Data has become something like a cult in Silicon Valley. While it is touted as the "new oil" for the rest of the world, data is the "new air" for Silicon Valley companies and especially startups fighting to gain traction. Collecting and studying data even becomes an end in itself nowadays, with product teams not knowing what to do with the data they have at hand.
Not everybody agrees with the importance attached to data, though. Steli Efti, founder and CEO of Close, a CRM platform helping salespeople close more deals through more effective calls and emails, thinks data is overrated. He objects to people's obsession with data and proposes an alternative method for startup success in his book Talk to Your F***ing Customers. This alternative method starts and ends with, yes, you guessed it right, talking to your f***ing customers.
Efti's thought process seems to have been shaped by two people we are all familiar with: Eric Ries and Paul Graham. Let's take a brief look at the impact these two thought leaders had on Efti and the framework he developed.
Eric Ries's influential book The Lean Startup has shaped the way many founders saw business and managed their startups for years. Inspired by the lean manufacturing philosophy of the Japanese industrialists, the book suggested a new perspective on innovation that prioritized efficiency while cutting waste. Its main premise was "validated learning," which was based on the now-well-known Build-Measure-Learn feedback loop. Ries preached to his readers to act quickly to validate their assumptions and develop a product through continuous, frequent iterations. Basically, what he said was to"fail fast so that you won't have to invest time and money in dead-end projects."
The Lean Startup emphasized that the best way to cut costs was to build what customers wanted. It prioritized user experience and, in a sense, paved the way for modern approaches like product-led growth popular among SaaS companies today.
Steli Efti's Talk to Your F***ing Customers is a sales-focused interpretation of Ries's framework. Efti suggests an "Ask-Iterate-Analyze-Adjust" cycle to improve sales performance. The process starts with a cold email, followed by a call during which the founder inquires about what worked or didn't work in the cold email. The same applies to cold calls. Turning to customers is the go-to move in this approach whenever the founder feels stuck.
Efti's insistence on talking to customers gets its inspiration from Paul Graham's well-known advice to founders. The author is a firm believer in the benefits of a hands-on approach in leading a startup. That's why he keeps urging founders to get on the phone themselves rather than tell the marketing team to contact customers.
Efti believes that personal contact with customers can tell founders what's wrong with their products in a way that data cannot. You see this piece of advice come up throughout the book multiple times:
- Wanna know if people have real buying intent? Ask them and see if they do.
- Are you curious about how your customers would respond to cold calling? Call them and see for yourself.
- How effective are your cold emails? The recipients can tell you.
- Are you having difficulty upselling? Ask your customers what else they need.
- What's your best marketing channel? Call your customers and ask them how they found out about you.
Efti envisages a customer-led sales process. Ask your customers what they want to see from you, learn how they want to be treated, and do as you are told. Do not spend hours analyzing metrics and what they tell you. The quote from Ezra Fishman at the beginning of a section perfectly summarizes what Efti thinks is wrong with data:
"When we let data drive our marketing, we all too often optimize for things that are easy to measure, not necessarily what matters most."
However, Efti might be going overboard with this insistence on talking to customers at the risk of oversimplifying things and underestimating the value of hard data. Designing a whole funnel on customer feedback may sound like a good idea at first. Still, sometimes customers do not know what they want, may fail to effectively communicate their opinions, or are not aware of better ways of solving a problem. By taking your conversations with customers as gospel, you might be sentencing your startup to mediocrity, which is akin to a long-drawn-out death in the startupland.
The real challenge remains the same whether you are looking at a data set on a computer screen or running a focus group: Converting information into knowledge and using it to solve problems. Asking your customers how likely they are to recommend you to a friend and colleague can give you a nice Net Promoter Score you can hang on your door. But it says nothing about why you got the score you did and what you should do about it. Learning what people think about you will not help you much unless you map those comments to business actions.
Although Steli Efti's advice may not be the silver bullet founders have been hoping for, it still makes a lot of sense for early-stage startups that have little data to analyze. Doing things that don't scale is the right thing to do when you feel lost, not knowing which way to go. Hustling, going the extra mile to listen to the customers, and sacrificing sleep to give better customer support can help you "cross the chasm," get out of the "trough of sorrow," or figure out a solution to "the cold start problem."
However, you'd better have a capable data integration infrastructure and a good grasp of data concepts for what comes next because you won't get to the promised land by just chatting with your customers.