“Listen to your customers, not your friends” and other lessons from building my first company

“Everyone has a plan until they get punched in the face.”

This line, a Mike Tyson misquote, obviously refers to what happens to boxers when they step in the ring, but it could’ve also been talking about what happens when a founder launches a company.

I’m an example. Back in 2012, my company Kaffeologie launched S Filter, a reusable ultra-fine stainless steel coffee filter for AeroPress coffee makers. Initial results were strong: Within 29 days, 1,576 backers pledged $31,605 to bring the idea to life — well over my $500 goal. Upon launch, we peaked at #3 in Amazon’s kitchen category. Things were going great.

Then I got punched in the face.

One of the realities of selling products online, especially on Amazon, is that the more successful you are, the more likely you are to invite cheaper, low-quality knock-offs. That’s exactly what happened to Kaffeologie. The S Filter, sold for $18, quickly spawned a host of cheaper imitators, many of which undercut our product by as much as $13.

We could have competed on price, but doing so would have compromised quality. We even tried working with Chinese manufacturers, but the quality didn’t measure up.

Seeing the writing on the wall, we pivoted to selling roasted coffee. That failed too, and by 2018, Kaffeologie was kaput.

I’m very forthcoming about this experience (I’ve even included it on my resume and LinkedIn). This is because I believe that, while there are a lot of stories about founders that hustled their way to the top and believed in themselves, there’s a lot more to success than just hustling and belief. You also have to marry those things with both ruthlessness (leaning in when things are successful) and radical honesty (throwing in the towel when things are not).

In short, being punched in the face is a great learning experience. Here are a few things I’ve learned from my experience.

Get addicted to metrics — but get them right

As someone who has used data to drive my product and marketing decision-making at every job I’ve had over the past decade, I’m a big believer in data’s power to help you uncover the invisible and help you reach better decisions more quickly.

But I also know that there’s such a thing as too much data: Without a filter, data can actually make decision making harder, and encourage you to default to instincts that get you in trouble.

My solution to this simple: find a north star metric, and stick to it. This is something I learned over time, but I’ve come to agree with the startup wisdom that pre-market fit and post-market fit are two distinct stages. The post-market situation will vary, but the fundamental question entrepreneurs need to ask themselves is, “what metric best tells me whether my business is thriving or dying?”

I did not ask this question when I started Kaffeologie. Instead, I was preoccupied with product need, product build, and all I could focus on was how my idea could evolve and come into being. What I didn’t realize as a starry-eyed founder was that ideas alone are almost worthless. You also need ruthless execution, and you only get that if you have the key metrics to execute against.

Accelerate your iteration cycle

The Lean Startup may be one of the most popular business books of the past decade, but you’d be surprised how often founders ignore one of its most important lessons: On day one of your business, you need to optimize for learning, not revenue.

Launching a physical product, doing this wasn’t easy. Turning steel iterations was brutally hard and slow at first, but thanks to Kickstarter, we were still able to test the market by asking potential donors what version of the product was most important to them. We also dogfooded liberally, testing the product on ourselves and in our friends’ kitchens on a daily basis.

If you can do this for a hardware product, you can do it for a SaaS tool, an app, or even an online course. Figure out your learning loop and find ways to accelerate it.

The more customers you have, the more you should ignore your friends’ opinions

Of course, it’s hard to test the market when you have zero customers. Because of this, when founders are getting started, they typically look for product insights from the people around them — their friends, family, and co-founders.

This support is always appreciated, and the feedback is especially valuable in the pre-beta launch phase of your venture. After that, however, your priorities must change. Once you have paying customers, those are the people you should be listening to. Find ways to get close to your customers, especially those that are marginally unhappy. Read Amazon reviews (or its software product equivlanet) religiously and use them to learn and improve your product.

One note, though: While you should always value your customers opinion over your own, it’s also important to have the courage to ready beyond the specific text of the feedback and anticipate the deeper problem they’re having with your product. At Amazon, we would always say that, “Customers tell you what’s wrong, not what to build.” You should embrace this philosophy as well.

The bottom line: You need to create a culture of honesty and truth

Starting a company is a deeply personal, emotional thing. But I know that one of the quickest ways to kill a small company is through running it by emotion. This is the throughline for all the advice I’ve shared above: it’s all about creating a virtuous cycle of ruthlessness, one that prioritizes honesty and truth dissemination in your company. It’s worth it.