⏩ Moving from ‘hunches’ to results
Founders Factory Startup Bulletin #38
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Daniel Kahneman, one of the great behavioural economists, died last week at the age of 90. One of his greatest gifts to the world was the concept of ‘Thinking Fast and Slow’ (taken from his book of the same name).
In sum, this outlines two systems of thinking: System 1, which is fast, instinctive and emotional, and System 2, which is slower, more deliberative, and more logical. Different kinds of decisions use different combinations of the two, to varying degrees of effectiveness.
One standout quote from the book is this: “We can be blind to the obvious, and we are also blind to our blindness.”
This concept should, but may not always, be at the front of mind for founders. At an early stage startup, decisions need to be made quickly: but quite often this misses crucial nuances or opportunities that could result in significant distractions or even failures.
The remedy? Serena Rizzo, a product coach at Founders Factory, proposes building a culture of learning and continuous discovery, for which she summarises five tips in today’s newsletter.
Also in the Startup Bulletin:
Our top recommended reads this month
Highlights from Founders Factory & our portfolio
Opportunities, events, job roles & more
⏩ Moving from hunches to results: 5 tips
This is excerpted from a longer playbook by Serena Rizzo, which you can read in full here.
Following a hunch might feel right, but it may lead you down the wrong path, wasting your valuable time as a founder. Ultimately, the key to overcoming this is through learning and discovery—being intentional about what you want to achieve and arming yourself with the best information to achieve this.
1. Find your learning outcome
In short—what is it that you want to learn more about to move your business forward? Being clear about this helps you align with other key stakeholders, as well as helping you laser in on a particular area when you speak to users.
2. Know how to get the most out of user interviews
Interviews are the best way to get closer to your learning outcome by finding out what your customers really want. But a note of caution—people often say one thing and do another, different people may want to different things, and ultimately we interpret things according to our bias.
So two key pieces of advice. First, look at how you ask questions. Use specific, story-like questions: “Thinking about the last time you bought clothing X, where did you shop, what did you think?” instead of “Do you care about the environment when shopping?”
Secondly, select segments carefully. Try and keep a broad focus, to understand different customer needs. Depending on your product, it may be that you want to focus on a very specific segment, in which case lack of variety is fine.
3. Turn insights into opportunities
Top insights should be as close to your customers’ pains, needs, and desires as possible, and written in their own words. Staying true to customers’ problems makes you less prone to bias and more targeted with solutions.
For example—for a meditation app, you might write “I can’t find a meditation topic I like” rather than “Not enough meditation topics”. It may be that it isn’t a problem of there being enough, but rather them not being properly indexed.
These insights can easily be turned into opportunities, easily communicating your users’ pain points, each with sub-pain points.
4. Prioritise!
There are four criteria I use to prioritise opportunities:
Customer—how many people are affected?
Impact—what is particularly important as opposed to just mildly annoying?
Market—could you unlock something great to gain advantage over competition?
Vision—which is more in line with your business vision?
5. Visualise your thinking wherever possible
This runs through the process, and is one of the best pieces of advice for any company looking to implement a culture of learning and discovery. Show what questions you’ve asked, what answers were, where you tracked learnings, how much evidence there is. Record all this in workplace collaboration tools—like Notion or Miro—so that everyone has joint access and can be aligned on everything moving forward.
Read Serena’s full playbook on learning and continuous discovery here:
📚 What we read this month
The Future of User Research Report (Smashing Magazine)
The role of positive friction in a world obsessed with efficiency (Digital Frontier)
Black Box (The Guardian)—not reading, but this podcast on the history of AI and the evolution of its various ethical challenges is essential listening
🚀 Highlights from Founders Factory & our portfolio
Founders Factory was named fourth in the 2024 European Startup Hubs ranking according to the Financial Times. We were the top ranked UK venture studio and the best corporate-backed programme. Check out the full ranking
Scan.com was named in the FT 1000, the annual ranking of Europe’s fastest growing companies
Sifted also announced their rankings of the UK & Ireland's Top 100 Fastest Growing Startups—featuring Tembo at #12 and Perlego at #39
We announced the launch of MB Speedup, our joint venture with Mediobanca to invest in and build startups innovating in financial services
DRONAMICS received a $10m grant from the European Innovation Council to continue testing for its Black Swan cargo drone. Flight testing is ongoing and the first commercial flights out of Greece are expected commence later this year
Confide publicly launched their corporate whistleblowing software solution, with founder Pav Gill hosting a breakfast at FFHQ on his part in ‘Uncovering Wirecard’. Read about it in the FT here
We hosted our first Women in Climate breakfast, bringing together founders and investors in the climatetech space. If you’re interested in attending future events, reach out to olivia.brooks@foundersfactory.co
Claire Mongeau, fintech investor at FF, was named in the Women in Fintech Powerlist by Innovate Finance, in the Rising Stars category
Opportunities
⚒️ Job roles
Tech Lead at Martee’s—demand forecasting for fresh, healthy food
Commercial Sales at Confide—corporate whistleblowing software
See you next month 👋
Interested in reading more of the same insights? Check out the Founders Factory blog, and previous newsletters.