Entrepreneur Office Hours - Issue #131
Always say "yes" when someone offers you a drink before a meeting
My first job out of college, I was in a video production meeting with a team from Southern California. The TV producer hosting the meeting offered a drink as I was sitting down, and I politely declined.
He shook his head in disappointment. “Clearly, you’re not familiar with the Hollywood Rule,” he said.
“The Hollywood Rule?” I repeated. “No. What’s that?”
He went on to explain how, in Hollywood, you’re always supposed to accept the drink someone offers at the beginning of a meeting.
After that, I learned to always say “Yes” when someone offers me a drink before I meeting; however, the guy who taught me to do so never explained why.
Since then, I’ve wasted more time than I probably should trying to understand the logic behind the Hollywood Rule. In this week’s issue, you’ll find an article where I explain what I’ve come up with based on my experiences meeting with venture capitalists.
Read it and let me know what you think. More importantly, let me know if my advice actually leads to a big investment. I promise I’ll only ask for a small finder’s fee…
If I’m being honest, it’s happened more than once. But there was one experience, in particular, that I’ll never forget because it taught me a valuable lesson about fundraising.
You know how people often ask if you want something to drink before the start of a meeting? When you're meeting with a venture capitalist, here's why you should always say "Yes!"
Office Hours Q&A
Hope you are doing well!
I wanted to ask -
Whenever my company releases a new product we obviously ask users for feedback. We try to do it in a way that allows us to discover our blindspots but we always reach the same problem - how do we decide what to take seriously?
I mean sometimes we get conflicting feedback, sometimes it's hard to figure out whether someone's feedback actually represents the needs of other people besides them and sometimes it's just difficult to overcome our personal inclination.
Do you have any golden advice?
To answer this question, I’m going to start by mentioning that I constantly battle the same thing with my classes. As a teacher, my courses are like my product, and students are like my customers. Because of this, I regularly survey students to find out what they like and what they don’t.
When I read student surveys, I often encounter exactly what you’re describing. For example, I’ll ask what their favorite and least favorite assignments are. As I’m reading surveys, I’ll often encounter one student telling me Assignment A was their favorite and Assignment Z was their least favorite, only to find the exact opposite in the next survey… Assignment Z was the favorite and Assignment A was least favorite. How the heck do you optimize a “product” when two “customers” are telling you the exact opposite things?
Here are three suggestions…
Suggestion #1: Always remember that every user/customer is different and values different things. You can’t possibly make everyone happy all the time, so don’t try. On top of that, survey data is inherently flawed. You’re asking people to tell you what they do and don’t like, and, by doing so, you’re asking them to think about and share something they likely otherwise wouldn’t have considered or vocalized. They’re going to answer your question because you asked, but that doesn’t necessarily mean their answers are thoughtful (or even truthful). In other words, while surveying your customers and getting feedback is great, take it for what it’s worth: A flawed data point that’s likely to give only vague insights.
Suggestion #2: Because customer survey data is inherently flawed, you can’t put too much value on any one individual’s opinion. Instead, look for broader trends in your survey data. If one person says they really want a certain feature, ignore it. If 100 people want it, maybe you should give the idea some genuine consideration.
Suggestion #3: Ultimately, the proof is in what people do, not what people say. For example, my end-of-term surveys for my favorite class were unusually poor one semester, and I thought it might be time to completely reimagine the class (i.e. develop a new product). Then I looked at enrollment for the coming semester, and not only was the class full, but the waiting list for the class was full, too. In other words, despite what students were saying in their surveys, they were clearly telling all their friends to take the class (because that’s how students decide which classes to take).
The same is true for your company. The proof is in the actions people take. Is your user base growing at a healthy rate? Is customer retention good? If so, that’s what matters, not what people say when you ask them for feedback. Conversely, if those metrics aren’t good, you need to figure out why people aren’t satisfied. But, again, their actions speak louder than words. For example, are customers leaving your platform for a competitor? In which case, you’ve got a substandard product. Or, are they leaving and not purchasing an alternate solution? In which case, your product isn’t serving a genuine need.
In other words, a big part of an entrepreneur’s job is to be a detective. Nobody is going to tell you what’s happening. You have to gather data from as many sources as possible and then determine the answers for yourself. In order to do this effectively, you need to: A) learn to get data from as many different sources as possible; and B) understand how reliable/valuable each source of data is.
Got startup questions of your own? Reply to this email with whatever you want to know, and I’ll do my best to answer!