3 common mistakes founders make in trading off user vs buyer needs
Who should you prioritize higher — buyer or user?
Who should you prioritize higher — buyer or user?
The stock answer is — it depends.
The popular silicon valley answer is — the user.
The Rolex watch-wearing executive answer is — the buyer.
The right long-term answer is — both.
While in a world of endless resources, there is no need to think of tradeoffs, looking through the lens of a realistic resource-constrained world, the answer is not always obvious.
Here are common mistakes I have either seen others make or made them myself:
Building a product that buyers will buy but one that users don’t love
This was very typical of enterprise software vendors of decades past. Today, most of us in the startup ecosystem think that we have since evolved into these higher-order user-centric organisms. However, I am still seeing vestigial remains of this trait today.
Many founders, especially those who are seasoned, have access to buyers at senior management levels in organizations. They will rightfully leverage such relationships to get into the door and even make a successful sale or two. But what they often forget is that the sale, even if it is multiple million dollars in ACV, or rather, especially if it is multiple millions in ACV, only grants them the privilege of engaging with the user.
In a world where newer upstarts are constantly challenging incumbents by building user-focused products, a buyer-centric approach will only go so far. Not keeping users close and happy is often what results in bad surprises when a contract renewal comes up.
As a product manager, I often liked to talk to everyday users without their management in the room. It is in these intimate conversations that I picked up on how they actually felt about using the product. The metrics we collected told me that they were using the product regularly but what I learned from those conversations is the uncomfortable truth that they were using it because they had to and not because they loved to. You never want to be in the situation that I was in and if you are, figure out what will delight your users without necessarily aggravating your buyer. There might be some low-hanging fruits that will deliver delight but sometimes those fruits are higher-up and are worth reaching for.
2. Building a product that users love but buyers hate
While certainly different from the previous problem, this is still not the most dangerous problem to have. I will explain why.
Products that are able to leverage built-in network effects are by and large sheltered from the overwhelming love that users have for such products. But outside of that, some products are notorious for being loved by their users but drive buyers insane due to a variety of factors most common among them being: unpredictable pricing or no guaranteed ceiling on pricing (common for usage-based pricing), laxity in meeting security, compliance, or other regulatory requirements.
Sooner or later startups facing these problems learn that they have to prioritize what buyers want in order to increase ACVs and drive enterprise-wide adoption. However, this is not a day 1 problem by any stretch. More specifically, if your product is still early, maximize your time and resources in figuring out what your users need to get their jobs done better, faster, and cheaper. Shove all the other asks into the roadmap where it rightfully belongs.
3. Building a product that users love but one that buyers can safely ignore
This can kill startups.
In our new world order, enterprise startups often make their products consumer-friendly, self-serve, and free to try. The thought here is that if they keep doing good karma (user focus) and delay gratification (monetization), good things will eventually happen. A combination of this hopeful attitude and a user-centric approach helps many startups acquire users at a rapid clip initially. However, many startups are stuck without being able to show any revenue for all that love from users.
To be clear, it is not that the product sucks. In fact, users might still love the product but they may have little incentive to buy.
Common reasons for this include:
giving away too much of the product for free, particularly, features that buyers value
being shy about charging users because they don’t want to lose anyone, even those who are not the right target users
having a good-enough substitute in the market or to put it differently, having a product that is not sufficiently differentiated
lastly and this is the most egregious one, not even realizing that they have a problem that needs to be fixed!
Building and selling for the enterprise is a complex undertaking. When done well, the results are amazing and the experience exhilarating. The key to success is to routinely assess where you are against your goals of adoption and monetization and fine-tune the knobs you have at your disposal.