I believe that “positive feedback” accounts for the death of many startups. “Positive Feedback” is when a Prospect (potential customer) tell you that they likes your product, and that they really enjoy meeting you. But you leave that meeting with no hard action item or intend to order a product from you. Sometimes they will take more meetings with you and your team, but no business is generated.
Sure, it’s easy if a customer pukes all over your product. You clearly get it. You need to change the product. However, it is much more difficult to understand whether you are on a good track when customers meets you and tells you “good things” about your offering.
We have a saying “if the customer tells you that your product is VERY interesting, kill the product and search for a new one”. A lot of times entrepreneurs are shocked with this approach.
I have seen too many startups that are encouraged by good words of analysts, journalists, consultants, business partners, potential customers and judges in pitch contests. They get compliments for their visionary offerings, and nice presentations. They are all getting “positive” feedback and people “like” or “love” their ideas. The “vibe” is good. But when it comes to actual business transaction or to actually buy your service or product, suddenly things start moving slow.
When talking to these entrepreneurs in the early days of realization, they have many reasons for the slow pace in deal closing:
- “We are in ‘enterprise-sales’ and it takes 9-12 months to close a deal”
- “It’s a sales process, and we scheduled a meeting for the end of next month…”
- “Our marketing material is not good enough”
- “Our prospects have many projects in the pipeline and they don’t have time for our implementation just yet”
- “The market is not there yet”
- “They told us that their current fiscal year is all planned out already, and they will put us in the plan for next fiscal year”
- ….
All these are just ways for the customer to tell you that your product is not important enough for them, and in the ongoing balance of “must” and “nice to have”, your product is on the “nice-to-have” section. Your prospects and advisors are simply polite, but you simply can’t afford that, since your burn rate kills your cash and the competition kills your market.
Add to that “False Positives” and you are really in the swamp of oblivion. False Positive is when 1-3 customers actually order your product, but it happened not because of the product, but because of excellent relationship with the account or a well-connected sales executive. Usually, you identify “false positive” when a customer buy the product, but is not using that. “We don’t have time to put it in production”, “We are waiting for resource allocation…”.
Usually it takes over a year to fully understand that the Positive Feedback we got was absolutely wrong and caused us to spend so much time, resources and money. Since most of the startups are at cash status of 18-24 months, this put them in a horrible position where they need to “pivot”, with limited to no cash to finance it, leading with most of them to the “spiral of death”.
Therefore, I recommend you, listen carefully! Be very attentive! Be true to yourself and clear the noise of the good words. Look for clear indicators that you are reaching a good product/market fit, and act upon them. Don’t try to force fake reality. Update your investors, talk to your customers. Don’t stop asking questions. Change your product or offering until you start getting these purchase orders in a predictable and consistent manner.
May the force be with you.
next week. “Sugar kills”…
Startup Dreamer 
Good one :)