The Ugly Baby Dilemma

How to make sure your love for your startup isn't blind

Written by David Crow

Nobody thinks his or her baby is ugly. As founders, our assumption is that our products are on the verge of becoming the next iPhone (or Android or Xiaomi). And we create forecasts that show hockey stick curves and massive growth. The unfortunate thing is, human beings are not very good at predictions.

“Startups don’t fail because they lack a product; they fail because they lack customers and a profitable business model.” — Steve Blank

And while every founder thinks that he or she is going to be the next Steve Jobs or Mark Zuckerberg, there are a large number of other founders all over the world who have the same thoughts. So, rather than listening to your own hype, you need to look for data to validate your hypothesis. Are there early indications that convince you people actually want your stuff?

It can be a challenge getting that data. Founders are required to make critical decisions based on limited information. It is the unique experiences and expertise that allow many entrepreneurs to leverage that imperfect information and combine it with their intuition to make key decisions that move a company forward. But intuition without data is tantamount to faith.

“Prayer becomes the technique of choice on projects with no clear metrics.” €“ Joshua Porter

The metrics framework described by Tomasz Tunguz explains how entrepreneurs should be thinking about metrics from the start:

  • Distribution €“ you can get the product in the users hands
  • Engagement €“ you’ve built the right product and people are using it
  • Monetization €“ you can make money from your users

There are other great metrics models, such as Dave McClure’s AARRR: Pirate Metrics for Startups or Alastair Croll and Ben Yoskovitz’s Lean Analytics. These frameworks provide great measures for building a better understanding of your customers, what you are building and how to monetize it.

What metrics should you prioritize?

The short answer is that most entrepreneurs should be focused on engagement metrics. Engagement and retention are key to demonstrating that people want and will use your solution. Retention, after all, is a function of customer (user) happiness.

The longer answer is, it depends. It depends on the company, the type of product, the engine of growth. But a strong, loyal user base that continues to use the product is a good measure that you don’t have an ugly baby.

Read DIY Market Research: Find out What Your Potential Customer Thinks

David Crow (@davidcrow) is an entrepreneur focused on marketing automation products, in particular customer acquisition and product/market fit. He is a blogger and an advisor/angel for early-stage startups, including UpverterSend With UsQuantify LabsTribeHRBunch, andHackerYou. He is also a Jolt mentor and director at OMERS Ventures, the venture capital arm of OMERS. Prior to OMERS Ventures, David was the founder of Influitive, an advocate automation platform that allows B2B marketers to capture customer enthusiasm and use it to turbocharge marketing and sales efforts. He has held product and marketing roles at both startups and large companies including Microsoft, Reactivity and Trilogy. David holds a MS in Human-Computer Interaction from Carnegie Mellon University and a BSc from the University of Waterloo.

More columns by David Crow

Originally appeared on