Why (and How) to Build Your Startup From the Customer’s Perspective
A lot of founders start companies because of problems they experience firsthand.
For example, a mechanical engineer was tired of dealing with leaky hotel plumbing and car troubles, so he invented the Leatherman Knife. A mortgage lender was sick of poor customer service, so they became the industry servicer. Firsthand problems provide an anecdotal basis for starting a company.
But it’s not how I started mine.
I started with empathy—seeing and understanding other people’s problems and figuring out ways to solve them.
When you start with empathy, you build your company not based on your point of view but based on the customer’s. It also encourages you to think about stakeholders beyond your customer. In the case of Flyhomes, our customers are homeowners and sellers, but their success also depends on real estate agents that they are working with.
Empathy allows us to connect all those dots.
Here’s what makes empathy so powerful, and how it can strengthen your business.
- It increases your total addressable market (TAM). I think of it mathematically. Each person faces a finite set of problems. If you only solve the problems that you face, you’re limited to that set. But if you use empathy to broaden your problem-solving frame of reference, you can address a much wider set of issues, thereby turning more people into potential customers.
- It creates a culture of proactive problem-solvers. Like any leadership trait, setting a standard of empathy encourages the same among your team. Many minds are more powerful than one, especially when they make a habit of considering problems from other points of view.
- It lets you experiment fast and learn fast. A huge part of empathetic problem-solving is deep listening — soliciting feedback, paying attention, actively learning. The more proactively you incorporate this process into your business, the more easily you develop that virtuous loop: understand problems, come up with solutions, collect feedback, iterate, and repeat.
The next time a customer is having a problem:
- Use their crisis to focus on what isn’t working. All entrepreneurs should train themselves to view crises as opportunities. Customer challenges are no exception. When handled properly, they give a direct account of what isn’t working, and form the basis for proposing new solutions that strengthen your products and services.
- Get in the trenches with them and help them solve it. Empathy literally means “sharing the feelings of others,” so when a customer comes to you with a problem, step into their shoes, and feel what they’re feeling. Think of yourself not just as a company selling them something, but as an emotional spokesperson as well.
- Zoom out, and ask why the problem arose in the first place. Stepping out of the customer’s shoes is just as important as stepping into them. Once the problem is solved, step back and connect the dots between this challenge and other challenges you’ve faced. This macro-analytic process will most likely illuminate new solutions, which can often turn into new products.
This empathetic problem-solving process enabled Flyhomes to develop our Flyhomes Cash Offer, which has become our #1 product. In a very competitive housing market, we helped a buyer with a 10% down payment win a home offer. We empathized with them: They wanted the security of a home, but they felt outmatched by other buyers with more cash on hand.
The listing agent initially balked when she heard “10% down.” Others were offering 50% or all cash. How could we compete with that?
We then empathized with the other side – the listing agent. What do listing agents want? A smooth transaction and certainty for their sellers. How could we provide that? To answer this question, we dreamed up a new product, which would add a short-term cash loan (the Flyhomes Cash Offer) to the more traditional long-term mortgage loan, and a guarantee that if our buyer backed out of the transaction for any reason, Flyhomes would step in and purchase the home on the same terms.
By empathizing with our buyers and the sellers/listing agent, we came up with a novel solution no one else had ever done that served all parties – and our buyers won the house!
Empathy doesn’t come naturally to everyone. But it can serve all who learn how to use it to their advantage. To begin incorporating empathy into your company’s problem-solving and product-building processes, zero in on customer challenges, understand the needs of all stakeholders, and create ways to satisfy each objective.