Tech startups are not easy undertakings. Many entrepreneurs spend years of their life and tremendous amounts of money on ideas that ultimately yield no results. While some of these failed ideas are doomed from the start, many others fall victim to a lack of customer learning.
This doesn’t mean that these companies failed to adopt customers’ suggestions immediately, as there is a crucial difference between customer suggestions and customer learning. When customers suggest specific features or changes to a product, these recommendations can be very helpful but they can also be misleading.
Sometimes, customers will suggest changes that they believe will improve their user experience, but actually have the opposite effect. Because of this, it is crucial for startups to understand the underlying motivations and causes behind customer feedback and thereby learn the nature of their interactions with a given product. By doing this, startups can know their customers better than the customers know their own desires. Better than the customers know themselves.
Companies like Amazon have touted programs such as the Anticipatory Shipping which has been refered to by many media outlets as "Knowing What You Want Before You Do", and consequently the idea of deep customer learning has been labeled as a practice undertaken by technology giants. However, tech startups have begun to fight against this perception, with companies like Hava attracting attention because of their adventurous customer learning approaches.
The Hava Case Study
Peter Gatt and James Martelletti, founders of Hava and graduates of Founder Institute: Melbourne, learned this key lesson first-hand while launching Hava, a service that gives customers visual diagrams of their cloud environments.
The idea to create Hava originated from customer learning and insights. Prior to the founding of Hava, when Gatt and Martelletti were working as technological consultants, they found that many of their customer companies did not have a clear picture of their virtual assets and their cloud environments. Peter Gatt, in an exclusive profile by Artlivemedia’s Michelle Bourke, recalls:
We’d get in there and say, “Hey, show us what you’re running. Let’s get started. Show us the documentation.” Everyone would just look at each other and be like, “Yep, the documentation. Sure.” Even if they had the documentation, or they had anything to show us, it was normally three or four months, or years, old
Fueled by this insight, they got to work and started building Hava. This was a particularly daring task because the Gatt and Martelletti were simultaneously launching another young infrastructure optimization startup, Vibrato. As a result, their time was extremely limited and there was little room for error or customer misunderstandings.
Once the two entrepreneurs had put many work hours into creating a Hava prototype, they quickly made even more key insights about their customers' needs. When an early customer ran Hava’s analysis service for the first time, they made a surprising discovery and sent some heated feedback to Hava:
They ran it for the first time. They had a look and they found some dev environments that had been running for five months at eleven-thousand dollars a month. They looked at us and went, “No, no. You’re application’s broken. We’re not running that.” We’re like, “Just so everyone knows, Hava talks to APIs. It can’t be broken. Everything it tells you is real.” The following day they switched that off, and effectively saved themselves an additional fifty-five-thousand dollars from no one knowing it was there.
Hava had accomplished one of the crowning achievements of the startup world: solving a problem that a customer didn’t even know existed. This was also not an isolated incident, as Hava later came across many groups that weren’t fully utilizing their cloud assets. Hava’s customer insights have proven so valuable that one customer and CEO uses the product’s analytics every morning:
He looks at the environment and says, “Have we spun it up? Why are we doing this now? We don’t need this anyway.” He’s able to look at the return on investment, which is what we really want to do as well because there’s a lot of sprawl
Notice that the pre-product customers did not suggest that the Hava founders create a system to better visualize cloud environments. Nor were customers even convinced that their inability to produce documentation was a major issue. Instead, Gatt and Martelletti connected the dots themselves after closely listening to customer feedback and ultimately created a valuable service that solves a real problem: disjunction, sprawl, and inefficiency in the corporate managing of virtual environments. Hava produced helpful solutions to problems that some customers couldn't successfully identify. All of this goes to show: this is the story of a company that understood its customers' needs better than the customers themselves.
Hava plans to expand their customer base to over 200 paying customers by the end of 2016, allowing more and more companies the ability to view their documentation in a conclusive and understandable format. All of this began with the insights into the undiagnosed issues of customers, and resulted in a successful product that accomplishes a major key to technological success: understanding customers' issues on a profound level.