Elizabeth Foughty
To loosely borrow from Jane Austen, “It is a truth universally acknowledged that a company with a new product idea must be in search of early testing customers.” As the Bennet sisters learned in Pride and Prejudice, this process can be daunting.
There are countless books written on this subject, but I’d like to focus on the most common mistake I have witnessed in early access, beta testing, and lighthouse B2B customer programs: losing balance when collecting and incorporating feedback from customers. On one hand, there is an overemphasis on one significant customer. On the other hand, there is what I call the “Steve Jobs effect,” where the notion of “people don’t know what they want until you show it to them” is taken too literally, disregarding its nuanced meaning. He also said “really great products come from melding two points of view—the technology point of view and the customer point of view. You need both.”
Over-Focus on one customer
Let’s call this the Bingley effect. This occurs when a prominent customer shows interest in a new product offering. Just like Mr. Bingley’s arrival and subsequent interest in Jane Bennet caused a stir, this customer creates a buzz. While having strategic reference customers is important, problems frequently arise when this customer comes to the attention of sales and company leadership. They transition from being a valuable source of product feedback to becoming a “must-win” opportunity, which often leads to losing sight of the forest for the trees. Inevitably, this one big customer may have requirements that are not applicable to the rest of the market – the market for the on-prem version of your cloud product is almost certainly oversold – impacting your ability to deliver, or steering you away from what can be successfully sold. I’ve seen so many engineering and product hours wasted on such customers, resulting in product setbacks rather than progress. Moreover, it can lead to burnout within teams as they strive to please both the broader market and the Bingley customer.
If one customer demands a specific feature, and you cannot validate its relevance with others, push back.
If one customer insists on highly challenging requirement that conflict with your value proposition, it’s crucial to prioritize your overall product vision. The cost of meeting those requirements may outweigh the value of that customer (seriously, I’ve seen this happen so often now it’s become a trope).
But it’s Strategic! If your product’s success hinges solely on one customer, you are doing a professional services project, not building a product. This can be fine! But it requires serious consideration to change the trajectory of your organization, and a re-think on how engagement will work, not just an assumption that things will work out.
Too far in the other direction
While disruptive ideas don’t always arise solely from customer feedback (think Henry Ford and the faster horse), you still need to solve real problems for your customers. A red flag for me is when someone earnestly uses that Steve Jobs quote – for every Apple which upends its industry, there are countless thousands of other companies laboring away with evolutionary changes that collaborate with their customers without prescribing their needs for them. That typically means it’s time to pause and evaluate. If your customers are successful in their business, they understand the underlying mechanic of value in their market. That doesn’t mean you can’t change the game for them, but if your product truly holds value, customers will recognize it even if it requires refinement. If you find it challenging to convince the majority of your target audience, something is amiss (typically your product market fit).
Finding the Balance
The goal of any early access, beta, or lighthouse program should be to strike a balance. Here are some important questions to consider:
To the customer:
- Does this product have no value for you without feature X? If not, validate this with other customers. If they agree, revise your product. If they don’t, it may indicate that you’re targeting the wrong early customer or need to push back on that requirement, even at the risk of losing them. I’ve encountered products on both sides of this equation—missing a critical functionality for the market or that functionality being hyper-specific to one customer. They key is to do more discovery!
- Would you be willing to purchase this product early with incentive pricing? This question reveals whether your potential buyers believe in the product enough to take a risk and put their name on the line. They are betting that they will be seen as heroes for securing a great deal on a solid product. People get promoted for introducing a product that significantly improves their business process, coupled with a good deal. They typically don’t get promoted for paying full price for a product that had to be customized extensively to fit their ‘needs’.
To yourself:
- Does the success of this product hinge solely on one customer right now?
- Can I articulate the value of this product in terms of real dollars earned or saved for customers right now? Even if it requires refinement, do I have a compelling ROI story?
Like the complex relationships in Pride and Prejudice, navigating early customer product testing requires thoughtful consideration and a commitment to finding the right balance. Compromises may be made (everyone will have a Mr. Collins), but they should not deter from the overall true vision. By answering these questions, you’ll have a good idea of whether you’ve achieved balance. However, it’s important to keep asking these questions. Finding balance is a journey, not a destination.
Elizabeth Foughty 