29 January 2014
Analysing your success... and learning from your failures
How important is reflecting on your achievements and failures as an entrepreneur? We asked Juan Martinez, CFO at the Knight Foundation, which invests in both for-profit and non-profit startups that share its goal of advancing media innovation.
For him, one of the main causes of failure is not taking the time to analyse what customers want. You have to identify their problem and fix it, which is why flexibility is a key asset. Martinez uses Twitter’s success as an example designing solutions to customers use: they created hashtags to enable tracking, they created lists and follows when people wanted to engage in groups; Facebook is another success story: ‘it was meant to do something different’, but the creators responded to the fact that people started using it in a different way.
[To learn more about hindsight, Wolfgang Blau, from Guardian News & Media, and Paul Smurl, from The New York Times Media Group (tbc), will be hosting a session at GEN Summit 2014: ‘With the benefit of hindsight…’]
According to Martinez, it would be a mistake to try to ‘force a change in behaviour’ in your customer. Entrepreneurs must ‘learn from the behaviour of people and leverage’ it. The main question should be, ‘How am I going to learn from the market?’ ‘The best entrepreneurs are the ones who can answer that question simply’. Sometimes, this also means that you need to be ‘ruthless and unemotional about what you choose to do’. An entrepreneur may be right, but if it is not what the user wants, he will fail. In other words, a great idea might not necessarily be market-ready and entrepreneurs should be prepared for it to evolve.
Those who are successful are able to ‘keep the user at the centre’, innovating and adapting all the time, focusing on flexibility, along with tenacity. Martinez observed this mindset in the way coders work: ‘They use functionality and codes that have worked before and innovate from that’. It has to do with the fact that ‘humans tend to believe that, whatever the current state is, it has always been the natural state’.
So we asked about Apple: didn’t they create a need? According to Martinez, they just build on an existing need and they create ‘beautifully designed products with a low barrier of entry, a high value proposition but also high barriers to exit’. Put simply, they make it really easy and beneficial to adopt iPhones, iPads and iOSs, but difficult to switch to another product.
To Martinez, adapting to this state of mind and imagining processes can be taught if you take a moment to step back and look at your product. Maybe this is what mainstream media lacks, as they are more capital-intensive and driven by immediate revenue, ‘It makes it difficult to make a case for something that may work later’. The best new media (Pinterest, Facebook, Snapchat, etc.) are excellent at seeing user data and processing new offers: ‘In the digital space, entrepreneurs are data-driven’—a good quality according to Juan Martinez.
‘Prior generations were happy to give up risk for stability, whereas younger people want to get value from what they do’, Martinez remarks. Most of all ‘innovation is now more accessible and widespread’, he adds. So, now that you know what to do: innovate!