How UX Research Can Save Your Startup from Failure with Nick Cawthon

Welcome to the B2B Growth Blueprint podcast, where we talk with entrepreneurs, founders, and leaders at B2B services, tech, and SaaS companies to learn the systems and processes they've used to create success for their business. We'll also learn from marketing and sales experts to provide insights to help you grow your business. I'm your host, Mark Osborne, and the podcast is brought to you by Modern Revenue Strategies and their 10X ROI B2B Growth Guarantee. Schedule a free diagnostic call to learn the fastest path to double your B2B revenues in just 90 days. Hello and welcome to another episode of the B2B Growth Blueprint Podcast. I'm your host, Mark Osborne, and today I'm very excited to welcome my guest, Nick Coffin. Now I'm going to read Nick's bio to make sure I get this right. Nick has been a practitioner in the field of user experience for nearly 20 years. He leads user-centered strategy and research efforts for enterprise and technology companies seeking a balanced strategy through qualitative and quantitative analysis. Mixing his academic background with practical development skills, Nick helps push projects forward to executive acceptance with voice of the customer research, driving evidence-based design and strategy decisions. Nick founded Gauge in 2001 to better service corporations, agencies, and startups where he is there in San Francisco Bay Area and beyond. Clients have grown to include Genentech, Airbnb, Adobe, Wells Fargo, and others. So Nick, I'm super excited to have you on the show. Welcome.

Mark, thank you for reading that bio. I know it was wordy and a mouthful, and I appreciate it. You nailed it.

Well, so it was a mouthful because you've done a lot of stuff. But for our audience that may not be as knowledgeable about what user experience design is, why don't you kind of illustrate that story of how you— what you've done and how you got to where you are today and really what it is you do today that makes such an impact for these companies?

Mark, I'm gonna call back to the Christmas of maybe 2002, 2003. We were in Santa Fe, New Mexico, and I was trying to describe, uh, to my wife's family, uh, what it is I did.

Uh-huh.

Uh, and she jumped in as she often does. Still married, by the way. She's upstairs, uh, doing her, doing her job. She jumped in and said, oh, you just make banner ads. And Mark, I know your background, you've got some agency work there as well. But that sort of encapsulation of all you do is just make the advertisements that make the web horrible. You actually detract from user experience rather than do it. But it was a foot in the door because back at that time, large companies were looking to digital agencies some sort of footprint on this thing called the internet. And yes, I paid my price. I made the animated GIFs loop however many times they wanted to. I had only 216 colors or less to work with. What it did is gave me a knowledge and a mastery of this medium called the internet. And the banner ads became microsites and the microsites became mobile experiences. The mobile experiences became service design. And now we're talking about ethics and application and advocacy and training. for things like responsible and ethical patterns and accessibility and all of the things that make the web a wonderful, inclusive place. So it may have begun with the banner ad back in 2002, 2003, but it's changed into how we deal with technology, how we have a relationship with computers. So that was a long-winded, unknowable backstory. But that's how it's written.

Well, and I think that's, you know, I'm sure a lot of folks, especially folks that work in the technology space, have had that, you know, that mom test moment of how do I distill it down to the simplest thing of what you do? And also the sort of nonlinear, both evolution and revolution of what you do, because as technology has advanced, we've seen really dramatic, you know, kind of impact. But is it fair to say that today you're really focused on sort of the experience of the user, which is, you know, user experience is somewhat of an overused term, but I know that you've seen how that focus on kind of prototyping and user research can really make, you know, a big impact as companies launch new products or move into new markets. Tell us a little bit about The role that you see that, you know, user experience design and the work that you do does for companies.

Yeah, we've encountered a very interesting time. I know a lot of your audience are founders, early-stage, mid-stage companies, and velocity is something that they worry about every day. You know, your runway only goes for this far. You've got these ideas that you want to get down and in front of users. And there's a temptation to believe that this increased velocity with new shiny tools like generative code is going to give us the success we want faster. However, what that trap might be is, although I can build it faster, am I building in the feedback loops that I'm building the right thing?

Right.

Do I have enough inputs before I put prompt to code that the area that I'm targeting that we're really focusing on is going to solve the need that we hadn't yet anticipated? So that's how in the modern times, in the before times of the last 6 to 12 months of a generative environment, how do we insert UX and research and strategy into the point that that velocity can be applied in the right direction? Because the analogy or metaphor I like to make is that we've all been given these electric bicycles. If you've ever been on one, it's this feeling of superhuman strength where you can go faster, further, At a sort of a distance that you've never conceived. That's what kind of using all these generative tools is like. But you gotta make sure you're going in the right direction and you gotta make sure if the bike broke down that you're able to put the chain back on or understand why the brake doesn't work so that you're able to be able to sort of stitch it back if you need to. So that's where I see UX as not being something that's replaced, but it's something that's much more more of guideposts and milestones and markers and mapping as we, again, increased our velocity.

So that you make a really important point. And one of the things that, you know, I work with folks a lot on in the marketing and sales space, oftentimes someone will come to me and be like, help us run ads. And, you know, we've kind of gotten out of the agency business of just running ads because You know, it's the, what do you say and who do you say it to? And then where do they live so that you can say it to them where they are? That's so much more important than just running ads. And, you know, the analogy that people use of, you know, where the club hits the ball, you know, tiny differences in that angle of attack or speed make huge differences in the down—

Mm-hmm.

down the fairway. And so, I know that as part of your work, you've actually embedded some of these feedback loops from the, from the user that not only does it, you know, sort of ensure that you're kind of landing the ball straight on the fairway, but it also, you know, can help with kind of downstream effects around renewals and churn. Talk to us about that a little bit.

Yeah, that's the early stage startup. You know, you're kind of all vying for the same date at the prom. You know, fractional sales, sort of engineering leads, UX design leads, CEOs, they all want to make that connection with their customer because there's a precious few of them. They've got this small pot to choose from. And in these early stage startups to be able to have a loop in any way that you touch them. And I meant, I found great luck at conferences to be able to say, look, we're going to have a booth, the glamorous, glorious booth, and to go through your list and say, I want to find everybody that might either be a considered customer or an existing customer and book a 20-minute slot come over, walk me through the interface and tell me what's wrong. These are wonderful ways of somebody coming up to you, finding the time in between the sessions and saying, hey, I'm gonna walk you through how I'm using your tool and give you some indication of what that gap is. You know, putting in calendar invites on the newsletter, if it's coming from a non-sales approach, it lands so much better than customer success or things like that. It's just like, look, I'm trying to build features. I would love your feedback. We had a CEO who every time we would have a customer churn would call them personally and ask why. And it was a great early indication. This was a Series C company. Early indication of a bad investment. I got off a call on Monday with the founder of a SaaS product that I've been using quite a bit and I'm pleased with them. He's got a small team of 15. He's got 3,500 customers. He's bootstrapped and profitable. But what he and his team have done is that with every product announcement, every release, there's an invite that I can book time on their calendar. And I have taken advantage of that and really extolled his virtue of like, hey, you're opening yourself up. I know you're busy. I know you're scattered, but To really have that customer-centric mindset, I think refines your message, helps you understand your priorities more than you think your investors do. It builds in de-risks where you're— I've told them point blank, I don't need this. That's not how I'm using your product. And if so, these things have no value to me, even though you've listed them as potential features that you want to integrate. I don't, I use you completely different than you think. And so I, those feedback loops will really help you cull down and target in the right priorities for your business and your product.

Yeah, that's so interesting and so valuable. First off, like you're the ideal customer because any company that really knows what they're doing is actually looking for that kind of feedback and And one of the things that I have seen very often is marketing and sales oftentimes is sort of the feedback loop and the only feedback loop oftentimes that CEOs get from the marketplace. And when marketing, sales, and customer success are all siloed from each other, you've got marketing out there saying what they think everyone wants to hear or what the sort of vision is, whether or not it's what people are really looking for.

Right.

Sometimes they're just saying whatever they think people want to hear in order to close the deal. Customer service is left to sort of pick up the pieces and try to reconcile, well, I know you thought you were coming to us for this, and then you were promised that we could do this, but we really do this. But a much better process than what you're describing, this feedback loop of what are people really getting value from? That's what we should be talking about in the market. That's what we should be promising in the sales process. And then that's what we can deliver that then creates this virtuous circle of bringing it up. Whereas instead, when they're siloed, it creates this death spiral of you say the wrong things and then you overpromise and then you underdeliver. Well, they leave without ever generating enough revenue for you to reinvest in the product. You don't get insight from them on, you know, what they care about in the product, so you don't know what to build, and they never advocate for you in the marketplace. And so, as a result, you get this death spiral of really killing clients, which is so interesting.

Yeah, our advocacy is the user and the product. We have the fortune of not being concerned with sales numbers. We want to keep people around. We want them to be happy, of course. But it's, it's not our, it's not our accountability metric is, is revenue. What we care about is feature adoption and product adoption and those things. And it, it really generates a very different ethos in conversations when it's not transactional. It's, it's much more sort of focused on— A lot of the times I work with B2B SaaS products for DevOps and system administrators, very tech thing. And I acknowledge that our product is one step out of many, where oftentimes these— again, there's an incident, they come into our product and need to move on to the next step in the escalation chain as fast as possible. It's a mind shift between everybody loves it, and they click around and they explore, and they see all these wonderful insights and patterns. It's like, no, get them to the answer and get them out of there as fast as possible. It's hard to communicate that in marketing. Some are successful, but there is a departure and a sort of a detachment that needs to take place of like, this is not a precious space, even though I may spend 12 hours a day in it. You need to spend 12 seconds and then get to putting out that fire as fast as possible. So this, again, different kind of countabilities and metrics and perspectives and ways of looking at the relationship between human And computer and product.

You bring— I'm so glad you brought this up because I was actually just going to, you know, sort of raise it myself. And I'll use a very sort of personal example. I find myself in, you know, this is, it's so much, it's so common, it's a meme, spending lots of time in the user interface of, you know, some of these streaming services. And I'm really convinced that there are some misaligned metrics of measuring what the user experience is, is like, oh, well, people are exploring lots of new movies, or they're seeing titles that they've never seen before. They're getting exposure to more of our catalog than ever. It's really because I'm so frustrated that I can't find something that I really want to watch.

Yeah.

And they keep recommending the same things to me that I don't want. So I have to scroll past it and scroll past it and scroll past it. And I have commented before To folks that like true user experience design, I would go in and immediately be presented with the exact thing that I want to watch and press play.

Yeah.

So it's not how much time do I spend or how many titles do I review, but what's the difference between, you know, log in and press play? That should be the metric. And based on the way a lot of them are designed, I'm certain that is not the primary metric they're being measured against.

No, I would agree wholeheartedly.

So you talked a little bit about how, you know, founders, early-stage companies are, you know, sort of really, you know, battling for the same audience and that user experience can be a path to, you know, do a better job of winning that audience and then using the feedback that comes from that to, you know, win even more. You've worked with a lot of startups. You know, some of them have, you know, had successful exits. Some of them have not. Knowing that a lot of our audience are folks on that sort of early-stage journey, I'm curious from your perspective, from the user experience side of things, what are, you know, you talked about that, you know, sort of CEO empathy and openness to kind of learn from, you know, people that are churning out. What are other patterns that you see? That lead to successful startups?

Yeah, it's where to put design and UX. We had initially thought we want our own seat at the table. We want design shoulder to shoulder with engineering and sales and marketing, and then we will be one of the heads of this company.

Okay.

That notion has faded somewhat. We're finding more design and UX leaders being the leads of product. And going into product and fitting either within that organization or assuming leadership roles. So as these business owners are thinking about how they organize their company, understanding where design fits technology-centric companies, as I mentioned, worked for a bunch of those. Sometimes design falls under engineering because their job is to unlock the engineers and Let them build what they need to do as, as the product representative within an engineering team. So that kind of organization is, is worth thinking about. There have, like Airbnb, there have been companies founded by designers, and design just becomes an ethos in everything they do. It's a way of validating their process. But I think that, you know, how to unlock growth with design, how to de-risk launches. We gave you that electric bike model of understanding that you've now got increased velocity or you may soon by using some of these generative tools and to build in a user research process. It can be informal, it can be inexpensive, but we can start to say, hey, either we're gonna build a prototype using these kinds of Click-through clicks, the higher the fidelity, the better, because they assume what that experience is going to be like. And but we're going to have this validation step because we know we don't want to be 50 miles down the road and think, geez, this is really not something—

Wrong direction.

Yeah, wrong direction. The acceptance testing has shown that we kind of wasted our time on this. Now, so take into account that just because you can go faster, Doesn't mean you should skip over that planning and the strategy and those loops that I mentioned of not only that at the beginning, sort of the validation of, is this a good idea? Is this what we should build? But also at the end, it's like, is this something that you would use and go forward? And those are motions and machinations that if are built into the company early on, I mentioned and used this word before, but de-risking. Is that you, you know that you're designing the right thing and that you have designed things right. So UX plays a big part of that. In that mouthful of a bio, it had quantitative and qualitative. And just to unpack that a little bit, we've talked about metrics and you had a good one for the quantitative aspect of from login to press play, has Mark Osborne found the movie that he wanted to? And can we improve that gap so that our product is perceived with the notions of convenience, of speed, of context? Quantitative metrics that you have feature adoptions that are increasing, that we know that if a user adopts this feature, the percentage of their likelihood to become a paid user increases by X. Like, we've got these metrics in place that we want to improve the paths and the acceptances for. And then the qualitative of just that same bit of feedback you gave towards me. Are we organizing and indexing and collecting enough qualitative feedback so that when the time comes to redesign our homepage, I can call up Mark Osborne as a video clip and say, Hey, when we make decisions on layout and what features and where the search bar should be, like, let's take these into context to inform our strategy and our UX and our design decisions so that when we do build it, Mark can get to what he's looking for quickly. So those are a bunch of different thoughts about embedding UX and feedback loops, as well as using quantitative and qualitative metrics to make early product decisions in startups. So that it grows and grows and grows.

Yeah. So you triggered something in my mind that I want to call out, which is this interesting sort of intersection of qualitative and quantitative, but that's being empowered by, you know, these AI tools that can just make reams of data much more accessible. And one of the things that, you know, we see customers doing is, you know, maybe they've Occasionally recorded calls in the past, but once they move into recording everything and then storing that data, then they can take 100 calls with happy customers and 100 calls with unhappy customers and have an AI analyze them to find that pattern recognition that they could never have the time to do themselves before. But, and that their intuition on it It may not be accurate because they lean in on what's most salient because one customer was really angry and really shouted at them about X. But really, there were 10 other customers that very calmly and but clearly stated it's really Y that's the primary thing. And having the ability to use some of these new tools to do stuff like that is really powerful.

I've got a story. Airbnb had 45 million reviews on one of their verticals. They have private homes, they have rooms, and the third one I'm blanking on. But because of legislation, they saw that the growth of room rentals was stagnating. People wanted to use it like VRBO and just rent the whole place, right? Myself included. But there were still a— this is the origin of their company, those that wanted to rent rooms. And they were trying to find out what made a positive stay. And they took 45 million reviews, they took the 5 stars, and then everything else was the comparative, the control study, and then translated other languages into English. This was work that we performed using language models before they were called AI, but it was all sort of open source out of Stanford. Different language models and tried to understand hierarchy and how people were describing their stay in these rooms. And what was it that made positive versus how we saw the occurrences, the sentiment and the hierarchy of written words, qualitative text. And it turns out it was the relationship with the host. Yes, location was utmost of importance, but the relationship with the host was where It was really this wonderful thing, or where it was something that fell apart early. And a lot of that had to do with access, where if I can go into the kitchen and meet the host in this, quote, neutral area, it's where the host will start to convey, go here, do this, have that, though this. But if the host tried to cordon the guest off into a room and started to establish boundaries, It very quickly turned into it, and you could see it as the sentence structure broke down with these keywords that described those kinds of engagements. And as you had mentioned, 45 million was something that would be imperceptible to a researcher to find out. They may have heard, you know, through echoes or anecdotes of like, ah, this is an important thing, but you can start to weigh and measure and understand at scale, these kinds of things. So anytime there's this recording of calls or customer success calls or interviews or those kinds of things, record them, transcribe them, and analyze them, tag them based upon keywords or subject areas that you're looking for. And you can see and really use that as a starting point for one-on-one conversations to validate or to invalidate hypotheses that you might have about different areas of your product.

Yeah, that, so that's a very kind of tactical example that we both sort of brought up. But, you know, as someone else who, like me, has been around the block more than once, I'm curious if you could sort of share your perspective. You know, we talked about a very tactical use case of some of these new generative AI tools, and you've talked about it kind of throughout, but I'm curious your perspective, you know, as someone who lived through the first dot-com boom and was, you know, one of those early people and has been there in the Bay Area that's seen, you know, a lot of the sort of ebb and flow. What's your perspective on what this sort of next wave of digital transformation is related to AI and automation and new sources of data and being able to process more data faster and all these things? Give us a little bit of just kind of your wisdom from perspective and, you know, where your catbird seat that founders and advisors can learn from as they try to navigate this.

Yeah, my instinct is to go into education. I, have you ever worked with somebody who everything seems right and everything seems good? And then when you start working together, you realize they learned Microsoft Office in the late '90s. And that's where they've stayed. That they use Excel for like timekeeping and, you know, things that CRMs now do. But that was the tool that they learned. And that's the tool that they currently stay. And I fear that, Mark, that as I walk around the block, there and back again many times. That's the thing that quickens my pace is like, I don't want to be the one that is the Excel jockey in 2045. I need to make sure that especially as we reach, you know, the last part of our career, I won't say how long, that we stay Relevant and understanding of the tools available to us. Yeah, we have trust of, quote, the cloud. A lot of what's happening with AI and these generative tools have a huge component of trust. Yeah, for better or for worse, for attributes or for ignorance. Do we trust what's being spit out? And these examples of those that have been left behind from a skills perspective, some of it has to do with they don't They lost their data once and, and that still stings. And they said, never again am I gonna do a cloud platform. I know that if it lives here on my desktop that I have control. And so that's gonna sort of shrink my world. I, and I said, I wanna go into education because the designers that have come up under me in their career, growing their community and growing their tool sets. We all coalesced to a tool that was revolutionary at the time. It was one of many UX tools that, you know, fell in sequence over the decades. And there was a clear winner, kind of like Spotify is a fairly clear winner of streaming music services.

Right.

It took several iterations and several years for us to find the right one. And those around me, those underneath me felt like they found the right one. And then record scratch, 6 months ago, all of a sudden the rug got pulled out to say, if you're even using quote design tools, you're now design. And that's something that is, that's something that's requiring an adjustment for design leaders, for VPs of product, for chief design officers, and then all the way down mid-junior designers to say, I went through school, I'm $100,000 in debt because my school was based upon this kind of motion and machination for how do you go from ideation to research to product design to development. And that just got upthrown. And I'm talking about generative tools and prototyping and AI algorithms to create interfaces and things like that. Where we were really good at doing patterns and design systems and libraries and components, And that all used was used to train models that made all the work preceding it obsolete. And so my thought is, what would this look like if I was in the early 2000s and there was this suite of office tools that those who were used to using pen and paper needed to adapt to this new way of working? And now, so I see this impetus for advisory and education on this new way of working? Long answer, short question. Thanks for writing that one.

I don't know. I think it's really interesting. Well, and, you know, it sort of highlights to me the importance of, you know, continual learning and, you know, forcing yourself to move out of the comfort zone of maybe I did get burned once because my data got lost, but I thought girls were yucky once too, and I grew and evolved. And so the world is different. So, well, we could talk about this all day. You're obviously an expert in a lot of really interesting things, but I gotta be mindful of your time. But before I let you go, tell us something sort of exciting on the horizon for you.

Yeah. The tools that I thought I knew are now obsolete, and that's either terrifying or frightening. How I'm dealing with this.

Terrifying or frightening?

Good. Those are terrifying. It is both exciting and terrifying at the same time, which are the exact— exactly 2 emotions that you want to have at the same time. You want to be both excited and terrified that you're pushing yourself beyond your comfort zone.

And roller coasters are for, right? Yeah. Yeah.

And so, I really am excited about that. There, you know, the weight of imposter syndrome never leaves one's shoulders. But to think, you know, I've been teaching MBA students for the last 7, 8 years, and what a great opportunity it is to redo the entire curriculum. And that maybe you could take it out the bounds of a traditional academic institution and start to see where this could fit in through other cohort-based learning models, executive training courses, And begin to push it that way. I've heard you had mentioned sort of your evolution of going beyond this agency mindset or going beyond production mindset and more to that advisory space. And so where I'm excited is what kind of manifestations and shapes that might take because I've never been bad at improvising. It's just the music theory that's always been a bit of a struggle.

So that's great. That's exciting. Well, and an exciting picture of the future, like you say, that you want to be both excited and, you know, exhilarated, thrilled. Like, that's where you really get that, uh, real passion out of life. Well, uh, Nick, for those of, uh, our audience that have been listening and they're like, I definitely need some more of this and in my products and in the, the company that we're building, how can they get in touch with you? What's the, what's the way for them to get in Connected.

Engage.io. Mark and I are close connections on LinkedIn. You can find me there. My last name is C-A-W-T-H-O-N. I do reach out. I try to maintain a fairly active presence on that one social media channel. And I'd love to hear from you. Please tell me what you're working on and tell me where you're hitting a roadblock because between Mark's advice and my hyperbole, I'm sure we could, we can make it all work.

Well, awesome. Nick, thanks so much for joining us today.

Thank you. Thanks for having me.

Talk to you soon. Thank you for joining this episode of the B2B Growth Blueprint podcast. We hope you've gained insights to grow your business. If you enjoyed this discussion, please rate, comment, like, On your favorite platform and share to others who will find it useful. Do you know a CEO, founder, or leader at an early-stage B2B services, tech, or SaaS company who would like to be a guest and share their story? Send us a note. Let's schedule a conversation.