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Go Crazy Ant

inexperienced entrepreneurs start a new business, they enter what I would call "the crazy ant phase". If you have no idea what you are getting into, if you don't even know what you don't know, if you need answers but you have no questions, where do they start? I doesn't really matter. If you don't know where you are going, any road will take you there. So just like the crazy ants, you need to run around randomly until they run into things. You can run into people, facts, insights, all little pieces of the puzzle. The image of you business becomes clearer when more and more pieces of the puzzle are collected. After a picture starts to emerge the research can focus on missing pieces and the research effort becomes more focusedAssumptions can be challenged and facts can be verified. The picture becomes more detailed, more complex but also more focused and substantiated. 

The idea of the Empathize phase is that you try to live the life of your customers. What do the really want (hidden desires)? What keeps them awake at night (hidden anxieties)? What consumes their income? What deteriorates their social status? How will their lives improve when the do business with you? This phase take a lot of research because any assumption you make is most likely not true. Asking people about the desires and anxieties is no use either, because they are "hidden". 

Case: The Staples Purchaser

Afbeeldingsresultaat voor nietloze nietmachineSay you are an inventor and you have invented the stapleless binding machines that can bind a bundle of paper 8mm thick without the use of staples, glue or coils and you want to sell your product through big office supply retailers like Staples ™ (distribution channels). You have five trial users who are enthusiastic about the product and would advise friends to purchase the product. You also have an appointment with the purchaser in charge of office binders from Staples and you do your sales pitch emphasizing on the benefits and features of your product. 
After 15 minutes, the purchaser politely sees you out and you never hear from Staples again. What went wrong? Did the purchaser not like the product? Does is need more features? Does it need to be a lot cheaper? No, your product does not need improvement. The problem is you haven’t Empathized properly. You are not talking to an end user, but to the employee of a distributor. What is the best dream or the worst nightmare of the purchaser? Most probably the purchaser lies awake at night worrying whether he or she still has a job next year.

Is your proposal to invest Staples resources in an unproven product, for an unproven demand by and unproven entrepreneur going to help the purchaser feel more secure about his or her job security? Of course not. The purchaser has nothing to gain from taking a risk with you, regardless the quality of your product.

  • You can ease the purchaser into doing business with you by eliminating the risks of failure:
  • you can eliminate the risk of demand by providing the purchaser with existing high sales volumes           
  • you can eliminate the risk of usability by providing good reviews by renowned bloggers and critics
  • you can eliminate the risk of your entrepreneurial skills by providing endorsements by renowned entrepreneurs and investors (could be board members)
  • you can create some competitive pressure by distribution contracts with other distributor
  • you can eliminate financial risks by providing your goods in consignment and only get paid for the goods that are really sold
  • you can create pressure by doing a lot of PR and promotion. Pressure on the purchaser increases when customers and management ask “why don’t you/we sell these machines”?  

You may ask yourself, what good is an distributor when I need to do all the hard work? Yes, that’s a good question. I wouldn't know. I just know that you can’t “sell” your problem to a distributor and hope they will fix your problem for free. And when you have a “strategic proposition” (you want the distributor to invest in your success), don’t talk to the employees, talk to the boss!

(c) ndw 2014

Case: Rural Electrification Project

An NGO focussed on providing LED lighting for people in rural areas with no electricity. The company provided affordable and elegant little lights, powered by solar panels. The systems could be acquired with the help of micro credit and because the solar energy would replace the use of kerosene, the loan could be repaid in about 18 months from kerosene savings. 

The idea was that children could do their homework at night and not get sick from kerosene fumes. The NGO was loved by donors. Funding poured in, but sales were slow. First of all because distribution was very hard. Peoples needed to be convinced of the usefulness of the product and distribution infrastructure was non-existent (according to the NGO anyway). 

But in my opinion that wasn’t the real problem. The real problem was lack of Empathizing. Of course the European entrepreneurs and donors loved the elegant nifty lights. But they were not the real end-users. The end-users were people in rural areas. If it was just the women that would buy the lights, that would be fine, but the man of the house has something to say in the purchase of capital goods as well. 

The men I spoke to have no interest in a small light so their daughters can study, no, the want BIG lights so everyone can see that they can afford such lights. Actually they don’t want lights at all. They want a big screen T.V. This was very confusing for the donors, should their money be spent in entertainment instead of education and health? In my opinion; sell the T.V. first, the lights will follow. What do you think?

(c) ndw 2014

Interview technique:


Approaching strangers


At the end of the Empathize Phase you need to have a thorough understanding of:

  • Your customers:
    • who are they;
    • what job needs to be done;
    • what are your customers anxieties and desires;
    • what kind of lives are they living, who are their friends;
    • how do they serve their anxieties and desires now;
  • Your Business Environment:
  • The problem you want to solve:
    • apply critical thinking to gain understanding of the problem to be solved or the opportunity to be pursued.

Research process and methods:

  • PLAN:
    • Orientation: formulate required outcome of this design phase
      • brainstorm
    • Strategy: formulate research strategy
      • choose methodology
      • substantiate choices
      • plan activities
    • Data gathering
      • do desk research
      • conduct interviews
    • Formulate hypothesis
      • analyse data
      • apply critical thinking
    • Test hypothesis
      • desk research
      • surveys
      • interviews
    • Adjust hypothesis when necessary and test again
      • assess information
      • apply critical thinking
      • determine actual outcome of the research process
    • Review the research process
      • review
      • reflect
      • act to adjust the general research strategy
ndw 2014