Your Baby is Ugly!

0:00 Intellectual honesty. It's something we've talked about before and frankly we're going to talk about again because it's something I believe is so critical to success in many businesses.

0:09 And we're not the only ones. 12-step programs use it, right? In Alcoholics Anonymous, the first step is to acknowledge you have a problem. You see, because once you know what the problem is, then you can work on fixing it.

0:20 And we as entrepreneurs, we've got a lot of problems and we have to acknowledge them so we can fix them. So how do we do this?

0:27 Well, internally, we do things like having KPIs, key performance indicators, but specifically

0:32 ones that are precise, sensitive to change, not averages over long periods of time, not

0:38 vanity metrics that can only go up, but things that are comparing how I did today to how

0:43 I did yesterday so I can see if I'm doing better or worse.

0:46 I had a really interesting experience I want to share with you with a CTO.

0:50 You see, every CTO I had worked with prior to this, when they would release a new product

0:55 or ask for testing, they'd be defensive and tell us how great the product was.

1:00 This CTO gave us a product and said, we're trying to release it next week,

1:05 but I won't release it until you find the first hundred bugs.

1:08 You see, he knew there were lots of flaws in his product,

1:10 and he wanted to be informed of what they were.

1:13 It aligned our interests.

1:14 We all had fun finding the bugs, and he wasn't defensive when we reported it.

1:18 As a matter of fact, he celebrated those bugs when we reported them.

1:21 We found over 100 bugs, squashed them all, and released a product that was really significantly better.

1:28 He gave us permission to tell the truth.

1:31 So when you go out externally to your customers, how do you get unvetted feedback?

1:36 How do you get the truth?

1:38 Well, the best way is when they buy your product, when they vote with their credit card, a paying customer.

1:44 But what do you do if you don't have a product yet?

1:46 You just have an idea.

1:47 I've got an idea for a new product, a better magic marker.

1:49 Well, if you want information about how good it is, go ask your friends and family.

1:54 Your mother is certainly going to tell you how wonderful the idea is.

1:58 But if you want the truth, if you want to be intellectually honest, you have to give

2:01 people permission to tell you that your product sucks.

2:06 Give people permission to tell you that your baby is ugly.

2:10 And how do you do that?

2:11 Well, big companies do it by hiring third parties to run focus groups.

2:15 Because if you're part of a focus group, you're not insulting anybody by giving them

2:18 honest feedback.

2:20 But we can't afford that as startups, so what do we do?

2:23 Well, we simulate it.

2:25 I don't go out and ask people, hey, I got this new product, what do you think of my

2:28 product?

2:30 Because human nature is they're going to tell me how great it is until they walk away and

2:34 laugh under their breath about how I'm going to fail.

2:37 What I do is I approach them and say, you know, I'm doing some research for a company

2:42 that has an idea for a product.

2:43 I don't even think this product is going to work very well, but do you have two minutes

2:46 to give me your feedback? In doing so, I just gave the person I'm talking to permission to tell me

2:54 the product sucks. Permission to tell me, really, my baby's ugly. Because if I know what the problems

3:01 are, I can fix them. So here's my advice to you. Always, always be intellectually honest.

3:10 Understand how your product or your company is broken so you can fix it. Fix what's broken,

3:16 and it'll allow you to grow.

3:17 And by the way, as you grow,

3:19 what worked yesterday isn't going to work today.

3:20 New things are going to break and you repeat the process.

3:24 And that is how you create a great company.