You are reading this title and probably thinking to yourself, what do start-ups have to do with birds? Even so, out of all birds, why black swans and probably if you are not from Australia: “Do black swans even exist!?” But let me stop you right there. We are not going to be talking about birds here, but about the events. Events that change the course of how a start-up operates. And since my background is in finance we will name them Black Swan as Nassim Taleb would.
So what is a ‘Black Swan’?
A black swan is an event or occurrence that deviates beyond what is normally expected of a situation and that would be extremely difficult to predict. This term was popularized by Nassim Nicholas Taleb, a finance professor and former Wall Street trader. You can find more information in this video here.
I still firmly believe every start-up needs to discover its own black swan on its way to success, their ‘eureka moment’, that suddenly inverses their chance of success. If you are interested more in this topic check GrowthHackers website where you will find plenty of materials how start-ups through highly unlikely turn of events discovered deep insights into their business that suddenly gave them a much better sense of direction. Often it is the alignment of KPIs and data insights that starts pushing the start-up in the right direction.
Why are Black Swans events crucial for start-ups?
Nassim Taleb underlines 3 key characteristics of these events:
- After the occurrence of the event, explanations are formulated making it predictable or expectable.
- The event has extreme impact.
- The event is unexpected or not probable.
In a sense this event in each start-up’s timeline is an occurrence which abruptly changes the direction of its development, has extreme impact and is unexpected. Working with clients in the last year I saw this events manifest in the form of gaining insights that were crucial to how PMF (Product Market Fit) was perceived and led to a complete shift in the development or marketing of the product.
Working mostly with tech consumer products with the goal to penetrate global market, we often find ourselves in the position, where we are able to pinpoint certain characteristics or features of the product that can dramatically improve the success of the product and make the ROI increase across certain demographic in a scalable way. What I thought I might do is to share a couple of pointers that might help you spot those moments.
Most important in the process of finding them is the mindset employed when engaging with your product. What we try to push our start-ups to do is to prevent the following:
“I suppose it is tempting, if the only tool you have is a hammer, to treat everything as if it were a nail.” – Abraham Maslow
Point being that it is good to experiment with the approaches they use. As they develop so should their approaches to the problems at hand. We have seen many positive outcomes in terms of how leadership teams approach decision making this way. We all know the story of the blind man and an elephant, right? Do not let this happen to you.
Think of the “and” solutions versus “or” solutions.
Quoting Avinash here, it is true that often our clients would like for us to tell them, what to cut and what to keep. However as much as simplicity is attractive, take up a challenge and ask of the journey of one of your customers – how they got to know you and what brought them to you. Then recheck if you are still as confident that their decision making is so simple that it only captures one interaction point.
In terms of resources we use, so we make it also practical, here are a couple of sources we use to tackle the customer insights issue better:
Micro moments: Position yourself as your potential customer, understand their needs, and think when your solution is relevant to them. When you have an idea, set up a way to track your assumption, and then go do that. Even better, make is a hypothesis, and compare it to others and examine relations between them.
Customer journey: This will help you understand how verticals are influenced by consumer behaviour and how search behaviour might look like. Connect this data with Facebook insights and Google Trends and you got yourself a cool sandbox for testing. Once you come across your Black swan event, study it and see how it might potentially influence your product.
I hope this couple of tips help you discover insights into your business better. If you are interested in cases and examples, let us know and we can help you tackle this challenges.