Successful Businesses of the Future: Built With Empathy

Tom Hulme of Google Ventures talked with Startup Grind London about user-centric design, prototyping hacks, and why he thinks empathy is the leading indicator of business success.​

Tom (@thulme) is a General Partner of GV, which has $2.4bn under asset management. He supports a portfolio of incredible companies, and receives hundreds of investment opportunities every week. He learned from the best, having founded OpenIDEO after planning it in Clayton Christensen’s HBS class. 

Clay Christensen is the bestselling author of The Innovator’s Dilemma and The Innovator’s Solution, and is considered by many to be the godfather of disruptive innovation.

Ideas are cheap.

Tom kicked-off London’s Startup Grind event by declaring that “perfection is the enemy of progress.” It’s the most common and frustrating mistake that he sees: companies wasting time perfecting an idea behind closed doors.

“The simple truth is that ideas are cheap. I don’t believe that I’ve ever had a unique idea. The lightbulb was invented concurrently by 12 different people.”

And Tom had a stark warning for founders that overvalue their ideas and use vanity metrics... 

“Perfecting things behind closed doors loses you the opportunity to get customer feedback. Glamorising the wrong things -- such as the length of a business plan, or how many lines of code you’ve written -- is usually the start of the end.”

Understand the customer.

Fortunately, he proposes that businesses can be saved from this slow-death. The solution is to keep the customer at the heart of your business, and to increase your empathy towards them. You have to understand your customer to be able to build something that they love.

“Startups forget, you’re usually a very small part of a very long customer journey. You’re as good -- or as bad -- as the worst bit of that journey. So you have to understand all of it. All of it is a design opportunity.”

Build the right thing.

Here are Tom’s top practical suggestions on how to use empathy to become user-centric:

Glamorise the right things.Does the customer like what we’re doing?”. 

Prototype early. Get your idea into the hands of the customer now. Launching a limited service can teach you what people really want.

Represent the customer. If you’re not your own customer (see: dogfooding), then find a customer representative (a concept found in Extreme Programming).

Hire a diverse team. People with intersecting skills, genders and cultures will give you the best insights into your customer data.

Build it quickly.

Whatever business you’re in, Tom believes in prototyping and piloting early. He reeled off some of his favourite hacks to get the customer involved as soon as possible:

Ghetto testing at Zynga. They advertised games before they had written a single line of code, to see if customers liked it. You can do this by running a $1,000 campaign on Facebook / YouTube audiences. This concept works for Hardware businesses too.

Split testing book covers with Tim Ferriss. The author of the 4-Hour Workweek walked into a bookstore and put different versions of his book on the new release table. He watched to see which one customers picked up.

Opening a restaurant with Ayr Muir. He found the best locations by driving around in a food truck. He picked the best menu by writing a new variant on a whiteboard each day.

You too, big businesses.

One of the closing questions came from the Startup Grind audience via “How do you balance empathy with a sustainable business plan?” 

Tom wrapped it up nicely; it’s not a question of “balance,” but instead, sustainable business relies upon empathy.

“Big brands collapse when they’ve lost empathy, and have tried to gouge the customer. Long term value is about exceeding the expectations of the customer in the long run. Empathy and staying customer-centered is the only way to create a sustainable business.”

In summary.

• Keep the customer at the heart of your business.

• Prototype quickly to find out what your customers really want.

• Find design opportunities by looking at the whole customer journey.

• Design for real needs, and design to be low-friction.

• Get the best insights by hiring a diverse team.

If you liked this…

The GV Design Team wrote a book called Sprint: a unique five-day process for solving tough problems, proven at more than a hundred companies. (US store / UK Store)

Learn from the best at similar talks hosted by your local Startup Grind chapter.

Find out about GV and what they're investing in by watching the rest of Tom’s fireside chat with Startup Grind.

Learn more about customer journeys and desire paths by watching Tom’s TED talk (viewed over 1.4M times).

Read Clay Christensen’s post on knowing your customers’ “jobs-to-be-done”.