Grow Your Business Through Evidence-Based Entrepreneurship

How do you scale your company here in Maine? It doesn’t happen without planning, perseverance, and evidence-based entrepreneurship. In today’s episode we’ll explore exactly what that means, and how you can ensure that the problem you’re solving is worth fixing. 

Rich: My next guest has worked at the intersections of business strategy and emerging technology for the past 25 years, building products, leading teams, raising funds and managing growth. After an early career, as an interpreneur, in charge of leading partnerships at early stage ventures for Cox and ESPN, she became a leader or founder in innovative products, bridging research technology and commercialization in education and health. Today, we’re going to be digging into customer discovery and evidence-based entrepreneurship with Betsy Peters. Betsy, welcome to the show. Thank you

Betsy: Thank you so much, Rich.

Rich: So let’s start with how did you get into this? How did you become an intrepreneur, and start working with these brands that we know so well?

Betsy: Well, I guess I come by entrepreneurship, honestly. Both of my parents own their own businesses. And my dad’s was a family business that his grandfather started. My mom owned her own dance studio and was an accomplished choreographer, that basically every Christmas season would separate the lions and the Christians, like Cecil B DeMille, on any pageant stage you could think of in Western New York. So, essentially, it’s in the blood. And I think my grandfather’s favorite saying that stuck with me was from the musical Hello Dolly, which is, “Money, if you pardon the expression, is like manure. It’s not worth a thing unless it’s spread around helping young things to grow.” So that was kind of my orientation, both of those two things formed my orientation, from the very beginning.

Rich: That’s really interesting. I always am fascinated by stories about musicians. And it always seems they grew up in a house filled with music. And my grandfather came to this country, and he started his own business, a retail shop. My dad went in a different direction, became a psychologist, but then at some point in his career became an entrepreneur psychologist, where all of a sudden, he was going out on his own and giving presentations and left his comfy job to write books and present and all this sort of stuff. And now here I am almost doing the same thing with marketing that he did with psychology. So I guess a lot of it is environmental, what you grew up with. But, so interesting to hear.

Betsy: Well, no question. I mean, and with entrepreneurship comes the roller coaster of sometimes things are good and sometimes things are more challenging. And certainly my family felt that. And as I was growing up, I almost rebelled against it and wanted to become a lawyer because I felt like I wanted the monorail and not the roller coaster. But when I got to college and there was an opportunity to study abroad that just absolutely changed everything, because the monorail became so uninteresting after that.

Rich: Yeah. You know, it’s funny because I grew up, and maybe I was rejecting it too, because I remember reading The Communist Manifesto and being like, capitalism is terrible. And then a few years later when I needed beer money for college and I started my own typing service, I realized, oh, this is actually quite an opportunity here.

And there were some other things that happened, too. I read Atlas Shrugged and it rewired my brain, not always for the better, but definitely changed my perception on a lot of things. So you use the phrase ‘evidence-based entrepreneurship’. So what do you mean by that?

Betsy: So, you know, to me, it’s this kind of paradox between being able to hold the faith of the power of your ability to create, alongside the kind of critical importance of cultivating beginner’s mind. And trying to slay the biases that will cause you to build something that the market doesn’t want. You can ask me how I know, because I’ve done this before. But the idea of really going out and finding out what the market wants before you actually waste a lot of time and money and heartbreak building something that no one wants or will pay for, is really the concept behind evidence-based entrepreneurship.

Rich: So I guess there’s multiple ways that you could look at this. One is when you’re maybe first starting your first business ever and you think you’ve got a great idea. And I’ve heard conversations with people who want to start something and as I’m listening to them, at least I don’t see their vision, and I don’t think there’s a place for it in the marketplace. Sometimes I’m right, sometimes I’m wrong. And then there’s the people who go out and do a lot of research before they even get started. Or maybe it’s a company who has been doing things fairly successfully for a while, but now wants to get into something different or wants to bring something new to market and they’re not sure how to do it. So what are the steps that you might suggest that we take, whether we’re just starting out or whether we’re starting a new venture in what we’ve already created, so that we’re not just kind of guessing at everything.

Betsy: Well, I think everything is about guesses at the beginning. Right? And so I think that the importance is being crisp about it and being honest about yourself, then guess. And then going and running down the real answers or finding out how much of the guess is true. Right? So reframing the concept of guess into hypothesis and stating it in kind of a scientific way. And then going out at the point of friction, which is talking to people you don’t know, and who would be in that target audience that you want to either validate your hypothesis or not. And again, the trick always is making sure that you are not changing a ‘no’ into a ‘yes’ in your own mind. Because your own biases, which is the hardest thing to do I think, as a creator or somebody who’s got a passion for something.

Rich: There’s a couple of things in there that I kind of want to unpack. One is this idea of the fact that you’re going out to people you don’t know, they’re more of your ideal customer rather than friends and family. And I’m sure I can guess why, but so that’s one thing that I’m just kind of curious about. When you’ve worked with companies in the past, how do you move past that? When you’re actually consulting with somebody, what do you tell them to do when they’re like, “I’ve got this brilliant idea”?

Betsy: Well, first of all, start to break it down. Because an idea is certainly, let’s call it a ‘technology’ or a ‘concept’, but then it’s, what are the applications of that concept in the marketplace and who inside of that marketplace might benefit from it. And then even further, who buys, who decides all of those things? So how do you actually take that core concept and break it down into something that could actually generate revenue over time? So who’s the customer? Why would they pay? Is this a mosquito bite to them or is it a shark bite to them? You know, those are the types of questions that can help you refine these ideas and help you understand the size of the opportunity that you have ahead of you.

Rich: If you’re trying to break into something new, and you have this idea. Like you said, you want to find people who are not necessarily connected to you, who won’t necessarily give you the answers you want, but the answers you need. How do I find these people? How do I determine if my idea for the ideal customer is even out there? And then how do I actually find those people to either survey them, interview them? What are the steps that I can take?

Betsy: Okay, so first is really defining it. So saying, let’s take the example of an AI based ultrasound machine. I can take that into any kind of market where I might be able to speed diagnosis. There’s plenty of markets out there. I could have that in a rescue ambulance with the EMTs as the people I sell to. Or I could take it into maternity wards, or I could take it into ERs. So again, really broad application of the market in that as the entrepreneur, I need to decide which one I want to start with. I don’t have to throw the other ones all out there, but where do I start? So once you start cutting things down, then let’s say I pick the ER market to begin with. I’m now going to go to the EMT and I’m going to look on LinkedIn, I’m going to go to websites. So, it’s networking, it’s research. It’s never been easier to find people throughout all those ways.

And then it’s really the appeal to say, I’m not trying to sell something, I’m trying to research. And what I have found through years of doing this myself and through iCore, the MIT program that I work with, is that people will get flattered when they’re asked for their expertise, particularly if it’s about an area that they’ve spent years of their life exploring and understanding. So it’s just like cold calling. Unfortunately, it is cold calling. And so you have to have the target in your mind, so you’re not wasting your time picking up the phone. And you have to have the resilience to know that you’re going to get more no’s than yes’s, but each ‘no’ gets you closer to the ‘yes’.

Rich: If you are a lot of what we’re talking about, feels like kind of cutting-edge technology, or maybe it’s also applicable for a brand-new type of service out there. But what if you’ve got something that maybe is not going to revolutionize the industry, it’s already out there, maybe you’re doing it slightly different. Is it worth still doing that sort of research, or you just look and say, oh, there’s other landscapers doing this type of brick work. There’s obviously a market for it, I don’t need to do that research, I just need to be able to deliver a better product, service, or market myself better.

Betsy: Yeah, I think certainly there’s all sorts of evidence, right? Just like doing the discovery interviews. I always think talking to people helps you sharpen your value proposition because when you’re looking at secondary evidence, you’re interpreting it through your own filter and through the person who wrote its filter, the more you get that validated by the actual purchasers and listen to the way they talk about it, the better your marketing will be, even. Because you’re using language that will be easily consumed.

Rich: Once you’ve kind of done this research, and I’m sure that it depends on how advanced what you want to bring to the marketplace is, on how much research you actually need to do. But once you’ve done it and you’ve kind of proven to yourself or your stakeholders that there’s a market out there, the pain points are there, what are the next steps that we should start thinking about as we’re trying to develop this into a real company?

Betsy: Yeah. Now it becomes the other parts of the business model canvas, which is the tool that, again, I use the most with both the MIT program and then with my own consulting groups. It’s where are you with key partners? Where are you with costs? Where are you with pricing? Where are you with customer relationships?

So again, there are a number of hypotheses you have in your head, all tied up into this idea of I have this business idea. But really taking the time to break it out into those individual components of what makes up a business, can help you right-size it to what your passion, what your belief, what kind of world you want to create is. Because it could be something that you want to be huge, and global, and exponential. It could be something that you want to be small, and controllable, and a side gig that gives you beer money, or kind of thing. So it really is a tool for you to project your own desires and creation upon and ask yourself those questions methodically.

Rich: So, how do you balance that? How do you know at the beginning, or maybe you don’t, how do you balance the scaling versus the sustainability? You know, this is a state that often a lot of people accuse it of thinking small. We have a lot of lifestyle entrepreneurs. We have a lot of micro businesses, not even small businesses. I myself have a boutique agency. Is this something that we need to try and to figure out what the balance is and how far we can take it. What do you tell your clients when they’re talking about how big they want to scale up or whether they want to maybe edge over towards sustainability?

Betsy: Yeah. And ‘sustainability’ is a big word, right? So it just depends on what you mean by it. But I think the beauty of entrepreneurship to me is that you get to create your own world. We spend most of our hours working, and so why not create the universe you want in those hours? And so I think entrepreneurship is as individual as each of us, who is an entrepreneur. And that, to me, what I like to encourage is really I think there are more people in Maine who should look at the stars and not the horizon. However, it should only be those who want to. So if what people want to do is create a lifestyle business and enjoy the beauty of Maine and their families and have a lifestyle business, there is absolutely nothing wrong with that. And by the way, all of these steps apply to that, to making sure it’s robust and it could be generational if that’s what you want.

Rich: If you decide that you want to start shooting for the stars, and you’ve started to make a little bit of traction. What are some of the steps that we should be thinking about or taking to really scale up a business here in Maine or beyond?

Betsy: To me it goes back to the Hello Dolly quote. It’s really how well-funded are you, how much have you proven that you have product market fit? Which is this idea between the value proposition you’re coming up with, and the demand that you’re finding in the marketplace. So to me, those are the first two questions as you begin to scale.

And then the next pieces really are about how do you then prove that value prop step-by-step without hiring too fast, without spending too much money in marketing? And there’s not a recipe book on the shelf. It’s all individual choices that are made because each value prop in each market are different.

Rich: Yeah, we’ve definitely heard stories about companies that either grew too fast, couldn’t sustain it and imploded, or ones that were too cautious, somebody else saw what they were doing and were able to scale much faster. So there’s never that perfect solution. There’s always going to be a certain amount of risk whatever path we take, we may end up with a little bit of this.

When it comes to scale, what are some of the things that are keeping entrepreneurs from growing, or what are some of the things that caused them to grow too fast that you’ve seen out there?

Betsy: First, I think that growing too slowly is about not paying attention to marketing. It’s about not understanding the psychological journey that we all travel from awareness to interest, to desire to action. Everybody has their own definition of that continuum. But it takes a while to get someone to really understand your value proposition. There’s always a percentage of the market that has the pain, and it’s a shark bite and they’re going to go after it right away. But then there’s a much larger market that you can cultivate, and lots of channels now to figure out how to do that. So that’s typically where I dive in.

And then there’s also the product-based questions of, is my core product broad enough to be drawing the pain points that are out there so I have less to spend on marketing and it’s more product led growth. So I think that balance between product and marketing is so important as you scale, is trying to figure out who am I serving, how wide can my proposition be, and then how do I get them to pay attention to. So those are the biggies in terms of not scaling fast enough, I think.

Rich: Yeah. It’s almost like an equalizer on a stereo where you have to figure out how much of each level do you need to actually maximize that kind of growth.

Betsy: Yeah. That’s a great analogy. And how do you test it, right? Because if you just randomly turn knobs all the time, it’s going to be harder for you to understand the impact of the choices you’re making. So how do you deliberately put tests in place to understand what vectors are giving you the most lift?

Rich: That’s an excellent question. So I’ll just turn it right back around and give it to you. Is there some experience that you’ve had out there where you’re starting to build in testing periods during growth, trying to find out what the pain points are that are really going to grow this, and whether we should invest more in fixing the product or whether we should invest more in building awareness around the problem?

Betsy: Yeah. I keep going back to this idea of formulating hypotheses and coming up statements that you can go test. And that’s true at the very beginning in customer discovery, and it’s true when you start to get to scale to say, okay, we have these four or five opportunities for growth as a leadership team. Let’s flush them out during strategic planning or whatever frequency or cadence that happens. Then let’s do the trade off and then let’s get at testing. And if the first one we prioritize doesn’t win, then let’s quickly get the second and third in.

So it’s a lot of stage gating that I have come to appreciate and see the value in. It takes a lot more time upfront, but the more you do that well, the more flexibility and agility you have to play these testing games.

Rich: Interesting. Yeah. I mean, I think that would resonate with a lot of businesses to sit down and plan out their quarters, their years, and they see 3, 4, 5 opportunities ahead of them as far as growth goes. And then just really trying to determine where should we be spending our efforts. And you’re saying we should be setting up some sort of tests, maybe prioritizing them to discover is there some real opportunity there, and if so, then we can double down. And if not, let’s move on to the next priority.

Betsy: Yeah. And that, ‘if not’, is real important, right? It’s like, because sometimes it’s not clear, sometimes it’s not an upward trajectory or a downward spiral, so to speak. Sometimes it’s the walking dead. And so for the management team to sit down and say, here’s the range of results we might get, what are we going to do? Where are the thresholds where we think it’s a negative? That’s equally important as the prioritization of the various test to my do, is really being strict about what success looks like and what failure looks.

Rich: I want to circle back to an example you gave us earlier with the AI ultrasound and how maybe there are multiple markets that might benefit from this. But there’s only so many resources you might be able to throw at it, you know? So maybe you just focus on the EMT market to start, for whatever reason there’s more promise area of a background there, whatever when you’re looking to scale. Do you generally recommend that you focus on one specific market and really nail that down and then expand into others? Or would you take a different type of approach and really just try and fix one thing in multiple arenas to see which one catches on? Or again, is this really just playing with those different levers to see what works?

Betsy: Yeah, I think it’s kind of a maddening answer. I’ll tell you my bias, because I grew up in software and in tech, is Jeffery Moore’s bowling pin strategy. Which essentially says, pick one market and go deep with it. And there’s an art to this, right? This is not a science. What does ‘deep’ mean in terms of product market fit, and what kind of revenues do you need to generate some surplus to get to the next market? And then what’s the next market that looks like the pain point is close to EMT. It might be maternity wards. Let’s use that. So at what point of profit or fundraising do I need to get with this proof positive on my first bowling pin,, to then go take the next one or two so that I can actually really continue to broaden out?

Rich: That is really in line with what I’ve seen out there in terms of… You know, I jumped on the social media bandwagon very early. And I saw a number of people who started off as experts in a very small niche. I mean, these are bigger niches now, but when I started, they were pretty tiny. They were the LinkedIn expert, or they were the Facebook expert, or they were this expert and that expert. And then there were other people who were like, I will help you with all of your marketing. And the ones who I see now at the top of their games are the ones that started narrow and they became the go-to person for Facebook or email marketing or LinkedIn, what have you. And at a certain point, then they started evolving into more. But they had owned that space, and then they would start to go into other spaces where the people were like, you can find me on these 17 different social media platforms. And I’m talking about everything under the sun are still there. They’ve just never really grew. And it really was the ones that took ownership in one place.

And I’ve always said, it takes a lot less time to fill up a test tube than it does a bathtub. So when you can really narrow that focus, you can do incredible things. And then once you’re the expert in one field, then that kind of transfers over to the next field that you want to take on. So that makes a lot of sense. Starting with one specific marketplace going as deep as you’re able to provide value, and then looking for similar markets that you might be able to serve as well.

Betsy: And back to a previous conversation. If the first market fulfills you and that’s the people you want to serve and you feel like there’s enough room to continue to learn and go deep, that’s a perfect. You know, that’s a terrific business. If you have the desire to serve more and more people, that’s also a terrific business. It’s really about the entrepreneur and what they want with their life.

Rich: Absolutely. Being the captain of your own ship. As we’re starting to wind down a little bit, you had mentioned I-Corps a couple of times. Can you just give us, I’m not super familiar with it, I don’t know if everybody knows it. Can you tell us a little bit about I-Corps?

Betsy: Sure. The national science foundation puts out $8 billion a year in research and development monies to mostly institutions of higher education to spur kind of deep tech. What they’ve found over the years was that a lot of these research projects that they were funding still were sticking on the shelves in the ivory towers. And of course, that does not please the taxpayer. So they got together with a gentleman named Steve Blank out of Silicon Valley, he kind of was the father of the lean startup world. And he created a curriculum for them that they have continued to use, and actually has gone now to beyond just the NSF. So he works with the DOD. He works with Department of Health, and essentially take these large government investments. Generally speaking, the people who come into this program have gotten $500,000 or more in NSF funding, again, for kind of scientific technological research. But they’ve developed something far enough that now it’s time to really test, to see if there’s somebody who wants it.

And so, I joke and say that really what I do is teach PhDs how to talk to people. Because they come in with these terrific ideas, they come in very nervous that they don’t understand how to find out whether the market wants it or not. And really, we take them through a curriculum that’s different enough that they need it. But because it’s evidence-based because, it’s about hypotheses, it’s a very familiar language to them. And once they apply it to this work of customer discovery, they come out the other side and they’re like, oh, this is awesome.

And so a lot of times this research that I’m doing is 10 years too early. Like, there is not a market for it yet. And then they revamp and decide what to do with it. They have to pass this project at this stage before they get additional funding. So they all come in very motivated to learn about whether the market wants it or not. And it’s fascinating to learn about in terms of learning about technology. I’m learning about self-assembling robots on Mars and things that you just don’t have access to in your day-to-day conversations.

Rich: Yeah, unless you’re watching the Marvel universe, because that sounds like something right out of Ultron.

Betsy: We could get it there, too.

Rich: That’s really fascinating. I’m always amazed at how many opportunities and resources are for entrepreneurs in this country, and in this state. It’s just, it’s really amazing if you know where to look.

So, this is a point in the show where I ask everybody the same question, but always looking for different answers. And so Betsy, I want to know what you’re thinking. What one thing would you change if you could to improve the business ecosystem here in Maine?

Betsy: I think it would be this idea of encouraging those who want to, to raise their vision from the horizon to the stars. How do we do that better? How do we find those people and support them better? I think we have a very robust ecosystem in Maine. There’s lots of opportunity, but it’s not differentiated enough. I think we try to take all comers, and therefore there aren’t enough services at the high end. Although perhaps Roux will become that for Maine entrepreneurs. I think that kind of, and I shouldn’t call it the ‘high end’, it’s the ambitious end, the people who want the life changing, global changing ventures, that don’t find the right first steps. Unless they’re older, they’ve been there done that, that kind of thing.

Rich: Absolutely. I think some of that may just come down to, because one of the things that I’ve discovered over the length of this podcast is just how many amazing resources there are here in the state, and how few people actually know how to access them or even that they exist. There really needs to be a Walmart greeter of sorts at the beginning of your entrepreneurial journey. “This is what you need is you need to go over here, or you need to go over there”, and really get the people the kind of resources and support they need for the growth that they’re looking for.

Betsy: Yeah. It’s interesting. I’ve been in this, MTI funded my startup, and I was an entrepreneur in residence, and been in this ecosystem for 15 plus years. And there are plenty of people who’ve tried to do that. It’s just ideas pop up everywhere. And there are many avenues to get to funding advice, I find. Because there’s not the sharp differentiation in terms of, SCORE is good for this, and MTI is good for this, and MBF is good for this, or whatever the case may be. It’s hard to understand. So, you’re right. Maybe we should have a Walmart greeter then, actually.

Rich: I envision a flow chart/infographic that is put into the hands of every budding entrepreneur. So not just do they know what the path is that they should take, but even that it exists. I know when I first moved up here, I had no idea of any of the business resources that were existence. And it took me a long time to find them. And luckily I made it on my own before I went out of business.

So anyways this has been great. I appreciate your time. I appreciate your expertise. If people want to learn more about you, where can we send them online?


Rich: Awesome. Betsy, an absolute pleasure talking to you today.

Betsy: You too, Rich. Thanks for all you do.