Startups should celebrate failures. This is how to keep the experimenting culture alive
As founders, how do decide which experiments to run and what needs to be considered before experimenting?
The age-old adage, ‘if at first, you don’t succeed, try again’ is applicable to countless scenarios. However, in the startup world, trying new things until becoming successful is only half the story.
In the startup world, things move at a rapid pace and ideas alone do not bring success. Success requires implementation and the right implementation process requires different business experiments in order to test and validate those ideas.
Experimentation can be as small as tweaking the font on a website or as big as pivoting the entire business, as long as these are steps towards a predetermined goal.
As Dr. Bechara Saab, CEO and co-founder of Mobio Interactive, a digital therapeutics company, rightly puts it, “Ultimately, the truth is very powerful. And experimentation helps you identify what is most likely to be the truth.” The truth is indeed very powerful from any way that you think about it, but particularly in terms of understanding how the business will succeed.
Greig Charlton, CEO of 247, a Shanghai-based lifestyle company that uses data to make it easier and cheaper for consumers to purchase products and experiences in China, believes that experimentation is a privilege that startups have that corporations do not.
Most corporates are fettered by layers of bureaucracy as everything needs to be signed off at several levels. Speaking from his own corporate experience, he mentions how anything he wanted to get done required approval from the manager, and then the manager of the manager.
Startups are lean and can test things faster, which allows them to be able to find the right market fit much quicker than it would take an average corporate.
However, just understanding the fact that experimenting with new ideas is important is not enough. This begs the question, how do decide what experiments to run and what needs to be considered before experimenting?
Segment your audience
One of the keys to conducting a successful experiment is segmenting the audience. For a company that is just starting up, it makes sense to test out new features or tactics on the entire user base but as the numbers grow, it is pertinent that they segment the target group so as to avoid losing clients or customers if the experiment does not work out.
Woovly, a lifestyle shop that connects beauty, fashion and wellness brands to their customers, started out as a wishlist aggregator in the travel industry with 900,000 users before the pandemic hit.
As travel was one of the most affected areas, Woovly decided to move into the lifestyle segment but that would risk losing their existing customer base since they signed up for something completely different.
Venkat J, CEO and co-founder, explains that the company segmented the user base, applied several experiments to understand the user behaviour, and ran experiments on partitioned groups until the new market fit was achieved.
As a result of this mindful practice, Woovly now has over three million registered users — a growth rate of more than 200 per cent in just nine months.
Small tweaks can have a colossal impact
Experiments don’t always have to be big and in scale. Sometimes the smallest experiments can bring the biggest of impacts.
Understanding that brand mentions play a significant role in a brand’s value in the lifestyle industry, Woovly first experimented with their content creation platform by providing users with a new feature to add brand names to their content.
This experiment saw successful results with almost 77 per cent of the users that tried the new feature. Next, they built on this experiment with better UI/UX, and within seven months, they managed to generate 750,000 brand-tagged user-generated content.
Have a good system in place
Trying and testing out new ideas does not guarantee success, but experimentation does minimise the probability of big failure. However, this is only true if the experiments are logically designed. Misguided (or even incomplete) experiments will often generate misleading results.
Indian healthtech startup Phable’s co-founder and CEO, Sumit Sinha, shares his experience wherein skipping some experimentation steps proved catastrophic for the company (but also a good lesson for future experiments). As the demand for teleconsultations rose during the COVID-19 pandemic, Phable experimented with this new feature offline first.
However, they made the mistake of moving quickly to bringing out to the public without getting any conclusive results from the experiment. Eventually, the company could not retain the new customers it had onboarded, which is why Sumit stressed having a good system in place and making sure all steps of the experimentation process are followed.
But the entire experiment was not a failure — ultimately the company is stronger as they realised where they went wrong and made the necessary changes.
247tickets conducted several experiments from the get-go. As Charlton mentions, they used to simply run experiments without any process in place. If the experiments didn’t work, they just forgot about them and if they did work, the team would double down on them.
Now, they have a “project brief template” which is essentially a procedure to define what the project will be. The person running the experiment fills out all the details including the hypothesis, budget, user groups, target users among other information which allows them to get a holistic view of the process. Having the right tools allows them to use the resources in a more optimal way.
Matthew Spriegel, CEO of Atiom — a mobile-first plug and play technology that elevates learning and engagement across organisations, also believes that experimentation is the key to figuring out how to generate leads.
Atiom uses a demo walkthrough that they send out to clients. This allows them to see how individual users interact differently with the walkthrough and make changes as required.
Experimenting without a system in place, hence, is as good as trying to hit the bullseye with a blindfold in place: you are shooting your arrows, but you have no idea where they are going.
Don’t experiment only when things go wrong
Experimentation is not a quick fix or stopgap. Successful entrepreneurs continue to innovate to stay competitive. While it is pertinent to conduct experiments and try new options when things do not go your way, this isn’t the only time experimentation is valuable.
Charlton believes that the best thing to do is to experiment when things are going well because that gives you an added advantage. Unlike corporates who may be content with just growing 1 per cent or 5 per cent each year, startups do not have that luxury.
The startup ecosystem is extremely competitive and sometimes having a growth rate in higher two-digits also may not be enough. The only way to stay ahead of the curve is to think differently, run as many experiments as you can, and find the best growth techniques versus the number of resources or money spent. Experimenting only when things aren’t working will ultimately slow the company down.
Matthew also has a similar opinion, where he believes founders must definitely not break things that are working. It is good to reflect and make changes. Everything the company does must reflect the evolution of its products or services.
Dr Saab does not see any reason a company should stop experimentation either. Perfection does not exist and so from that perspective, there’s always room to grow and improve. If founders stop experimenting, then the competition may very well pass them. The only way to maintain the business and continue growth or even to stay the same size is to continue to experiment.
Build an environment that fosters proactiveness
Conducting experiments and trying new things at a frequent pace is taxing. A founder will undoubtedly have more drive and motivation to see the company succeed than the employees. This means it is critical to make sure that employees are as involved as possible.
Mobio Interactive has a very “simple” approach to solving this — control the culture. All the founders put in a lot of time thinking about a unique corporate culture for their business that structurally ensures company-wide involvement and supports an idea-meritocracy.
Even before they hire somebody, they have that individual examine their corporate culture document and highlight what they feel are its strengths and weaknesses.
This allows the founders to understand how to improve the culture, while also ensuring that every new member of the team buys into the culture, understands why it is the way it is, and knows what will be expected of them — before they join the company.
Dr. Saab adds, “To run experiments and fail, is something we see as an opportunity. It is, because of its failure, in truth a success because we’re learning. So, our employees, for that reason, are not demotivated when an experiment fails, or when a favourite hypothesis proves wrong.
It is fully understood that the important thing is that we grow, and we can grow faster by focusing on our weaknesses. Weaknesses, after all, almost always represent our biggest potential to actually make a difference.”
Charlton believes in transparency to create a more conducive work environment. “If people see other people failing, and not getting into trouble, and in fact being celebrated, then it’s a really good way of inspiring people to be okay with failing. That’s probably the biggest thing that we try and do.
We’re not great at it, but we try to instill that transparency and make sure that everyone can see. In fact, I’ve run experiments before where we fail, and it’s about celebrating that failure. It’s about saying okay, here’s what we did, and it didn’t work, but what we’re going to do next time is this, and it’s going to work, and then maybe it fails again, and then we try again.”
This type of transparent culture reduces fear and lets everyone thrive.
Experimentation is not easy and is critical to every startup’s success. As Dr. Saab puts it, “If you’re not prepared to continue to fail and to learn and to be open to it with yourself and to be bold, then you’re going to have a real hard time. And if you’ve already taken the risk to start a company in the first place, then not taking additional risks becomes your biggest risk at all.”
This article was written by Sagar Chaudhary, Marketing and PR Manager at Chinaccelerator. Chinaccelerator, Asia’s leading startup accelerator, is a mentorship-driven program helping enterprise software startups from around the world enter Asia selling to a network of over 200 multinational corporate partners, and global startups enter China and local Chinese startups expand to global markets. It is operated by the Accelerator VC — SOSV ($900m AUM).
This article was first published on e27.