Why vision and instinct are as powerful in business as data

What is your business’s value to your customer?

First published on
Jun 30, 2020

It sounds like a simple question, but you might be surprised how many business leaders would struggle to provide a simple answer. Because defining your customer and, more importantly, their specific needs in relation to your business, is harder than you think — especially when you’re a start-up with little data about the people using your product. 

Humans, after all, are not logic problems to be solved. They are fallible, unpredictable and irrational. Indeed, the idea of a rational actor must be one of the greatest fallacies of business economics — which is why agility and flexibility are start-up traits that are every bit as valuable as skill in data analytics.

For small-business accountancy app Coconut, launched in January 2018 by former PwC accountants Sam O’Connor and Adam Goodall, and currently funding to scale up, that has been an important lesson to learn — especially when both co-founders have a background in numbers.

“In my experience in start-up land, trying to tell a story with data is the killer of a vision,” says O’Connor. “What a start-up should be doing is lurching around a bit to really root out that very clear value that ultimately creates your exponential growth. And I don’t believe that those insights come from data. I think they can be informed by data but ultimately they come from a vision of how the world could look, but doesn’t yet.”

He’s in good company with this view. Serial tech CEO Raj Koneru, who founded app development platform Kony before starting the AI assistant company Kore.ai, knows all too well the importance of data — but is a strong proponent of instinct first. 

“I envision things based on my experiences, customer feedback, foresight, and market research,” he says. “The knowledge of the past, present, and future data helps me connect the dots and build a stronger vision to guide my teams accordingly. And although I’ve always had a penchant for data, it never got in my way of thinking something new or exciting that’s never been tried.” 

In a business environment that is increasingly obsessed with data — whether it’s for proving a concept, optimising performance or reassuring investors — the idea that good old instinct and human empathy could be key to decision-making feels surprisingly radical.

“Vision and the data go hand in glove,” adds Koneru. “One without another is meaningless.” 

That is, of course, why senior leadership teams need to cover both skillsets — a CEO that can concentrate with equal focus on vision and data analysis is an exceptionally rare beast, after all. And that is something O’Connor, who admits he leans more towards instinct and vision, acknowledges as being at the heart of Coconut’s growing success. 

“There are process leaders and data leaders, who are like, ‘This is how I make decisions, based on these things’,” says O’Connor. “And then there are emotional leaders, who are a bit like greyhounds. The rabbit’s out of the trap and they’re like, ‘I’m going for that rabbit. I don’t care if we’re not 100% certain on the outcome yet.’ And your ultimate in a start-up is the intersection of both. If you look at the profiles of me and my co-founder, Adam, I’m the greyhound and he is analytical. So it makes a fantastic partnership.”

Finding that happy balance seems to be one of the sweet spots that marks the difference between a great start-up and a failed start-up. But continuing to helm a sustainable, scalable business, without being fenced into a path set by a one-track vision on one hand or a dogged obsession with data on the other? That’s a real challenge. As a team grows, and internal culture combines with investor pressures favouring short-term revenue, for example, it can be a struggle to ensure the company is driving forward in the right direction, not just reacting to immediate conditions. 

“Today, transparency is key and it’s hard to bend or manipulate bad signals from real information. Your stakeholders know this,” says Michael Litt, CEO and co-founder of Vidyard. An engineer by training, he describes finding a direction or purpose without data as “like walking through a forest blindfolded. Information and data are the tools that effectively allow you to lay the trail toward your purpose.” 

And that is, perhaps, what makes someone CEO material — the ability, as he describes it, to “utilise data to empower and justify the vision and passion. That doesn’t mean you need to be a data scientist or analyst, but you need to be able to contextualise the data that your team provides you and make it understandable or human in order to fuel alignment and purpose.”

So how, as a partnership rather than a single entity, have the co-founders of Coconut managed this balance? Well, they’re in a happy place now, with 3x growth in the last year and 213% overfunded on their current CrowdCube investment round (at time of writing). But it hasn’t been straightforward, says O’Connor.

“It’s pretty difficult to get your head into the gold seams of value, and we’re really starting to do that now,” he says. “We are really driving into the customer value, from two years’ worth of customer data. But what happened last year was that we [the co-founders] had pulled apart a bit, not realising that the intersection of where our skills cross is where the magic happens,” says O’Connor. 

That two leaders of the same business can see different roadmaps ahead of them is a reflection of just how hard customer value is to define. And it’s a fork in the road at which many a business has foundered. For Goodall and O’Connor, it was the push they needed to really dig into exactly what Coconut was offering. 

To achieve that, they looked to the ultimate customer-led tech company, Amazon, crafting a four-page Jeff Bezos-style memo in prose about what they wanted to deliver over the next two months. 

“That enabled me to convey my ideas around vision. Adam fed into that and then wrote another memo which was more process oriented. And the flow of that then started changing how we operate as a business. It created a complete expectation of what people should be delivering and brought those two sides together.”

In a world of catchy slogans and one-line elevator pitches, the idea of capturing a brand vision across four pages of storytelling seems almost quaint, yet O’Connor believes it is this approach that has best captured the customer need and the brand vision — and it is one he would recommend to other start-ups and scale-ups. 

“What I would say if I was starting out again is: when defining product features, write them out as a story and that will keep your product development and feature prioritisation rooted in the world that you want the customer to experience in the future.” 

Sound advice. And if it’s good enough for Jeff Bezos…

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