Author J Cornelius, who recently wrote the book Loops: Building Products with Clarity and Confidence, is a really interesting guy who went from teenage entrepreneur, to rock band sound guy, to internet pioneer, then to product design and branding specialist. Today, J is the founder and CEO of the Atlanta based company, Nine Labs–a digital experience designed in strategy consultancy.
In his new book, J teaches readers how to create, build and bring to market products that consumers love–the type of products that consumers don’t just use, but that they become rapid fans of. The secret ingredient to all of this is designing with human beings in mind. That might sound obvious, but according to J, far too many companies have lost the human touch that shoppers are seeking.
J Cornelius: I started in the entrepreneurial world by building businesses back when I was a teenager. I was in a band, and we were at a battle of the bands, and the guy who was setting up the audio system was either drunk or high or both. He just wasn’t getting the job done in order for the show to start on time. I set up audio systems for our band many times, so I pushed him aside, I hooked the whole thing up, got the show on the road, and the owner of the venue came over to me and he was like, “Hey, you know a lot about this sound system stuff? Can you help me fix some stuff around the club?”
I said, “Yeah, sure.” He asked, “Well, how much do you charge?” And I said, “$200 bucks an hour.” He said, “Okay, great. Can you be here Monday?”
For a 17-year-old kid who is working the drive-through at Wendy’s at that point–I think minimum wage was like 3.75 an hour–this was a windfall. This was a major opportunity. I skipped school and I went to the club on Monday, fixed up his stuff and got paid some decent money. I never looked back.
At that point, I started my first company, which was sound and lighting for rock-n-roll bands. We did tours with some bands that you have probably heard of and have their music in your playlists. Then when the internet came around in the 90s, it captured my attention. A friend of mine was just starting some software that helped people make websites, so I jumped on that bandwagon and we grew that company to about 50 million users around the world.
We started a web hosting company in 2000 and we sold that to Rackspace, then we sold the software company in 2006. Then, when I finally left the software company in 2012, I just kind of floated around for a while. People kept coming to me asking, “How do you make software products? How do you make things that people are actually going to buy? How do you grow a company?”
I decided to answer their questions, and instead of just doing it from the goodness of my heart, I decided to charge for the answers. That spawned the consulting company which I run today.
Identify a Need
Rae Williams: What is it about software that appealed to you?
J Cornelius: Well, I’ve always had kind of a balanced creative/engineering or analytical mindset towards things. I’m inherently curious about how things work, and why they work the way that they do. I’m also very curious about how people make decisions and why people behave the way that they do.
It wasn’t necessarily that software captured my attention, but the internet definitely did. At that point, we were doing a lot of work with the sound and lighting company. It was a lot of late nights and we were doing all kinds of other things that took a lot of time–having a job where I could sit in air conditioning all day and type on a keyboard and make better money seemed pretty appealing.
That led to the software business and through the course of that company producing, I think 60 different pieces of software over the course of that decade or so, it really cemented in me this idea of understanding what people need and building something that satisfies that need and selling it to them. That is the core of entrepreneurship, of startups, is identifying a need and filling it. I think that was Henry Ford’s quote, was you find a need and you fill it. That’s how you start a business.
So, in the consulting practice, we work with a lot of startups, we also work with a lot of big companies. Fundamentally, they’re all trying to do the same things–they’re trying to make their customers happy and they’re trying to make a little bit of money along the way. The process that I’ve identified over all of these years of doing this is really not much to do with software, as much as it has to do with products. That could be a software product, that could be a physical product, that could be a service, it’s any number of things, but it’s really around finding out what people need, what people are willing to pay for, and building a product that satisfies that.
Identify your Market
Rae Williams: What do you see that people are really doing right and that they’re really doing wrong?
J Cornelius: I think the thing that people often get wrong is they have this idea, they see something happen in their life, or they experience something, and they have an idea. They say, “I should make a thing so that it is easier, or better, or doesn’t happen in the first place.”
They immediately run out, they start thinking about what they’re going to call the thing, how they’re going to brand it–they go buy domain names and they set things up. They absolutely skip the fundamental first step, which is validating that the problem exists for other people.
Once you figure out that a problem does exist for other people, you have to figure out how many other people that problem exists for. That’s what we, in the startup world, know as your total addressable market and your market size.
A lot of people just skip that entirely. They think because they had a good idea that it needs to exist in the world. They go forward, spending all types of time and money, trying to create that idea and make it stick. That’s completely backwards thinking.
The people who are doing it right are the people who identify a group of people that they can help and that they can understand, and then listen closely for what those people need. Then they figure out how to build that in a way that is profitable for a company.
The Pain Point
Rae Williams: This validation process, what should it look like?
J Cornelius: Sure, let’s take an example that’s actually in the book. An entrepreneur came to us and he had this idea to help people save money. I guess the environment that he was in, he saw a bunch of people around him who had difficulty saving money. I don’t know if they were living paycheck to paycheck, or just didn’t have the discipline or something else.
He came up with this idea that he was going to create an ecosystem of coupons. A network of shops, stores, and restaurants that would accept the coupons, and you could get a discount off of whatever their products or services were. Then you could trade those coupons with other people, and you would end up spending less money on those things. But it never addressed the core problem of putting money into savings.
He was out trying to raise money, trying to convince people to use this thing. He never actually figured out what the pain point was for those people who had difficulty putting money in savings. It had nothing to do with coupons. People can use coupons, that’s fine. The discipline that people need to put money in savings is often as simple as just doing it automatically, which you can see with products like Digit. Even some of the banks are starting to do this automatically, where they just move miniscule amounts of money, say 37 cents at a time, a dollar here, a dollar there, into a savings account for you automatically. That’s the way to solve saving–not this other harebrained idea that this guy had.
I think as I was writing the book, he’s still running around town trying to get funding for his idea. He skipped that identification of the core problem that people actually have in trying to accomplish that task.
Idea and Identity
Rae Williams: Do you think situations like this are a matter of people trying to get too tricky with their products, or do you think it’s just not being able to identify the root of problems?
J Cornelius: I think it could be a little bit of both. I mean, human nature is that we’re all fascinated with our own idea and everyone thinks that their idea is the best. Few people are willing to do the mental gymnastics that it takes to separate their idea from their identity. If you have a bad idea, that doesn’t mean you’re a bad person, or that you’re dumb, or anything else derogatory.
It just means that the idea doesn’t have viability as a company. A lot of people just don’t know how to do that work, because they’ve never given it that much thought. Part of what we’re doing is trying to provide a framework for people who have an idea that they want to take to market, to figure out how to do that in a way that maximizes their time and maximizes their effort.
It could lead to them figuring out, “Okay, this is not viable. Yes, I have this problem, but to solve this problem at scale for a large number of people, it’s going to cost way more than people would pay for it, so it’s not a viable business.” It’s still fine if you want to do it as a hobby, but it’s not a viable business.
Few people know how to think through that or in some cases, people just don’t want to think through it, because they love their idea so much that they’re going to try to make it happen no matter what.
Rae Williams: I was really struck by what you just said about our difficulty separating our ideas from our identity.
J Cornelius: One of the things that happens in human nature is, we come up with an idea, and because we can see it clearly, we think other people should be able to see it clearly too. That’s just not the way that the human experience works.
Overcoming some of that fundamental human psychology is one of the steps that more people who want to build businesses need to do in order to be successful.
A Precise Picture
Rae Williams: What else goes into identifying and then successfully building products that customers love?
J Cornelius: The main phase of work is doing research, and that research is highly focused on a target market. That could be a target market that you belong to, or it could be a target market that you see out in the world. Basically, understanding those people at a very intimate level. One of the examples that we give is we’ve seen plenty of startups come to us and say, “We’re building this thing for professional women in their 30s.”
Okay, that sounds good, but professional women in their 30s is a very broad audience, and that doesn’t tell me anything about what their needs are, or what their pains are. We recommend getting very intimate in terms of who you’re targeting. You’ve got a professional woman in their 30s, who lives in a specific zip code, who works at a certain type of company, drives a certain type of car–she goes to the local coffee shop, not Starbucks, she’s on Instagram, posts a couple of times a day, usually pictures of her dog. She follows Martha Stewart on Facebook, she is into art, she goes to a yoga Meetup, and she probably has a tattoo that you’ll never see.
That’s a much more precise picture of who that person is and how they make decisions. Getting that level of intimacy with your target market is going to help you understand that person’s pain point, which is going to enable you to build a product that satisfies that pain point with much greater accuracy.
There’s Riches in the Niches
Rae Williams: The idea is to move away from this idea of a big market and being successful that way and instead, really getting intimate with our consumers, so that we understand them and can capture them on a niche level, is that right?
J Cornelius: Yes, there’s a phrase running around the internet, “There’s riches in the niches,” and that’s very true. If you can find an audience of people who have a specific type of pain point, and you can articulate your value proposition to them in a way that resonates, then you’re going to be able to sell a product that they love. Then you can build the company up from there.
I also work with a handful of startup incubators and other innovation and entrepreneurship programs, and one of the things that we’re working on in one of those programs is dispelling this myth that you have to be the next unicorn–you have to build a billion-dollar business. It is simply untrue for a lot of people.
Most people in this country and around the world are middle class. In America, let’s just say that the average income is $80,000 a year, and if you can create a business where you can earn $15,000 a month, that is a substantial increase in your lifestyle. That is not a billion-dollar business. Then once you have that fundamental business in place and earning money, you can then leverage that to build out to a wider range of customers.
You can then go and introduce more products or introduce the same product to a different market with a slightly different spin, and then grow the business from there. People skip that first step of getting that initial traction with a small market, and then that leads to growing the business into larger markets.
Rae Williams: Is there a company you love that really emulates these ideas?
J Cornelius: There’s so many. If you look back at the origins of Airbnb, for example–I don’t know how much you know about their history–but one of the founders is from here in Atlanta and I had a conversation with him about this. One of the things that they did early on was they as the founders, would actually go door-to-door and talk to the people who had agreed to be hosts, or talked to people who were interested in being guests. They tried to really understand what was important to them. Part of the findings from that were that they needed to have a greater way of matching the guest and the host in terms of lifestyle, and what is important to them. It is not just about how big the space is and how many beds are in it, but what’s the vibe of that room, what does the host want to know about the guest, so that they are comfortable allowing a stranger into their home?
So, they solved a lot of those pain points really early on, by intimately understanding those needs. We talk about it in the book too, that fear and desires that are the two main motivators for decision making in humans. So, really understanding the fears and the desires of the host and the fears and the desires of the guest enabled them to create an experience that answered both of them. Now, as we all know, Airbnb is a giant business.
What they did early on was that really hard work of going door-to-door and talking to people face-to-face to understand what their challenges were and finding novel and creative ways to overcome those challenges.
Rae Williams: I am very struck by the humanity of everything that you are talking about. I think that when we think of tech, we think of it as sort of a cold thing and this is all very humancentric.
J Cornelius: It is. It is human-centered design. That is a core tenet of the book. In the end, we are not designing a product or creating a product for a computer to use, we are creating something for a human to use. In order to create something a human will use–you have to understand that human.
Rae Williams: You may not be talking about things that would have been intuitive to me if I were designing a product for the first time, but it is all very logical once you break it down.
J Cornelius: It is easy to see how something’s put together once it is already put together. It is assembling that is hard. So, if you have a jigsaw puzzle on the table and it is already completed, you look at it and you can see a pretty picture, but if it is still in jumbles and pieces, then you can’t really tell what is supposed to happen where.
I think that what you are describing is the fact that over the past twenty-five years we have been figuring out how to put these pieces together in a way that makes sense. Now we have gotten to the point where we’ve got a system in place that people can follow to make order out of chaos. So, from the outside looking in, it seems to be pretty straightforward.
Rae Williams: The name of your new book is Loops. Explain to me why that is the title.
J Cornelius: Specifically, in software in the old school there’s these two competing methodologies. There is the waterfall methodology, which means that you can’t do one thing until you do the thing that comes before it. If you think about building a house, for example, you can’t put on the roof until after you have built the walls, and you can’t build the walls until you have the foundation. That core principle of waterfall is something that is present in software and product design, even to this day.
Then there’s this concept of agile, which is you move, you do things in very short bursts, and you are constantly iterating and constantly improving on the thing, which exists in a certain point within the software. It is a very helpful and useful methodology, but what it lacks is you can’t have that level of speed and that level or iteration until you have laid the foundation.
So, it is agile within the waterfall methodology, if that makes sense. What Loops introduces is the concept that you can’t have just one linear path. Going back to the house metaphor, if you build the foundation and then build the walls and then build the roof, that’s fine, but what if you discovered that you need to have three bedrooms instead of two? Or what if you discovered that it needs to be two stories instead of one? You don’t know those things until you are further down the process, and you only know them by talking to the humans that are going to use that house. If you go out, you lay a foundation for the house, and then you go and talk to the people who are going to buy it and they tell you it needs to be a different layout, you have got to go back and redo that foundation. In a physical world that is a lot harder than it is with a software product, because you can go and change things pretty rapidly in software.
What Loops basically does is it introduces this concept of looping back and forth between these different phases of work. The phases are research, and then definition or prototyping, and then building, and then deployment and going to market. Those five phases don’t change, but what you have to do is in your prototyping phase, you have to be willing to loop back into the research mindset in order to make sure that what you are building is actually good for the people you are building it for.
You have to go back and forth between this mindset of research and discovery, and then this other mindset of analytical and building things or creativity and building things. That is a constant process as long as you or your company is alive. You are going to be looping back and forth between those two general mindsets of research and analysis and creativity and building things.
Rae Williams: It sounds to me like really inherent with success with this strategy is both flexibility and the willingness to iterate.
J Cornelius: Exactly. I think flexibility is a good word–just keeping a general mindset of being able to adapt to what you’re seeing in front of you. If you build a prototype of something and you put it in front of people who might use it and they get stuck at some point in the process, you have to be flexible enough to recognize whether it is a problem with the way that you put something together, or whether that is a learning gap that you need to overcome with them.
Maybe it is not answering their problem in a way that is compelling to them. The only way to answer those questions is by going back into the mindset of research and a fundamental understanding of those people’s needs.
Rae Williams: Even validation is not a one and done process–it is constantly going back. Is that correct?
J Cornelius: That’s correct. One of the metaphors we use is as a passenger on a flight from New York to London–you get in the seat, you sit there, you watch a movie or read a book, whatever you’re going to do while you are sitting on the plane.
As a pilot, it is a much different experience. Typically, there are eight to nine thousand course corrections over that flight from New York to London. Even though you know where London is, and the plane is going in that general direction, things happen. Weather happens, the wind changes, maybe there is another plane coming that you need to avoid. There are all types of things that happen over the course of that journey that you need to adjust for. Those tiny little course corrections are that validation and that research that you are doing as you are going along the journey of building a product.
Rae Williams: If you were to give listeners who want to bring a product into the world one beginning piece of advice, what is a little thing they can do as soon as they finish this?
J Cornelius: Outside of the shameless plug of buying the book, what I would encourage people to do is get a fundamental understanding of human psychology and how people make decisions. One of the hardest things to do is to get people to change their behavior, and if you are introducing a product to somebody that is going to require them to change their behavior that is a difficult thing to make happen. Get an understanding of basic human psychology, and then really put your ego aside, and fall in love with the problem you are trying to solve. Don’t fall in love with what you think the solution is. If you fall in love with the problem, the solution will sort itself out through your research and your prototyping and your work. If you fall in love with the solution– what you think that solution is going to be–then you are going to be running around forever trying to find somebody to buy something that might not be perfect.
A Personal Favorite
Rae Williams: What is your favorite product? If you remove yourself from the process of making it, what do you personally love as a consumer?
J Cornelius: Well, it depends on what category you’re in. The things that come to mind–I think about the company services and products to which I am loyal–things that I use every day and that I am really fond of–and it might sound weird, but one of those is American Express. They do such a good job with the service offering, the website is clean and clear, they are super on the ball if you ever have a problem with the charge, or the card gets lost, or whatever.
They actually bailed me out of a bad travel situation in Spain one time when I got stuck and I lost my passport. The service is just fantastic. That is not one product, it is a suite of products, but they all work together really well to help me with both personal and business finances in a way that few other companies do.
Rae Williams: It is very interesting to me that one of your favorite products is such an established company. Clearly, they are looping.
J Cornelius: Absolutely. They are constantly listening to what their customers need, and they are constantly introducing new ways to provide a solution to those problems.
Rae Williams: J, is there anything I haven’t asked you that you want to make sure that we get into this podcast?
J Cornelius: I don’t think so. I think you’ve covered all the bases and I am sure that people will be able to click the show notes and get to the book. The only other thing I’ll say is that as part of the book, there is also an online course that people can take that leads them through all of those processes in a little bit more guided way that you usually can’t get out of a book. That is going to be super helpful for a lot of people who might not be able to get through all of this stuff without some level of support.
I mean we all need support to do things–that is why we have friends and family. Maybe that will be helpful for some of the people.
Rae Williams: And where can listeners go to find that course?