How to discover the audience insight that could make or break your startup

It’s an “aha” moment that is less than obvious but makes a ton of sense when you hear it. The deeper and better your insight, the better your business will be.


23 Jul, 2018TECHINASIA.COM

Beamstart - How to discover the audience insight that could make or break your startup | Beamstart

The following is an edited excerpt from Shortcut Your Startup by Courtney Reum and Carter Reum. The excerpt is provided by Gallery/Jeter Publishing. You can buy a copy of the book here.

We always tell people that when we look at any business that was crazy successful, it stemmed from a single meaningful insight.

It’s an “aha” moment that is less than obvious but makes a ton of sense when you hear it. The deeper and better your insight, the better your business will be.

Often an insight is something fundamental about a group of people’s proclivities, desires, or pain points. Howard Schultz’s insight was that Americans were craving a “third place” between work and home where they could have a sense of community and meet for conversation, like the Italian cafe. That was the seed of Starbucks. Larry Page and Sergey Brin had an insight about the way people search for information – the most common searches and most often chosen answers being considered the most accurate – leading to Google.

How to look for insights

There are patterns to look for to generate insights. Typically, they fall into one or more of the following categories:

• New behaviors. What are people, particularly early adopters, trying, tasting, liking, and buying for the first time? Can you spot the waves forming?

• Life hacks and MacGyver fixes. Ever used a paper clip as a collar stay? That’s an example of a small hack – a creative solution in the moment. Where are people using these “duct tape”-type solutions in their lives? Can you provide what they’re looking for?

• Resources that were once abundant but now are scarce. Capitalism can be wasteful when it comes to abundant resources. Inherently, valuable goods are treated as precious and less expensive goods are tossed to the side. But the value of things can change and often does. Can you notice any process in which there’s a by-product that could be made more valuable than it is now?

Consider the guy who “invented” baby carrots. In the mid-1980s, Mike Yurosek became tired of throwing away 400 tons of carrots a day in his Bakersfield, California, processing plant. They were too bent or broken to sell, so he first used them to feed his pigs. When their fat turned orange from eating so many, he decided to see if he could sell the discards somehow.

At first, he shaped them by hand with a potato peeler. Then he bought an industrial green bean cutter, which happened to cut carrots into two-inch-long pieces. And voilà, baby carrots – and a whole new industry – were born. Mike’s insight was partially inspired by his desire to avoid food waste, as well as by his ability to break the conventional belief that people wanted carrots of only a certain size.

What started with an issue in the trenches became a learning experience, which led to a bankable business for an innovative product subcategory, one that many other companies would later enter. None of that would have come to pass if Mike hadn’t been in the trenches, thinking about what he was observing. Whereas many people focus on seeking information, successful people seek insights.

Find that insight early

Photo credit: imagincy / 123RF Stock Photo

One important reason you want to get into the trenches as early as possible is that you want to discover your insights as soon as you can. Here’s why: the smallest adjustment based on early insights can make massive differences over time. It’s like flying an airplane: if you are flying from JFK to LAX and adjust your airplane’s trajectory wrong by only one degree at takeoff, you’ll end up landing fifty miles out into the Pacific Ocean.

Consider the story of the founders of Twitch.tv, now the world’s leading video platform for gamers. Justin Kan’s first company, Kiko Software, was a digital calendar, similar to Google’s. When Kan and other founders realized that their calendar wasn’t going to be a major success story, they decided to auction their page site on eBay, receiving $250,000. Subsequently, Kan and his business partner Emmett Shear used the money from the sale to launch Justin.tv, a site that would livestream people’s lives, what they called “lifecasting.”

Though responses were mixed, many users began to request the ability to create their own online video streams. At the same time, the practice of streaming video games was popular but technologically difficult. By watching customer behavior, following market trends, and listening to customers, Kan and Shear realized that there was a major opportunity with gamers. They took that learning and spun off Twitch.tv, ultimately selling it to Amazon for nearly a billion dollars.

The key here is that the founders weren’t blinded by love for their original idea, which so often happens. Instead, they saw an insight early enough and changed course to a much more successful idea.

How to find insights

Another example of the power of finding insights early is a company called Aflore, a Colombian financial services platform launched by a company builder called Polymath Ventures. When Polymath was searching for how to assess the creditworthiness of an underserved population, the majority of whom didn’t have a credit history, it became clear that numerous people in Latin America borrow from other people within their communities.

How do those community lenders decide whom to lend to? They usually know the person personally and therefore can estimate their creditworthiness. That insight led to a whole new business model. Aflore engaged those community lenders as informal advisers to help it not only assess creditworthiness but become its primary distribution channel, making Aflore one of the first direct-sales lending companies in the world.

We love this example for a few reasons. First, this insight is something that the founders of Aflore couldn’t have discovered through desk research. They discovered it by conducting in-depth interviews with a wide range of people about their borrowing and lending behaviors and then creatively synthesizing the information they gathered. Second, it’s a reminder of how innovation stems from insights, and insights result from observing human behavior. Pay attention to what people are doing or trying to do most naturally, and you will uncover insights.

Notice that we used the word “uncover.” That’s because insights are found, not created. You need to be out there talking to people, seeking to understand what they are doing and why, rather than in a room brainstorming. Make sure you personally are getting in front of customers and asking questions to understand their experience, rather than just using focus groups.

Incentivize your employees to identify insights as well. Your sales team may be best suited to discover insights, whereas your engineering team may be the one that needs to hear them. Be sure there are clear lines of communication between those teams.

This post How to discover the audience insight that could make or break your startup appeared first on Tech in Asia.

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