Introduction
Understanding your customer's needs is not a guessing game, but a key to success. This understanding isn't born from intuition, but from a systematic process that can be learned and mastered. One such process is the OODA loop—Observe, Orient, Decide, Act. Originally designed for combat operations, I heard about it in the context of startups the first time from Ash Maurya if I remember correctly. It is is decision-making framework for a fast-paced environment and can be your secret weapon in customer understanding and making something they want a.k.a. “Make Something People Want” (PG).
Understanding the OODA Loop
The OODA loop, developed by military strategist John Boyd, is a decision-making process that thrives in competitive environments and therefore has found its application in many areas of where “threat” is immanent (Kean 2022). When applied to customer understanding, it offers a structured approach for learning and adaptation based on customer behavior, leading to products that people truly want.
Information about your customer is a central aspect of the planning process across all startup functions. The OODA framework helps startup founders make better decisions.
Customer Understanding with the OODA Loop
Let's break down the OODA loop into actionable steps for startup founders:
- Observe: Start by embracing data. Analyze customer usage data, purchase histories, and reviews. Look for patterns and trends that reveal customer desires. This is your first step towards informed product development.
- Orient: Engage directly with your customers. Surveys, interviews, or informal chats can unveil the 'why' behind the patterns you've observed, providing a richer context for your data.
- Decide: Use the insights gained from the first two steps to make strategic decisions. Should you pivot your product? Add a new feature? The key here is to be data-driven—let your customer insights guide your decisions.
- Act: Implement your decisions and watch for the reaction of your customers. But remember—the OODA loop is a cycle. After you act, you go back to observing. The process of understanding your customers is continuous.
The OODA Loop in Action: Real-World Examples
Many successful companies implicitly use the OODA loop. Amazon, known for its customer obsession, continually observes customer behavior, orientates based on this information, makes strategic decisions, and then acts. This continuous process, driven by customer insights, has led to customer-centric innovations like one-click purchasing and personalized recommendations.
Conclusion
The science of customer understanding can be distilled into actionable steps that, when followed, lead to products that truly meet customer needs. The OODA loop provides one strategic framework for these steps, ensuring you're continually learning from and adapting to your customers' evolving needs in an VUCA environment. This isn't just theory—it's a practical, actionable process for startup success.
Have you used a structured process like the OODA loop to understand your customers better?
Works Cited
Kean, Christopher. 2022. “Conceptualizing Information Advantage Using Boyd’s OODA Loop.” The Military Review, no. November-December 2022: 109–15.
What is a VUCA Environment?
VUCA stands for Volatility, Uncertainty, Complexity, and Ambiguity. It's a term that originated in the military and is used to describe challenging conditions and situations.
Volatility: The nature, speed, volume, and magnitude of change that is not in a predictable pattern. Uncertainty: The lack of predictability and the prospects for surprise in an organization's environment. Complexity: The confounding of issues and a chaos of causes that surround a problem, which makes decisions difficult. Ambiguity: The haziness of reality and the potential for misreads of the situation.
In a VUCA environment, the usual rules of business do not always apply, and it can be challenging to see what lies ahead. This is often the case in fast-moving industries or periods of economic instability. To succeed in a VUCA environment, organizations often need to be adaptable, agile, and responsive to changes.
