In a previous article, I shared the story of how eBanqo built Nexus360 – a “great product that no one was willing to pay for”. I would summarize the reason for the product’s failure as this – “the ‘pain’ that the clients were facing was smaller than the ‘risk’ of migrating from the existing service providers to a new service provider”.
Once it was evident that it was going to be an uphill task to scale Nexus360, we realized that it made no sense to keep “whipping a dead horse”, so we went back to the drawing board. We looked back at what we did wrong and what we did right. We were desperate to find out if we could salvage some of the work that we had previously done, or if we had to tearfully junk everything.
Escaping the “escalation of commitment” trap
The not-so-simple decision to “pivot” away from what we are doing is very tough for founders. We see this as our personal failure, as giving up on our dreams and convictions. A scholarly theory called “escalation of commitment” refers to the tendency to continue investing in a project or decision, even when evidence suggests that it’s not working out. This happens because we have already invested time, money, or other resources into the project, and we don’t want to feel like the efforts have been wasted. As a result, we keep putting more and more resources into the project, even if it’s not achieving the desired results, leading to further losses. This phenomenon can occur in personal, professional, and organizational settings, and it can be challenging to recognize and overcome. It is a trap!
Every successful organization has a graveyard of failed products, so don’t beat yourself up. Do you remember Windows Phone, Google Glass, iPod Hi-Fi, Microsoft Kin, or Microsoft’s Zune? These are all discontinued products, so you won’t be the first or the last person to discontinue a product.
Learnings from Customers
We got into customer discovery mode again and asked deeper questions – this time we didn’t just speak with banks, we also spoke with their customers. We defined the hypotheses that we wanted to validate with the banks and their customers and kept tweaking the hypotheses as we learned.
Key insights and feedback from Customers
- Customers’ dissatisfaction with banking channels went beyond the inconsistency across the channels (which was the problem that we had initially set out to solve)
- “Customer service in most organizations sucks! It’s as if businesses don’t want to be reached and just play lip-service to customer service”
- Businesses responding quickly to customers was the (single) most important determinant of customer satisfaction
- Customers expect businesses of all sizes (not just banks) to be able to provide 24/7 support
Key insights and feedback from Banks
- Banks did not see the inconsistency across different channels as a big problem – they felt that each of their customers had a preferred channel and that’s the channel that the customer would use most of the time; so offering multiple channels didn’t really add value to the customer
- “There’s a ‘cost’ to banks of changing from one solution to another. Something that a lot of solution providers do not understand. The problem being solved must be significant to us, and the cost of change should be much less than the cost of inaction”
- “We are used to being reached by telephone an email. It’s inconvenient for us and our customers, but it’s very difficult for us to change”
Keep asking questions
The learnings from the customer discovery process defined our pivot. Even though our customer discovery questions were focused on customer’s experiences with banks and financial institutions, we noticed that customers always shared their experiences beyond banking. This opened our minds to the opportunity to build a product that was not targeted at banks alone. Another major insight that we gleaned was that “person-to-person interactions amongst Gen Zs and Millennials is overwhelmingly skewed towards texting or chatting”. So we asked the question, “why aren’t businesses encouraging customers to interact with them based on the customers’ text / chat preferences?”. This led to our foundational belief, helped define the problem that we wanted to solve and what the solution would look like.
Our final conviction was that “The future of customer-business interaction is DIRECT MESSAGING!” which birthed eBanqo Messenger – “an omni-channel platform that helps businesses automate customer interactions and deliver services instantly on messaging apps that their customers already use”.
What we learned from the pivot
Hindsight they say is 20/20. We recently did a retrospective comparison about the different approaches we took in building Nexus360 and eBanqo Messenger. Below is what we noted:
| Nexus360 | eBanqo Messenger |
|
The customer discovery process was done once – at the beginning – before we started development Spent about 13 months building the product Didn’t start selling until the product was fully built Never really had the opportunity to get market feedback as we built the product |
We kept on doing the customer discovery process throughout development, MVP, and launch We built the MVP in 6- weeks, which we could put in front of customers to try, even though we were not sure if it could scale Started selling immediately after the initial customer discovery phase, even before the first line of code was written Kept engaging with prospects and showing them what we were building to get their input |
My biggest takeaway from the process is that building a product that people are willing to pay for, requires a lot of iteration based on feedback from “the market” – this is why I called it a “dirty process”.
We’re still learning, and praying that we continue doing the next right thing.
PS: I define “pivoting” as “changing the customer(s) you serve, or changing the problem you’re solving”. Like most things that I write, I didn’t come up with the definition. I must have stolen it from somewhere ?.
In our case, we expanded the customers that we served, and also changed the problem that we we’re solving.
Please join me in thanking and applauding the eBanqo team.
