Our guest today is Emil Lamprecht, Founder & CEO of Growth Mechanics.
Growth Mechanics was formerly a global operator of accelerator programs at Google.
Today, Growth Mechanics is an international startup studio working in women’s health, software, social impact and more.
Emil is a career entrepreneur, advisor, and researcher.
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Chueyee Yang: Today is April 4th, 2022. Happy Monday. This is Chueyee Yang, the show’s producer and you’re listening to the Happy Market Research Podcast. We have a very special guest today, but before we get to that, here is a word from our sponsors.
Jamin Brazil: Support for the Happy Market Research Podcast and the following message comes from Michigan State’s Marketing Research Program and HubUX. The Michigan State University’s Master of Science in Marketing Research Program delivers the number one ranked insights and analytics degree in three formats. Full time on campus, full time online, and part time online. New for 2022, if you can’t commit to their full degree program, simply begin with one of their three course certifications, insights design, or insights analysis. In addition to the certification, all the courses you complete will build towards with your graduation. If you’re looking to achieve your full potential, check out MSMU’s program at broad.msu.edu/marketing, again broad.msu.edu/marketing. HubUX is a research operations platform for private panel management, qualitative automation including video audition questions and surveys. For a limited time, user seats are free, if you’d like to learn more or create your own account, visit hubux.com.
Chueyee Yang: This is episode 517, and yesterday was the 64th annual Grammy awards ceremony, which was broadcasted live from Las Vegas at MGM Grand Garden Arena. The award ceremony featured guest performances from John Legend to Lady Gaga, with Jon Batiste taking home the most awards with five, one of which was for album of the year for We Are. Here is Freedom by Jon Batiste from the hit album, which this song was also nominated for Record of the Year.
Jamin Brazil: Our guest today is Emil Lamprecht, researcher, founder, CEO of Growth Mechanics. Growth Mechanics was formerly a global operator of accelerator programs for Google. Today Growth Mechanics is an international start up studio working in women’s health, software, social impact and more. Emil is a career entrepreneur, advisor and researcher. Sir, welcome to the program.
Emil Lamprecht: Thanks so much for having me.
Jamin Brazil: We met just yesterday really through the research ops Slack channel, I was very – I’m thrilled that you’re willing to spend a few minutes with myself and our audience to talk about probably some of the more important topics, but I wanted to start with really a framework of your career. You started as a UX, or user experience professional, and then later became the chief experience officer at Whole Design Studio. Now today, you’re obviously a serial founder and CEO of Growth Mechanics, which as I already went through is that startup accelerator, and this is an interesting stat, the highest startup survival rate of any program globally. I was curious what role UX plays in startup success.
Emil Lamprecht: Yes, it’s an interesting question, and I think like most serial founders and like most people that become professional UX researchers or user researchers over time, the journey is a winding road, right? It’s never linear, I came to the whole topic of testing and interacting with customers through the failure of toys to succeed when going to market, right? My first jobs were in toys and designing – basically a product designer, writing rulebooks for complicated games. It’s amazing how easy it is for that to go incredibly wrong very quickly if you don’t actually play with people. And the same kind of remains true for most startup services and products, that the truth is that it’s much easier to build product that no one needs, than it is to build one that is actually solving someone’s problem. And so the biggest takeaway from all of the programs that we ran internationally across 36 different countries, the 100s of entrepreneurs we’ve worked is that if you, no matter what stage they’re at, whether it’s at the very very earliest stage or even as far as series B, if they haven’t done it at that point, getting them to proactively do and onboard qualitative user research to their product and service development process is the one single largest risk mitigation tactic that we were able to identify over all that time, all those products and services, all those countries. That is kind of the one truly universal methodology that you can instill in an organization, and never really go wrong with it.
Jamin Brazil: Qualitative is so – so my background is a quant researcher, qualitative is new – really new for me, I’ve done obviously focus groups et cetera et cetera, but I haven’t been a believer in qualitative until really the last five years. Do you see – is part of the reason that qualitative is so powerful is because it humanizes the customer journey or is there an intimacy that’s built? Why is qualitative the superpower?
Emil Lamprecht: What you just said, yes, also important details of qualitative, and there’s different levels of qualitative, right? Even with quant structures, you have qualitative opportunity, right? But I should clarify that when I use the word qualitative, I really do mean a conversation like we’re having, right? Asking open questions, having a discussion, and the biggest and most important translation of why, regardless of who you are it’s critical is that quant, the numbers and analytics or the outcomes you get from split tests, or the survey numbers will do a very good job of explaining what is happening, but it’s almost impossible for numbers after the fact to explain why it’s happening. You may be able to take a good guess, your experience may lend you to assumptions that are very close to the truth, you may feel that through your ego and experience of something, you know as well as anyone what it will be, but the truth is you don’t really know until you’ve had those conversations and have asked those people why it’s happening. And if nothing else, even if you were right, all that process does is confirm that so that it’s easier for everyone to make decisions in the same direction, in the same vein, along the same lines when it comes to product strategy and delivery, when it comes to service, design and development. That’s where qualitative stands out for me is really answering the why question, especially if you have a whole lot of what, but you’re unable to really sort out what to do with it, go ask why, that’s absolutely critical.
Jamin Brazil: It’s interesting too that companies are faced with so much data, not just survey data or self-reported data, but also tremendous amount of user data, behavioral data, transactional data, et cetera et cetera. Do you see the synthesizing of that data happening really in qualitative?
Emil Lamprecht: That data informs – should inform what questions you go to ask in qualitative, ideally, in so much that the quantitative that you have, all that behavioral analytical data implies something that you’re not sure where it’s coming from or why it’s happening, or actually, there is no data filling this gap, so you have all this user behavior, but no one is doing this thing or there’s this kind of blind spot because of how you did your analytical coverage on actually this outcome. It could be used to fill that gap, or it can as I said before, just be used to verify the why something is happening, right? So there’s this user journey, we assume that they’re on this behavioral path within product or this service for XYZ reasons which means they want this outcome, but we still don’t actually know unless we do one of two things, we build that outcome and deliver it to them, which is kind of a product first approach and as long as you’re really good at keeping it lean and iterative, may be fine, also depends on the scale of the organization of course, but if you have the capacity to just go ask first, it saves you the time of a lot of wasted strategy, a lot of development or engineering resource being used for something that then may not be necessary at all. So and when the agencies that we work with get called is usually unfortunately after they’ve already made that mistake, right? So user research agency work lives in this area where they’ve tried the product first method, possibly already several times, and it hasn’t delivered the outcomes that they assumed it would be based on the analytics they have, and they don’t understand why. They go to an agency and go, can you please tell us why, why this is happening? And if there’s so many agencies in the world doing that for so many organizations, it – there’s a 100 more companies in the world, there are 1000s more companies in the world that aren’t taking that extra step to go ask why.
Jamin Brazil: Right.
Emil Lamprecht: So just start earlier with that question, do we really know what’s happening? And how can we have a few conversations to validate or invalidate that assumption? It’s so funny, I have a current project, HubUX, and we just did our user analytics for the last year, 2021, and we noticed that 30 of our customers basically had a 90 day or 60 day plus window of not using the platform, and we’ve been racking our – literally meeting – it’s – we are the moron in the room, right? And right now the light bulb goes off and I’m like, why in the world don’t I just ask the customer why? But it’s amazing how easy it is, unless user research is your job, it’s amazing how easy it is to forget that just calling a couple people –
Jamin Brazil: Yes, right.
Emil Lamprecht: Is so much easier than sitting in a room thinking and thinking and thinking and thinking and hoping. I still mentor a lot of start – I don’t participate in programs, we only really sort of fringe support some impact programs, now we don’t run them, operate them anymore, fully, but I still mentor for a bunch of them because I still like the brain exercise and everything, and the conversation is always almost the same, right? Especially when you’re emotionally invested in something, your instinct is to sit there and think and make a decision and that’s what’s been communicated to you, that’s what a lot of the entrepreneurship narrative that exists online forces on you is for you to just make decisions, but if you go talk to a couple people, those decisions are far easier than debating and arguing with your team on who’s right.
Jamin Brazil: That’s so interesting.
Emil Lamprecht: Because ultimately it doesn’t matter which team member is right.
Jamin Brazil: Right.
Emil Lamprecht: That’s not the point.
Jamin Brazil: No.
Emil Lamprecht: The point is what does the customer actually need or want or require for this target outcome.
Jamin Brazil: It’s so easy to rely on existing data, user data to try and derive that decision as opp – or that point of view as opposed to just having the conversation, which is such an easy exercise anyway, wow, thank you for that. [CROSSTALK] And thanks for the on the fly mentoring. Let’s shift gears a little bit, or maybe we won’t shift gears a little bit, my question is, what do you see is the biggest problem that faces startups today?
Emil Lamprecht: It’s not so different to the conversation we just had, but I think the only real difference between the conversation we had and my answer to this question is where the impetus comes from, so in the example we just discussed, the impetus is just this kind of internal freezing that product teams have or founder teams have, which is that it’s my decision, it’s my assumption, therefore, it should be right and the inability to tackle that. I think on the whole in the greater startup ecosystem, it’s a little more complex than that clearly, the ecosystem is enormous encompassing of now almost every type of business. Part of it for sure is that the predominant methodology that is now pervasive in the world of entrepreneurship globally comes from the VC narrative, so the venture capitalist’s narrative of startups and entrepreneurship, which is not how the majority of business in the world works. There’s this weird imbalance between, this is how you start and run a business, VC narrative, and 70% of all business globally. And as a first time entrepreneur, as a first time founder, it’s impossible to see past that, why would you not – that there’s – why would you know that there’s difference and why would you know that there’s layers to look behind? So and to the credit of some more progressive VCs, VCs are starting to understand the importance of knowing your customer, and some of the really progressive ones are starting to understand that that means actually having a conversation with customers and doing things like user research, but that’s still the minority within a very large ecosystem that they’ve built. And so the pressure to produce value in any form, whether that be the hiring of more people so that the total value of the company is more, versus sales or acquisition or just acquisitions that have any sales to make it look like the company has more value, because it has more reach, it has more touchpoints. The pressure comes on that so that the – because VCs, ultimately, their job is to make money off of the investment, right? That’s their prerogative, if you are genuinely out there trying to start and run a company or you’re generally out there trying to solve a real human problem of some kind, those should not be your priorities, but the ecosystem will tell you from day one that they are your priorities regardless of your approach, and that’s – it’s very difficult to separate those narratives for first time founders, and that for me is a pervasive issue that we did a really good job of combatting with the programs that we ran for a while, but is ultimately still just the loudest, most consistent view of entrepreneurship and starting new companies.
Jamin Brazil: It’s a psychological challenge, isn’t it? For many first time founders, and that pressure is – that you’ve mentioned several times is very real from an expectation of finding product market fit and then scaling the business subsequently in a three year time frame, which is not trivial as an outcome. Do you think there’s a tremendous amount of waste inside of the current VC framework? I’m thinking about –
Emil Lamprecht: Enormous.
Jamin Brazil: Ratios of one to 40, of their investment payoff.
Emil Lamprecht: It’s much lower than that, it’s much much much lower than that. So we did a couple – in 2015 through 2017, as we started running these programs globally, we did these huge sort of ecosystem evals and admittedly, we don’t publish a lot of that data because it’s taken in a pocket, right? It’s not longitudinal is the word I’m looking for, it’s not a longitudinal study, so it’s not something that we’re going to stand on forever, but we would take snapshots of an ecosystem within a several month or a year time frame, and so OK, what is actually happening? And there’s a few really damning statistics, and again this is a few years old and snapshots, so caveats for anyone listening, but in those moments, there were a very few damning statistics. One was that if you were a funded startup, statistically, there was a 99.3% chance that you were not going to live past year four, so if you were venture backed, you were extremely unlikely to live beyond the kind of four to seven year mark.
Jamin Brazil: Wow, does death there mean acquisition, transaction or does it mean out of business?
Emil Lamprecht: This is part of the question, so how do we define failure? And we chose to define failure as anything that wasn’t financially sustainable growth of the business proposition, of the product or service, OK?
Jamin Brazil: Got it.
Emil Lamprecht: So even if they’re not profitable –
Jamin Brazil: Right.
Emil Lamprecht: If the revenue is not growing in accordance with the value growth of the company –
Jamin Brazil: Right.
Emil Lamprecht: Then they’re failing, right? And that means that often by the – if they’ve – even if they’ve made it past the four year mark or to the four year mark, that next three year gap, they’re usually fire sold to a larger competitor, which some founders build companies specifically for that, but most don’t, let’s be honest, or they have to do some major industrial pivot or they’re given a whole new round of funding to become something entirely less, or they close out the doors and walk away, which happens far more than is talked about. That was one thing, the other thing was that you were more likely to fail as a startup within the same time frame, if you joined as an accelerator than if you didn’t, which was shocking and very upsetting, though I have to admit, at the time that we did the study, not surpri – it’s part of why we did it, because we were like, the numbers don’t work. Our numbers look great, but if you look at the ecosystem that we’re about to build into this doesn’t – it doesn’t make sense, what is happening? And over and over and over again, that proved to be true, the other weird thing is that the success rate of companies overall is culture dependent, so different countries have sometimes substantially different ratios of success based on the cultural progressiveness of the entrepreneurship methodology, which go figure, often has to do with how that culture balances product versus customer focus in early stages of development. These sorts of windows into ecosystems were kind of the wow, this is actually the standard communication, the common knowledge version of entrepreneurship is inherently not correct from the standpoint of a founder. As a statistics games for VCs or investors or other money, including founder money, there, it could make sense. There’s a reason why accelerators like YC and everything who invented this model, right, they invest in anywhere between 30 and 300 companies a year, it’s a statistics game, and they have a one to three percent win rate, because they’re the best and they’re the best at choosing, but it’s still only a one to three percent win rate.
Jamin Brazil: Right.
Emil Lamprecht: That’s not terribly high in the grand scheme of things, once you start looking at these numbers and you kind of go, OK, wait maybe I should look at what it means to develop something for a market that I can validate is there and has a real problem, the need to have real conversations with real people is emphasized quite dramatically, and once people kind of grasp that, it becomes very easy to then make that a priority enough to at least hedge and mitigate your own risks going into something, whether or not you’re VC backed at that point.
Jamin Brazil: The world coming out of COVID into this not perpetual but maybe seasonal shelter in place has changed dramatically in the last 24 months, and probably will continue to evolve at a rapid rate in ways that people – most people can’t see coming, so when you think about the future and your investment thesis, I like this little mental of game, if I had 10 dollars, where would I invest that 10 dollars? With the intent of saying, I would see half of that go over here and maybe three of that 10 go over there, this isn’t my lunch money, just for clarity. I don’t even know if you could buy lunch for 10 dollars in most places, so anyway, yes, if you had 10 dollars, relatively speaking, that was a total pie chart for you, of your investable capital, where would you invest that in a context of a five year payback?
Emil Lamprecht: I think I would first scrap the five year and look at a 10 year payback, and then I would focus on things that are solving institutionalized problems or humanized, truly human problems, right? And that’s – I’m biased, right? That’s the whole mission of our organization and the startups that we start, but there’s a reason there, right? So if I had a big pool of capital that I could push around or even just time to donate to a series of purposes, regardless of the money involved, there’s a lot to be said for kind of the world of social impact and social business as is sort of pioneered by Muhammed Yunus and that whole sort of ecosystem. Some of the themes there that I think are most important but will also be incredibly profitable when done well are, financial inclusion, that’s an enormous one, infrastructural innovation is another huge point, so green adaptations, replacements of rapidly aging and deteriorating infrastructure. If you want to do the stock option thing, green energy is always a safe bet for the next 20, 30 years, so that’s a no brainer, and a personal passion of mine which we’ve seen over and over again to be increasingly important but also increasingly an opportunity for well done, ethically run businesses is gender inequality in medicine, race inequalities as well for sure, but gender maybe being one level above that, zooming out as in not level above in priority, and women’s health in general being one of the least modernized areas of the health industry is a dramatic and upsetting area that is very profitable when done well, and has tons of room for incredible innovation and needs more people [CROSSTALK] to do it.
Jamin Brazil: Do you see with women’s health at a global level or is it –
Emil Lamprecht: Yes.
Jamin Brazil: Centralized around specific countries?
Emil Lamprecht: No, no, no it’s actually far worse in a way in Western countries because it’s more institutionalized. Let’s use one of the standard things that we end up working a lot with, which is the world’s most common adult bacterial infection is the urinary tract infection, right? 70% of ER visits around urinary tract infections are women, and a vast majority of them are women under 55, we’re talking about pandemic level seriousness of bacterial infections, right? The test that is used as the gold standard globally in all countries including the West is a single dipstick test, which is biased to a single bacteria type, and doctors are still taught in universities today, by the way, that dipstick was developed for a different reason, testing something on pregnant women only in the 1950s, so we’re talking super old school technology, biased to a single pathogen in a world where no infection is single pathogen anymore, probably never was anyway, and touted as the world’s standard, for what? For detecting E. coli in people’s pee, it’s – you couldn’t be farther from assisting people with a consistent problem than that, that’s – it’s just a complete inadequacy of the medical facility. And people often then come back when I start talking about this stuff, about aging medical standards around, all – the only other option is new age-y alternative shit, and the problem is, people don’t realize that that’s not the only option. There are people doing much more innovative, much more intelligent testing, much more comprehensive diagnostics, much more integrative styles of medicine, they’re just few and far between still, but that is part of the medical industry that will surface and take over, particularly in the face of gender and race inequality in medicine, and it needs as much help as it can get, and as much innovation as it can – as people have the engineering capacity to provide.
Jamin Brazil: It is interesting how in the world, the better mouse trap doesn’t always win, and in a lot of ways, you could come up with whatever, and it probably exists, right? The better testing approach technology, and yet we have built these habits in our lives that are very difficult, even at an institutional level to structurally change, so a big part of growth is figuring out how you can infiltrate those institutional ways of figuring – of learning and teaching to affect change and that agenda.
Emil Lamprecht: Absolutely, and I will say – that’s the caveat of the list of things that I gave, right? Financial inclusion, infrastructure, health, the caveat against these as industries is that they’re posse driven, which means they’re incredibly difficult to safely innovate within, and particularly be a sort of strappy startup within, it’s quite hard without just being very surface level to the problem, but people are getting better at it, and governments are slowly getting better at adopting or at least leaving paths for innovation to come through for that, and those opportunities need to be taken as much as possible for sure.
Jamin Brazil: And the speed of adoption of the core changes is also really important to understand, one of the things that I’ve been really surprised at in the US is the politicalization of the immunization process for COVID, and so that’s – I’m not sure how speed played into that, but anyway, it is a really interesting topic. My last question, what is your personal motto?
Emil Lamprecht: I don’t really believe in mottos, and that’s a little bit just for the sake of being contrarian, but it’s also to enforce the fact that I don’t think anyone should live their life off a quote, I don’t think anyone should live their life off of a single quip or anecdote, I think that is a huge human mistake to think we’re intelligent enough to determine decisions based on one concept thought of years and years and years ago. Philosophy has never stood still, so why should our ideas about what is right and wrong in the moment stand still? I just think that’s silly, so what I prefer instead and that’s not to say that I don’t have something, but it’s not a motto, but what I prefer instead and what I – this in part how I approach business and our teams as well, but it’s also just on a personal level important to me is this concept of having principles basically, and principles are something that are different than a motto because you design them with the intention to review and update. I might have a few principles, or for a specific thing that I’m learning or training, I might have a principle that turns into a mantra, right? A reminder in this moment, if something goes wrong, this is my reminder. I need to have this reminder. My mantra right now, after seven years of not skiing, I’m relearning how to hardcore ski and my – I have very simple mantras, because they need to be simple right now, right? When things start to go wrong and I have a wobble, tense your abs, bend your knees, it’s very, very cut and dry. I need to remember those two things because they will save me, but once I’ve evolved to the point where that is then natural and instinctual again, and I don’t have to consciously remind myself, I will need new principles, I will need new mantras of ways of keeping myself save as I push my skill level further, as I put myself in more dangerous downhill or backcountry situations, right? So that’s a very simple example, life is never that simple, so the way you look at principles for life choices are probably going to be more complex than tense your abs or bend your knees, but the principle of principles is the same, right? You need to design something with the intention to readdress, and how you readdress that is up to you, you can do it quarterly like you would an OKR, or you can do it once every year, that’s fine, but I’m not a fan of sticking to single points of reference when it comes to life decisions.
Jamin Brazil: Just for short periods of time.
Emil Lamprecht: Just for short periods of time, and that might mean I have four, five, six, never more than seven, because the male brain doesn’t really memorize more than six or seven items very well, that’s statistically proven, so try to keep it under seven if you’re a male. If you’re female, tactically, you could go up to 13, you have that advantage, but I still think that’s too many, so three to seven principles that help you make decisions this year, or this month, and set yourself a date on when you’re going to reevaluate them, because based on what’s going on in your life, some of them are going to be still the same, some of them are going to be no longer relevant at all, and some of them will have evolved to be more advanced.
Jamin Brazil: Our guest today has been Emil Lamprecht, researcher, founder and CEO of Growth Mechanics, sir, thank you very much for joining us on the Happy Market Research Podcast.
Emil Lamprecht: Thanks so much for having me. It was a pleasure.
Jamin Brazil: Everybody else, have a great rest of your day.