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.

The Micro SaaS Future is Bright!

Rick Gregg July 11,2024 What do you think?

The Opportunity

Software as a Service (SaaS) refers to the type of public cloud service that delivers software applications over the internet on a subscription basis. Users can access and use the software through web browsers without having to install or maintain it locally. SaaS eliminates the need for purchasing, installing, and updating software, thus offering convenience and automatic updates while allowing users to focus on using the software to meet their requirements. According to the October 2023 Statista Market Insights report “Software as a Service: Market Data & Analysis”, Software as a Service worldwide revenue is estimated to increase at a compounded annual growth rate (CAGR) of 16.1% to $282B in 2024.

What’s Micro SaaS?

Traditional SaaS companies create software products that offer many solutions and try to address a wide range of users or clients. Unlike a traditional SaaS company, a Micro SaaS company creates one product that solves one need for a specific market niche. It is a Software as a Service business targeting a niche market owned and operated by one person or a small team. These businesses are location-independent, high margin, and low-risk with predictable recurring revenue. Profits and business sustainability is prioritized over growth. It’s one of the most powerful lifestyle business models out there right now.

The saasmvp Project provides the essential components to launch a Micro SaaS fast with no fluff enabling you to discover your customer quickly and begin generating revenue in months instead of years. And, as the cost to deploy SaaS has come down, there are more opportunities to build valuable niche SaaS business models. Check out this Micro SaaS ebook by Tyler Tringas for inspiration and ideas. Why wait? Start starting building today! We can’t wait to see you succeed with saasmvp.

Bootstrapping SaaS Startups

Rick Gregg June 27,2024 What do you think?

Current Funding Environment

Venture capital financing is the exception, not the norm, among start-ups. Investors want to be convinced you really know who your customer is. They also want to see some amount of early revenue. All before even considering an investment. 300,000 SaaS startups in North America competed for $5.4B in seed and angel investment during 2023. Less than 1% or approximately 3,000 startups received funding after dedicating countless hours over at least 12 months raising money.

Increase Your Chances for Success

The saasmvp Project is out to change all of that by leveling the playing field. Our open source Minimum Viable Product (MVP) SaaS framework lets you focus your valuable time and money on customer discovery, customer validation, and that all important early revenue generation milestone on your own without any outside investment. This approach will raise your valuation and allow you to keep more of your equity making an investment in your SaaS startup less risky. Or keep the equity yourself! What are your thoughts? I’d like to hear from you. In the meantime, keep building.

Methodology

In 2023, Crunchbase estimated there was $13.7B invested in 7,670 Venture capital funded seed and angel deals with Carta claiming that SaaS startups account for 39.2% of seed and angel capital raised. Consider the following:

• 300,000 North American angel and seed stage SaaS startups sought funding in 2023. One percent (.01) received funding. ((7,670 * .392)/.01 = 300,000)
• 3,000 North American angel and seed stage SaaS startups received funding in 2023. (300,000 * .01 = 3,000)
• $5.4B was invested in 3,000 North American angel and seed stage SaaS startups in 2023. ($13.7B * .392 = $5.4B)

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!

Reading List

Rick Gregg June 18,2024 What do you think?

I have several “go to” books in my library that I have used throughout my four decades as an entrepreneur. I will refer to these books from time to time and offer my own thoughts on these books through the occasional book review. I will also use them in developing and executing a roadmap for my own saasmvp customer discovery and validation work. In order of reading, here are my recommendations:

1. Ries, Eric. The Lean Startup. Crown Publishing, 2011.
2. Osterwalder, Alex, et al. Value Proposition Design. John Wiley & Sons, Inc., 2014.
3. Nordgren, Loran and Schonthal, David. The Human Element. John Wiley & Sons, Inc., 2022.
4. Osterwalder, Alexander and Pigneur Yves. Business Model Generation. John Wiley & Sons, Inc., 2010.
5. Bland, David and Osterwalder, Alex. Testing Business Ideas. John Wiley & Sons, Inc., 2020.
6. Blank, Steve and Dorf, Bob. The Startup Owner’s Manual – The Step-by-Step Guide for Building a Great Company. K&S Ranch Press, 2012.
7. Chen, Andrew. The Cold Start Problem – How to Start and Scale Network Effects, HarperCollins Publishers, 2021.
8. Wickman, Gino. Traction – Get a Grip on Your Business. BenBella Books, Inc., 2011.
9. Moore, Geoffrey A. Crossing The Chasm – Marketing and Selling High-Tech Products to Mainstream Customers. HarperBusiness, 1991.
10. Feld, Brad and Mendelson, Jason. Venture Deals – Be Smarter than your Lawyer and Venture Capitalist, John Wiley & Sons, Inc., 2019.

What books and teachings do you rely upon? Let me know in the comments. I’ll take a look and give you my thoughts.