In last issue, I shared that, “When Tundra Angels invests, we often analyze startups betting on the workflow that will prevail.” (In case you missed it, the last issue is here.)

So…what determines if the startup’s new proposed workflow will win, or if the existing status quo workflow will prevail?

I want to introduce my mental model on workflows that I think through when evaluating startups for investment. I evaluate companies through the lens of five variables.

Specifically, game changing workflows have the following characteristics:

Let’s address each of these variables:

The trigger moment is the customer or user’s context that causes the workflow, old or new, to be kicked off.

Understanding the trigger moment that kicks off the workflow helps me as an investor understand how often this product will get used.

Sometimes the user or customer doesn’t understand the trigger point clearly. They don’t understand the use case that your product can help them with.

The “A ha” moment is a feeling in the middle of a workflow when the customer gets a quick glimpse to the Value Payoff at the end of the new, proposed workflow. If it occurs, such moments tend to be when a user hits a milestone in the workflow.

Strong product experiences have at least one “a ha” moment and ideally many “a ha” moments.

Poor product experiences do not have any “a ha” moments.

I have acutely observed the dynamics of what happens in an “a ha” moment. Simply put, “a ha” moments are moments of comparison.

In an “a ha” moment, the user does a delta evaluation of the waste that used to be involved in the process compared to the waste now (if any) to accomplish the same milestone. But that comparison happens in a split second. The user mentally concludes something like, “Whoa! Did that just happen? Before it took me _(waste)__,” or, “I never experienced ________ before! That was awesome.”

✅ From a user perspective, “A ha” moments are critical moments of progress. They are like emotional fuel that keep the user moving sequentially to the next milestone of the workflow.

I have observed that once a user crosses the first “a ha” moment, that is the critical moment for that customer and for the startup’s product. ✅

One great example of a product “a ha” moment is from an interview with the former CEO of Waze, Noam Bardin. The clip is from 12:36 to 13:44.

https://on.soundcloud.com/mCgvK

👇 Here is what is very important 👇

✅ I pay attention to where the product’s “a ha” moment lies.

The placement and location of the “a ha” moment in a workflow makes a critical difference if a new workflow will be adopted or if the existing status quo workflow will prevail. ✅

I call this concept “Time to value.”

✅ Where the workflow’s “a ha” moment lies, and if and how the startup can move it up in the workflow for the user, is the major difference between a product that never gets used and one that is used every few minutes, or hours, or days. ✅

Unsurprisingly, the product experiences that win have an designed “a ha” moment to occur < 20 seconds after the user gets exposed to the product. But… most startups inadvertently think that the customer can endure for many minutes before ever getting a hint of value at all. That’s the wrong way to think about workflows.

The Line of Ambivalence can happen in workflow when the customer communicates an attitude of “I don’t know if I want to do this anymore,” or, “I don’t know if this is worth it.”

When startups hear potential customers or users say something like that, the startup has entered the danger zone. The customer is flirting with returning to the status quo.

The Line of Ambivalence can happen because:

A) The user sees that too much waste exists in the proposed new workflow

B) The user has not experienced any “a ha” moments in the product,

C) The Value Payoff is either not clear, or is not spectacular enough.

Or a combination of the three.

Here is the point - it doesn’t matter what the startup thinks about the proposed workflow. It all matters what the customer says and thinks.

Let me give an example.

When I was a startup founder and gave demos of our product to prospective customers, The Line of Ambivalence came up a lot. In the flow of the demo, customers would ask nearly the exact same question at the same several predicable moments in the product flow. They asked questions like,

“Oh, so I have to manually upload this data? I get it on Bloomberg automatically.

“You want me to do what?”

“Can you stream the data in?”

It became clear pretty quickly that there were several moments in our demo where we showed specific features and the customer was immediately evaluating if undertaking those steps were worth it to them. Enter, the Line of Ambivalence.

Unfortunately, this experience happened over and over but we never course corrected… 😕

I also call it a “line” because the Line is Ambivalence is relative to each potential customer. Each potential customer has a different tolerance level and understands your product differently. Think of it as each customer has a tolerance that can be visually depicted on a graph. We never know where the Line of Ambivalence is unless we pick up signals from the customer as they are looking at the product.

The Line of Ambivalence is the precursor to the Drop-off Point.

The drop off point is when the user has had enough and just abandons the new, proposed workflow. The symptom that the startup observes is extremely low user engagement.

Startups often times why their products have low engagement. Sometimes, I think it’s not as hard as we make it seem.

Once the user is dropped off, they will almost likely never return.

The Value Payoff is the most important variable.

The value payoff is at the end of the workflow is the mountaintop moment where user concludes either, “This was worth it,” or, “This wasn’t worth it.” They also conclude, “I’m going to do that again,” or “I’m not going to do that again.” The value payoff is where product engagement plummets or skyrockets.

Even though the Value Payoff is fully realized at the end of the workflow, the user can often to get a fairly clear sense of the Value Payoff at the very beginning.

I spend time with the founding team before the pitch as well as in due diligence to understand this key question - “How much does the customer believe the solution is worth it?”

The Value Payoff can and should be measured in statistics or numbers - money saved, time saved, etc. But the an easy test is measuring it in customer energy.

In fact, I as an investor tend to know pretty easily if the solution is worth it to the customer. In due diligence, customer reference conversations tend to be quite binary - either the customer adores the product and can’t live without it, or they think it’s just OK. There is hardly any middle ground.

I recall one customer conversation where I was talking to a startup’s customer but the founding team happened to be right there as well. I remember the customer speaking for about 20 minutes straight on how much this person loved the startup’s product. Completely unsolicited. Then, the customer began speaking about the broader market for this technology saying, “This [solution] will save us.” Whoa. The value payoff of this startup’s product is overwhelmingly positive.

Contrast that with a different customer reference conversation for another startup. One comment summed up this person’s perspective for me. It was when the person said to me, “So, can this technology save time and help me with my process, uhh maybe?”

Maybe? This person was not confident in the Value Payoff. That was a signal to me that this customer reference was not in love with the startup’s product..

The Value Payoff is the ultimate outcome of what is gained using a startup’s product vs. the existing status quo.

The Five Variables are not expressed by the customer. They are mental and emotional lines that the user crosses in their psyche. But understanding how these five variables may appear in their psyche is critical when designing workflows.

To recap, game changing workflows have the following characteristics:

The net of these five variables determines if a new workflow is adopted, or if the old workflow will prevail.

In the next issue, we will get tactical and compare startups with varying Value Payoffs to see why game changing workflows start with the end.