SaaS Customer Discovery Begins Here

Rick Gregg June 18,2024 What do you think?

Welcome to The saasmvp Project blog. The primary objective of this blog is to show you how saasmvp can be used as a customer discovery and validation tool. Technical support issues will be discussed in the related open source repositories. This blog is about our shared experiences using saasmvp to help you accelerate your time to revenue and discover a repeatable Software as a Service (SaaS) business model. We will use the well-known business model canvas methodology developed by Alexander Osterwalder and Yves Pigneur in their 2010 book “Business Model Generation”. I will be sharing my own customer discovery and validation experiences with you as The saasmvp Project develops. What works, what doesn’t and why. This should be a lot of fun. Let’s get out of the building!

What Makes Entrepreneurs Tick?

Rick Gregg December 09,2024 What do you think?

I’ve thought about this for a very long time. Why, oh why, do I stick with it? Four decades. Several startups, one of which is currently operating; and two exits. I’m beyond the traditional retirement age. Is it an addiction to the roller coaster thrill of success and failure? What exactly motivates an entrepreneur to persist? It turns out, unsurprisingly, that the answer can be found in the psychological domain.

Psychological Ownership

Psychological ownership is the state in which individuals feel as though the target of ownership, or a piece of it, is “theirs”. At the core of psychological ownership is the feeling of possessiveness and of being psychologically attached to an object. Such possessive feelings make people evaluate a situation more favorably than other things that they do not own or cannot easily obtain.

The concept of psychological ownership is relevant and important to the context of entrepreneurship. Entrepreneurs come up with business ideas, invest tremendous time, money, and energy into developing their venture, design the venture’s values, goals, vision, and culture; and acquire critical resources such as employees and customers. During this process, they have also developed industry knowledge, the market; and business operations gaining a sense of control over their venture. Because self-investment, having control, and intimate knowledge of their venture are three routes to the development of psychological ownership, ownership feelings are developed during the entrepreneurship process. As a result, there is a positive relationship between psychological ownership for the venture and the likelihood of persistence.

Adversity in Entrepreneurship

Adversity in Entrepreneurship is the comparison between venture performance and entrepreneur’s expectations. Well-performing ventures are those whose performance exceeds the entrepreneur’s expectation and therefore are low in adversity. In contrast, underperforming ventures are those where the performance falls short of the entrepreneur’s expectation and are high in adversity. Entrepreneurs cycle through this comparison daily which explains the roller coaster ride metaphor.

Examining the relationship between adversity and the likelihood of persistence, individuals will act in a certain way when they expect that (1) a given amount of effort can result in the achievement of a particular level of performance that will lead to a particular outcome which, in turn, creates an expectation for the entrepreneur; and (2) the outcome is attractive to motivate the entrepreneur to attain it. When the entrepreneur perceives things are going well, the entrepreneur remains motivated and continues their current behavior, increasing the likelihood of persistence.

In contrast, when adversity is high, the negative disparity between venture performance and entrepreneurs’ expectation will prompt entrepreneurs to reassess the situation. As a result, you might conclude that an entrepreneur may have a lower likelihood of persistence with the venture. However, this is incorrect. Instead, psychological ownership and adversity interact to affect the entrepreneurs’ likelihood of persistence.

Entrepreneurs high in psychological ownership tend to protect their ownership target, particularly in adverse situations when they feel their ownership is challenged. There is a much stronger desire to react to the high adversity to protect their ventures, no matter how irrational that may seem. To be specific, the sense of responsibility that accompanies psychological ownership will be triggered in the high adversity context and entrepreneurs with deep psychological ownership will feel responsible for protecting the venture to maintain the felt ownership no matter what the adverse circumstances are.  

Should I Stay or Should I Go?

An entrepreneur’s persistence decision to continue with their venture is highly governed by the entrepreneurs’ psychological ownership when adversity is high. As a result, psychological ownership will have a stronger influence on the likelihood of persistence when adversity is high than when it is low. This constant battle between psychological ownership and adversity effects not only the founder but all involved in the venture which creates a tremendous mental health challenge for every entrepreneur.

At The saasmvp Project we stive to provide entrepreneurs with the mental health resources they need to navigate this challenge by incorporating these resources and access to counseling dedicated to this very issue in our saaskamp program. You can learn more about this in the 2017 Applied Psychology paper entitled “An Investigation of Entrepreneurs’ Venture Persistence Decision: The Contingency Effect of Psychological Ownership and Adversity.” In the meantime, we’re excited to help you discover your ideal SaaS customer profile and can’t wait to see what you build! Let me know what you think.

Don’t Compete Against Luck

Rick Gregg October 03,2024 What do you think?

SOURCE: freepik.com

In its 2012-2016 annual Breakthrough Innovation Report, Nielsen tracked over twenty-thousand new product launches and identified just ninety-two that sold more than $50 million in year one and sustained sales in year two. That’s a failure rate of 99.5%! In our work of identifying the customer jobs for our customer profile, we view customer jobs in light of the “Jobs to Be Done” theory made popular by the late Clayton Christensen, a Harvard Business School professor and thought leader in his book Competing Against Luck.

Creating the Right Experiences

Defining the Job

Customers don’t buy products or services; they pull them into their lives to make progress. This progress is the “job” they are trying to get done. The metaphor used is that customers “hire” products or services to solve these jobs. Remembering that the definition of a Job to Be Done is precise, a job is then defined as the progress that a person is trying to make in a particular circumstance. The idea of a circumstance is intrinsic to the definition of a job. A job can only be defined – and a successful solution created – relative to the specific context in which it arises. The emphasis on circumstance is not hair-splitting or simple semantics – it is fundamental to the Job to Be Done. Finally, a job has an inherent complexity to it; it not only has functional dimensions, but it has social and emotional dimensions too. In many innovations, the focus is often entirely on the functional or practical need. But consumers’ social and emotional needs can far outweigh any functional desires.

Who Does Your Customer Have to Fire Before They Hire You?

Most companies want to stay closely connected to their customers to make sure they’re creating the products and services those customers want. Rarely, though, can customers articulate their requirements accurately or completely – their motivations are more complex and their pathways to purchase more elaborate than they can describe. But you can get to the bottom of it. What they hire – and equally important, what they fire – tells a story. That story is about the functional, social and emotional dimensions for their desire of progress – and what prevents them from getting there. The challenge is in becoming part sleuth and part documentary filmmaker – piecing together clues and observations – to reveal the jobs customers are trying to get done.

The saasmvp Project is dedicated to helping SaaS Entrepreneurs who want to create a repeatable SaaS business model and Minimum Viable Product (MVP) that generates revenue with minimal financial risk. If you’ve enrolled in saaskamp, our FREE one-on-one mentoring program for SaaS Founders, you already know that we rely heavily on the Jobs to Be Done Theory in the development of our customer profile’s jobs. We’re excited to help you discover your ideal SaaS customer profile and can’t wait to see what you build! Let me know what you think.

How to Build a Startup

Rick Gregg September 12,2024 What do you think?

Source: Udacity

Startups are not simply smaller versions of large companies. Companies execute business models where customers, their problems, and necessary product features are all “knowns”. In sharp contrast, startups operate in “search” mode, seeking a repeatable and profitable business model. The search for a business model requires dramatically different rules, roadmaps, skill sets, and tools in order to minimize risk and optimize chances for success.

Startup success is not a consequence of good genes or being in the right place at the right time. Startup success can be attained by following the right process which means rejecting the traditional business plan and embracing the methods taught by Eric Rees in his seminal book entitled, The Lean Startup, combined with Steve Blanks prime directive on Customer Discovery and Validation entitled The Startup Owners Manual. You can read both of these books for FREE by clicking on their respective titles.

Take the How to Build a Startup Course for FREE

Want to learn what it takes to build a successful startup using the Customer Development process, where entrepreneurs “get out of the building” to gather and iterate on feedback? This FREE Udacity Course entitled How to Build a Startup by Steve Blank and Kathleen Mullaney teaches both the Lean Startup; and Customer Discovery and Validation. I highly recommend before developing your business model canvas.

The saasmvp Project is dedicated to helping SaaS Entrepreneurs who want to create a repeatable SaaS business model and Minimum Viable Product (MVP) that generates revenue with minimal financial risk. We’re excited to help you discover your ideal SaaS customer profile and can’t wait to see what you build! Let me know what you think.

Exploring Customer Jobs

Rick Gregg August 24,2024 What do you think?

Source: freepik.com, The saasmvp Project

Your first Customer Profile results from your initial assumptions about your innovative product and service. These assumptions are then tested by you for accuracy in the customer discovery and validation process. As Steve Blank has famously said “no business plan survives first contact with a customer.” You are no different.

The Customer Profile

In Alexander Osterwalder’s ground breaking book, Value Proposition Design, the Customer Profile describes a specific customer segment in your business model in a more structured and detailed way. You may have more than one customer segment which requires its own profile. The Customer Profile breaks the customer down into its jobs, pains and gains. Consider:

• Jobs. Customer jobs describe what customers are trying to get done in their work, and in their lives, as expressed in their own words. Make sure you take the customer’s perspective when investigating jobs. What you think of as important from your perspective might not be a job customers are trying to get done!

• Pains. Customer pains describe bad outcomes, risks, and obstacles related to customer jobs.

• Gains. Customer gains describe the outcomes customers want to achieve or the concrete benefits they are seeking.

Customer Jobs

We begin our development of the Customer Profile by considering Customer Jobs. One of the best frameworks is the “jobs-to-be-done” theory popularized in the book Competing Against Luck by the late Clayton Christensen, a Harvard Business School professor and thought leader. The foundational principle is that people “hire” products and services to deliver three basic needs: functional value (e.g. it will save you time), social value (e.g. it will impress your friends), and emotional value (e.g. it will bring you joy). These three dimensions of value are present in every decision we make about whether to buy or try something new.

• Functional. When your customers try to perform or complete a specific task or solve a specific problem, that’s a functional job. For example, how warm and dry you feel when wearing a jacket you are considering for purchase.

• Social. When your customers want to be perceived by others in a favorable way or gain power or status, that’s a social job. For example, what does the style and brand of the jacket tell you about the purchaser? (fashion conscious, wealthy, earthy, hipster, etc.)

• Emotional. When your customers seek a specific emotional state, such as the feeling of job security in the workplace, that’s an emotional job. For example, how do you feel about yourself when you wear the jacket (and even when it’s hanging in your closet).

The past few blog posts have discussed in detail four human frictions (inertia, effort, emotion, and resistance) that prevent someone from adopting your innovative product or service. We will evaluate the impact of the four frictions when discovering and validating your customer’s functional, social and emotional jobs.

The saasmvp Project is dedicated to helping SaaS Entrepreneurs who want to create a repeatable SaaS business model and Minimum Viable Product (MVP) that generates revenue with minimal financial risk. We’re excited to help you discover your ideal SaaS customer profile and can’t wait to see what you build! Let me know what you think.

Kill the Business Plan. Adapt and refine your Minimum Viable Business Plan.

Rick Gregg August 19,2024 What do you think?

Alexander Osterwalder has it right. Business Plans are the enemy of the startup. Check out Alex’s insight entitled “Kill the business plan. Adapt and refine your Minimum Viable Business Plan.” The saasmvp Project empowers you to build a repeatable business model & MVP using the methods taught by the renowned Alexander Osterwalder.

Overcoming Buyer Resistance

Rick Gregg August 17,2024 What do you think?

In my last post, I discussed the importance of uncovering the tricky customer pain of Emotion. In the last part of this four part series, I will continue my discussion of the four frictions that cause innovation headwinds and prevent your customer from buying. In summary, these frictions are: 1) Inertia (part one), 2) Effort (part two), 3) Emotion (part three); and 4) Reactance (this post).

Why We Feel the Impulse to Resist Change

If inertia is the resistance to change, Reactance is the resistance to being changed. In their groundbreaking 2022 book “The Human Element,” authors Loran Nordgren and David Schonthal point out that “people don’t like having change imposed on them. We don’t like being told what to do. This is a major obstacle for the innovator, because innovation is the act of changing what people do. This means that the innovator’s objective is at odds with our human nature. And when people feel they are being pressured to change, the automatic reaction is to react against change. This phenomenon is known as Reactance. Reactance leads us to see new ideas not as opportunities, but as invaders. We raise the drawbridge and arm the gates.”

Humans have a fundamental need for freedom over their environment. Freedom is a basic human need because it is essential for survival. Freedom allows us to select options that are beneficial and desirable and avoid options and outcomes that are detrimental. The trouble is, when we attempt to influence people we are, in effect, imposing on their freedom. We are attempting to push them down a particular path. When people feel their freedom being threatened, their instinct is to restore the freedom by pushing back.

Don’t Add Features

Innovators quickly learn to expect new ideas to be met by knee-jerk doubt and disapproval. When we encounter resistance to a new idea, the innovators impulse is to add features. We are attempting to overcome buyer resistance by igniting the idea with features in the hope of providing more evidence and encouragement to get them to adopt. However, by creating more change through the addition of features, we create an unintended consequence of even more Reactance.

Overcoming Reactance

The secret to overcoming Reactance is to stop pushing for change. Rather than attempting to persuade others, we should try and help them persuade themselves. This approach uses self-persuasion which occurs when the arguments and insights for change come from within. Rather than telling people what to think, self-persuasion uses questions that lead to self-discovery. Oftentimes self-persuasion is the only technique that will work to overcome Reactance.

Ask Yes Questions

When practicing self-persuasion, asking is a better approach to getting buy-in than telling people what to do. New innovations and ideas will be more easily accepted if we begin with questions that reveal acceptance and common ground. Getting people to say yes to small requests, such as giving feedback stokes self-persuasion because it makes them feel more involved in the process. By the time they get to the big request, they already identify with the idea. To calculate the degree of Reactance your innovation will produce, consider these three questions:

• Does my idea threaten a core belief? This question determines whether your audience is open-minded to the change you are trying to create. If your idea touches on issues you avoid at the Thanksgiving table (e.g. politics, religion, social justice), it’s probably a core belief.

• Does my approach pressure people to change? When people feel pressured to change, their instinct is to push back to maintain their autonomy. Pressure comes in many forms. Penalties for not changing, time pressure, and a demanding message all are strong Reactance generators.

• Was your audience excluded? Is the idea entirely yours or did your audience play a role in the process?

When asking yes questions contemplate the following:

• Are you asking or telling? Telling people what to do is a form of pressure. Asking removes Reactance.

• Are you asking a yes question? The innovator’s faulty instinct is to begin the conversation at the point of tension or disagreement. New innovations and ideas will be more easily accepted if we begin with questions that reveal acceptance and common ground.

• Can you create public commitments? Self-persuasion becomes more powerful when the commitment is made publicly. This has the effect of accelerating adoption from the like minded people that are resisting the change since one or more of their own is endorsing the concept among their peers.

This wraps up our four part series on overcoming the resistance that awaits new ideas. We will be using the four frictions during customer discovery when we develop tests to measure the effectiveness of our customer profile and value proposition for our innovative SaaS offering. Want to learn more? Check out The Human Element book for more information and examples.

The saasmvp Project is dedicated to helping SaaS Entrepreneurs who want to create a repeatable SaaS business model and Minimum Viable Product (MVP) that generates revenue with minimal financial risk. We’re excited to help you discover your ideal SaaS customer profile and can’t wait to see what you build!

Overcoming Buyer Emotion

Rick Gregg August 11,2024 2 comments

In my last post, I discussed the importance of uncovering the extreme customer pain of Effort. In part three of this four part series, I will continue my discussion of the four frictions that cause innovation headwinds and prevent your customer from buying. In summary, these frictions are: 1) Inertia (part one), 2) Effort (part two), 3) Emotion (this post); and 4) Reactance.

Why the Best Ideas Produce the Most Anxiety

Emotional friction is the unintended negative feelings that inhibit a new idea or innovation. In their groundbreaking 2022 book “The Human Element,” authors Loran Nordgren and David Schonthal teach us that “emotional friction is the exact opposite of what we intend to do. When introducing a new idea, we hope to trigger positive emotions. We want our ideas to fill people with delight, excitement, confidence, etc. But without our realizing it, our audience often has the exact opposite emotional reaction. Even the most promising idea can unintentionally trigger negative emotions that become significant barriers to adoption. When that happens, those negative emotions are frictions. And, just as with other frictions, the drag of Emotional friction must be addressed before any real change can occur.”

What is Emotion?

So far, we’ve discussed the frictions of Inertia and Effort. I believe that Emotional friction is the trickiest to think about. Why? Because emotion has an almost outsized role over our behavior. Emotion is a subjective experience which makes it tricky. By transforming our thoughts and actions, emotion shifts our attention, changes the way we processes information, and alters which ideas and memories we hold in our mind.

Observing Emotional Friction in the Wild

Emotional friction is often revealed when we observe the full journey of those we hope to serve – the series of events, motivations, and feelings that led to a moment of change, and the events and feelings that will unfold after that decision is made or not made. Examining and comparing multiple user journeys help us shine a light on key moments of friction. This is especially helpful in the identification of Emotional friction, as it rarely represents itself in traditional forms of market research. Once we diagnose these crucial moments and their causes, we can begin to do something about it.

Overcoming Emotion

How closely do we pay attention to the world around us? The phenomenon of not seeing what we are not looking for is called inattentional blindness, and we experience it every day. Think about your last trip to the grocery store. During your mission to hunt down specific items, how attuned were you to the tens of thousands of other products on the shelves that you weren’t looking for? Probably not much at all. Because you weren’t looking for them, you didn’t notice them. They did not fit the mental model of your shopping trip, so they hid in plain sight. It’s the same with Emotional friction. But we should take notice. Addressing Emotional friction isn’t simply about removing a few hiccups from an idea to help it function a little better. Incredible opportunity awaits those who spot the frictions others have missed.

The first step to spotting Emotional friction is to start looking for it. To begin seeing the frictions that hold our ideas back, we need to start noticing them. Most individuals tend to keep negative emotions hidden, especially when interacting with new ideas and new people. They rarely express their authentic feelings of worry or hesitation with clear, introspective language like, “This idea offends me,” or, “Using this new product gives me anxiety,” or, “Our company’s new hire makes me feel insecure.” Instead of seeing the true negative emotions our ideas provokes in others, what we often observe are the symptoms of these underlying feelings – symptoms that may confuse or even contradict the problem. Sometimes a customer’s “anxiety” expresses itself as “disinterest.” Sometimes a colleague’s “anger” shows up as “apathy.” If we only treat the symptoms of these emotional frictions, we would not be able to overcome the cause of someone’s resistance.

Focus on Why

Toyota pioneered a method called the five whys in the 1970s to identify the cause of systemic manufacturing problems before they got out of control. The foundational premise is that the exact cause of any systemic problem is typically five layers beneath the presenting symptoms. This approach is particularly good at spotting emotional resistance. Questions that reveal why people are resistant to new ideas tend to have three features:

• Ask Open Questions. A closed question prompts a brief yes or no answer: “Is price important to your company?” If the entrepreneur asked this question, the client would simply say “yes.” This would just reinforce the price objection and reveal nothing about the true underlying reasons. Open questions don’t lend themselves to one-word answers and are therefore much better at revealing information. “Can you share a little more about your expectations around price, and what it is about the platform that causes you to think twice?” Asking the question this way gets people talking.

• Ask Probing Questions. People are often reluctant to reveal their fears and anxieties. Probing questions ask people to dig deeper into the issue. “What was your last experience like?” subtly nudges people to say more. Asking probing questions doesn’t have to be complicated. The simple phrase “can you tell me more?” works great in most situations.

• Ask Illuminating Questions. Illuminating questions focus on how the new idea might conflict with one’s needs or objectives. “What is it about the platform that causes you to think twice?” is very much an illuminating question. Questions like these help you to discover what it is about the new idea that people find threatening. By asking “Do you recall the elements of our proposal that received the most scrutiny?” we learn that worry over something unrelated to price was the true issue giving us strong clues about how to prevent this friction in the future.

We will be using the four frictions during customer discovery when we develop tests to measure the effectiveness of our customer profile and value proposition for our innovative SaaS offering. Want to learn more? Check out The Human Element book for more information and examples.

The saasmvp Project is dedicated to helping SaaS Entrepreneurs who want to create a repeatable business model that generates revenue with minimal financial risk. We’re excited to help you discover your ideal SaaS customer profile and can’t wait to see what you build!

Overcoming Buyer Effort

Rick Gregg August 01,2024 What do you think?

In my last post, I discussed the importance of uncovering the extreme customer pain of Inertia. In part two of this four part series, I will continue my discussion of the four frictions that cause innovation headwinds and prevent your customer from buying. In summary, these frictions are: 1) Inertia (part one), 2) Effort (this post), 3) Emotion; and 4) Reactance.

Why We Follow the Path of Least Resistance

The Law of Least Effort captures the idea that humans are programmed to find and favor the path that brings the most rewards with the least possible effort. In their groundbreaking 2022 book “The Human Element,” authors Loran Nordgren and David Schonthal conclude that “when we first encounter a new idea or innovation, our minds instinctively calculate the cost of implementation.” The Effort associated with innovation is a psychological friction that undermines the appeal of new ideas. Though we often aren’t aware of its influence, the instinct to minimize Effort is perhaps the most powerful force operating on our decisions. The preference for the easier path is so fundamental, our perceptual system is engineered to make easier options look more appealing.

Changing the Effort Calculus

When people consider a new idea or opportunity, the first consideration isn’t the benefits or value of the idea. The primary concern is the cost of the action. Reducing the cost of a new idea will make people more open to that idea. The lesson for innovators is that small changes can have a big impact. Finding ways to make the behavior you want just a little bit easier can change behavior substantially. Although Effort is one of the strongest forces operating on our behavior, people rarely account for it when leading change – a blind spot known as Effort Neglect.

When Effort is Valued

People don’t always choose the path of least resistance. There are many contexts in which people actively seek out the road less travelled. The Effort required to play a video game is high, but the game player will put incredible time, attention, and mental Effort into the video game experience because it is enjoyable to them. How much time you spend volunteering each month is a strong signal of your commitment to humanitarianism. Doing more gives you greater bragging rights. Finally, people will often seek out physical and mental exertion as a cure for boredom. Boredom is a negative emotional state that people try to avoid. Engaging in a challenging task can offer relief.

Overcoming Effort

Before we can reduce Effort, we need to understand what is meant by it. Effort has two dimensions, one obvious and one not. The obvious and intuitive dimension of Effort is exertion. Exertion captures how much energy goes into a task or behavior. A second dimension of Effort is ambiguity which reflects whether people know how to achieve the goal they are interested in reaching. If you don’t know the way, you must discover the path yourself. That means trial-and-error. It means false leads and dead ends. Ambiguity is a critical dimension of Effort because a lot of ideas that appear easy to the innovator are shrouded in ambiguity for everyone else. Ambiguity is overcome through a process known as creating a roadmap, while exertion is transformed by streamlining the behavior.

Creating a Roadmap

By creating a path to follow, the cost of exploration is reduced by clearing a path to action. A lot of behavior that would be categorized as apathy is really ambiguity. People want to be shown the way or they won’t act – they’ll look apathetic to everyone else, but they just want guidance. Another benefit of creating a roadmap is that it helps people remember to perform an act. Simply forgetting the behavior is a big reason people fail to embrace new ideas. Road mapping tackles forgetfulness by creating a clear link in your memory between a future moment and the correct behavioral response to that moment.

Streamlining the Behavior

The greater the Effort required, the stronger the resistance to change. If the Effort in your idea is causing resistance, your job is to find ways to make change easier. Your goal is to remove drag by making your idea sleek and aerodynamic. This is known as streamlining. Streamlining involves knocking down barriers and finding shortcuts by spotting the points of friction. Sometimes they are self-evident. Having to wait in a long line is a clear and obvious friction. Other times a friction is hidden and can only be revealed through careful discovery.

Using an experience timeline can help discover Effort friction. An experience timeline identifies all the steps a person must take to complete a desired action. Experience timelines are moment by moment visual representations, where the leftmost position on the timeline is the beginning of the experience and the rightmost position represents the end of the experience. The objective of the experience timeline is to help innovators visualize the moments of friction that inhibit change. The key to streamlining is to diagnose which specific steps in a journey are causing the greatest friction, thereby focusing your energy on addressing the moments that matter the most.

We will be using the four frictions during customer discovery when we develop tests to measure the effectiveness of our customer profile and value proposition for our innovative SaaS offering. Want to learn more? Check out The Human Element book for more information and examples.

The saasmvp Project is dedicated to helping SaaS Entrepreneurs who want to create a repeatable business model that generates revenue with minimal financial risk. We’re excited to help you discover your ideal SaaS customer profile and can’t wait to see what you build!

Overcoming Buyer Inertia

Rick Gregg July 25,2024 What do you think?

In my last post, I discussed the importance of uncovering extreme customer pain. In part one of this four part series, I will discuss the four frictions that cause innovation headwinds and prevent your customer from buying. These frictions are: 1) Inertia, 2) Effort, 3) Emotion; and 4) Reactance. We’ll start with Inertia this week and progress in order over the next few weeks.

Why We Stick with What We Know

The friction of inertia captures the idea that the human mind is hardwired to favor the familiar and as a result, we resist new ideas – even the simplest ones. In their groundbreaking 2022 book The Human Element, authors Loran Nordgren and David Schonthal observe that “for humans, familiarity breeds liking. We favor the known over the unknown. And that makes sense from an evolutionary perspective. Because things that are familiar have been tried and tested and are thus safer than things that have not. Familiarity means that we have survived contact with it in the past. Our instinctive mind recognizes this, and steers us towards a familiar option.”

We Buy What We Know

Inertia is a major reason why advertising is so essential for product adoption. Search engine optimization (SEO) suggests that the coveted first position or for that matter any position above the fold is the critical factor for determining what people will click on and buy. Studies have shown that brand familiarity plays a far greater role in click rate than people realize. 80 percent of the time, people choose the brand they already know – regardless of where it ranks on the page. This is exactly why it is a waste of time and money for a SaaS startup to rely on and pay for social media advertising until at least a repeatable business model is discovered.

How Inertia Kills Innovation

The principal problem with Inertia is that it breeds inaction. And inaction is precisely what the innovator is fighting against. Inertia leads us to choose the familiar over the potentially better but uncertain options. Even when people are willing to break from the status quo, Inertia limits the options we are willing to consider when pursuing opportunities or solving problems. For example, despite the benefits of diversity, our preference for familiarity leads people to form relationships with individuals who are like themselves. We do this because it is more comfortable. It is easier to trust someone who views the world through the same lens you do. The instinct to favor the familiar suggests that even when we are open to new ideas, innovators and organizations don’t consider all the possible opportunities and solutions, just the familiar ones – those they have tried in the past or fit with the culture.

Overcoming Inertia

Inertia is a friction against innovation and change. To overcome the effects of Inertia, we need to transform the unfamiliar to the familiar. There are two approaches for overcoming Inertia: 1) acclimate the idea; and 2) make it relative. At the MVP stage of our SaaS innovation, acclimation of the idea is most important. There are five strategies for acclimation:

1. Repetition. The mere exposure effect is the finding that contact increases liking. Psychologists calls this the illusion of truth effect. It’s the notion that the more we hear a statement, the more likely we are to believe and endorse it.
2. Start Small. New ideas vary in the scope of change they require. Some require only incremental adjustment, while others call for substantial disruption. When a significant change is required, initial exposure is often easier to take when given in small doses.
3. Find a Familiar Face. Although the message we are selling might be unfamiliar, the messenger doesn’t have to be. We are heavily influenced by who communicates information. People are more likely to listen to a message when it comes from someone they know or someone who’s like themselves.
4. Make it Prototypical. Ideas that fit the prototype are generally more familiar (and thus better liked) than those that don’t. When a new idea doesn’t fit the prototype, it causes friction. The brain must work harder to understand it.
5. Use Analogies. If people aren’t familiar with an innovation firsthand, compare it to something they are familiar with. This is called analogous comparison. An analogy is simply a comparison that suggests parallels between two things. Analogies work because they make the unfamiliar seem familiar. They help people navigate new territory by making it resemble territory they already know. Think “Its’ like a Roomba for your yard.”

We will be using the four frictions during customer discovery when we develop tests to measure the effectiveness of our customer profile and value proposition for our innovative SaaS offering. Want to learn more? Check out The Human Element book for more information and examples.

The saasmvp Project is dedicated to helping SaaS Entrepreneurs who want to create a repeatable business model that generates revenue with minimal financial risk. We’re excited to help you discover your ideal SaaS customer profile and can’t wait to see what you build!

Why Won’t They Buy?

Rick Gregg July 18,2024 What do you think?

Startup entrepreneurs are taught that personas are fictional characters, which are created based upon research that represents the different user types that might use your service, product, site, or brand in a similar way. Creating personas helps the startup entrepreneur to understand users’ needs, experiences, behaviors and goals. Renowned Swiss psychiatrist Carl Jung defines “persona” as the “social face an individual presents to the world. A kind of mask, designed on the one hand to make a definite impression upon others, and on the other to conceal the true nature of the individual.” It’s the concealed behavior that must become part of the persona and customer profile to properly discover and validate your customer, otherwise you will have a much more difficult time finding the repeatable business model that you are searching for.

Uncovering Extreme Customer Pain

The pains and gains identified in your persona and customer profile are mostly based on a deep assumption. It’s a view of the world so deeply ingrained in our thinking that we rarely see its influence or question its value. It is the belief that the best (and perhaps only) way to convince people to embrace a new idea is to heighten the appeal of the idea itself. We instinctively believe that if we add enough value, people will say “yes.” This reflex leads us down a path of adding gain creators and pain relievers to the idea or increasing the sizzle of the messaging – all in the hope of propelling people to get on board.

7 out of 10 new product or service innovations fail because entrepreneurs don’t uncover the extreme pains a customer faces. In this series on the Customer Profile, I’m going to do a deep dive into identifying the extreme psychological pains that keep your customer from engaging with your innovative SaaS offering. I’ll discuss the techniques I have used to develop gain creators that eliminate the extreme pain your customer suffers but won’t reveal to you.

The saasmvp Project is dedicated to helping SaaS Entrepreneurs who want to create a repeatable business model that generates revenue with minimal financial risk. We’re excited to help you discover your ideal SaaS customer profile. Let me know your thoughts and experiences on this journey together.