Speed vs Perfection

I prioritize speed because taking action allows faster validation, iteration, progress, and growth. My focus isn't on making the perfect move but on making a move. Spending more time to increase the odds of getting it right on the first try never guarantees 100% certainty. Therefore, acting swiftly and eliminating what doesn't work is more effective.

Professional poker players understand that making decisions based on expected value is not about winning every hand but consistently playing hands with favorable odds to win tournaments in the long run, demonstrating the benefits of playing the odds.

Positive Expected Value, or EV, is a concept from probability theory that predicts the average outcome of a decision when repeated multiple times. In business, it refers to actions or decisions expected to yield positive outcomes over time, even if some individual attempts result in losses.

Consider a startup investing in a test of multiple marketing campaigns across various channels and customer segments. Some campaigns will fail, but the data collected and the successful campaigns will determine direction and drive growth. If you spend six months preparing the perfect campaign for the perfect channel and segment, your outcomes will be far worse than the company that spent two weeks preparing and launching a dozen campaigns for a dozen segments.?

Even if your “perfect” campaign was successful, you only have a single segment proven, whereas the “speed” focused company might have multiple successful segments or a dozen proven no-gos. The speed-focused venture will also have spent less time and money with their approach.? The approach emphasizes testing and adapting, similar to how venture capitalists invest in a portfolio of startups instead of searching for the perfect one. They know that while some investments fail, the successful ones generate substantial returns.

Another example is quickly releasing a minimum viable product for user feedback and progress based on that input. This allows startups to refine their product based on real market data, increasing the likelihood of long-term success.

Taking multiple actions increases the chances of finding successful solutions.

Focusing on positive EVs also means avoiding the pitfalls of false perfectionism. Startups that delay market entry, believing they can perfect their product, miss out on valuable critiquing, time, and opportunities. Taking calculated risks and learning from failures leads to informed decisions contributing to sustained growth. The approach aligns with the principle that while not every individual action will succeed, the cumulative effect of actions will yield positive results. Over time, the best strategy is to play the odds. Companies that progress rapidly outperform those that delay for perfection.

Savvy investors make numerous informed decisions rather than seeking a single perfect investment. They understand that not every choice will yield success, but their diversified approach secures sustained growth and profitability over time.

By moving fast, we position ourselves for victory, leveraging each experience to build toward long-term success. Taking multiple actions increases the chances of finding successful solutions.

Product Testing

Without validation, startups risk investing time, money, and resources into creating a product that doesn’t resonate with users.

Every startup must launch a Minimum Viable Product as soon as possible to test market demand. The MVP is the basic version with just enough features to attract early adopters and validate the idea.

Dropbox is a prime example of a startup utilizing an MVP to validate its market. Instead of investing significant time and resources into building a full-featured product, Dropbox initially launched with a simple video demonstration of its concept. The video explained how Dropbox would work, highlighting its cloud storage solution's ease of use and benefits. The low-cost and low-risk strategy allowed Dropbox to gauge interest and gather valuable information from potential users.

Observing the response to the video, they confirmed substantial market demand for their product. The validation gave them the confidence to proceed with full-scale development, knowing they were addressing a real need. Furthermore, the insights from early adopters enabled them to iterate and refine their product, remove some unneeded features from the roadmap, and ensure that the final version met user expectations and needs.

Without validation, startups risk investing time, money, and resources into creating a product that doesn’t resonate with users. Proper market testing identifies whether the product solves a real problem, what features are most important, and if the target audience is willing to pay.

I frequently observe startups delaying or resisting market testing, citing the need to "just do a couple more things." The hesitation stems from false perfectionism, fear of negative critique, or loss of control. Whatever the reason, these delays are detrimental.

When startups postpone market entry, they miss early evaluation for shaping the product roadmap. They continue to build based on their assumptions, wants, and biases rather than validated insights, increasing the risk of developing features that users don't need or want. It wastes time and resources and diminishes the chances of success.

Startups that delay market validation guarantee failure for themselves—a slow and painful death. They deprive themselves of the opportunity to pivot, iterate, and improve based on real user input. It leads to a situation where the startup finally launches a fully developed product, only to find that it doesn't attract users. The resources spent on developing the wrong features cannot be recovered. A step-by-step approach validates the product ideas early and increases the chances of successful market adoption.

• Define the MVP: Identify the core features that solve your target audience's primary problem. Build a version of the product with just those features.
• Create a Low-Cost Demo: Develop a simple demonstration, such as a video or a clickable mockup, to explain the product's concept and its benefits.
• Launch the MVP: Release the MVP to a small group. Ensure this group represents a diverse segment of your target market and is willing to provide an evaluation.
• Get Feedback: Collect responses through surveys, interviews, and usage analytics. Focus on understanding pain points, ease of use, desired features, confusion, and willingness to buy.
• Analyze Results: Evaluate the feedback to determine whether the MVP meets market needs. Look for patterns in user responses to identify common issues and opportunities for improvement.
• Iterate and Improve: Make necessary adjustments to the product. Prioritize changes that address the most critical user needs and enhance the product's value.
• Refine the Roadmap: Include the features and improvements identified during the testing phase. Remove or deprioritize features that users do not value.
• Scale Gradually: Gradually introduce the product to a broader audience.?
• Continuous Testing: Maintain an ongoing dialogue with users to test new features and keep alignment with their needs and preferences.
• Monitor Market Fit: Regularly assess the product's market fit to ensure it remains relevant and competitive.

Customer Acquisition

Too many startups spend excessive time internally deciding and preparing for the perfect customer segment.

Startups must test multiple channels to determine the most cost-effective and highest-returning ways to attract and retain users. Testing multiple channels early and often allows startups to identify what resonates with different segments and optimize their spending.

Different channels reach different audiences, identifying where target customers spend their time. Marketing budgets are limited, especially for startups. For instance, a startup may find that pay-per-click advertising on Google yields a higher return on investment than display ads on less trafficked websites. Airbnb initially struggled with traditional advertising until it tested and found success with content marketing on social media, significantly boosting its user base.

Startups often have preconceived notions about who their customers are and where to find them. Testing challenges these assumptions and provides real data to inform decisions. It prevents the common pitfall of spending too much time and money pursuing unvalidated customer segments. For instance, Blue Apron initially targeted busy professionals but found more success when they pivoted to health-conscious families after testing various customer segments.

Many startups spend excessive time internally deciding and preparing for the perfect customer segment. The approach stems from a desire to get everything right on the first try, driven by passion and belief in their product. However, this delay is detrimental. Passion for the startup creates biases that cloud judgment, leading founders to convince themselves that they know their ideal customer, everyone loves their product, and adoption rates will be vertical arrows on every chart without any external validation—the distorted reality results in focusing on the wrong segments and ignoring valuable insights. In the startup environment, early feedback is non-negotiable. The approach that provides the best outcomes is simple.

• Small-Scale Campaigns: Start with a dozen campaigns across multiple channels and segments to minimize cost and maximize data gathering.
• Analyze Results: Measure each channel's performance based on engagement rates, lead generation, and responses. Identify which channels attract the most interest relative to their cost.
• Iterate: Use the data collected to refine the marketing approach. Adjust messaging, targeting, and spending based on what works.
• Double Down on Success: Once a channel is validated, allocate more resources to scale up efforts. It increases the odds of reaching qualified prospects.
• Continuous Testing: The market and customer preferences change. Maintain a culture of constant testing to stay ahead of trends and adapt to evolving conditions.