THE DREAM IN ACTION

I’ve been thinking a lot about customer development over the past few months. It’s a new way of thinking as a company, it’s a new way of approaching marketing, product building, and customer service. It’s changing, or maybe already has changed, the way companies think about the relationships with their customers, and it’s never been easier to employ this strategy than in early stage technology companies. And that’s exciting.

One of the smartest pieces of startup advice I’ve heard in a while was Andy Rachleff of Benchmark Capital saying, “The most important thing to look for in a founder: Authenticity”. (thanks to @TristanWalker for pointing me to this quote) The same goes for evaluating a startup as a whole, is the corporate philosophy of the company true to it’s actions? Is the company authentic about what they tell customers and partners? Take Comcast for example: They say they are listening to customers, they have a large team scanning twitter to make sure that customers voices are heard, but they sure as hell don’t seem to be listening to customer feedback about their phone support, or cable and internet packages. In short, it’s terrible. They’re not using customer development to drive their product offerings. True customer development focused startups make this a priority, and that helps them brand themselves as authentic.

Companies that that make learning a priority are exciting and they’re the type of companies I want to work with.

Today I was in a mtg about how GE will work to reach out to potential job candidates. Surprisingly, the recruitment practices are on the cutting edge of listening and reaching out to candidates and meeting them on the platforms that they use. They’ve abandon the “they’ll come to us” mentality that will fail every time. I don’t care if it’s a 2 person startup or a Fortune 2 behemoth, you have to listen and engage in customer feedback at the customers level or you will no be able to accurately road map your product.

Similarly, with the work I’ve been doing with Foursquare the team is very interested in the user feedback. To the point that they are intimately aware that the game must develop with user feedback in mind for it to remain compelling. With the recently inclusion of deals ‘in-game’ it’s only become more valuable for users. In the past it was just fun, now Foursquare is benefiting users financially, and that has staying power.

LEARNING companies solve problems quickly while remaining true to their strategy. LEARNING companies keep users and customers happy even when they don’t give them everything they want. LEARNING companies focus on long term value and they don’t let their products get stale. LEARNING companies measure the metric of user/customer engagement and realized that there is valuable data to be measured there. LEARNING companies listen.

If there is one thing that will be consistent with my career, I want to work for LEARNING companies.

image via flickr

Bottom up is the way to grow anything these days. Construction workers have know this for…well, forever. Surprisingly the idea of bottom up growth is just getting around to startups, politicians, and corporate America… probably in that order.

37 Signals

When Jason Fried, founder of 37 Signals was first building his company he was inspired by chefs. He shared at a talk recently that he found it interesting that even though chefs have all these cooking secrets they don’t hesitate to share them. Chefs write books about their secrets and host TV shows giving their secrets away. Their “secrets” became their product! This appeals to any individual. Myself for example, with no cooking stills at all (my gf can attest), am very intrigued by some cooking shows just because they are teaching me to be the expert. In reality what they are doing is giving me the power of information. This power of information is what reaches and appeals everyone. I don’t know anyone that doesn’t want the power of information. What Jason discovered is that empowering people with information can create a huge following or audience and that audience becomes a few things:

• a powerful marketing team
• a powerful support team
• a very powerful and lucrative customer base

This realization has helped 37 Signals to become a very profitable software company with a huge audience on its chosen communication platform, their blog Signal vs. Noise. This ground up approach, starting not with big name software publications or traditional “respected” media, but with their own blog that anyone could subscribe to proved to be hugely successful.

Building Obama

The next, perfect, example of embracing bottom up growth is the completely unexpected win of PE Barack Obama in the presidential election 2 weeks ago. There has been no shortage of coverage on how PE Obama has utilized non-traditional media to build a huge following of over “8,000 Web-based affinity groups, 750,000 active volunteers, and 1,276,000 donors“. It certainly shows that by reaching out through social media tools DIRECTLY to the people and not only through debates, press conferences, and traditional media PE Obama was able to create a loyalty to his cause maybe stronger than any in the past. He certainly was the first to use technology is such a huge way during a presidential campaign. Whether it directly affected votes I’m sure could be debated but certainly through donations his involvement and attention to this group had an enormous and undeniable effect.

As startups may have realized this trend first, as is normal in the tech world, the political world has now shifted in the realization that reaching the “common man” directly is a very powerful act. Daniel Debow, CEO of Rypple, wrote in his recent Huffington Post blog post:

I think Obama’s improbable election will be the final “evidence” point that convinces the business world that they need to understand the change that is coming to their way.

I believe this to be very true. Adapting to change is what keeps a business alive at any level and smart corporations must and will react to this shift.

GE opens up to bottom up

Just as getting into politics on this blog is something that I almost never do I’m going to comment on my employer General Electric because it has recently made moves towards embracing bottom up growth that I totally respect.

GE recently launched a site called GEreports.com. GEreports is basically a blog for GE. They cover anything from how much the company is spending on it’s revolutionary ecoimagination campaign, to posting talks from CEO Jeff Immelt (which are really awesome in person). They share recent new products from all of the different GE portfolio businesses and overall does a good job of showing the public (the bottom) what they are up to. I’m sure the growth of GEreports.com will not sky rocket right away but as large corporate blogs grow and as companies let their communications departments have a bit more freedom and openness I think that they could become very powerful communication platforms for the general public, investors, and in my case…employees.

This last move from closed to open and from top down to bottom up that is beginning in corporate America is a bit surprising to me, but very encouraging. As we grind through a very tough economic state we see a call for great regulation and disclosure from corp America. The start of blogs and other communication platforms from corporations to the public will do nothing but encourage this sort of open and honest behavior. I’m not naive enough to think that if a corporation has a blog it means they are immune to scandal. However, what it does mean is that at least someone inside the organization understands the importance of reaching to the bottom without using traditional, slow, and overly scrubbed media to inspire openness and growth.

Link from picture not working : Warren Buffett interview

This video of Warren Buffet being interviewed by Charlie Rose is an absolute must watch if you are interested in the financial crisis and it’s affect on the United States. Please watch this and consider what Buffett says about, well, almost everything. I’ve ready many (leather bound) books about Buffett and I have a great deal of respect for his opinions and his incredible insight into the sould of the US finance markets. Let us know what you think of the video.

Last night I had the pleasure of having an extended conversation with the CTO of GE Healthcare, Nevin Zimmermann, about CEO’s and what they are able to accomplish with a given company. We talked about the past CEO of GE Healthcare, Joe Hogan, and the current CEO of GE Healthcare, John Dineen, and their differences. He explained to me that certain leaders are great at leading during certain periods of time in a businesses life. It has to do with their individual leadership styles. It was no secret that Joe Hogan was a phenomenal growth leader taking the business from $8-12 billion to $17 billion in annual revenue, huge growth! But, now that the business climate has changed significantly there have been leadership changes. These changes in leadership styles are essential as a business moves from a “boost profit” mentality to a “cut costs” mentality. No doubt this attitude will switch back and forth, but that is what is required for business growth.

This corporate lesson is a great one for start-up CEO’s. Many times the start-up founders find that they are great at “founding” but not as great at running/growing a company. Many find that they enjoy that starting phases of a start-up but don’t enjoy the growing phases or the process implementation phases. This can be difficult for a start-up founder who is used to having control over almost everything that company does, and now has to begin to give up control and ‘trust’ others with their company. This first starts with the realization that the entity that they have created is now larger than them and that they must act in the best interest of that entity over their own best interest.

Certain leaders are “one trick ponies” in that they can only start, only grow, or only cut costs, but cannot find those other leadership styles needed to lead through multiple business environments. Sometimes that is ok in the corporate world, and sometimes that is ok in the start-up world. After all Larry and Sergey passed Google off to Eric Schmidt when they realized they needed somebody with the business and leadership experience to lead Google into the next growth phases. They made the right decision and it worked. The most important thing is for the start-up founder to be self aware and realize who and how they are as a leader. For a founder to say, “someone else would do this job better than I would” is a very difficult thing, but sometimes it needs to be said for good of the company.