Combatting False Positives with More Aggressive Asks
A false positive is defined as “a test result which incorrectly indicates that a particular condition or attribute is present.”
When building a startup, you’re constantly running tests, answering questions like
What customer persona is my product the most valuable for?
How much will my customers pay for this product?
Will my product be able to retain customers?
What are viable distribution channels to help me grow customer acquisition?
The road to answering these questions is paved with a lot of negative results (AKA “finding out what doesn’t work”), which can be immensely valuable lessons that should be embraced.
But one of the worst things you can do is be tricked by false positives, leading you to believe that something works, when in reality it doesn’t. Falling for these false positives encourages you to invest more resources in the wrong path, which can ultimately derail your startup.
Some examples of common false positives that can trick founders are:
Potential customers saying that they’d pay for something, but when the time comes they either aren’t willing to or just don’t have the urgency
Potential users saying that they like your product and find it valuable, but when it comes time to adopt your product or switch, they don’t do it.
Investors saying they like your idea, but when the time comes, they don’t pull the trigger on the investment.
The key to combating false positives is to go past the positive feedback by increasing the aggressiveness of your ask so that you either reach the ideal outcome (e.g. “yes I want to pay you for this product right now!”) or negative feedback (e.g. “I’d like to see feature x before I pay that much for your product”).
I learned this lesson by getting tricked by false positives with Compass (freelance web design marketplace) and Sail (client billing software for freelancers). Here are two examples of costly false positives that we encountered.
1. Compass Partnerships: we started selling to referral partners who would send us clients who needed web design, and they were really excited about the prospect of sharing Compass with their audience. The conversations went something like this.
We interpreted this as evidence that partnerships would be a great channel for us. However, we didn’t go deep enough with our ask. We found that partners needed to work us into our content calendar to promote us (which took way longer than we thought), and they had difficulty effectively referring customers due to our custom pricing model. We only found out these issues when it became clear that partnerships weren’t working as effectively as we wanted.
2. Sail user activation: We talked to a lot of users about Sail and solicited their feedback before launching it. They told us that they loved the app and felt it would provide them and their clients with a better experience. While the conversations were a little more in-depth, they went something like this like this:
When we launched, user activation was a lot slower than we anticipated. Our potential users told us they loved our product and were excited to use it. However, when we launched, the switching costs were a lot higher than expected, and not as many users as we wanted were able to make the full switch from existing solutions.
In these situations, had we pushed past the positive feedback until we encountered resistance, we would have quickly learned about obstacles that ended up taking us too long to learn.
With Compass partnerships, our goal was not for Compass partners to “become a partner” – it was for them to refer customers consistently. Had I pushed for that, I would have learned about some of the major obstacles with our proposed partnership model. Those conversations likely would have gone something like this:
With Sail user activation, our goal was not for Sail users to “sign up for the beta list” – it was for them to transition all of their client billing onto our app once launched. Had I pushed for that, I would have quickly found out that for many users, transitioning all of their client billing onto our app would not be possible. The conversations would have gone something like this:
This practice of making increasingly aggressive asks until you reach your ideal goal or encounter resistance can be applied to other areas of a startup, like having pricing interviews or even angel investor pitches. You can ask a user who says they’d pay for your product if they’ll place a pre-order right then over the phone. You can ask an investor who says they’re interested in investing to sign the docs and wire the money that day.
Sometimes, this practice may result in you achieving the end goal quicker than you expected (you won't get something unless you ask for it). Other times, you’ll learn what barriers exist for the person you’re speaking with to take the action you want. You may find that a user wants a different feature, that there’s an unexpected switching cost, or that an investor will send you money as soon as you find a lead investor.
This practice is easier said than done. Positive feedback feels good! Once someone tells you that they really like what you’re selling, it’s tempting to feel like you’ve accomplished something and stop there. Pushing forward and asking for more can also be uncomfortable– the person you’re talking to has already given you a their time and positive feedback, and pushing more can feel aggressive.
But the key to avoiding false positives is to ask for more and embrace that discomfort. You’ll learn more about the obstacles and avoid taking the bait down an incorrect path.