My advice might sound counter-intuitive at first, but looking at the hard data, 90% of startups fail, with a 44% survival rate in the fourth year.

That’s 123,300 closed down startups every day!

72% fails because they can’t find a product-market fit or run out of money to keep going. Turns out the design and delivery of the product is one of the most significant factors in finding product-market fit. Our product decisions include the feature set, visual design, and user experience. Why do we get it so wrong, so often?

In this post, I will take a closer look at the remaining 10% of successful companies that got things right and are known for unconventional thinking and execution.

We focus on the present.

To find product-market fit means to achieve broad market adoption as soon as possible. To get there, we research the past and the present, and we imagine future solutions based on the existing pain points. This data-driven approach makes sense to us. We can defend and pitch the data.

We can expect good feedback from VCs and C-level execs, but it also shortens our sight, cripples our imagination, clips our courage. We stop reinventing the wheel because no-one is complaining about the wheel being round.

It’s also damn hard to take a stand against common sense and risk everything based on a gut feeling.

But risk we must if we want to perceiver the competition, the ups and downs of markets, global pandemics, or shifts in fashion and personal preferences. It’s called long-tail thinking, and it works for the rich and famous innovators, so why not for the rest of us?

Examples of long-tail thinking:

• Jeff Bezos didn’t pay any dividends to Amazon stakeholders for twenty-five years to reinvest everything back into the company and build long-lasting market dominance.
• Elon Musk invested in SpaceX to build rockets because space exploration will be the base of communications in a hundred years from now. He pushed to reinvent the new alloys instead of using existing technology to bring down the build price of rockets, but also to bring down the weight of Tesla cars.
• And my favourite, Steve Jobs imagined the personal computer when computing was considered a military or university department activity. He stood against bankers and investors, numbers and experts because he wasn’t building for his present, he was dreaming about ours.

TLDR

Don’t depend on the present.
Think in decades, generations, or centuries.

We become bias with feedback.

We tend to look for hidden insight into user research. It’s often easier to pitch our ideas when data supports it. Business goals become obtainable when we can prove the existence of a capability gap on the market.

The challenge is to find a balance between realistic deliverables and ivory-tower claims. The tensions in the product team, personal agendas, investor pressure, and cashflow make the equilibrium even harder to keep.

It’s essential to stick to the long-term vision and not to give in or give up under the pressure of user feedback. It’s equally important to keep an eye on the trends and make things that haven’t been done before.

Examples of uncompromised vision:

• Google Search is still one input centred on the screen as it was 23 years ago. Yahoo had three years of an advantage over Google but never bet on the simplicity mostly because they had excellent user feedback. In 2020, Google has 91.98% of market share vs. 1.66% of Yahoo.
• iPad was considered a big mistake by every second person in the US when it was announced. People didn’t see the need for a middle-tier device, one that sits between a mobile phone and a laptop. For over three years after the launch sales were lower than expected. Should Apple never introduce iPads or discontinue the line since the market feedback wasn’t great? Up until the fourth quarter of 2018 Apple has sold over 425 million devices worldwide and generated 19 billion of revenue in sales only iPads.
• SpaceX passed $36 billion evaluation and became the largest privately-owned company in the world.Still, in its early days, Musk was called a novice by Russian experts and his goals were openly discussed as unachievable. It took him 18 years to prove everybody wrong by launching and landing Falcon 9, the first reusable rocket that costs ten-fold less than any other rocket build before.
• And from my backyard, Classuite, was designed as a simple communication product for the classroom. At the time, 2017–18, it wasn’t a market fit because remote collaboration wasn’t a necessity. The investors decided to cut the loses and close the company. The product never took off. This story could end differently if anyone could predict COVID-19 pandemic or count on a change of customer preferences and continuous market shifts towards digital technology.

Counterexample:

• Blackberry controlled 50% of the smartphone market in the US and 20% globally until the iPhone finally won in 2016, and the company crashed. John Chen, Blackberry CEO, didn’t believe touchscreen devices will take over the business world. Blackberry’s customer base was very vocal about sticking in and not giving up on the physical keyboard. Every new user research study reassured the product team and the management in their strategy. The phones were selling, and the company was doing well until the customer preferences switched. By then, it was too late.

TLDR

Don’t rely on user feedback, stick to your vision.
Make things that haven’t been done before.

We find safety in prototyping.

This might sound preposterous, but when we use the prototypes as a guideline for success, we forget the value of engineering as a function of the business. Prototyping shifts the focus from the business model validation to the acceptance of the overall design and user experience.

As far as good design can be fundamental to adoption and successful business model, it is not the business model itself. Failure to find a viable business model before running out of money happens to 64% of startups, and only 17% fails because of unfriendly user experience.

The lesson is to find the Minimum Viable Product (MVP) and not to settle on the direction after testing the user experience by a bunch of smart designers (I’m a designer, and I stand 100% for what I just said).

Build to test, don’t test to build. When you put your product into the hands of your customers and watch the data on how they use it in real-life situations, you will stumble upon unforeseen opportunities and prevent making wrong assumptions.

Examples of winning delivery:

The best example of this approach is the gaming industry. The real insight doesn’t come from making fake mockups of the game and testing those with test users. You make the game, even if only a few levels, often called a preview, you let people download and play the game, and you make them open the wallet.

It’s a more significant risk because it’s a more substantial investment in time and resources, but the business validation is worth it. Only at the point when you know people will pay for your product you know you have a hit.

• Super Meat Boy is an excellent example of an indie-game sold in millions of copies, done by two enthusiasts, and released with maximum risk. It’s a success story of unbelievable grind and perseverance.
• Fez has a dramatic story behind its success. The development started as a side project with team members coming and going. After unsuccessful initial launch money started to run out and the game didn’t sell well due to many technical issues. At the end of 2013, Fez sold a million copies and was announced as one of the most complex and innovative games of all times to develop.

If you want to create a successful game, you can not just talk about it, testing designs in wire-framing tools, run focus groups, and ask did they have fun. You build a simple version of the game, and you let people play it.

You test the experience by allowing people to connect to the gameplay, but to achieve the authentic connection you have to build it. It has to be real. Can’t be a mockup. The same applied to hardware and software.

• iPhone touch screens were MVPed by Palm, and even though it was a crappy UX implementation that required a stylus, people paid for it. Heck, I had one! Palm PDA is also a crown prototyping study. Allegedly, Jeff Hawkins was carrying a block of wood shaped like the PDA for a week with him and pretended to use it taking fake notes and sending fake emails. It’s a great example of ingenuity in design thinking and an even better example of prototype’s shortcomings.

Counterexample:

• Nokia crashed and burned after many years of success. They depended too much on prototyping and user research as part of their creative process. Users could comment on size and type of the keyboards or screens, but couldn’t imagine touch screens. Once Apple invaded the market with iPhones the game was over for Nokia.

TLDR

Don’t depend on prototyping, validate the business model.
Build to test, don’t test to build.

The Wrap

It’s hard, scary, and risky to go against the advice of successful VCs, professional mentors, and specialists in the field. Most of them will tell you to prototype more, talk to your users, address existing pain points.

They will ask you for market data and growth KPIs. And don’t get me wrong, don’t disregard the market data, but search for long term patterns rather than quick gains. Solve problems that don’t exist yet. Address markets to come. And most of all, listen to your gut feeling.

Be prepared for the pioneer’s reality — The more innovative your idea is the less likely others will see its potential, until you show them the evidence. That’s the story of every visionary innovator.

Getting things right with a bunch of smart people, while contributing, dreaming big, and learning on the way is a smart iterative process. It’s not an opinion, it’s a long term pattern that repeats in careers of famous innovators.

One more thing

Consider this. If my advice didn’t fully resonate with you, it’s because I’m not one of the rich and famous. That’s my guess. If only I would build at least one unicorn company in the past, you would be like — Yes, this dude must know what he’s saying! It would be easier for you to believe me, follow my footsteps and advice.

That’s the point, though. It’s not about what worked for me, Musk, Jobs, or Bezos. It’s about what works for you. To become the creator of the trends and markets you first need to believe you are capable of. Next, do the unexpected and surprise everyone with your way of looking at things and your unique solution.

Don’t listen to the nay-sayers. Build things even if they fail at first. Become friends with people who help you build stuff. Let them in and dream together. Do the work. When you’re ready, risk everything. Wait actively. The success will come. Good luck.