How Deadly is Confirmation Bias in Early Stage SaaS startups?
Ever had a customer sign up and pay you, after which you read about them and began to join dots in your head to form a conclusion about an entire possible market? Every action they take appears to reinforce that need you think they have. Six months later, when they’re barely using the software, is when you realise how wrong you were.
What is confirmation bias?
“Confirmation bias, also called confirmatory bias or myside bias, is the tendency to search for, interpret, favor, and recall information in a way that confirms one’s preexisting beliefs or hypotheses.”
Upscope’s confirmation bias mistakes
In your head, try and figure out who needs Upscope.
Here are the clues:
- Upscope is a ‘zero download needed’ instant screen sharing tool.
- It integrates with major live chat and phone systems.
Early buyers include people running sales tools, CRM systems, platforms and more. So, anyone with complicated software. We all struggle with that stuff.
Does it make sense?
A zero download, instant screen sharing tool for complicated interfaces?
Yup. It made sense to us. You can instantly see their screen and even click and scroll for them to take them through that complicated interface as if you’re sitting right there. Perfect.
We were wrong.
The level of complication in the software did not matter.
What mattered was the level of experience of the user and how time poor they were.
We live in a bubble
We added simple metrics to show each customer how much they were really using it.
Some of the complicated software people were barely using it because many of their customers do not need help that way.
Their customers were you and me.
Many SaaS people in small companies sign up and test a dozen apps a month. We find answers in help files or we know where to look. Even your 21 year old app addict out of university does not do that.
SaaS people adjust to new business tech rapidly. The biggest problem with us is that we don’t fully use the software because we’re time poor. That’s a different problem and Upscope can help there but not as a support tool but as a rapid demo type training tool for which there’s a growing need as retention and churn become more important.
So, who is using it?
People who make software for shop owners, lawyers, real estate agents, teachers and patients, hospital reception staff, car salesmen, recruiters…
Their customers are people who spend the least time with technology. Often people who are not at a laptop because they’re talking face to face with someone.
They need to be supported by instant ‘no download required’ screen sharing like Upscope.
We went through each one, ranked them by the amount they use it and then figured out who they were and what level of tech experience their customers have. 30% were heavily non-tech. Another 30% were reasonably non-tech. 30% were mixed. 10% were tech.
What are the consequences of this?
Our marketing will change. Our landing pages will change. We’ll be trying to reach industries and publications we had never considered.
Also, our pricing will change. If our core customers are using it 10X more than others, then we don’t need to fear price changes, we should charge based on value. If others who don’t need it much and drop off then we both win.
If you’re like us and often thinking about how to price your product, see some great advice on the best saas pricing models.
One action to take from this article?
Re-segment them by how much they use it.
Run through your client list and evaluate them by how much they use it and why they use it more than others. It’s the no-brainer move if you haven’t done it already.
See next: 25 companies show you their best SaaS pricing models
Also see: 27 companies show you their best onboarding emails