As a six-time entrepreneur, I’ve been building companies for a long time. Long enough to remember the big tech bubble of the early 2000s. It was the beginning of the internet back then, and lots entrepreneurs were building web-based applications to solve problems. They were brilliant coders, but many hadn’t spent time in the industries they were building for. Rather than having conversations with customers, they built companies — and investors funneled incredible amounts of money into those companies — without listening to end users.
Then, when the show hit the road and these entrepreneurs started showing customers the products they’d spent so much time and money building, they often heard back: “This won’t work for us. You don’t get us.”
We all know how the story ends — with the bubble bursting and a lot of folks losing a lot of money.
A lesson not learned
You’d hope that entrepreneurs would learn from history (and the many startup veterans who have since warned against this mistake), but after speaking to and advising hundreds of entrepreneurs as an investor and advisor, I’ve learned that too many are still making the same mistakes today.
Just recently, for example, I sat down with a first-time entrepreneur who had 15 years of experience selling in a specific market niche. Was he planning to create a product built on his deep experience listening to customers in that space? No. Instead, he was dreaming of creating a product that was going to be all things to all people and planning to talk to potential customers in a mishmash of random industries.
Unfortunately, he’s not unique. I can’t tell you how many times I’ve met with young entrepreneurs with big plans, only to find they haven’t even defined their target audience, let alone sat down and asked them: What challenges do you have? What’s your pain? Where do you see problems? Listening is always the first step. I’m shocked how many entrepreneurs still don’t get it.
Experience is not a substitute for listening
Some might argue: What if you yourself are the end user? After all, Y Combinator founder Paul Graham famously instructed, “the way to get startup ideas is not to try to think of startup ideas. It’s to look for problems, preferably problems you have yourself.”
If you’re solving your own problem, can you skip listening to customers?
The short answer is no. Building a product in a niche you know well — or to solve a problem you yourself experience — is a great idea. But you need to recognize the way you experience that problem is unique. One person’s pain point is different from another’s. That’s why it’s important to always have conversations and listen carefully. It’s the only way to solve for the greatest and most widespread pain, and to create a product that’s both high-value and sticky. That’s what early-stage companies must do if they want to be successful.
This isn’t just something I preach. It’s something I practice — even after building six businesses. My current company, Vertex, is actually in a market space that I pioneered way back in the 90s with my first startup. It’s a niche I know very, very well. But even though I basically created the space, I’m still not satisfied with saying I know best, because I don’t. The people who are doing the work every day do.
That’s why at Vertex we set up an early adopter program and have spent the past three months on the road, sitting down and talking with companies to get their opinion of what we’re building. We show them demos of what we’ve already built and mockups of what we’re going to build, and really listen to their feedback to help us evolve the product. I’ve been doing this for nearly 30 years, and I still listen before I create.
The problem comes down to ego. The mistake I see most often among entrepreneurs I mentor is a failure to drop the arrogance that says, “I know what to build.” The most important first step towards success isn’t building amazing tech. It’s checking your ego and getting to work by really listening to your customers.