I have talked to thousands of startup executives, and every darn one of them reminds me of myself and my co-founder Dharmesh Shah back in the day. Man, back then, we were maniacal about anything and everything startup. We read every article and book on startups, listened to every podcast, streamed every live webcast, and dutifully attended hundreds of mixers -- anything to absorb startup wisdom and learn from the experience of others.

Of course, it was not our intention to be in startup mode forever. Our dream was to create a company that would, in its own way, make a dent in the universe. We spent about a year in the "founders' phase," when it was just Dharmesh and me, working on an idea. Steeped in startup dogma, we must have said minimum viable product a thousand times a week.

We reached the next startup plateau, with a couple dozen employees on board, trying to get the thing going. Early on in this phase, you know all your customers -- many of them are your cousins, your childhood friends, or your friends from band camp. We had all sorts of customers that were small businesses, and from among that disparate group we were religiously committed to finding product market fit. We were working the classic startup playbook.

Did I say plateau? OK, sure, we maintained a reasonably healthy up-and-to-the-right growth curve. But it was a straight-ish line; no hockey stick inflection point. We remained in that second phase for half a decade. Sometimes, we felt we had the formula right and we'd hit the accelerator hard, hiring lots of new sales reps. But, within a few quarters, we couldn't make headway on lowering our customer acquisition cost, and our retention rates were erratic.

We weren't scaling.

Six years of being a startup was enough already. We wanted to be a scaleup -- where we've got millions of dollars in revenue, and are growing fast. We wanted to find a groove where we could pour money into the top of the funnel and get a nice return out of the bottom of the funnel.

We were so focused on getting our product right for the right customer, we remained unaware of an equally important -- but unarticulated -- doctrine: product market delight.

It's not what you sell, it's how you sell.

This doctrine has found currency of late. Last summer, Alberto Brea of OgilvyOne Worldwide eloquently gave voice to this growing consensus with his cogent observations about how some businesses and industries have been disrupted. His perspective is that some businesses weren't so much disrupted by technology but rather self-destructed because of a fundamental disregard of product market delight.

That it wasn't Netflix that killed Blockbuster; late fees did. That Apple didn't disrupt the music industry; having to buy a whole album did. That Uber on its own did not disrupt the taxi industry; waiting outside in the rain did. The incumbents all opened the door wide for the disrupters to come in by having a crappy end-to-end customer experience.

Still, putting technology aside, it's worth taking a look at the disrupters to see what traits they share. What are the elements of an emerging axiom of product market delight?

Self-service

Light touch and automation win out over heavy touch and humans. I don't necessarily like that fact, but it's kinda true. Self-service is one of those double-win things. It's better for your bottom line, and customers like self-service too. Software companies such as Dropbox and Evernote, and media companies such as Spotify and Pandora, take friction out of the process by getting started with a freemium.

For physical goods, the direct-to-consumer model of online self-service coupled with a hassle-free return policy has repeatedly shown itself to be a successful light touch. Companies such as Purple (mattresses), Warby Parker (eyeglasses), and Away (luggage) are harbingers of disruption in their respective industries.

24/7 availability

From a prospective buyer's initial visit to your website, to finding basic answers to common questions, all the way through to post-purchase customer support, consumers (and business customers) have come to expect to have a conversation with someone on your end. Small and medium-size businesses, such as the Rock & Roll Hall of Fame, without the resources to fully staff phone and website chat, use chatbots to provide coverage for predictable interactions.

Predictive

Just as Netflix and Amazon have mastered the ability to decipher a customer's likely next purchase, companies that are able to anticipate a website visitor's next most likely piece of information, or a customer's likelihood of churning or renewing, will earn attention and loyalty beyond just the value of the product or service they offer. 

The reward for product market delight comes in the form of repeat business, upgrades and cross-selling, and excellent word of mouth. The words coming out of your customers' mouths are 10 times more valuable than the words coming out of the vendors' mouths. Delighted customers are a better marketing channel than your own marketing department. Advocates of TurboTax and Slack have been a critical part of the success of those products.

Most companies have a great product and a disjointed customer experience. To avoid disruption from a nimble new competitor, or to become a disrupter yourself, you need a great product and a great customer experience.

Published on: Mar 12, 2018