The Pack intends to disrupt an old paradigm which hasn’t changed significantly since its inception. Our goal is to create a service which redefines the standard of quality for consulting companies doing $1 billion in revenue. To this end, we will put together a package preliminary priced around $10,000 per month on a subscription basis for small to medium sized business and large enterprises that cannot afford the McKinseys of the world.
I co-founded a startup called The Pack and we were 2014 Techstars finalists. We developed the idea out of a shared passion for improving communication and emotional well-being for executive business teams. The reason we chose this customer segment is that we found C-suite executives to be savvy and willing to invest real money in long-term improvements to their team’s performance.
We began by exploring the space of corporate wellness and business therapy. We conducted customer development interviews with a range of potential customers, including CEOs, academics and medical professionals. Our findings revealed that there is a need for business therapy as a service, but it has to come from the CEO. It had to be a no-brainer, an obvious decision, and most CEOs we interviewed already had support in this area. Given our findings, we decided to pivot the product.
Our next stage was developing a service aimed at solving the top pain points we discovered from interviews. The service we developed was a platform for conducting one-on-one mentorship sessions over videoconferencing. We contacted top thought leaders to gauge interest and found support for our hypothesis. There was actually a market for high-end consultants during their downtime.
We conducted 2-5 interviews with potential customers each week, in person, for a minimum of 20 minutes. The goal of conducting these interviews is to get customers to talk, to open up about their actual problems and not hold back anything. In doing so, we hope to discover the problems that are actively in search of a solution. When you hear the same problem over and over, and you know how to solve that problem, you’ve found product-market fit.
Here are a few pointers for conducting interviews from Tristan Kromer.
- Ask the customer to describe their problem using their own words. It’s probably the exact same words they’ll type into google to find a solution.
- The amount of time someone will complain about a problem without prompting is directly correlated to the amount they’ll pay for a solution.
- If someone says, “I could see a lot of people might want this” it means that they themselves don’t want it.
- # of questions you ask / # of sentences you speak = % of customer development you actually did
Along the way, we collected some insightful quotes from our interview sessions:
- “It’s about creating simple human statements.”
- “You can take a bus anywhere as long as everyone is on board.”
- “Our business is to do cool stuff with our friends and money is what finances that.”
- “Leadership means being an agent of change.”
- “They can’t see the difference in process, technology and people problems.”
- “Once you make a subjective call, you have to keep making it that way. If you say this carpet is red today and tomorrow say it’s scarlet, that’s not acceptable.”
When setting out to solve problems for a given customer segment, it is important to clearly state your working hypotheses before you begin the process. Each week, we adjusted our hypotheses to reflect our current findings. For example, we began with the hypothesis that executive teams want services to improve their team’s performance. Over time, we developed more precise hypotheses, validating and eliminating portions as needed. The result was increased confidence that we were on the right track and getting closer to product-market fit.
We arrived at the following hypotheses: We have seen, from services like ****, that entrepreneurs will pay for business advice on demand when delivered in the form of 15-30 minute phone conversations at a pay-by-the-minute rate. Therefore, we believe small entrepreneurs want access to top industry advisors because they believe it would benefit their business. We believe that many entrepreneurs would love the opportunity to access these same advisors for several hours a week, and would be willing to pay a monthly subscription fee for this access.
- We believe small entrepreneurs can’t find great advice
- We believe small entrepreneurs can’t afford great advice
- We believe small entrepreneurs want more advice than a simple ad hoc conversation
- We believe **** users are dissatisfied with their current service
Pain-points and key findings
The plural of anecdote is not data, but anecdotes still tell an important story. The following excerpts from interviews we conducted speak to some of the problems facing executive teams today.
- Tim has experienced how “gone” his capacity to do client work is when working without a biz dev department.
- John has faced executive team churn for 30 years, a “constant in the industry” because it’s “a human condition.”
- Lisa knows that successfully making changes requires management buy-in, and also making sure people who are on projects that get cut are retrained and promoted.
- Rick cannot help teams who are resistant to being helped. They must have a genuine desire to change.
- Ali did say that there is a shift where more and more people are becoming open to design thinking, especially with the advent of cloud computing:
- Ali knows that when the person who brought you in leaves the company, the likelihood of a long-term customer relationship is low.
- Michelle had a hard time convincing a CEO to take her seriously. She turned to another CEO to gain credibility and trust.
High level connections
- Getting the right people in the room is important. Coming to an agreement about how to proceed is a crucial step in making meaningful changes to a company.
- Stephanie pointed out how busy people are and how getting a connection with someone and maintaining relevance is important.
- Henry knows that it’s critical to build relationships with senior management.
- Ray knows the difficulties businesses face when scaling. It’s hard work growing past 20 people.
- John believes up to around 15-25 people a business can get by without analyzing its processes too much, but growing past that is difficult—for every 20 new people you add, the old processes need to be revised.
- Problems knowing how and when to scale.
- Problems with losing culture when scaling, it happens at very specific growth stages.
- Ray knows the difficulties businesses face when scaling. It’s hard work growing past 20 people.
- Loss of collaborative communication.
Top pains for CEOs
- We’ve heard time and again how a lack of foresight or difficulty making decisions is a recurring pain point for executives. Knowing the unknown is huge. They don’t want to get blindsided.
- Rick is concerned about the repercussions of, for instance, hiring a consultant to examine her business activities. She used the example that everyone, all the time is working at at least 30% inefficiency if not more. Any time you analyze something, it reveals a lot of flaws, and this can negatively affect perception. She is reluctant to hire consultants to assess her business activities because it could negatively affect her perception by others in the company.
- We’ve heard time and again how aligning on values is a difficult challenge for executive teams.
- Stephanie also had issues around travelling and finding time, leading to a reactive working environment where he was always rushed.
- Annie tried to make a business with a previous cofounder who had to leave because he didn’t have sign off from his wife. Annie’s particular pain point was his cofounder’s work-life balance, not his own, but this is still an indication of how work-life balance issues can break up companies.
- Tom has a lot of pain around email. Well, more specifically, other people have pain points here, since they are trying to get ahold of Tom and can’t. But, this inevitably causes problems for Tom as well, since he feels stressed about not staying on top of communication with others.
- Dave thought the root cause of [unhappy customers], as with about 80% of problems, is poor communication, poor written communication, poor project management, and poor documentation.
- Stephanie said that aligning strategy is an ongoing issue although team members take on roles of conflict resolution mediators to some degree.
Other opportunities for solving problems
- B2B client feedback
- Finding good talent
- Working with consultants
- Embodying the values of the company
- Hiring the wrong people
- Work and life balance
- Personal issues
- Knowledge transfer & personnel changes
- Insufficient hiring management training programs
Together, these findings helped us to understand the complex ecosystem of executives and consultants, and some of the inefficiencies and problems encountered by both. We were able to develop a service that addressed some of the core issues we kept on hearing.
Working in a startup
Founding your own business is an exhilarating experience. The day-to-day activities of working in an early stage startup involve wearing many hats, from technical proficiency to scheduling appointments and making sense of data to help perfect your strategy. Navigating conflicting information and separating signal from noise is paramount. You have to make good decisions with only 20% of the information.
Each day you wake up and remind yourself of critical path—what’s necessary, what will lead to the holy grail of product-market fit and what you can do to have the biggest impact. Things change rapidly and the entire business model can look different from one week to the next.
To help make sense of these changes, we used the Business Model Canvas technique of laying out our value propositions, target customer segments and other key factors. The BMC and mindmapping helped us organize our business model. We integrated information from many sources including customer interviews, surveys and discussions with advisors in the local startup community.
During the time we developed our core business, we reached out to several companies and began building customer relationships to test our platform. We also leveraged some of our skills in order to provide value and get something in return. We had interactions with Code Fellows and Surefield in various capacities ranging from product strategy to UX design. We also had interest from an award-winning consulting firm to bring our service under their umbrella.
The experience of running a startup is unlike anything else. Eric Ries says that a startup is “a human institution designed to create a new product or service under conditions of extreme uncertainty.” As such, it’s a hotbed for innovation and out-of-the-box ideas.