1CMO

Growth strategy | Advisory | Force multiplier

Kimball Norup

How My Son’s Life Made Me a Better Leader (and human being)

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Two years ago, my youngest son, Drake William Norup, passed away at the age of 24.

Reflecting on the past 24 months of grieving, searching for answers, and trying to make peace with what happened, I have slowly begun to realize how much his life has changed me in both subtle and profound ways.

It has made me a better husband, father, son, friend, CEO, leader, and ultimately a better human being.

I am very grateful for these lessons.

Please don’t get me wrong. While I appreciate the life lessons, I wish it had never happened. My son’s passing is the absolute worst thing I have ever experienced in my life. I would not wish the pain and torment that my family has been through upon my worst enemy.

I would do absolutely anything (and I mean ANYTHING) to have him still with us, but that is unfortunately not how life works. No matter how much I hate it, I know that he is gone and not coming back.

It is up to me to find a positive outcome. This article is one attempt.

To honor Drake and his legacy, and perhaps help others who might be facing similar challenges, I am sharing a few of the most impactful things I have learned so far.

Life is Unpredictable

As a child, Drake was a blond haired bundle of energy. Always sweet and kind-hearted, he was also very intelligent and athletic. By the end of his senior year of high school, he had been a four-year Varsity starter in both soccer and lacrosse, and was accepted by his top university choice, California Polytechnic, in San Luis Obispo.

Everything was going perfectly according to his plan. It felt like an exciting and fulfilling new life chapter was opening up before him.

We did not know what was happening when the early symptoms began to appear. It was confusing and scary for all of us, most especially for Drake. Everything that used to be so easy for him – things like school, or socializing, or even basic self-care – became difficult, if not impossible.

What we thought was a just a case of “senioritis” and wanting to party in college, was in fact early psychosis and his failed attempts at self-medicating to calm the uneasiness and chaos in his mind.

Sadly, it took several failed attempts at college, multiple arrests, and stays at re-hab centers to figure out that he in fact did not have a substance abuse issue at all. He was suffering from a severe form of bipolar (schizoaffective disorder).

You have to dig deep on the root cause. What is visible to the world may in fact not be the real problem…

Drake’s illness was a curveball that we did not see coming. In fact, we had never imagined it even as a possibility. In this instance, I don’t think there was anything we could have done to physically prepare. However, in retrospect, I do wish that I knew it was within the realm of possible. At least then, we could have prepared ourselves emotionally for the many horrors to come.

In business and life, sometimes you have to expect the unexpected. And even if it is painful, we have to consider the worst case scenario and how we might respond. This preparation has many benefits in the middle of crisis.

Mental Illness is More Common Than We Think (and it SUCKS)

Through my research, I have learned that it is fairly common for this type of mental illness to manifest in young adults, more often men than women, and it is often triggered by a stressor like a new job, becoming a parent, or leaving home for college.

Mental illness comes in many forms and affects so many people. For lack of a better word, it absolutely SUCKS. It sucks for the family, but most of all mental illness sucks for the person afflicted. Through no fault of their own, they suffer in ways most of us cannot begin to imagine.

There is so much stigma and ignorance around mental illness in our society. Because of this Drake was also often in denial that he had it. He never stopped fighting, but he never wanted to fully admit or accept that he had a serious medical condition.

As a business leader, I have learned to speak openly with my team about my son’s experience and the importance of mental health in general. The more I listen and share, the more I have come to realize the far-reaching impacts of mental illness in our society. It touches almost every one of us in some way.

It is okay to talk about mental illness.

It is okay to take a mental health day.

It is okay to admit you need help.

You are not alone.

Live Each Day to the Fullest

All of this reinforces the old truism that life is so very short.

Most of us take our daily lives for granted. For the last six years of his life, most days were a hard struggle for Drake. I hope my writing today will serve as a reminder to be thankful, to love one another, and live each day to the fullest. That is truly what Drake tried to do.

I am thankful for my wife, my other son, my family, my friends, and my work colleagues. I am also thankful for my health, and the opportunity I have been given to lead a great company.

Each day, I try to do something positive that expresses my gratitude for my life and all the people in it.

Remain Optimistic

Everything good in life is worth fighting for.

The summer before his senior year of high school, I went with my son to a traveling lacrosse team tryout. These were top players who had been invited from all around the San Francisco Bay Area, all of whom wanted to play lacrosse in college.

Drake was thin and wiry, most of them were huge. When we arrived, he took one look at the assembled players, turned to me, and told me he wanted to go home.

I shared with him that it was an honor to be invited, and then said one of those dumb dad things you regret as soon as you say them: “If it doesn’t hurt you, it will make you stronger.” I said, “It’s not the size of the fight the man is in, but the size of the fight in the man.”

He geared up, ran onto the field, and had a great tryout.

It proved to be a memorable day for both of us.

In some of his darkest moments over the last several years of his life, Drake repeated that story back to me…I think it was his way of reminding me, and himself, that he still had fight left in him.

He was optimistic that he could beat the disease. What neither of us realized was that nobody could.

As a leader, I always try to remain positive and convey my optimism. If I am being honest with myself, I have to admit that my view has shifted somewhat, I now lean towards being cautiously optimistic. My operating mantra is to trust, but also verify. And every plan, no matter how well conceived, should also have a contingency plan B.

Be Actively Empathetic

Empathy can be defined as the ability to sense other people’s emotions, coupled with the ability to imagine what someone else might be thinking or feeling.

There were many times when we struggled to understand what Drake was doing, or why he was saying the things he was. It took a while (in retrospect, much longer than it should have) for me to realize that he was just living his reality. Everything he was thinking and doing, no matter how illogical or delusional it appeared to the rest of the world, was very real and logical to him.

Even if I did not agree with him, I had to accept that it was his reality.

I have learned that the old adage to “walk a mile in someone else’s shoes” before you judge them, or try to help them, is profoundly useful in so many personal and work situations.

Looking at the world from someone else’s perspective is hugely helpful to both understand, and communicate better.

As a leader, I try to have the grace to accept that someone might have a different opinion, or just be having a worse day than me.

Have High Expectations, But Be Realistic

The biggest mistake I made as a parent, and the one I regret the most, was over-estimating Drake’s capability to overcome the challenges of his illness. Moreover, by extension, how much I was under-estimating its severity and debilitating impacts.

Expectations are situational. They must be in the context of what is realistically possible, and must consider both the individual and the operating environment.

As a leader, I have learned not to expect miracles. My role is to provide the resources, support and coaching, while removing as many obstacles as I can for my team. However, I should never expect someone to do more than they are capable of, or more than the situation allows.

Give as much scope as they can handle. But not so much that they fail.

Expecting the impossible to happen is setting up disappointment.

Err On the Side of Being Generous

One day we took Drake’s broken bicycle to the shop and had it repaired. When we asked him the next week how it was working, he replied, “I gave it away to a homeless person who I felt needed it more than I did.”

I was angry at the time, but should have seen the bigger picture. It is hard to be angry at someone with such a generous heart.

In the days since his passing, we have heard many stories about his kind and loving attitude. From petting every single dog he walked by, to saving a dying and abandoned plant he found on the sidewalk, to enthusiastically fist-bumping and greeting homeless people on the street, to literally giving away his last dollar to someone who needed a meal.

Life is much richer and more rewarding when you have a bias towards being generous. Even when you are having a miserable day, it always feels better to help someone else.

Live. Love.

One of the last times I saw him, Drake proudly told me that he had gotten two tattoos and asked if I would like to see them. He shared that a neighbor of his was training to become a tattoo artist and Drake had volunteered that he could practice on him.

At this point, I was thinking to myself that this might not end up well, but I gamely said that yes, I would like to see his new tattoos.

He then lifted up his long lacrosse shorts to reveal a bunch of upside down and backwards letters inked across his upper thighs. I was squinting, trying to read them, and Drake clearly saw the confusion on my face.

He then explained, “Dad, it says ‘Live. Love.’  –  The letters are facing me, so that any time I need a reminder, I just have to look down.”

“Live. Love.”

So simple. So pure. So profound…

This has become my new motto. It is how I choose to live my life.

Live. Love.

Final Thoughts

My dear son, Drake, was a rare loving soul whose bright light was extinguished far too soon. We are deeply saddened that the world will never get a chance to know him as we did, or benefit from his contribution. Nor will we get to see him grow into adulthood, launch his career, or start a family.

There is nothing like life and death to put things into perspective. I have learned that most of the stressful things in my daily life really are not that important. I am learning to ignore the small stuff, and focus on the big rocks.

I have so much love for my son, and cherish the time we had with him. There is no question that through his actions and struggles while alive, he has made me a better person.

My wife and I, and our older son, have a huge hole in our hearts. One that we hope someday to patch up and fill with purpose and meaning in honor of Drake and the challenges he faced.

For those that have read this far, I do have one small request.

For the rest of the day, I ask that you will choose to “Live. Love.” In memory of Drake.

I love you, and God bless.

-Kimball

PS – If this article has touched you in any meaningful way, please share it. And please consider helping others who are suffering from the many forms of mental illness and the common companion impacts of substance abuse and homelessness. If you don’t know of a local organization to support, I can highly recommend Transitions-Mental Health Association (www.t-mha.org) – their dedicated and caring team made a big difference in Drake’s life, and so many others.

NOTE: For those who are more curious about Drake’s life, we created a life tribute website with more photos, some poems he wrote, and a video of the service we held in his honor. Here’s the link: Drake Norup

What Is the Job To Be Done?

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People do not want a quarter-inch drill, they want a quarter inch hole.

– Theodore Levitt

A best practice for growth leaders and entrepreneurs who want to develop a successful new product or service is to first consider the job to be done.

Most innovators search for significant problems in defined markets, and then they think about possible solutions. This is a proven approach to achieving business growth. Unfortunately, many go about it the wrong way.

Here is the reason why: There is a natural bias to start the innovation process by improving existing products or relying on unproven assumptions without validating them first. This common mistake often results in innovations that buyers do not want or value (borrowing from above quote, this is creating an improved quarter-inch drill even though buyers are happy with their old drill). A dramatically better approach is to search for ways to help buyers improve how they want to do their jobs (for example, creating better quarter-inch holes, faster, cheaper!)

This focus on the “job to be done” is a subtle, but very powerful, shift in mindset for innovators. Moving from an inside-out perspective to an outside-in perspective does not always come naturally to growth leaders or entrepreneurs. Learning how to leverage this concept can accelerate your path to finding Product/Market Fit and company growth.

To understand what motivates people to act, you first must understand what it is they to need to get done. In a strategic planning context, you need to know the why behind the what.

Job To Be Done Theory

The late professor and business book author Clayton Christensen popularized the job-to-be-done (sometimes called JTBD for short) framework. His core theory: “People don’t simply buy products or services, they ‘hire’ them to make progress in specific circumstances.”

If the solution does the job well, buyers will “hire” it again. If it performs poorly, they will “fire” it and look for something else to solve the problem.

Christensen went on to write: “Innovation becomes much more predictable — and far more profitable — when it begins with a deep understanding of the job the customer is trying to get done.”

The implication of this shift in thinking can be profound. Growth leaders should stop focusing on their products and instead study the job that people are trying to do. By making the job, rather than the product or the customer, the focal point of your analysis you can create commercially successful products and achieve predictable growth.

Why Is This Approach So Useful?

Short answer: Because most new products and/or services fail.

Innovation has always been a top priority—and a big frustration—for growth leaders. For example, one McKinsey survey found that 84% of global executives reported that innovation was extremely important to their growth strategies. However, 94% were dissatisfied with their organizations’ innovation performance.

These numbers are staggering. How can this be? With the proliferation of technology, and the resulting ability to use it for generating customer insight data, companies today know more about their customers than ever before. Yet these insights seldom lead to better or more targeted innovations.

The hard truth is that the vast majority of innovations fall far short of ambitions. For many organizations, innovation is still an expensive and painful hit-or-miss exercise. Why? Many sellers are so focused on building customer profiles and trying to correlate vast data with behavior that they neglect to do something more important: simply understand why their customers make the choices they do. To create offerings that people truly want to buy, firms instead should focus on the job the customer is trying to get done.

Adopting this job-to-be-done approach can help improve your odds of success by providing actionable insights that lead to improved product or service offerings.

If you do the research to truly understand the “job” for which customers “hire” a product or service, you can more accurately develop solutions that align with what customers are already trying to accomplish. When you nail this, at a price point that is acceptable, you have a winning solution.

Applying the JTBD Methodology

In practice, the JTBD methodology is an useful refinement for the common approach of looking for a problem to solve. By focusing on the job-to-be-done, innovators can gain a much deeper understanding of all the customer’s needs and determine which are unmet.

It turns out that when customers are executing a job, they have a complex set of metrics in mind that they use to define the successful execution of their job. It is very helpful to capture these metrics (or desired outcomes) in the form of actionable customer need statements. This approach replaces the typical suggestions or satisfaction inputs companies ordinarily capture and use to create new products.

With this approach, the customer’s job to be done is translated into one or more uniquely structured statements that describes how customers measure value. When you think about it, creating a value statement is a perfectly logical first step in a process intended to create valued products and services.

Here is a simple 4-part template to follow: (Written from the buyer’s perspective)

  • When I…(provide context for the buyer’s challenge or problem),
  • But…(details on the barrier or obstacle that gets in their way or prevents success),
  • Help me…(this is the job to be done),
  • So I…(the value buyer will realize from the solution).

For example, using the drill/hole example from earlier, here is a JTBD statement: When I need a quarter inch hole for a project, but I don’t own an expensive professional drill, help me to quickly get a perfectly drilled quarter inch hole, so my project is finished quickly and looks great.

Here’s another example for a Peloton exercise bicycle: When I need an option to workout, but I can’t go to my favorite studio, help me to get a convenient and inspiring indoor workout, so I can feel my best for myself and my family.

A slightly simpler, alternative template:

  • When…(the situation),
  • I want to…(the motivation or forces),
  • So I can…(expected outcome).

Regardless of which template you use, a well-crafted JTBD statement creates clarity around a solution that does not exist today. Ultimately, you might end up with a number of these statements, each detailing a potential “job” your product or service could do. Growth leaders should prioritize them based on those with the highest market demand and largest market gap.

Conclusion

Anyone can build new products. (Well, almost anyone!) Not everyone can build products that solve a real problem and land product-market fit.

To better define the problem you are trying to create a solution for, think about the potential customer’s job to be done. This requires putting the customer hat on and looking at the world through their eyes. The JTBD framework will help you better understand customer behavior, and design better solutions as a result.

While conventional marketing focuses on market demographics or product attributes, JTBD theory goes beyond superficial categories to expose the functional, social, and emotional dimensions that explain why customers make the choices they do.

The JTBD approach reinforces something every growth strategist knows: intent matters. Everyone has reasons for the choices they make—a need to meet, desire to fulfill, objective in mind, some metric of success or completion! Successful products are borne from a deep understanding and solution for that intent.

People do not simply buy products or services; they have a “job” they are trying to get done. Understanding this leads to better innovation of new products and drives company growth.

The painful alternative is to invest time and money building products that nobody wants. You decide which is the better approach…

-Onward

About the author: Kimball Norup is the founder of 1CMO Consulting, a business strategy and growth advisory firm based in Sonoma, California. To read prior articles, or sign up to receive future ones by email, click here.

Knowing When to Pivot, Persevere, or Stop

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You’ve got to know when to hold ’em

Know when to fold ’em

Know when to walk away

And know when to run…

– Kenny Rogers, chorus from The Gambler

The concept of “making a pivot” has become popular to use when talking about business growth strategy, but I have found it is commonly misunderstood. Moreover, there is often confusion about when to consider it, and how to evaluate the alternatives.

This article will explore the meaning and purpose of making a pivot, and the two common alternatives of persevering, or stopping.

Defining Business Pivot

In some respects, business is like the game of poker. It is full of uncertainty, some things are in our control and others are not, we learn from experience, and there are multiple players all trying to win. Your strategy is how you choose to handle all of those elements in order to create a winning hand. Over time, expert players learn when to double-down, hold, fold and when to walk away to realize the greatest odds of success.

Poker is a great metaphor for the concept of “pivot or persevere,” which comes from Eric Ries classic book, The Lean Startup. His definition of a pivot is a change in strategy without a change in vision. In the book, he goes on to explain, a pivot is a “structured course correction designed to test a new fundamental hypothesis about the product, strategy, and engine of growth.”

It is important to note that while a pivot is a change in strategy, it does not necessarily need to be a complete change in direction. In fact, pivoting is often about looking at what has worked, and seeing how you can make refinements or refocus your efforts using those insights. As Ries notes, “keep one foot rooted in what we’ve learned so far, while making a fundamental change in strategy in order to seek even greater validated learning.”

Where Pivot Fits in Growth Strategy

The search for Product/Market Fit is a structured process where a growth leader gains validated learnings by sharing a minimum viable product with prospects and listening to the feedback.

How does this work in practice?

Growth leaders and company founders always have a vision. To achieve their vision they need to define a strategy and objectives to get there. Classic strategic planning theory dictates that the chosen strategy can change over time (or with new learnings from the market) but the vision should remain the same. When deciding to make a pivot, the target market or the value proposition (features and benefits) of the product or service might change, but the vision for the problem to solve does not. Each pivot creates a new set of assumptions and features to validate, and the process repeats.

The objective for each cycle of this process is for growth leaders and their teams to make a decision by asking a simple question: Should we pivot, persevere, or stop?

  • Pivot: If all the feedback is negative (or even worse, indifferent) and the data does not support the leap of faith assumptions, then it may be time to pivot. As the definition states, this means to try a different strategy in pursuit of the original vision.
  • Persevere: If each experimentation cycle seems to be more productive than the last, meaning there are lessons gained and the data supports the leap of faith assumptions, then the obvious next step is to persevere for another round of refinement.
  • Stop: In extreme cases, typically driven by complete failure to validate any of the leap of faith assumptions, or running out of cash to continue funding the search for Product/Market Fit, growth leaders or company founders may conclude there are no other pivots to make and it is time to stop. The decision to walk away is never easy, but sometimes is the only rational decision left.

The 10 Most Common Business Pivots

Just as every business and solution offering is different, so are the potential business pivots. However, there are some common themes. Here are the ten most common business pivots as highlighted in The Lean Startup book:

1. Zoom-in pivot

In this pivot, a single feature of your product becomes the whole product. This might be because one specific feature gets significantly more traction than the rest of your product. In these cases, channeling your resources into that feature alone can allow you to get your product onto the market much more quickly.

2. Zoom-out pivot

This pivot is the exact opposite of the first example: Your current product becomes a single feature of a bigger product. In this case, it means you have established that there is an interest in your product, but there is reason to believe that it needs to be a part of a larger, more developed product in order to be successful.

3. Customer segment pivot

Based on your field research, you conclude that your product should be targeting a different type of customer. This comes from discovering that your product interests a different audience to the one you were originally pushing it to. You might not need to change your product much at all – only your customer persona.

4. Customer need pivot

Your solution is refined based on a greater understanding, or new revelations, about your customer’s needs. Sometimes this pivot is driven by the discovery that the problem you’re solving is not important enough to your customers, or they are unwilling to pay for it.

5. Platform pivot

This pivot refers to a change from an application to a platform, or vice versa. Most often, startups that aspire to create a new platform begin their journey by creating a single application as the foundation.

6. Business architecture pivot

This pivot was inspired by concept that a business can either be high-margin/low-volume (complex systems model, common in B2B solutions with complex sales cycles), or low-margin/high-volume (volume operations model, common in B2C solutions). Some organizations choose to pivot by switching architectures.

7. Value capture pivot

This pivot reflects a change in the way you make money from your product. An example of this pivot would be changing how you charge by switching to a subscription business model from a sale-by-sale e-commerce model.

8. Engine of growth pivot

In this pivot, you make a change in your growth strategy in order to achieve faster or more profitable growth. Most startups use one of three primary growth engines: (1) Viral growth, when current users recommend other users. (2) Paid growth, when you spend marketing budget on acquiring new customers. (3) And sticky growth, which is focused on customer retention and maintaining a low churn rate. In this pivot, you decide to change from one of these growth engines to another.

9. Channel pivot

In the Channel pivot, you change how and where you sell your products and/or services (for example, in stores, online, through partners, in-app, etc.) This pivot is typically in response to the learning that the same solution can be delivered more effectively through a different channel. In many cases, this will drive changes in the price, features, and competitive landscape of a product.

10. Technology pivot

In this pivot, you decided to change the technology that your project is built upon. This is often a result of learning you can achieve the same outcome with a different lower cost and/or better performing technology.

As you can see from these ten examples, business pivots can take many forms. Which pivot you choose will ultimately be driven by what you have learned from your market experiments.

The bigger challenge for growth leaders is determining when to pivot.

To Pivot, or Not to Pivot?

Deciding whether to pivot, persevere, or walk away is one of the classic entrepreneurial dilemmas. It is one of the most difficult decisions any growth leader, or company founder, will ever have to make.

Asking the honest question of “should we make a pivot?” is sometimes painful, but always important.

Making the pivot decision can be very stressful and difficult for teams to evaluate. To avoid the trauma, many growth leaders and company founders wait too long to consider a pivot, sometimes with dire consequences.

One easy way to avoid this “fire drill” is to schedule regular Pivot/Persevere decision-making meetings in advance. A best practice suggestion is to do this no more frequently than once a month, but not any less frequently than once a quarter.

The agenda for this meeting is simple: Ask yourself, and your team, what evidence do you have that your current strategy is getting you closer to achieving your vision? Are you making sufficient progress to believe that your original strategic hypothesis is correct, or do you need to make a major change?

If your product experiments are helping you make progress towards validating leap of faith assumptions, and the feedback you are receiving is resulting in material improvements to the product offering, then it makes sense to continue.

If there is no evidence of making progress, or it is insufficient, then a pivot may very well be the best course of action. In the words of Eric Ries, “If we’re not moving the drivers of our business model, we’re not making progress. That becomes a sure sign that it’s time to pivot.”

Sometimes all you need is more patience, additional capital, or a larger audience. Other times, you might need to make a strategy change. In these scenarios, you might have the right product but you are targeting the wrong customers, it’s too expensive, lacks essential features, or doesn’t solve the right problem. This is when you pivot, or if you cannot see any viable path forward, you choose to stop and walk away.

Danger Zone for Growth Leaders

There may be no bigger destroyer of creative potential or financial capital than the misguided decision to persevere in the face of negative or neutral market feedback.

Instead of pivoting, or walking away, some growth leaders are tempted to stay on course and try to power through the obstacles. By refusing to make a decision, or embrace market feedback, they run the risk running in neutral. This is a dire situation where they are neither growing enough nor dying – just consuming scarce human and financial capital, but not making progress.

Growth leaders and their teams should take comfort in the realization that failure is a prerequisite for learning. In this context, making successful pivots will put them on the path towards a commercially viable solution offering.

This is the reason that many successful entrepreneurs and corporate growth leaders who have decided to make a pivot will tell you that their only regret was not making the decision earlier and quicker!

Conclusion

If growth leaders take only one lesson from the economic turmoil of the last 24 months, it is that we are living in complex VUCA business environment. The best path forward is to develop a growth strategy, and then move quickly to execute it. This market-facing activity will sometimes result in the need to re-evaluate the plan.

The decision of whether to pivot, persevere, or stop challenges every growth leader and business founder at some point. Making a good decision regarding whether or not to pivot your business strategy can be the critical difference between success and failure.

-Onward

About the author: Kimball Norup is the founder of 1CMO Consulting, a business strategy and growth advisory firm based in Sonoma, California. To read prior articles, or sign up to receive future ones by email, click here.

Finding Product/Market Fit

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The only thing that matters is getting to Product/Market Fit, which means being in a good market with a product that can satisfy that market.

– Marc Andreessen

When developing a new product or service, growth leaders are ultimately searching for the condition that venture capitalists like to call Product/Market Fit (or PMF for short). It is the ideal situation where you have identified the solution to a significant problem in a defined market and validated that prospects are willing to pay for it.

Product/Market Fit is the ultimate objective for entrepreneurs in startups and for growth leaders of more established companies. From this starting place, they can commercially develop their solution, build the go-to-market program and team, and begin scaling the business.

Investing in any scale-up or growth effort without having found Product/Market Fit is a guaranteed path to failure. Finding it is not easy, but it is vital.

In fact, many growth strategists (this one included) believe Product/Market Fit is the best predictor of future success for a company.

Definition of Product/Market Fit

There is some interesting venture capitalist history behind the creation of the Product/Market Fit concept.

The classic definition is the degree to which a product satisfies a strong market demand. Product/market fit has been identified as a first step to building a successful venture in which the company meets early adopters, gathers feedback and gauges interest in its product.

The Process to Find Product/Market Fit

While finding Product/Market Fit is not always simple, it is easier if you follow a proven process. The basic formula is: Develop a hypothesis. Test it. Observe/learn. Continue or Pivot. Iterate.

The best way to test, learn and gain market validation is to share an actual prototype with potential buyers, what is often called a Minimum Viable Product (or, MVP for short).

The process looks like this:

  1. Determine your target customer. Who is the buyer, and what does the market look like?
  2. Identify underserved customer needs. What is the problem you expect the product or service to solve?
  3. Define your value proposition. Why should they buy it?
  4. Specify your Minimum Viable Product (MVP) feature set. What do you need to share with potential buyers in order for them to evaluate your solution and provide feedback?
  5. Create your initial MVP prototype. Designed to test your most critical assumptions first.
  6. Test your MVP with customers. Observe and listen to test your hypotheses.
  7. Continue to iterate, or pivot. Based on the feedback you receive, make the decision to continue refining the MVP, decide you are ready to go to market, or pivot in a new direction.

Here’s what it looks like in practice: Growth leaders must first identify a significant problem and a target customer profile. Then they must get out of the building and have conversations with real life prospects to validate their key assumptions. Based on what they learn they refine their solution, fine tune the value proposition, and repeat the process until they either arrive at a winning solution or change directions.

This validated learning process is challenging, but not impossible. Ultimately, it leads to great outcomes because it provides growth leaders with the confidence and insight to define the solution and a market, so that there is no guessing when it comes time to build or sell.

Business strategists will recognize and appreciate this measured approach as a great risk mitigation strategy. It allows you to learn quickly as you move towards your objective while limiting your downside exposure.

Which Comes First, Product or Market?

The number one reason why startups fail is that there is “no market need” for the product or service they are offering. It is hard to believe, but this reason for failure even ranks ahead of running out of money. It is for this exact reason that finding Product/Market Fit is so important.

Many growth leaders wonder which element is more important to validate first, product or market?

The quick answer is: Market.

Here’s why…

According to Marc Andreessen, “product/market fit means being in a good market with a product that can satisfy that market.” Unfortunately, in many cases the focus is too much on the latter part of the sentence (a product that can satisfy the market) and not enough on the former (in a good market).

Market matters the most. Andreessen went on to explain why that is the case: “You can obviously screw up a great market — and that has been done, and not infrequently — but assuming the team is baseline competent and the product is fundamentally acceptable, a great market will tend to equal success and a poor market will tend to equal failure.”

That is also why time spent building a business around the product alone is pointless: “In a terrible market, you can have the best product in the world and an absolutely killer team, and it doesn’t matter – you’re going to fail. You’ll break your pick for years trying to find customers who don’t exist for your marvelous product, and your wonderful team will eventually get demoralized and quit, and your startup will die.”

You can have the best product or service in the world, but if there is no market, there is no business.

Market wins. Always.

Two Key Hypotheses to Validate

As growth leaders and their teams are iterating their MVP in the market, they should focus their research on validating two key hypotheses:

  • A “value” hypothesis – to test what solution will delight customers enough to buy. The process of developing and testing your MVP will help you define the ideal combination of features and benefits to include in your offering, the value proposition for customers, and the best way to articulate them in your marketing.
  • A “growth” hypothesis – to test how to get more customers and scale the business. Your field research will help you to refine your targeting and develop a clear profile for an ideal client, the buyer personas you will sell to, and how best to reach them.

Validation of these two hypotheses reinforces the lesson that “market” comes first and then the product comes second. Your solution offering (your product or service) is intended for a market, and the market will confirm what to create by the interest of potential customers and their willingness to buy.

Leverage the 40% Rule

Searching for Product/Market Fit can often be a long and complicated journey, with many detours and dead ends. It is seldom a straight line.

Growth leaders should remember that it is more about the journey than the destination. Why? Because it is often not clear, or completely obvious, when you have found it. Unfortunately, Product/Market Fit is not a binary state; it is more a matter of degrees. You should be looking for more than the minimum degree of fit, ideally finding a high degree of Product/Market Fit.

One proven way to validate that you have found an acceptable level of PMF is to survey potential buyers and apply the 40% Rule. If you find that at least 40% of surveyed prospects indicate that they would be “very disappointed” if they no longer have access to your particular product or service, then you are in a good spot.

An alternative way to structure the question is to ask if surveyed buyers consider the product or service a “must have.” Again, if more than 40% respond positively, then you are looking good for PMF.

Avoid This Common Mistake

One mistake many growth leaders make is to confuse Product/Market Fit with problem/solution fit. This sounds a bit confusing, but it is actually simple.

You need to be very careful that you are measuring desire for your product or service (the MVP you are testing) and not just the desire for any solution. This can be easy to misinterpret if you are not careful in your validation testing. Many buyers will express enthusiasm for a solution to a problem, but not necessarily the one you are proposing at the price-point you need to be profitable. This can create a dangerous “false-positive” metric for validating PMF.

Conclusion – What Comes Next?

Product/Market Fit is often considered the best predictor of future success for an organization. It is a prerequisite for sustainable growth, because it represents alignment between supply and demand, and when you achieve it, you have the foundation for growth.

This makes a lot of sense when you consider that without validating PMF you may invest a lot of time and money into developing a product or service that nobody will buy.

After achieving Product/Market Fit, the next step is to scale the business by finding more customers within the target market.

Time for a growth strategy and plan!

-Onward

About the author: Kimball Norup is the founder of 1CMO Consulting, a business strategy and growth advisory firm based in Sonoma, California. To read prior articles, or sign up to receive future ones by email, click here.

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Validate Your Leap of Faith Assumptions

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Leap of faith assumptions are the real power of entrepreneurs because the entire venture depends on it. If they are true, then great opportunity awaits. If they are false, the start-up/business risks total failure. 

– Eric Ries (author of The Lean Startup)

Many organizations choose to invest their scarce time and resources developing new products and/or services without having first validated that there is a market.

One frequent cause for this is the solution looking for a problem syndrome, where startups or more established companies neglect to fully understand or verify the problem first.

Without realizing it, the growth leaders of these organizations have made what is often called a “leap of faith assumption” that is, they have assumed there are ready and willing buyers for their offering.

Logic and common sense tell us that it would be very smart to verify this assumption before investing in building a solution.

Unfortunately, common sense is not always common practice!

There are several related common leap of faith assumptions made by company growth leaders. In this article, I will share what these strategic traps are and offer some guidance on how to avoid them.

Let’s get started…

Defining Leap of Faith Assumption

Every good strategic plan begins with a set of assumptions. After defining these assumptions, growth leaders next develop a strategy that uses those assumptions as a foundational starting point and build a plan around them that will achieve the organization’s objectives.

In general, you can categorize assumptions into two buckets:

  • Technical – assumptions you make about topics like usability, construction, efficiency, and reliability of your product or service.
  • Commercial – assumptions you make about topics like what prospects want, how you will market, sales channels, and customer success.

The goal for growth leaders is to test their assumptions as quickly as possible. For most assumptions, this is not that difficult. In fact, some assumptions can be validated from past experience or simple deduction based on accepted facts. For example, people need to eat food to live, or companies need to sell their services to grow.

Other assumptions, often related to functional details of the proposed product or service, require field-testing with prospects. This will be a topic for a future article.

In the world of startup and growth strategy there is a special subset of assumptions that are more challenging. These assumptions are so fundamental, that the success of the entire business rests on them. If they are true, tremendous opportunity awaits the company. If they are false, the company risks failure. Because they are unknown and highly risky, they are often called “leap of faith” assumptions.

Eric Ries popularized the leap of faith assumption concept in his book, The Lean Startup.

Note: Don’t be misled by the title of the book – the principles apply to any size or maturity of organization. In fact, his definition of a “startup” is: A human institution designed to create a new product or service under conditions of extreme uncertainty. This definition purposely does not include anything about company size, industry, or sector of the economy. It applies to any organization.

Growth leaders need to recognize that leap of faith assumptions are the riskiest elements of their strategic growth plans. They are also more difficult to validate, therefore there is a temptation to take them for granted, or simply gamble that they are right and not wrong.

Many startups and more mature companies have failed because they did not prioritize and properly validate their leap of faith assumptions first.

Critical Leap of Faith Assumptions

Growth leaders must try to validate as many of their assumptions as possible before they invest in developing a new solution to a problem. However, the critical assumptions, the ones we call leap of faith assumptions, should be the priority.

Leap of faith assumptions most often focus on the demand side of the equation. Why is this the case? Because if there is no demand, then there is no sale, and if there is no sale, then there is no business opportunity.

In my experience, here are the three most critical leap of faith assumptions that startup founders and established company growth leaders make:

  • The ultimate “leap of faith” assumption – is that prospects actually want the proposed solution. Making sure there is market demand is critical. If you solve a problem that people want to fix that is great news.
  • The next is – prospects recognize they have the problem. Or, are they living in ignorant bliss? This is not necessarily a showstopper, but if prospects don’t know they have the problem it means your marketing and sales process will be more complicated because you will have to educate on the problem and then the solution.
  • The third is – prospects are willing to pay for a solution. If people recognize they have a problem and want your solution, will they pay for it? This should be obvious – it is extremely hard to build a business model around a solution that nobody will pay for!

Validating Your Leap of Faith Assumptions

The Lean Startup Methodology pioneered by Steve Blank and optimized by Eric Ries was designed to help growth leaders quickly identify their critical leap of faith assumptions so that they can test them out on potential customers. Then they can decide whether to stay the course (continue validating and begin developing the solution) or change directions (pivot). A future article will cover this process in greater detail.

Discovery can only happen when growth leaders get out of the building and talk to real live prospects in the marketplace. Only then can you learn if potential future customers have a significant problem worth solving.

How do you do this? – By asking and getting answers to deeper questions like:

  • Do people really have the problem you think they have?
  • How do they describe the problem?
  • How do they address the problem today?
  • Is your concept a better alternative for them?
  • What is solving the problem worth?
  • What is the cost of inaction?
  • Where would they search for a solution?
  • How would they like to buy?
  • Where would you find more customer like them?

One proven strategy for growth leaders is to identify and prioritize their most risky assumptions to tackle first. Why? Those assumptions that are scary or make us uncomfortable are also the easiest to push aside. It is human nature to embrace what is familiar and safe, just as it is to avoid risk and the unfamiliar. Focus first on the leap of faith assumptions that have a high level of importance for project success along with a short duration of time to test.

Conclusion

Just because you “can” create a new solution is not a good enough reason. The real question is “should you?” – This can only be answered by determining that it is a solution to a problem that people want to solve and will pay for.

Before starting to create a new product and/or service, growth leaders must ensure they can positively answer critical leap of faith assumptions around demand for their proposed new product or service. A positive response will provide greater clarity and confidence to proceed.

-Onward

About the author: Kimball Norup is the founder of 1CMO Consulting, a business strategy and growth advisory firm based in Sonoma, California. To read prior articles, or sign up to receive future ones by email, click here.