Archives for November 2017

It’s tempting to let the little things slide.

But ever been to a restaurant with a dirty bathroom and wonder what the kitchen looks like?

Details matter. Getting them right is good for business.

Details help deliver an exceptional experience for your customers. James Freeman of Blue Bottle Coffee knows all about this. He obsesses over details so much that he admits he’s “probably an exhausting person to live with.” At Blue Bottle, James orders special coffee mugs designed to fit perfectly in the customer’s hand. He shops for the perfect sounding speakers and even edits the menu to remove words customers might not be able to pronounce. James believes that no detail is too small to contribute to a positive customer experience.

The small things are tangible ways to show that you care. Howard Behar, former President of Starbucks, recognized that the company’s core competency was human service. He and founder Howard Schultz used to remind each other that “Starbucks is in the people business serving coffee, not the coffee business serving people.”

They believed that if they could show employees they cared, the employees would do the same for their customers. Behar found small, concrete ways to care. Corporate employees could recognize eachother for a job well done and Behar would personally deliver a big helium balloon to their desk to say thank you. In the stores, pins were given to those who got the little things right. Behar also committed to handwrite cards for employee birthdays and work anniversaries. He would scribble out the cards whenever he could, sometimes while on airplanes or watching TV. He started writing 60 cards a month and was up to 2,500 by the time he retired. Employees constantly thanked him for the cards, his gesture meant a great deal to them. Little things like these helped Starbucks “stay small while growing big.”

Getting details right establishes trust with your customers and encourages them to come back. In our increasingly unpredictable world, people crave order and understanding. Details provide consistency and comfort to the experience that can be replicated. In the E-Myth Revisted, Michael Gerber talks about the need to experiment with different details, to find the ones that work, and to be relentless in delivering them. “Because unless your customer gets everything he wants every single time,” says Gerber, “he’ll go someplace else to get it!” The smallest of details can make an impact. Employees in blue suits outsell those in brown suits for example. Even the shape of your logo matters. Research shows that crests outsell circles and circles outsell triangles.

Details matter and always will.

However, I’ve been trying to reconcile this fact with the startup ethos of “just ship it.” Are there times when you actually should neglect the details?

It depends.

First, you need to think long and hard about what stage your industry is in. David Cancel’s Hypergrowth Curve highlights three stages. First is the experimental Edison Stage where you’re testing the product and market. Second is the Model T stage where you’ve found product-market fit and are scaling up. Third is the P&G Stage where you can no longer differentiate on product or pricing and need to emphasize brand and experience. Customer service matters most in this third stage.

Let’s dig a little deeper.

When it comes to your product in the Edison Stage, it’s crucial to establish a feedback loop with customers as soon as possible. This is at the heart of the lean startup movement. By giving your early adopters something to work with, they can tell you what they like, what they don’t, and what they’d prefer. You start the process of iteration and can work to improve your product. As Reid Hoffman of LinkedIn-fame likes to say, “If you’re not embarrassed by your first product release, you’ve released it too late.”

With any new innovation, customers are hungry for a solution. Your product might solve a problem customers didn’t even know they had. Or maybe a problem they knew they had, but didn’t think could be solved. Customers are willing to accept imperfect solutions in these cases. As former founder and current VC Marc Andreessen says: “In a great market — a market with lots of real potential customers — the market pulls product out of the startup. The market needs to be fulfilled and the market will be fulfilled, by the first viable product that comes along. The product doesn’t need to be great; it just has to basically work.” So don’t wait. You can’t afford to be a perfectionist in the first stage.

In the second stage, once you’ve established product-market fit and are scaling the business, you still won’t have the resources or capacity to deliver on everything. Reid Hoffman even argues that growth startups need to neglect customer support at this point. When the window of opportunity for hypergrowth is slim, you should dedicate your manpower to new customers and opportunities. Smart managers know when to let fires burn, he argues. Be aware of all the details but figure out which ones are most important and prioritize. Decide to neglect some details for the future of the business. Compromises need to be made.

Even Sam Walton had to sacrifice many details when building up Walmart. Early on, he admits, “Our stores really didn’t look that good – they weren’t professional at all. Store number 8 in Morrilton, Arkansas, that was really a sight. We had clothes hanging in layers on conduit pipe all the way to the ceiling, and shelves wired into the walls. We didn’t have systems. We didn’t have ordering programs. We didn’t have basic merchandise assortment. In fact, when I look at it today, I realize that so much of what we did in the beginning was really poorly done.”

Faced with constraints, Sam was ruthless in his priorities. He decided that two things were most important: low prices and customer satisfaction. The next wave of retail, discounting, was arriving and Walmart intended to capitalize on it with the lowest prices and by allowing customers to return items as needed. Other things, like the quality of stores, could wait until the business was viable.

In the third stage though, when the industry is mature, brand and experience become key differentiators. You can no longer rely on your product or pricing alone to beat the competition. Here, details become even more important and must be addressed. Customers have more options so you need to give them a reason to choose you. You still need to prioritize to be sure, but too many details neglected can sink the ship. Deliver on the details to motivate employees and give customers an awesome experience. Use the details to show customers they can rely on you. Leverage them to build “emotional moats” that keep customers returning and keep competitors at bay.

Details matter and they always will. But when you’re feeling the tension between perfecting the details and just shipping, marinate on your industry and figure out what stage of business you’re in.

If you’re early, just ship.

If you’re scaling, ruthlessly prioritize.

And finally, if you’re focused on brand and customer experience, take a page out of the Starbucks playbook and obsess over small ways to show that you care.

Make customers choose you.

Again and again.

 

Shout Outs

James Freeman: Subtle Notes of Coffee and Philosophy on Stanford’s ECorner

Howard Behar: It’s Not About The Coffee: Leadership Principles from a Life at Starbucks

Michael Gerber: The E-Myth Revisited: Why Most Small Businesses Don’t Work and What to Do About It

David Cancel: The Hypergrowth Curve: How to Navigate the Three Stages of Massive Growth

Marc Andreessen: Part 4: The Only Thing That Matters

Reid Hoffman’s Podcast Masters of Scale, episodes “If you’re not embarrassed by your first product release, you released too late” and “I believe smart managers know where to let fires burn.”

Sam Walton: Made in America

 

Thanks for reading!