Validated Learning – By ABDULAZIZ AL LOUGHANI

Talabat

As an entrepreneur with investors backing my acquisition, nothing worried me more than whether “Talabat” (previously known as 6alabat.com) was catching more eyeballs or not.  Before that, I was an associate in a Private Equity “PE” house in 2007 (Global Investment House), and was accustomed to measuring progress by earmarking certain milestones through management teams in companies we invested in that stretched through the life of specific funds (typically 7 years).  Despite spending significant time and efforts working with management teams in portfolio companies, pressure on execution was always delegated to the management team on the Company level as we enjoyed reporting the results and collectively planning new milestones for specific investments.  Towards the end of 2007, I found myself doing a personal leverage-buyout (LBO) when my co-investors and I acquired a significant majority stake of Talabat, where pressure and I became very close friends.

As a managing partner of Talabat, I started redefining quarterly/monthly and weekly progress reports with detailed MIS daily reports for each side of the business we operated in.  By the time my partners and I completed the acquisition process, I had already taken a deep dive in the business side of the startup to take strong grip on it.  I later started to question what if we found ourselves building new features that nobody wanted? What if the features were key to our User Interface “UI” but customer experience didn’t capture the best of it? And in that case it didn’t’ really matter if we delivered it on time and as per budget!  Working hard was really a commodity, it all boiled down to how much of hard work and money being spent resulted in positive outcome.  I only hoped that our team’s effort was taking us closer to catching more eyeballs (the goal) and in case we hit a fan, at least we learned something valuable.  This was my first real life engagement as an entrepreneur which was only the first step into the door.

In my previous life, I was used to building high-level corporate/business strategies and execution came in the form of consulting work and minimal executive roles but as an entrepreneur, domain expertise, functional strategies and swift turns “pivots” were key to validate the learnings in the journey.  I learned that as entrepreneurs under pressure to succeed, we were “wildly creative” when it came to delivering results.  “You can’t take learning to the bank; you can’t spend it or invest it”; pressure was on and results had key weights to the scorecard of my co-investors.

Amongst the features we wanted to introduce in Talabat was Gamification.  “Gamification is the use of game-thinking and game mechanics in a non-game context in order to engage users and solve problems.  It is used in applications and processes to improve user engagement, ROI, data quality, timeliness, and learning.”  We introduced a points/reward system for our users which enabled end-users to order food and earn points with specific restaurants that qualified users for winning prizes; it was later called the “Nag-Negg Fiesta” in 2009.  In the design process of gamification, Nag-Negg was very well designed with an interactive crowd-sourcing content page and dynamic users’ charts (private & public) linked to users’ social networks.   The beta version of the design was marvelous and after functionally testing it for over 60 times, the Nag-Negg Fiesta was up and running very smooth.

Despite the positive functionality of the gamification ad-on to the website, the pool of customers we tested the campaign on was very narrow and did not represent a general mass of our client base.  A majority of transactions in the first couple of hours of the campaign launch were not captured in the Nag-Negg Fiesta restaurants’ universe, FAQ’s content did not cover all questions, points system did not make sense for the average user, restaurants’ were not happy, Arabic content of the ad-on was poor… and the list goes on.  It was devastating! Did all of our hard go down the drain? How are we going to react? Is “Plan B” actually worth taking a stab at? So many questions were falling on us…Focus was on solving the problem, and no attention was given for responsibility…at least for now.  After monitoring users’ behavior (heat map) on our main page for a couple of hours (during a peak hour) and collecting of real live data with first hand customer questionnaires, we quickly realized that our biggest flaw was in the sophistication level of the ad-on.  Within hours, the whole gamification ad-on was redesigned and after an “all-nighter of testing”, we re-launched the game on the morning of the following day.  Result? 60% surge in eye-balls month-on-month and unprecedented engagement with end-users, employees and restaurants.

“I’ve come to believe that learning is the essential unit of progress for startups.  The effort that is not absolutely necessary for learning what customers want can be eliminated. I call this validated learning…”  Our biggest take home from the gamification experience was that validated learning is primarily backed by empirical data collected from real customers; no other form of validation is as competitive or effective. GET YOUR DATA RIGHT!

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5 Comments

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