Using UX to Mitigate Venture Risk
Joy Fairbanks shares an article based on a chat with Michael Margolis on user experience research to discover your product-market fit.
How can you find your TAM and validate your product-market fit if you don’t know who your bulls eye customers are? UX research is a way to accelerate the learning curve of startups and derisk the investment.
This week my student founders and I had the pleasure of welcoming Michael Margolis, UX Research Partner at GV (Google Ventures), to our H4H impact venture incubator course at Columbia Business School.
Michael has been collaborating with GV portfolio companies on UX research for 11 years. He was the first person doing this at a venture capital firm. It is still pretty unusual for anyone to be doing this at a VC. The experiences and effectiveness of his group have been written about in the highly useful bestseller, Sprint: How to Solve Big Problems and Test New Ideas in Just Five Days by his GV colleagues Jake Knapp, John Zeratsky, and Braden Kowitz.
Michael shared with us highlights of his approach developed over his vast experience working with Uber, Slack, Foundation Medicine, One Medical, Flatiron Health, GitLab, Lime, Kindbody, Gusto, Blue Bottle Coffee, StockX, Cockroach Labs, and Nest. These are all companies known for effectively scaling based on maximizing the value of their customer/user experience.
I asked Michael to explain the value GV places on UX (User Experience) research for its portfolio companies. Michael explained to my Columbia student founders that UX research is a way to accelerate the learning curve of startups.
“It is a way to derisk the decisions you have to make, to validate concepts, to help figure out product-market fit, and to help clarify who exactly is your bulls eye customer.
If we are investing in a company, we want it to be successful. They have a certain amount of runway, which you can think of as the amount of time to get it to work and make progress. Research is a way to accelerate that.”
Key points include:
- Using free prototypes
- Iterative learning cycles
- TAM and customer segmentation
Read the full article, Derisking Ventures through UX Research, on FairbankVentureAdvisors.com.