This is the third post of seven – “The CloudTruth Journey to Product-Market Fit” series.
Developed in the mid-20th century by U.S. Air Force Colonel John Boyd, the OODA Loop (Observe, Orientate, Decide, and Act) offers an effective framework for any organization faced with making complex, strategic decisions. While the Air Force leveraged it to provide a structure for gathering and acting on vital intelligence in a military context, the OODA loop can help leaders facing a variety of decision-making challenges.
For example, as CloudTruth embarked upon our search for product-market fit we found that the OODA Loop offered a helpful lens for thinking through our own growth process. Although our version no doubt looked different from its original military applications, the OODA Loop helped us to gather observations about our product and market, orient that data in context, decide on a path forward, and act on those decisions.
In addition, one important component of the OODA approach is that it is a cycle, not a one-time event. Determining the best market for us to target — as well as the best product with which to meet that market’s needs — required a lengthy process of iteration, in which we went through each stage in the OODA Loop repeatedly, getting closer to our final product with each time through.
So what did this look like in practice? The first stage of the OODA Loop is Observe. This refers to the data-gathering phase, in which you identify and measure key indicators that will help to inform your actions. In our case, we began our product development process with a series of interviews designed to observe our potential customers and learn about their existing pain points. We conducted hundreds of interviews, starting with our first-degree connections, and then expanding out to anyone we could find who matched our customer profile. As we narrowed down our product space and focused on an increasingly specific niche, that helped us to develop a narrower understanding of who our customer would be, in turn enabling us to target potential customers that were a better and better fit for our offerings.
Once we connected with these interviewees, we would begin gathering our observations. It’s essential to note here that the focus was on observing — it can be tempting to give potential customers a detailed overview of your exact product idea and start selling, but leading questions don’t help you actually understand your customer and their needs. As such, we did our best to simply set the scope of the conversation, and then let the interviewees do the talking.
In addition, we invested in simple recording tools for our phone and video conference calls, as well as a transcription service, to ensure we were gathering data as effectively as possible. While recording and transcribing every interview may seem cumbersome, your observations are only as useful as your documentation. It was imperative for us not just to get customers to share their insights, but also to make sure that we were set up to make the most of those insights once the interview was over.
The next stage of the OODA Loop is Orientate. This is the process of synthesizing and contextualizing the data you’ve observed, transforming your mass of data points into trends and hypotheses to be tested.
For CloudTruth, this meant working as a team to connect the dots between the many interviews we’d conducted, and determining what larger lessons we could take away regarding our target market and product ideas. One piece of this was to identify and dismiss false positives: that is, customers who may have seemed extremely excited about our offerings, but were in fact unlikely to move forward as actual customers. To ensure we were getting an accurate picture of the data, we intentionally ignored both the most-positive and most-negative interviewees, since these outliers were unlikely to represent the larger market base.
We also attempted to be as intentional as possible about mitigating the impact of potential biases that might cloud our judgment. Especially as co-founders of the company, it was only natural that we might be biased to assume that customers would understand the importance of our proposed product. It was important for us to counteract those biases by increasing our own self-awareness, and by asking colleagues and advisors to weigh in when we weren’t sure how to interpret a given conversation.
Once we’d done our best to account for our biases and remove outlier data points, we were ready to identify and react to the trends that appeared to be emerging from our interviews. That’s where the Decide phase came in. Based on the data and our understanding of the market context, we would choose a direction in which to move forward.
To be sure, that direction wasn’t necessarily the “correct” direction, and it didn’t necessarily reflect the exact market and product pairing that we would ultimately settle on. But especially in the early days of our development, it was essential to simply make a choice and implement it (even if we felt that we didn’t yet have enough data to be totally certain about that choice). Once we made that decision, we could then start to develop a game plan to help us further refine our offerings and work towards product-market fit.
Finally, the last phase of the OODA Loop is often the most exciting: Action. Armed with a well-defined plan grounded in observations and contextual orientation, we had to take the leap and act on that plan. Again, that didn’t mean that we were 100% sure that the path we had taken would be our final path — but sometimes you have to take that first step in order to determine whether or not it’s leading where you want to go.
To that end, after just a few months of interviews validating the general concept we hoped to pursue, we began building a basic prototype product with limited functionality. We were careful to avoid investing too much time and effort into these early drafts, but it was essential to develop something to show customers and start to gather some more concrete product feedback. Then, as we cycled back through the process, we were able to develop more and more refined versions of our product, thus enabling us to gather more and more precise data from our customers.
Of course, the most important thing to remember about the OODA Loop is that it is just that: a loop. Whether you’re planning a military operation or building a startup, the secret to success is iteration. If you get stuck indefinitely in the observation phase, you’ll never make a decision, and so you’ll never reach your goals. At the same time, if you’re quick to act but fail to gather data to determine the impact of your actions, you’ll never learn from your mistakes or even notice new opportunities to grow. It’s only by continuously cycling through Observe, Orientate, Decide, and Act that you’ll be able to identify — and reach — your true potential.
Read the next article in our “CloudTruth Product Market Fit” series: