Surviving The Apocalypse, Step 4: Focus on Customers

By: Eric Marcoullier and Joseph Logan mentors of Labs.

Over the coming weeks Eric and Joseph will dive deeper into each of the steps outlined in their first post The Startup Guide To Surviving The Apocalypse. Make sure to read Step 1: Don't Panic, Step 2: Communicate and Step 3: Reach Out before moving forward with this post.

Even in the best of times, I can tell whether a company is likely to succeed by asking the CEO one simple question: What does your company do?

The hapless CEOs who are unlikely to succeed answer this way: “Our company makes editing software.” Or, “our company makes paper.” And it might be the best paper in the world. It might be the whitest white you’ve ever seen. But if that’s how you answer the question, your company is probably going to fail. R.I.P., PaperCo.

If, however, you answer it in terms of the customers you serve, the problems they’re facing, and how your company solves those problems for your customer, your chances are pretty good. The CEO of a paper company who answers the question with “we help people communicate more clearly so they can get paid, fall in love and change the world,” is on the right track.

CEOs often forget that their company exists solely to solve the problems of their customers. And, understandably, this is exacerbated during a crisis, when CEOs have so many distractions close to home. So while “focus on customers,” isn’t a step only to be taken during an apocalypse, it has outsized importance when everything around us is changing.

Right now, your customers’ worlds are changing. As a CEO, it is your job to understand your customers’ business better than they understand it themselves. So, in a time of rapid change, you better be paying attention. If you lose focus, you’ll quickly find yourself out of sync, no longer solving their priorities, and, especially in these times, they’ll stop paying you. Quickly.

Now is the time to redeploy customer discovery, even if you have previously established product/market fit and were repeatedly and reliably acquiring customers. Even if the world hasn’t changed for you, you need to verify that’s the case for your existing customers. Get on the phone, as this is not a conversation to be had over email.

How you start the conversation depends on the client. In some cases, start with a quick reflection of what you’ve already done for them and how your company has made their lives better. Remind them why you matter. This re-establishes a connection through trust. In other cases, practice radical candor. Lead by telling them what you’ve been dealing with over the last months and how the pandemic has impacted your business. Don’t vent at them, but show them how to be open and vulnerable and they’ll respond in kind.

It takes some tact, but if you’ve been talking to your customers regularly (please tell me you’ve been talking to your early customers regularly) then it’s entirely doable. If your customers are shocked to be speaking with you, let this serve as a wake-up call. You reaching out to customers to see how you can be helpful should not be surprising. It should be happening every month or two, no matter what is going on in the world.

To say it again, this is customer discovery. You’re not trying to sell them anything — your existing products *or* something new. You are simply seeking to understand what their world looks like after all this change and what problems are most pressing to them. You’ll be so tempted to ask qualifying questions, like, “if we could solve that problem for you, how would you feel” or, “if you didn’t solve that problem, how will that impact your business.” Don’t fucking do it. Stay out of sales mode. Just understand your customers. Trust me, there will be time to offer them solutions on your next call, whether that’s next month, next week or tomorrow.

Also, now is not the time to pivot. Now is the time to dial in and provide even more value through your core competencies, finding new needs you can serve by doing much the same work you did yesterday. Science fiction writer William Gibson started out by writing an incredibly prescient cyberpunk novel called Neuromancer, and in recent decades, he’s become adept at writing about what the future will be like only a few years from now. In a recent interview, he said he “look[s] for something else—for things that aren’t especially new, but suddenly stand out as special.”

This should be you. You’re not looking for an entirely new problem to solve, you’re looking for new constraints (and opportunities) around a problem you are already solving. As Joseph recently said, “If you’re a restaurant, you might no longer have a dining room, but Eric still needs to eat.” That hurts, Joseph. In the vast majority of cases, the needs or desires of your customer’s haven’t changed, just the logistics of how they can be solved. Stay true to your mission of solving their problem.

For instance, my client RampUp has been in the employee recruiting space for half a decade, and has built a solid tech platform that enables their internal recruiters to more efficiently place candidates. That same platform also reduces the complexity and hassle of recruiting for their clients. Unfortunately, most companies outside of health and shipping aren’t hiring at the moment. Just the opposite, in fact. Many of their clients are laying people off in huge numbers. And unless they want to look like Bird did a few weeks ago, how they lay those people off matters. After a number of conversations with his largest clients, RampUp’s CEO realized that helping companies honorably reduce headcount looks an awful lot helping people get jobs, and he has a software platform for that. See how this works?

As long as your current company is solving a real problem for real customers, no matter what obstacle is put in front of you, you should be able to route around it. Don’t take a shortsighted view just because things are scary right now. Fact is, they’ve always been scary. Long before we’d ever heard of this virus, you were working to secure funding, grinding for your customers, and overcoming all sorts of challenges along the way. What has really changed? That you have to work from home?

You’re a founder. You started a company. By definition, you’re a risk-taker who is optimistic when nothing in the world seems to warrant optimism. Now is the time to tap into that confidence and go solve some problems for your customers.

— Eric Marcoullier

Eric Marcoullier has spent 27 years as a tech entrepreneur, starting digital companies in media, games, social networking, big data and travel. His companies have exited for more than $850M in total, including an IPO, three acquisitions and a turnaround. Additionally, he co-owned a software development shop for four years and has worked with Techstars since the very first cohort in 2007. All this to say that he’s seen some pretty successful companies, as well as dozens, if not hundreds, of failed companies over the years (including several flameouts of his own). Eric blogs each week at ObviousStartupAdvice.com.

Joseph is a coach and turnaround veteran focusing on founders and teams. He has done exec stints as a CEO and COO, learning about businesses as diverse as data analytics and hemp-derived CBD. In his coaching practice, he has worked in teams in health tech, advertising, social media, behavioral health, and aviation. His work focuses primarily on team performance and operational discipline with a line of sight to profitability and increased valuation. Joseph blogs at theteamsthething.com and josephlogan.com, where you can find his TEDx talk, "The Upside of Crisis".

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