We made a mistake at boomering after we launched our MVP. We stopped validating our customer. It is a cardinal sin in business, and one that will destroy your company. Nietzsche was right when he wrote that “Along the journey we commonly forget its goal.” I look at customer validation in the classical way. Basically, are you making a product that customers will buy. Another way to think about in customer validation you are running tests to “determine whether there’s strong enough product/market fit to justify scaling sales and marketing spending.” (Blank). You are testing your entire business model, not its individual components. Ask yourself “Where will the traffic come from? Will it stick? Will the product be strong enough to grow virally?”
So what happened at boomering, and how are we going to fix it? I’ll share that now, along with a story about how a consumer fintech startup I worked with lost its way on customer validation as well.
Boomering
At boomering we did extensive customer discovery at the beginning. We tested our value proposition, segments and channels on 49 test users. We did this using mockups we had built in Figma. The response was overwhelmingly positive. That in itself should have been a red flag. Maybe we weren’t doing it right? But we were blinded by the optimism from our potential customers and set about building the MVP. It was at this moment we screwed up and stopped validating our customer. We had validated parts of the product, and customers were enthusiastic about it, but we had not validated the business model to the customer. We had no idea how we were going to acquire customers, we just thought they would come because our testing had been so positive. So, fast forward 8 months (way too long btw, another problem of using 3rd party vendors), and we had our MVP ready. We launched it on the app store and google play store, and then, nothing. It has now been 6 months and we are sitting at a few thousand users in markets we hadn’t really anticipated. In short, we had no idea how to take this thing to market, and we had completely forgotten about customer validation. Cardinal sin, yes, company on road to hell, yes.
Jumo
Jumo was once the darling of African fintechs. I joined about early on and they were already crushing it. The product had hit product/market fit, the business model was there, and distribution was secured. We were growing like wildfire. The product was a micro-loan delivered straight to your mobile phone, with no collateral required. We built a credit algorithm on your telephone data, and with that score we set a loan amount for you. You could access the loan on your phone, and boom, if you qualified money was delivered to you in seconds. Success breeds complacency though, and as the company grew and politics infested the business like rats in a good bag of grain, so the business started to be eaten from within. We set up a customer team, whose job was to validate the customer. The problem was, they were only validating their pre-existing idea of the customer. We had launched a large campaign essentially greenwashing our business. The idea was something like “Our loans were being used for great things, predominantly by women to start businesses.” So thats what we looked for, and we only tried to validate what we wanted to believe. That was a terrible mistake, and it wasn’t helped by a poor culture where investigation and critical thinking was punished. We couldn’t question our direction, and that led to eventual stagnation, feuds with our far more pragmatic distribution partners, and eventually downsizing. We became complacent and we stopped rigorously validating our customer.
Going Forward
It’s never to late to change. We still have some money in the bank, and were not going to go out with a whimper. The next few months are going to be critical to customer validation. We have to be data led on this, and as founder, I have to lead this. Were going to hunt our early evangelists, were going to constrain spending, and were going to prioritize validation. Were going back to the manual. I look forward to sharing our progress.