Gratification Delayed: When Metrics Don’t Matter

At Gatherball, we’re big fans of the Lean Startup movement. I’d suggest Eric Ries’ book to anyone who wants to start a tech startup today, and even before it came out I bought enough copies for my entire team and a few of my entrepreneur friends. Having spent years on failed products that could have benefitted from some early customer research, I jumped at the chance to “get out of the building” and verify some of our assumptions about the product we were making with hard data and metrics.

Nevertheless, while we still use metrics for a lot of things, I’ve come to learn that there are aspects about being an tech entrepreneur that cannot fit so simply into a metric-based model. No, I’m not talking “hunches” or the “spark of genius” or any of the arguments that Lean Startup detractors use. None of it really has anything to do with Steve Jobs, considered to be the “anti-Christ” of the Lean Startup movement. They are the indispensable parts of the job where the return on investment can’t be calculated, and where the act is its own reward.

Marketing

I assume that most tech startups, at some point in their lives, experiment with AdWords or Facebook Ads. I know I did. It’s like playing a game, and it’s easy to get carried away with keywords, click through rate, and conversion percentage. While things like AdWords can get you at the “top” of the search page for certain searches, they can’t get you into the organic search results. They are getting you into the part of the screen that everyone has been trained to ignore, and not into the part of the screen that nearly everyone actually clicks on.

PPC ad performance

Getting into the organic search results isn’t so easy. It requires you to be significant, not annoying. Create or contribute to a community. Create content that attracts people. Combine that with great SEO and awesome customer service. Unfortunately, the pay-off for these isn’t as instant as buying a few ads, and the exact ROI is difficult or impossible to measure. But ask any inbound marketer with experience in this, and they will tell you that the returns vastly outweigh the money spent on the instant gratification of PPC ads.

No matter what you do, if you’re starting a company, you’re a marketer. Your products, your presentations, etc., are all about communicating value — significance — and that’s what marketing is.

Ian Lurie

Manufacturing serendipity

“Manufacturing serendipity” is a phrase coined by Dan Shapiro and explained in this wonderful blog post by Rand Fishkin. I couldn’t do justice to the explanation here, but the TL;DR version is that part of a CEO/entrepreneur’s job is to be helpful to others and to contribute to others’ success without expectation of a reward. By building relationships and being helpful to others, you become the type of person people want to help and have a relationship with. It’s like Ian Lurie’s product significance, but you are being personally significant to others. Plus, it feels really good to help people. That’s why I’ve started implementing this as part of my job, as well as another of Rand’s suggestions, The Help Me Help You Dinner. But just like inbound marketing, it’s nearly impossible to determine an exact ROI.

Living with the frustration of that un-trackability is hard, but essential. The truth is, that lack of direct attribution is one of the reasons it’s so powerful. If we could directly trace revenue or business impact, the magic of serendipity would be lost, and there’d be millions more people attempting to manufacture serendipity of their own, saturating the field and ruining any hint of authenticity in the process.

Rand Fishkin, “Manufacturing Serendipity”

Show me the marshmallows!

Anyone talking about delayed gratification ultimately brings up the Stanford marshmallow experiment. In case you haven’t heard of it, it goes like this: researchers offered a marshmallow to a young child. The child was told they could eat the marshmallow now if they wanted; however, if they didn’t eat the marshmallow for 10 minutes, they would get two marshmallows. As the researchers followed-up with the children later in childhood, they found that the child’s success in school and life was directly correlated with their ability to resist the temptation to eat the first marshmallow. The study is so famous there are YouTube videos of parents who tested their own children:

Of course, we’re not 4-year olds. We’re entrepreneurs and CEOs! We can wait, can’t we?

It’s simple, but not easy

The need for the entrepreneur to resist gratification is even more strict. It’s not just waiting 10 minutes for an expected return — it’s doing an unknown amount of work over an unknown amount of time, with no expectation of reward. You don’t get the marshmallow. You give the marshmallow to someone else. You don’t get two in 10 minutes. You may get 10 in two years, or 100 in five years. You just don’t know.

The solution is simple. Learn to love giving people marshmallows. Your job isn’t to eat marshmallows: it’s to help everyone around you get their marshmallows, or help them through waiting for theirs. Be patient, be kind, be helpful. These are your marshmallows.

Honestly, it’s something I’m still learning. There is that part of me that is like that boy in the video. He just wants his treat.

It’s very simple. It’s just not very easy.

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