🚀 Customer Obsession: Key to Thriving in an AI-Driven World 🚀

Customer obsession is not just a buzzword, but critical in building wildly successful businesses, especially in today's competitive and fast-changing markets dominated by AI. That was the theme this summer at #FoundersForum, in one of the best panel discussions I have ever moderated featuring four remarkable founders: Cal Henderson from Slack , Cameron Adams from Canva , Marcia Kilgore from Beauty Pie , and Sam Chaudhary from ClassDojo . I have summarized their valuable insights below for all to enjoy and learn from.

Instinct and data are both essential

• While being passionate and intuitive about the product is important, it's also crucial to gather data and research. User testing with a small group can help pinpoint the target customer and improve the product. For example, Canva's user testing across various industries revealed social media managers as their initial target market.
• Over the past 20 years, Twitter has been the most effective tool for collecting feedback, according to Cal, as it offers insight into what is and isn’t working for a large audience.
• A customer-obsessed company isn't just about following every single customer suggestion. Successful customer-centric companies have a clear vision and use customer feedback to guide them toward their objectives. Being the initial user of your own product offers significant insight into both the product and the market. At Slack, they rapidly developed the product for their own use. Gathering feedback from early users was essential - according to Cal, during the first week with a second customer, they made “more changes than likely over the subsequent year of feedback cycles.”
• Merely identifying the surface of a problem isn't enough; it's essential to delve deeper. ClassDojo began by interviewing teachers to uncover biggest issues and pain points. They found that teachers’ felt disconnected from the parents of their students, and felt lonely, isolated, and exhausted. These insights led Sam and Liam to create a communication app, ClassDojo, designed to bridge the gap between home and school. And they clearly struck a nerve- within ten weeks of launch, 30,000 teachers were using the app.
• Balancing human empathy with accurate data is the “magic ticket”. Relying solely on a data dashboard is insufficient according to Marcia. It is essential to train your customer service agents to respond efficiently, integrating both empathy and data.

Setting and maintaining an intentional culture

• "The priority is the cultural aspect of being customer focused. And then everything under that can change" Cameron explains, noting that scaling at a startup involves creating short-term processes, scaling more, then re-evaluating as those processes break. It's a cycle of listening to customers, responding, launching excellent products, and showing customers their feedback leads to improvements, thus fostering further enthusiasm.
• It is crucial to intentionally preserve a company’s culture. Values play a key role in maintaining this culture, but they need to be actively applied in decision-making processes to truly be effective. For instance, in a customer-focused company, any significant decision should be justifiable to an informed customer. If such justification cannot be provided, then that decision is likely inappropriate, according to Cal.

Serving diverse customer groups

• Resource allocation across diverse customers is complex. Originally serving a single customer type, Slack has expanded to cater to diverse customers with varying needs and expectations. Consequently, the company had to consider the perspectives of users, executive stakeholders, purchasers, IT departments, among others, who may have conflicting opinions and requirements. One critical objective is determining the optimal allocation of resources to address these various audiences. Cal emphasized that their “goal isn't to make every one of their customers happy. The goal is to make them successful through what the product does.” This nuanced insight shifted their focus toward fostering organizational success through Slack, rather than solely prioritizing individual user satisfaction.
• Recognising and addressing the unique needs of each customer group: Canva began with a focus on individuals and small businesses but found it challenging to gain support from CIOs and enterprise tech teams. Their initial approach was to offer a slightly altered consumer flow to enterprise customers, which proved ineffective. Consequently, Canva assembled a dedicated team, undertook thorough user research, and developed a product that appealed to enterprise decision-makers. As Cameron stated, they "went back to how we'd normally build product, which is actually listening to people and building an actual product for them."
• Cultural differences among customers across regions require tailored communication strategies, especially during changes. When Beauty Pie shifted from monthly to annual memberships to reduce churn, the approach succeeded in the US but faced resistance in the UK, where customers felt it limited their freedom. This led to extra effort for a smooth transition. It's crucial to consider cultural nuances and emotional responses when implementing changes.

The power of community building

• Effective communication with its community has been extremely impactful for Canva. It makes the audience feel valued and heard, creating a sense of involvement in the product's development, as improvements are made based on their feedback.
• Marcia highlighted the crucial need to closely manage communities to prevent toxic behaviour. Some users, driven by a desire for attention, can become disruptive and influential. If not carefully monitored, this can negatively impact the product.
• ClassDojo harnessed community power early on by enlisting passionate teachers to promote it among their peers and build a network. They set up a Facebook group for power users to exchange experiences, challenges, and ideas while the company listened. This group is refreshed annually to foster positive behaviour.

Scaling customer obsession

• Scaling processes in a growing company is challenging; methods effective for small teams often don't scale. For example, at Slack, everyone handled one support ticket weekly to connect with customers, but this became unwieldy as the company grew and customer issues got more complex. They had to develop new ways to maintain that connection. ClassDojo decided early on not to employ dedicated user researchers, believing that everyone should contribute to this role. Instead, they brought in coaches to train all product managers, designers, and some engineers in effective customer research and discovery methods. As the company scaled and it became increasingly challenging to communicate with users, they established a dedicated operations team responsible for arranging customer interviews and distributing the notes and summaries to the rest of the organization.
• As any organization scales and the customer base changes, leaders may distance themselves from real customers or focus too much on early adopters, neglecting newer customer segments. Consequently, all four agreed that engaging directly with customers, as Sam suggests, or utilizing platforms like Trustpilot or Twitter, as recommended by Marcia and Cal, remains essential over the lifespan of the company.

The AI opportunity

• ClassDojo is considering how to use AI to benefit kids, and which customer to address first with AI tools.  The company’s guiding principle is to consistently act in the best long-term interests of children. Thus they weigh important questions such as whether to create individual AI tutors to benefit each child more, or whether to develop an AI assistant for teachers to help with their most time-consuming tasks. Since the panel, they launched their first AI assistant for teachers, called Sidekick. 
• LLMs have been useful in searching through vast volumes of unstructured text, like customer support tickets. ClassDojo has been able to extract valuable details such as the frequency, sentiment, and topics of the inquiries.
• Canva has relied on a culture adapted to continuous change to take advantage of AI. Canva's mission is to enable everyone to design, and they see AI as an accelerator for this goal. They strive to minimize the time and effort required to produce excellent content. For the past decade, Canva has employed consistent tools and methods for product development, but AI brings added uncertainty and risk. This shift necessitates a greater comfort with failure and experimentation. Cameron notes that it's reminiscent of their early days when they were starting out and exploring new things. Consequently, to foster the necessary research and development in AI, they've had to restructure their product teams to include more machine learning engineers.

As AI continues to reshape industries, the ability to integrate these technologies while remaining committed to customer needs will be a defining factor for future success. The lessons shared by these four founders serve as a powerful reminder that in the quest for innovation, the voice of the customer should always guide the way. By keeping customer obsession at the heart of their operations, companies can not only survive but thrive in today’s competitive landscape.