Why Deep Pain Leads to Great Products
What makes a great product? The answer often gets lost in the weeds of design, features, UI/UX. What actually makes a great product, is that it delivers an excellent solution to a customer’s problem, or that it unlocks a huge amount of upside value. At BIV, we say that “customers don’t care what’s in the box, they care what the box does.” Products are the medium for the delivery of a value proposition, nothing more, nothing less. It’s what they DO that matters. And what they do only matters if the “why?” of what they do is deeply understood. Understanding the “Why?” of a product is the first step to making a great product.
Understanding the “Why” takes time and application on the part of founders. They need to deeply feel and understand their customers’ pain. They need to spend time in the problem space (ideally years) understanding the incentive structures, the information flows, the competition (including the status quo). They then need to synthesize these experiences effectively to minimize the likelihood that they build something that nobody wants.
Follow the threads and pull on the strings
My story of inventing and developing a product for the water space follows this pattern. While presenting my doctoral research on the relationship between water rates (what customers pay for water), consumption and drought, the room full of utility leaders immediately skipped over the bulk of the report and flipped to the appendix at the back, focusing on the data anomalies. They were obsessed with the idea of bad data leading to revenue issues. How were data errors leading to billing problems and lost revenue? I was shocked, but I had found something that utilities truly wanted a solution for.
Over the following months, I heard the same thing time and time and time again; utilities begging for help with their ever-stressed balance sheets and revenue shortfalls. They didn’t care about historic anomalies, they needed to know where they were losing money now to data errors and how to fix them. To me, software was the solution lit up in neon and I immediately ran to get a licensing agreement signed with UNC (go Tarheels) for a SaaS product to detect missing revenue in billing and meter data. Valor Water was born out of my customers telling me over and over what the product needed to be until it was practically hitting me in the face.
By the time I was ready to build a sales motion around a hot-off-the-press product, the process I had followed of talking to my customers until it had become genuinely repetitive meant I had the rolodex and the credibility with my first buyers to hit the ground running. And when irregularities in typical utility metrology and data amount to ~1-2% of lost annual revenue, and the fix is near-term and falls straight to the bottom line, it wasn’t a hard sell. Money was lying around, and they just needed to pick it up. That’s what powered the engine.
There are no shortcuts
Water is an enormous, tricky space. You have to have spent time in it to know where the land mines are and how to navigate them. Over and over, we see that successful founders are those who have taken that time in some way or another, whether as a longtime researcher (like me), an experienced water professional, or a deeply passionate individual who has done the legwork, to learn every inch of the space in which they want to operate. They (explicitly or implicitly) understand the value of making sure the gap between the actual reality of the market and their perceived reality of the market is as narrow as possible.
Paul Vacquier at Beagle Services knows his reality. He didn’t suffer a home leak, he worked at a company that served thousands of customers who suffered from home leaks and then went and built Beagle Services to solve the real problem which was plumbers aren’t super fussed about learning to install IoT units. Josh Mackanic spent too much time watching the same street being dug up to lay water pipes then telecom fiber then a gas pipe (all the time worrying about excavators smashing into unrecorded subsurface assets) before he founded CivilGrid to serve as a single source of truth for all types of contractors. John Bertrand at Daupler is a water engineer with a background in both utilities and consulting. He watched the emergency response department of utilities (and the professionals that rely on them) suffer with broken processes and outdated technologies for so long that he was his customer. Time in the space is a non-negotiable that pays back in better products, faster sales cycles and happier customers.
Pain Leads to Products
Out of suffering comes invention, when that suffering picks on the wrong (right?) person. The lightbulb goes off in a smart person’s head saying, “This is dumb, and awful, and maybe I don’t have to live with it?” Sometimes that is someone totally new to the space, and they have a LOT of problem wading to do (it is very tiring when people suffer a home leak, and decide to build a home leak detection company - there are a lot of these). When it is done well, it can be just as powerful. People can learn markets. They just have to respect them.
Anthea Sargeaunt at 2S Water dug her way through white papers on potential sensing technologies with excruciating exactitude until she landed on something that she and her team thought fit their skillset, had a big and obvious market, and an in-built moat. Julie Bliss Mullen at Aclarity is a deep expert in PFAS science and that translates to her exceptional ability to bridge product and the commercial needs of waste companies. Reuben Vollmer spent years in their garage fine-tuning Spout, and teaming up with Tyler Breton brought on exceptional B2C expertise. This video details that 8-year journey. Whether you grew up in a market, or are new to it, effective products emerge from people who are too impatient to watch continual suffering and not do anything, and are willing to put in the work to find something that delivers the value proposition to solve the problem.
If you’re not doing founder-led sales for a long time, there had better be a good reason why
Founders who have waded in the pain understand what their customers need. They are the most effective salespeople because they speak the explicit and implicit language of their customers, and those nuances take a long time to master. Living the pain and building credibility around the emerging solution is why founder-led sales is so vital. The founder-led sales motion needs to be able to get the company to at least the first 10, if not more, contracts. Founders need to quickly learn the tactics of effective sales and contracting, but this can be learned. What can’t be learned is the path to sales credibility around a buggy early-stage product - only a founder has done the hard yards necessary. You need that early credibility, especially in the water industry to get the early wins with tough buyers.
Y Combinator reported that 25% of its founders don’t raise their Series A until year 5 or later. The best founders take their time building up their relationships and understanding of their customers so that when they’re ready to go, they’re ready to run. It’s why universities, R&D hubs, and incubators play such a significant role in the ecosystem. They create a space for immensely talented people to go through the requisite cycles with non-dilutive funding (ideally) and sufficient time and resources before they even begin to think about revenue, capitalization and commercialization. Great products take time so that great businesses can build quickly.