Why learning from customers will get your startup farther than any best practice or playbook

_{This is Lesson 2 from Bessemer's How to Lead: Founders Fundamentals Course. Sign up today for mentorship from 30+ leaders.}

There’s no one-size-fits-all approach to making startups successful. The litany of recommended tactics and strategies only represent a small fraction of all the possible ways to solve a problem, and their efficacy will always be determined by execution, context, market conditions, and your customer.

Prescriptive best practices can confine early teams that need to experiment constantly to find what works. But while the “right” approach varies from company to company, the origin of those approaches is often the same: listening to customers. 

In this article, founders of Zola, BlackLine, Zoom, and Twilio discuss the rigorous customer focus inside their companies and how they used feedback and data to transform their product and businesses. You’ll also get the story of Procore’s unconventional two decade journey to IPO from Bessemer Partner Brian Feinstein.

1. Never assume you already know your customer

In the early days of Zola, founder and CEO Shan-Lyn Ma had an assumption that seemed like common sense: for many couples, receiving wedding gifts from loved ones is a joyful experience. But using customer research skills honed at Guilt and Yahoo, Shan-Lyn learned the opposite. 

“We found that receiving gifts was the worst part of the process for couples,” recalls Shan-Lyn. Conversations with many newlyweds revealed that getting gifts was a logistical nightmare for a number of reasons. Among them, gifts were getting stolen off doorsteps because they had arrived during the couple’s honeymoon. 

In response to this unexpected finding, Shan-Lyn and the team designed Zola to only send gifts once couples confirmed they were ready to receive them. “We’re putting the control in the hands of the couple where they felt like they didn’t have it before. 

Had Shan-Lyn not sought out this depth of feedback from customers early on, they might have never built a feature that customers now rely on and love.

“We’re still the only player that does this because it’s very hard to engineer if you have a system that’s already been set up.”

_{In our interview, Shan-Lyn also discusses the origin story of Zola, the value of building features that don’t directly drive revenue, and her experience navigating entrepreneurship as a new parent. Keep reading →} 

2. Build a practice of staying close to customers

Tooey Courtemanche built Procore to address the problems that he and his wife experienced first-hand when they were building their house in Santa Barbara. This was back in 2002 — a time when communication in the construction industry relied on paper plans, post-it notes, phones, faxes and walkie-talkies.

As Tooey finished the house and started building the company in earnest, he did everything in his power to keep the team as close as possible to the people facing the problems Procore wanted to solve: architects, contractors, subcontractors, builders, and suppliers. 

Today, Procore’s R&D team travels even more than sales, visiting construction sites around the world. Procore also assembles 1,000s of industry experts at its annual Groundbreak conference to discuss the future of construction together.

Recently, a major builder conducted an ROI study on its use of Procore, and discovered that the contract managers at the firm were saving eight hours a week. “That's what we're here for,” says Tooey. “Everything we do is in service of our vision to improve the lives of everyone in construction.” 

_{In this article, Partner Brian Feinstein tells the full story of how Tooey Courtemanche and his team transformed Procore from a scrappy startup to an industry-defining construction platform. Keep reading →} 

3. Let your customers dictate your product direction

The first in her family to attend college, Therese Tucker fell in love with computers in an elective class she took on a whim. After working her way up from an engineer to a CTO at SunGard, Therese got the entrepreneurial itch and started BlackLine, a company she has since taken public. 

Early on, Therese faced a catch-22 familiar to most founders: without momentum, it’s hard to gain momentum. But then a regional bank called her with a request. They were closing out their books, and needed to figure out who owned which account in a spreadsheet that had over 10,000 accounts.

Therese, low on cash, agreed to build a solution for them for $10,000, a low sum even back then. When she began to scope the project, Therese was perplexed — she had assumed that enterprise resource planning platforms (ERPs) used by banks would already have this functionality.

Few would have considered and fulfilled such a simple and unorthodox customer request, but by agreeing to it, Therese and the BlackLine team had uncovered an acute pain point that nobody else was trying to address, and were ultimately able to create a new market category based on this finding. 

_{In our interview, Therese also discusses the long road to successful category creation, the reason she hires ‘corporate misfits,’ and why more capital doesn’t always equal faster growth. Keep reading →} 

4. Learn from your churn

In this day and age, Zoom needs no introduction. But even pre-pandemic, Zoom had millions of daily active users worldwide, earning reports that dramatically outpaced analyst expectations and led to a wildly successful IPO in March 2019. 

Eric Yuan was able to drive these successes in large part by focusing on churned users. In the early days building Zoom, Eric made sure to personally talk to anyone who canceled their subscription. “It was critical for me to understand what had happened every time.”

Eric discovered that many users found the upfront cost of using video conferencing too high for experiences that were often disappointing. “It would take 10 clicks and installing a huge file. Then you start using it and guess what? The video doesn't work. The audio is very choppy.”

Eric dedicated significant engineering resources to make the product easier to use and provide unmatched audio and video quality. Both were a key factor in its widespread adoption for personal use during the pandemic, and even resulted in winning back some of those churned customers. 

_{In our interview, Eric also discusses building Zoom after everyone told him not to, keeping up team morale in difficult times, and why long-term trust is worth far more than short-term profits. Keep reading →} 

5. Ruthlessly remove friction to attract customers

The original idea for Twilio had few backers. While working as a product manager, Jeff wanted to make it easier for developers to reach customers, but his employer, Amazon, didn’t want to build it. After he founded Twilio, he pitched a collaboration with Cisco and AT&T. Also a no. 

So Jeff and his co-founders decided to be what the phone companies weren’t: completely dedicated to customers. Software is what makes it possible. “It’s the power to quickly iterate and serve. You listen, you build, you solve, and your work is never done—you can always build a better product”

In this spirit, Jeff and his team put all their pricing and documentation on the website, so developers working on a problem late at night wouldn’t have to wait to reach someone on the phone. 

They also launched an API with public documentation to get more developers testing the product. “We ruthlessly removed friction and barriers to experimentation and that became our guiding principle.”

_{In our interview, Jeff also discusses building a product for a market investors said didn’t exist, the decision to start a sales team based on customer feedback, and Twilio’s 1% pledge. Keep reading →} 

Bonus exercise

Read Kim Caldbeck’s playbook for implementing the ‘Six Ps’ of lean product and then complete her five steps for answering one or both of the following questions:

• Who are our first customers going to be?
• How do we position ourselves to our audience?

Note: If you don’t yet have a team, you can go through the exercise independently. If you’re pre-product and don’t yet have prospects, set up interviews with people in your target market.

_{This is Lesson 2 from Bessemer's How to Lead: Founders Fundamentals Course. Sign up today for mentorship from 30+ leaders.}