“How many signups did we get last week?” he asked. I flinched inwardly, then told him, anticipating the inevitable. The inevitable was, of course, what I got: dismay, anger, blame. I was
the one he was dismayed with, the one he was angry at, the one he blamed. “We have to hit our targets for the month,” he raged, “because I have no way to explain it to the board if
we don’t. Do whatever you have to do.”
I did what I had to do. I beefed up AdWords spend. I sponsored Facebook posts. I promoted YouTube vids. I got the signups.
And then I had
to explain the cost per acquisition.
It was a broken model. We were so focused on reaching investment-related goals that we had no room to identify and remedy fundamental problems, even though
that’s what we needed to do. We needed to understand why people were dropping off after signup, or after a day or two. We needed to understand why people weren’t telling their friends
about us. We needed to understand why we were falling short.
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What I should have said was, “You know what? We should stop spending money on acquisition right now. The product isn’t
good enough. Our historic acquisition spend has shown us that. Let’s fix the first broken piece, spend enough on acquisition to identify the second broken piece, then pause and fix that. Why
would we pay money to bring our product, in its currently lousy state, to the whole world? We’re not ready for them.”
This is the whole idea behind Eric Ries’ "The Lean
Startup." Ries talks about creating a Minimum Viable Product, getting it into the hands of a few customers, figuring out where it’s broken, iterating, and testing again. He does not talk about
creating a Minimum Viable Product and then spending hundreds of thousands of dollars promoting it while frantically trying to improve it on the fly.
But it’s hard to say no. It’s
hard to look the CTO and the CEO in the face and say, “You know what? We could achieve those magic numbers we promised, but the truth is, we would be paying for a mirage. We never
should have promised those numbers in the first place. The best thing we can do for the company right now is to confess that people don’t yet love our product enough. And you know how
you’re pressuring me right now to set an even higher target for next month? That’s going to do us even more damage.”
Nobody wants to admit that people don’t love the
product. It’s especially hard for the marketing person to say it, because it sounds like you’re just blaming the product for your own failings. But acknowledging the truth is the smartest
thing you can do.
CEOs: It starts from the top, from the core structure and expectations. As soon as you get into the
we-have-to-show-hockey-stick-signup-numbers-every-month-or-we’re-screwed trap, you lose the ability to face the truth about product-market fit. So you need to set a different tone, one that
says, we don’t push the product to market until we know the market loves it. Instead of pressuring your CTO and CMO to achieve signup numbers, pressure them to show you what people are falling
in love with.
CTOs: Resist having your product marketed until it’s ready. Until that point, use the customer acquisition process not to acquire customers, but to acquire
data, about what people love, don’t love -- and why.
CMOs: Show some discipline. CEOs and CTOs should be relying on you to advise them not on how you’re
going to get them a million customers, but on whether the product is even marketable. That is your job. Speak up.
It’s hard to face the truth. But it is the bravest thing you
can do.