Do You Think You Know? Think Again!
There’s a difference between thinking you know (aka assuming) and knowing. I worked for 14 years in the market research industry – where I was helping my clients make informed decisions using data - so trust me when I say that most of our assumptions are not correct.
I can hear your argument. I am an entrepreneur, if I was listening to all people who told me I couldn’t do it, I would never have started. I need to trust my guts, I know some things feel right.
Absolutely. Listening to your guts you should. Some things do feel right.
But there is a difference between following your intuition and using data to make an informed decision to confirm it. And the problem is too often we don’t make informed decisions because we want to go too fast.
When you make an uninformed decision, you often make an assumption based on your gut feelings. The danger in doing so in today's fast digital environment is that what you think was true yesterday may not be true anymore.
Let me take a simple example: Your next marketing campaign. How can you become better at targeting the right people, exactly at the right time and at the right place if you do not continuously collect data and analyse them?
Many companies don’t take advantage of everything that modern marketing has to offer, especially because marketing is changing fast, as there are many new tools that constantly come to the market.
The thing is, what worked before may not work in a year's time. Technology develops super-fast, and marketing today relies on rapid testing (multiple campaigns at the same time usually) and learning. It is therefore essential to continuously test and analyse so you can let the data show you what you have achieved and whether you are on the right track.
Where do intuitions come from?
In addition, think about the following. What are your intuitions really based on? They are coming from your own perceptions of the market and the business environment, from your skills, from opportunities you see untapped, which you can anticipate because you gather the facts and make sense of them.
So, in essence, our intuitions are based on our knowledge. And our knowledge is coming from various sources: primary and secondary data, opinions from others, skills, experience, education, etc.
It’s like when Steve Jobs was claiming he had never done any market research. I have difficulties believing him. Maybe he had never hired an external research agency, but his intuitions didn’t come by themselves. They were based on analysis, on the knowledge he had accumulated over the years combined with an extraordinary ability to think ahead.
How do you collect data today?
What is important is that you create a structure that enables you to collect and gather data (what we call quantitative and qualitative data), opinions, experiences, and gut feelings to help you form your knowledge and in turn use it to quickly scale your business up. I am talking about knowledge management here.
I recommend you read Ray Dalio’s book Principles for more on this topic.
Think like an entrepreneur
There will be times when you need to trust the data because they are more valid than opinions. There will be times when data don’t exist yet, so you need to base your decisions on opinions and intuitions.
What I am saying is you are a business owner, and you should definitely trust your gut feelings. But you will reach a point where you need to rely on data to make sure you move in the right direction, and to know whether or not you have reached your destination.
In other words, follow the numbers but do not disregard your gut feelings. Follow your gut feelings, but do not disregard the numbers.
Again, the combination of data + intuitions + opinions + experience + skills is how you shape your knowledge.
And knowledge helps you be informed, which in turn helps you make the right decisions.
Now that you understand the principle, there is one area where I am certain you can do a lot better.
How much do you actually know about them? How connected do you believe you are to them?
You probably think you know them enough but I am going to assume that you do not know them as much as you think you do.
As you noted, I am making an assumption. But I am relying on 20-year experience, hundreds of conversations with entrepreneurs, including guests on my podcast, and secondary data. So the knowledge I have acquired has shown me that many entrepreneurs are not as connected as they think they are with their customers.
For instance: do you have an Ideal Client Profile?
It is one thing to say you are customer-centric, it is another to actually be. When was the last time you talked to a customer? When was the last time your people talked to a customer?
Remember that your customers are the ones who actually pay your bills, not your shareholders or other stakeholders.
And you are not in their heads.
If you want to know how your clients feel, and behave, if you want to understand why they do the things they do and why they would buy from you and not from your competitors, the best approach is to simply ask them.
And even better, do it old style, over the phone, or on a Zoom conversation so that you can probe more, and ask the important questions like How and Why.
The danger is that as your company grows, you become more and more disconnected from your market, and you spend less and less time with your customers.
So, always remember who pays your bills and make sure you continuously dedicate time to know and stay connected with your market!