Episode 79: Solving for Interesting with Alistair Croll
Almost every startup I talk to you in the last 20 years that's made. It had a secret go to market strategy. They had some slightly subversive act that allowed them to capture the attention of a marketing and event organizer Alice to Crowell who's the founder of a very interesting business. I kind of have ADHD is a career. I've been lucky enough to find a way to turn an inability to focus on one thing from a liability into an asset and my company much as it is because it's really just me is called sulfur interested in the reason for that is that we live in an attention economy is Herbert Simon said and we pay attention to the truly Facebook's valuation is its attention and when we have too many things to pay attention to refocus on what's interesting is all the good things in my life happen from not solving for fame or risk or Bell for safety.
Today on the show Alice and I are going to be talking about this notion of Solid 4 interesting what that means our business is is they think about the best way to get people's attention when they go to market to tell you a little bit more sold himself earlier knowledge in society including lean analytics more episodes of baki emerging technology Trends and how they affect software companies organizations that are looking to turn the corner that take their businesses the next level today. I was sure I will be doing just that we could be talking about go to market and product strategies Market Market Jason sees different challenges that beat it be vs. B2c. Brad's face in these areas. It's going to be a great show. So stick around of John pryal. Welcome to the impact podcast.
Alistair Crow what a pleasure having you here today. Have you ever seen one of those really cool Dollar Shave Club videos I have but I'm probably not the target market leaving your beer decide what you thought about them going kind of directly to you. How do you take to go to market strategy aligns with product? There's no doubt that we can either eat an experiment people in Target pricing and so on the big change that we've had information theory in the last 40 years has the media is no longer one too many broadcast single message. It's not 101 multicast to a mini messages and the ability to Taylor experiment messages means anybody who is a native of new tractor medium is going to get a read on product markets much faster and I think Dollar Shave Club is what happened today is much more than kind of a b testing in marketing in terms of targeting you you've been thinking a lot and
Didn't know a lot about how you should be taking this learning for me to go to market and really make sure you got the right product that place. I mean the fundamental message of Lean Startup models is your job is to identify the riskiest assumption and then quantify it as quickly as possible. If you have five possible risks and you're getting off at guessing the relative importance of those risks, why not spend all your time fixing the first risk of the most significant Masters doctor Monday the difference between a b2c and B2B product is often not talked about but much of the advice doesn't work in one versus another if I'm a big company I would want to do my first sales directly where I was in my room doing sales because that's how I learned what customers needs are so high.
Having automated systems engage of your customers and so analytics is is a proxy for Windows customer actually wants chatbots or not engaging in chat talkin directly customer service a good way to see the whole reason the BTC companies can spring up and steal so fast with you humans is that they are automating the attraction was Custer when he lost one of the primary sources of innovation iteration, but we used to have that situation you mentioned in a start-up Amsterdam presentation. I'm sure you've said it other places as well that your first product really is in your end product. Your first product is merely a test cases. Is that a fair way to categorize at how to build people have asked me what would you have done differently with Korean which was a Performance Management Company. I found it took us three years of other people's websites.
Realize that the real challenge was understanding what you're in users were experiencing. If I had known that I would we be sitting on my Yosh for starters. I would have delivered value much more quickly. And are you talked a bit about Tupperware? And you know, they did well with with parties vs. Plastic boxes. Do you see a tupperware of the future and I'm making this up now, but everybody shows up in in somebody's living room sales persons living room and is given an iPad and rather than having a bunch of plastic boxes sitting on the living room table or maybe having some on the living room table is a lot more on the iPad and we can learn about interactions and product these and product desires and my sense is tupperware. Does it go back to the salesperson and says, hey what you learn what they really going to go back to the Haywood just sell so I heard from David and he said that craft had at one point figured out how to powder cheese, which was technically
Proficient in spoiled a long time and there was a guy in San Francisco and then he attached a box of elbow macaroni to the powdered cheese packet with elastic band sold like mac and cheese and today according to a David says boxes of that stuff in the salesperson's the one that realized that the product just need to have a technology you have to have it is trying to sing that the target market value and is actually the critical tool there because it's the thing that attaches the the technology you have to evaluate the customer perceives if you want to think about the way first of all, I can companies Innovative Dental on a range. So there are companies doing sustaining Innovation lights on next year's Mercedes-Benz.
Or the market or the go to market method example, Mercedes-Benz selling and electric are there still selling it true dealerships still selling it to people without a car but it's electric car and there's disruptive innovation which is where you introduce something that changes several aspects of the business model so car to go for example, which is owned by Mercedes-Benz cars actually destroys the existing business and then there's this idea of discontinuous innovation, which is some of the underlying societal ships. We can anticipate self-driving car at the end of that because that changes a lot of things will be a timer 20 years time with yourself to look at a company like Dollar Shave Club Jason Innovation taking an existing target market and an existing product, but they're changing to go to market method one of the reasons that we are in this incredible.
Of innovation technology companies, you know, none of the companies that were the top of the stock markets with digital 20 years ago said maybe Microsoft today. Everyone is is because the Advent of digital technology has given us the ability to redo the go-to-market method of almost every product that has ever existed. I'm not sure if in my mind Dollar Shave Club is an adjacent Market versus a different route to that market. I think a bit about Blue Ocean strategy, which I think was much less about let's get the product. Right and let's first understand the market and then find adjacencies and differentiation, which I might be slightly different than Dollar Shave Club just to have a Disturbia Counterpoint year. Yeah. I think it's important recognized as a I have a background in marketing. And so I kind of cringe every time I see this product marketing method because the go-to-market methodism intrinsic to the product, right?
What is your product on Amazon when Amazon started it was a website to sell books to read their Innovation was that they did web-based ordering and centralized? So that was a go-to-market method Innovation later on using the millions of people that were buying books when they can introduce the kids over to the new product sold using a now existent method you the website to the audience which was then they could sell audible on they can sell large print Kindle devices and Inca Target. Why do people actually Newmarket Amazon has now got a new market but they got their step at a time and I think that's sort of the lesson of the mac and cheese is you got to take those inner two steps that eventually get you to the blue ocean. I think I almost want to write the book that talks about how you got to find Three Rivers to get to the ocean.
Think about startups kind of our audience year startups in growth companies getting to that point those of a greater gross. What about startups worrying about getting disrupted as well as being disruptive. Is it at what how do they think about it? Which when should they start to think about that? The shoemaker's children? They're very poorly shot by which I mean that there is a star that is trying to sell some new technologies air blockchain, but they're reluctant to employ that stuff themselves are elected actually use it and that seems kind of hypocritical asking to see the world but you don't want to lose yourself probably missing out on some tremendous opportunities to optimize what you do. Which what's your message is you at if you were opening the session up and saying you in 2018 here or going to talk about what what are you getting them to think about? So this yours Phim is infinite possibilities.
Great interior inside looks like an infinity and you need to steam. That's what it was on the lid for a lot of these startups. What I'm trying to get them to think about is to put aside cognitive bias about there certain. There's a start Brennan face the chances that you was a Founder are going to be successful the end of it are incredibly unlikely a whole bunch of these and some of them having to do with the privilege of having to do with the existing Network a risk aversion to dusters and so on and there are ways to mitigate that risk to yourself by experimenting with the riskiest thing first, for example, by finding ways to test things at scale example. I heard a few years ago of a startup whose Name Escapes me right now, but they wanted to allow you to send gifts via Twitter. Now, let's say that I've met you online and I'm like, I really like to send you a present. So I go online. I want to send you a thing on Twitter. So how would I send you a box of
Saying thanks for doing the podcast. This was your home address and so will personally accept a gift from a stranger on Twitter. It's not know can we ship chocolate chocolate? And so they started out with a service that would allow you to send a postcard to someone on Twitter and you would literally go to their website and there's a message and then they'd send that person a tweet saying hey so-and-so, you know, April has sent you a card click here to collect it when he went there. I would ask you for your your username and your phone number and whatever else that you used to ask you for information about yourself and your phone number and that phone number would then, you know, you'd be able to call for delivery and they give your address here asking for personal information than the few people tried it and see people said yes, and then they kept optimizing the floorman some work for comfort with explaining more about out of this work to send it would never know who you were.
Hi, it's pretty easy to say now. I'm going to send roses or boxes of chocolates. But the real risk was will you provide your address? So website you've never heard of to receive something from a stranger and the postcard was the lowest risk thing. You could send them. There's a public message on the siding cost $0.50 to send. So I think that's a rather long example, but it's a great example of how you look very hard at your business model and dearest the riskiest elements as cheaply as quickly as possible interesting now Twitter start up again to get traction that grows they got revenue probably burning a lot of cash, but they really try to turn that corner mature some of the business processes. It's running. How would you want those CEOs? That's think about their business in terms of this kind of Lean Startup methodology social things first a little bit before you really going to think about
Who sings going to think about the products you sell and then your company has the product that is sold. So you got to spend a day working on the business. And as you scale, hopefully have a management team that lets you do that. I think the other thing is all the data shows that organizations that embraced metrics do significantly better than those that shoots and heparin use best the whatever nostalgic multiple the highest individually paid person's opinion the iconoclast of a founder of person who Against All Odds believe in the world speak a different way is what got you to this point this say half a million a month of Revenue and scalable MRI and declining customer acquisition cost or else
And it's very hard to get that person to say okay. Now, you know what hit escape velocity that burn away from the planet at all costs is gone and now it's time to be much more precise with targeting navigation small adjustments. And so this ability to be honest with yourself about what the big risks are is a very rare attribute that I think startups as they can get to scale stage really have to think about I do not to talk for a lazaritas Institute a little while ago about orders of magnitude and I think every time there's an order of magnitude change in the number of employees the number of customers or the amount of money. You may have to change process One customer your employer.
Same thing is true. If you have one employee, then you're self-employed can employees. You're a small-business a hundred please you probably an HR person a thousand if you make $1,000 a month, that's probably a hobby or side business. If you make $10,100 a month, you need teaching people that it's not about you. It's about these orders of magnitude as you still is a very good lesson the distances that founding coz go from the problem at hand. I love the separation in the evolution. And so we think about fighting controls it it does come down to data science and decision-making. I think it's fair to say data scientists again do a pretty good job targeting or understanding customers, but do you think data science team for spending enough time thinking about kind of evolving the product? What's their alignment?
We leave is a requirement for an MBA or working with a product management team. Which companies are and how should they be evolving as they turn this corner? I've been teaching class years called data science in critical thinking and what I'm pleased about is the first law Harvard recognize the need for this and the people that room are really engage made of are doing Civics and politics and stuff as well. It's a real problem. I think the issue of machine learning to buy Asus is one of the first of all possibility and then second is about serve judgment. The possibility of stuff is it's hard to tell what's possible earlier this week Google announce duplex, which allows Google automated agents to call a business and ask questions. That's cool. Technologies got all kinds of locations and nobody was talking about this the day before like now, I rode a horse
Control humans humans are flash-based apis 2 days ago. And so it's very hard for us to see the world as it could be some Founders see the world as people like it to be most of us see the world as it is and that's true of any data system that is using historical information. If you ask your customers what they want. I'll tell you what they know they want what they need and you'll never build the minivan of the iPad Sony Walkman. And so we have to be very conscious that the data science is tremendous a normative predictions predictions based on past examples, but it is not very good at formative predictions meaning how the world should be. And so even when you have the best day to sign system in the world, the most important management skill is asking the right questions because any answers are all around you, but you need to ask
We're talk about self-driving cars and you mention 20 years in that. Someone's going to say. Oh my God. How did you get your work done that before you had a self-driving car that is not an issue that shows up in any of the discussions today of self-driving cars on the phone with some folks in the Department of Transportation in female while ago in the states. They asked me to talk with you packed and Technology on resiliency and natural disasters and get rid of 90% of cards and you still have the shop when we get rid of when you look at a disaster.
Needs to get out of the Cascadia subduction zone because the entire West Coast is shaking with an earthquake that's ever been overdue for 50 years and there's no cars around uberpool to get out of town with my family and some other families cuz we didn't have enough cards. So there's a lot of these unintended consequences of technology and resilience water in my house. But the water goes away. I'm pretty glad I did and so I think we are going to renegotiate a lot of systems automated systems to try to make things more efficient by discovering how they break and we haven't had those things happen yet. The breaking that we're hearing today on the Ubers in the lists of the world are now car is a driving around and polluting waiting to pick somebody up but I I hear that I go. Yeah, but in five years, they'll be electric and that's at issue is gone. I didn't talk to you today on discontinuous Innovation and I talked about
Free horse manure crisis of 1886 there were these alarmist headlines of the times that would be under 99 feet of manure in a few years in the numbers are astonishing mean. They're killing 65 or 60 on horse-drawn carts in the numbers are a horrible number. And of course there was this meeting we have no idea and by 1912 everyone had a car so, you know again life comes at you fast, and I think the challenge is that the iteration speed for bits is much higher than the duration speed for a seems. So we we run into these
Very interesting ethical questions is if Google knows that when duplex calls someone has a conversation with them. They react better. If the speaker has the same gender and race, is that what you could learn pretty easily as you can do voice analysis change its voice to be the best resulting gender and race to the response out of the machine Midwest accent New York accent. Maybe it's a pretty
Push it right. We have to consider the data valid and there's tons of examples of normative data. Which is the norm is used classic example of that. I did a podcast again with David this amazing podcast you are my friend is a nurse and two other three are sheet prediction for the email. So there's the is the date of biased then there's is the algorithm functioning correctly and we see lots of cases especially with machine learning algorithms where they have unintended consequences Janelle shange talks about how if you have a picture of a field of white rocks in it and I will often say a field full of sheet because it's been trained on pictures of sheep in
Fields even those are rocks The Rock Says picture of flowers in a fuel those are good examples of how riddle of the model can be. And then finally you have to say what you're playing a video game pong or breakout objective function is the score Nick Bostrom famously says, if you give a superhuman the I object to function of May YouTube clips of the universe into a giant paper Coat Factory. He's overlooked the idea that the AI if it's itself why it's making some point is the date of biased is the algorithm for the model correct and is the objective function the thing we're trying to accomplish the intended outcome are the three questions that any executive thinking about how to apply data science the business needs to consider de Tobias. I think he has to be done. It's critically important that we've been talking about that a lot lately and of these Rihanna
Open podcast, but you mentioned earlier kind of one day on the business and two days in the business and my old boss said like I spend 50% of my time on strategy and it sounds like those other two questions require an executive team to step back and really think hard about the big picture is that it's hard to use the term Black Swan cuz you can identify a black Salon but maybe it's a grey Swan, you know, what's coming down the pike that you was a company can get a head up and take advantage of you Isley write the is the data, correct? You sort of legislated. You have a set of policies you want to reinforce you and your clothes rules is the model correct often requires. That's why I like you a sew in Boston, for example, the City of Austin with an app called Street pump which you put on your phone but in the passenger seat next to you in on the way to work at measure
It was fine. It was great. It showed you where all the rich white people's bottles were cuz they're the ones that drove themselves to work with an unlimited data plan on a sushi next and so the Gina was fine. The model was biased and it took a human looking at the map of where the cobbles where to go to school buses going from thinking about the Market operating a business as it grows to what we have the impact podcast. Love so much getting the data right out of the crawl. It's been a pleasure. Thanks for taking the time to be with us straight guy really enjoyed chatting.
Thanks for listening if you like what we doing, we appreciate your telling other people about the show that he had give us a 5-star rating on iTunes or write a review doing so will really help ensure the more people can find us and if you haven't already please subscribe to the impact podcast on iTunes, SoundCloud or have you go to find your podcast.