Okay. Now, at the end of all this, you’re going to have a crap ton of data.  Depending on the size of your market, what type of product you’re building, you may talk to anywhere from 75 to 150 to 200, maybe even more people. And that’s a lot of data. One of the best ways that I’ve found to do data analysis is to transcribe everything so that you have people’s exact words that they used when they were talking to you, and put all of that into analysis tools. We’ve got a bunch that we’re building into Precursa. You can find word cloud tools. There’s lots of different types of data analysis and word analysis kind of tools online that you can use that will give you varying levels of success, depending on how much they’re looking at specific word matching versus concepts and trends. But what you’re looking for in all of that data, what are the trends? And a trend is something that happens at least 50% of the time. Preferably getting closer to 80 or 85% of the time. What are the trends that you’re noticing? What are the words that people are using consistently? How are the concepts being understood and relayed back to you? Where are the patterns? The patterns are going to guide you towards, do you actually have something here? Is your problem what you think your problem is, or is there a different problem that if you solve that it would be even bigger for your end user, it might open up your market, or it might open up your ability to charge for it or whatever that is, right? There’s something bigger or better to go after in this space. And you’ll also start to recognize how do people talk about it. There’s going to be some consistent language that you notice people start to use. All of those things will help you speak in the way that your users speak. You’re going to hear, you’re going to hear me say that over and over and over again, because if what you’re left with- However long, this podcast runs however long Precursa’s a company, and we’re on a journey and we’re showing you the insides, the, you know, all the hairy guts, slimy guts, hairy guts can guts be hairy. I don’t even know, but all of the slimy insides of what it really takes to build a startup and the ups and the downs and the challenges and the wins and the highs and the lows and the emotionalness of this journey. If what you take from it is my user is what matters, I have won. That is a win in my book, because too many companies are built upon the ego of their owner, the ego of their founder, the ego of one or more humans who think they have the answer and are going to be the next Facebook. Look, I want you to be the next Facebook. I want more people to have like world changing, impactful ideas that actually get to market, that make the impact that they’re supposed to make. But the only way that happens is if you understand your user. I can’t dive into building a company like Precursa; I can’t put my name on three quarters of a million dollars worth of debt; if I am not thinking about my user. I have failed them already, if I don’t listen and ask them questions and get in their world about it, otherwise it’s just an ego exercise for me. And I’ll be totally honest with you. I’ve done that twice before already, and I’ve failed huge at it. And it’s cost me everything I’ve had both times. It’s a stupid way to try and build success or build a business or invest money. And I’m not willing to do it again. So all that said the user is what matters. So listening to them in the conversation, looking back at the data and realizing what trends and what patterns emerge from the group of people that you talk to and being willing to pivot, being willing to have this be a scientific method where you can say, with this piece, I’m wrong. Or with this piece, we need a pivot or, wow, there’s a, it’s going to cost me a million and a half dollars to get to market. And the market cap is 5 million. This makes no sense, there’s no business here. Cause you’re not going to get a hundred percent of a market, which we’ll, we’ll talk about that later. The point is, users will tell you, you have to listen. Your job right now, the whole reason we do the blue sky exercise very, very first in the beginning and get out all of our ideas and all of our thoughts and all the things that we think we know is so that our minds can be empty. So that we aren’t injecting ourselves and our views and our beliefs into everything that we talk to people about at this stage of the game. This is about the user. This is about what they, what they think, what they know, how they believe, what they say about it and us understanding them better, so that we can actually build a company and build a product that solves their problem. Not the problem we wish they had. So removing bias gives you access to that. Listening gives you access to that. Being able to look objectively and as unbiasedly as possible at your data gives you access to that. This is how we switch the statistic. This is how we turn this thing on its head to where five or 10 years from now, we look around the VC world and we say, wow, one in 10, maybe fails. We’re winning. Not only are we winning, but think about the nine. Think about those nine entrepreneurs who had VC backing, who ultimately failed.

30:40

Now, some of them will get up and try again. And some of those VCs will give them money again, because they know if they keep betting on a good horse, eventually they’ll win. But there’s a lot of people in those nine out of 10 who will be ashamed, embarrassed, who will never want to try again, who may be ostracized by the VC community because of what happened. The reality is it’s not their fault. I mean, it is, everybody is- nobody’s a victim in this game. Okay. Everybody should take responsibility for their part and there piece in that. Right? But there are a lot of people who will be put more blame on, even though it should be that, you know, you’re a venture capitalist, aren’t you putting money into a lot of companies and don’t, you know what to look for that that is a marker of success or not? Well, the reality is a lot of, most VCs, they really don’t know what to find success. They think they do, or they invest in a FOMO way. But I guess what I’m trying to say is I don’t like the fact that nine out of 10 entrepreneurs who get VC backing are having the experience having failed. Because there’s a lot of stuff in there that probably should never have happened in the first place. And what I’m interested in is shifting that narrative so that it’s very rare that someone gets to a point where they’re being invested in and it fails. And when it does, we can look and see why, so that we can say, okay, great. Now we know how to do this better. Let’s find a way to get that entrepreneur back into the saddle so that they’re creating again in a way that we’ve fixed whatever the thing is that was having them be unsuccessful. And maybe it’s a whole different idea. Maybe it’s a whole different market. Maybe it’s something we didn’t even realize that is a complete zone of genius for them. And we’re like, Oh my gosh, you need to be doing that. Like, let’s build a company around that thing. The more wins are the norm, the more likely people are to try. Now am I saying that failure doesn’t have its place and it doesn’t have value? Absolutely not. I have failed enormously in my life and it has given me an incredible amount of wisdom. It’s been a huge gift in ways that at the time I could not see. Okay, I want to be very, very clear about that. But I’m not sure that we should be celebrating that 10% of people who get to the point where they’re given millions of dollars to go do a thing, only 10% of those people are actually succeeding with that money. Let’s get better at figuring out the formulas and let’s get better at supporting great ideas. And I fully believe a hundred percent in my gut in my heart in my soul and in my results, it is 100% about the user, are you looking at the user? Are you listening to the user? Are you considering them in what you’re building? Or are you building what you think or wish was the case? Okay, next week, we’re going to be talking about the thing I promised we would talk about like weeks and weeks and weeks ago, branding and naming, how did we name it? How did we come up with the branding? What does it all mean? And then I want to talk about content and marketing strategies, because this is a struggle. We are struggling with it. You know, I promised full transparency. We are really struggling with content and marketing strategy right now. What social media outlets should we be in? We feel like we know which ones, but how does that play into a larger marketing strategy? How does that play into what types of content we’re developing at what times along the journey? Are we getting out the right messaging? You know, we know that we’re SEO really well, cause we’ve been working with an SEO copywriter, but SEO has to play with what we were just talking about, which is how do the users talk about this? How do they understand it? What are, not only what are they searching for, but what do they need to understand in order to one, for us to validate that we are experts and they can trust us and our products, but also for them to understand what they’re going to get in working with us and how it’s going to transform their experience along the path. Because that’s ultimately what buyers are looking for. They’re like, if I’m going to spend time and money working with your solution, I want to know what kind of outcome am I expected to get and what can I expect along the way. That all comes back to content marketing strategy. What content are we creating? What are the channels we’re in? When are we in those channels? It’s a national campaign, right? We’re based in Denver, but this isn’t like a local store where we want to make sure that we’re getting only at the Denver market. This is a national market. So what markets do we go into first? Do we go into Silicon Valley first? Or do we go into the Midwest first? Because they’re more likely to resonate with the lower price point and being a little bit less risk-tolerant in the beginning. Right? So I want to talk through a little bit of that. I want to talk about the challenges that we’re facing. How are we addressing some of those challenges? And then how did we get to the brand and the name? Okay. So that’s coming up next episode. So glad you’re on the journey, and happy entrepreneuring. Until next time…

Thank you for listening to this episode of Precursa: The Startup Journey. If you have an idea for a startup and you want to explore the proven process of turning your idea into a viable business, check us out at precursa.com. Make sure to subscribe to this podcast wherever you listen to podcasts, so you never miss an episode. Until next time…