Idea to Startup: Extreme Quality

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This Episode

We’re back.

Today, we’ll talk about Extreme Quality. How you can zig as everyone else building startups zags.

We’ll create an equation for Quality Potential, we’ll go through the six components of a moment that can support a business, and we’ll revisit our old friend The Car Guy.

We’ll also talk Gladiators and Steve Carmichael.

It’s been too long - hope it’s useful.

Pod References

• Tacklebox - we finally have a two-week free trial

• Byldd - the $10k MVP

  
  00:27 Anxious People
  04:17 Email Opportunity
  08:20 Extreme Quality
  10:00 Byldd - a development agency we trust
  11:10 The Quality Misunderstanding
  12:20 The Quality Equation
  14:43 Example: The Car Guy
  19:09 The Six Components of a Moment
  23:33 A Clarification, and The End

Transcript - Feel Free to Read it Like a Long-form Article:

Anxious People

Today, we’re going to talk about my favorite way to approach a business. In fact, I’d argue it’s the only viable way to approach a business these days.

But first, let’s talk about how we both feel right now. And gladiators.

I’ve found that as I’ve gotten older, the goal posts for what makes me nervous and anxious have started zipping around like they’re on roller skates.

For most of my life I had a pretty good handle on what shook me. I avoided those things when I could and did my best to deal with them when I couldn’t.

But over the past few years, as my family and business and life have expanded, as the world has changed in all the ways it has, it all feels much harder to corral - I feel like a contestant on that old show American Gladiators that people my age used to watch when we stayed home from school sick and price is right was over. I’m weaving through an obstacle course while roided up guys in spandex leotards shoot tennis balls at me from a tshirt cannon for some reason.

About six weeks ago, the little guy had a seizure. He’s fine now, but it was scary. We called 911 as it happened and within 4 minutes - we later matched up the call log and our ring camera - a police officer came careening down our driveway at a full sprint, leapt up our front steps in a single bound, and gently took my tiny son from my shaking arms. He lay him on a chair, positioned his head properly, then looked over his shoulder to console my wife and I, telling us that the scary part was over and that our son would be just fine. Paramedics took over minutes later, and the next day the three of us came home from the hospital more or less no worse for the wear. My son is fine. I’ve watched the ring camera footage of the officer leaping up our stairs a dozen times, and each time I’m surprised there isn’t a cape flowing behind him.

Two weeks to the day after that incident, we welcomed our second son, the littlest guy, into the world with a pregnancy that escalated so fast we almost had to pull over and have the baby in the breakdown lane of I-95 - again, everything ended up great. But a week after that, a true family tragedy hit, one too personal to go into on the pod.

The gladiators just keep firing those tennis balls.

I mention all of this for two reasons.

First, because a lot of you have listened to this podcast for a long time. When you reach out, you mention the little guy or Rubes and I always appreciate it. We haven’t had a new episode in nearly two months for the first time in 4 years and a bunch of you have checked in and asked if everything is ok. Thank you. And yeah - we’ll be great.

And second, because what follows an earthquake of tragedy is a tsunami of reflection and clarity unique to these sorts of moments. Google tells me that churchill once said to never waste a good crisis. And whether he was actually the one to say it or not, it’s great advice.

The past two months brought two clear insights:

First, that the anxiety-inducing stuff isn't going to suddenly revert back to some version of normal that probably only existed in my head anyway. I can’t buck against the anxiety or feel sorry for myself or spend all day wishing for the way things were. I’ve got to learn to dance with the anxiety. To get the most out of it - to thrive because of it.

And second, that increased anxiety I’m feeling isn’t specific to me.

It’s my job to meet with founders basically every day, and while my specific anxiety-inducing experience was unique, the anxiety I’m feeling isn’t. People are stressed the hell out. I might see it disproportionately, because the act of starting a business, for most people, is a reaction to anxiety. They’re starting a business because something happened and they reflected on their life and decided they wanted more. Or just different.

Anxiety can be a clarifying force.

It can also directly impact how we work.

As things calmed down a bit last week I went to check my inbox after more or less ignoring any emails not from Tacklebox members for like 45 days, and it left me… furious. Insulted. Outraged. And any other adjective Kramer’s lawyer jackie chiles from seinfeld would’ve used.

My email was full of garbage. Hundreds and hundreds of emails with people baselessly asking to come on the pod or sell me a service or ask me to invest. 99% of these emails were clearly written by AI, with a dumb little intro sentence followed by a horrendous segue into their ask. Here’s an example: “Hi Brian, I really enjoyed the last episode of Idea to Startup, particularly how you broke down the three types of problems. Speaking of that, your listeners would love Steve Carmichael. He’s an analyst at Capital One and would be perfect to come on your pod to talk about the recent dip in the European markets.”

Smooth as butter.

AI has, overnight, made it exceedingly easy to be average at scale. To, with almost zero effort, waste thousands of hours of peoples time with a strategy that will never work.

But that’s not what I’m taking away from the emails.

What I’m taking away, is opportunity.

Because hiding in that inbox full of total garbage was an email that stood out like it was written in size 120 font.

The subject line felt different from the rest. There were no gimmicks - just a tight description of a problem I have at Tacklebox. The body was short, targeted and specific. The sender clearly knew my business and offered to solve a problem I’ve been struggling with for years. He called out my specific blocker and guessed all the things I’ve tried to navigate that blocker, then told me why they hadn’t worked.

He then teased his counterintuitive approach and told me how, if I worked with him, I’d. never have to do a thing I really hate doing ever again.

I nearly sprained my index finger clicking on his “book 15 minutes link,” and within 48 hours of getting the email I was a happy, paying customer.

Startups - and life - are about contrast. The clear, obvious difference between you and the crowd.

The best startups zig when everyone else zags.

Which brings us back to anxiety. Everyone seems to be way more anxious now than we were X number of years ago. And when you’re anxious, the last thing you want to feel is rejection. So, a product that lets you send quasi personalized emails to 10,000 people with AI as the interface is crazy attractive - it shields you from personal rejection and let’s you tell yourself you’re testing something out.

Sending 10 painstakingly crafted emails to 10 handpicked customers who you’re confident are the most likely people in the world to want the thing you’re building opens up the possibility that all 10 say no. And the thing you were doing isn’t all that important. Which is hard to stomach when you’re anxious. It’s uncomfortable.

And discomfort = opportunity.

Life is precious, short, and unpredictable.

And that’s where todays pod came from. The crystal clear realization that the only thing worth my time and your time - the only thing I’ll help people with from now on - the only thing that’ll actually create contrast these days - is the pursuit of what I’m dubbing Extreme Quality. Stuff that’s hyper targeted and startlingly useful.

The tools coming out right now, many leveraging AI to do enormous amounts of work for you, remove you from the feeling of failure. The people who sent me all those emails have no idea how I felt when I read them.

Our job will be to do the opposite. To get as close as possible to the customer in the moment they decide to work with us or not. To live and breathe that moment and optimize for feedback.

And now I’m going to hop off my soapbox or stop yelling at clouds or whatever the last 7 minutes were. As the joke goes, I’m a dude born in the 80s so I have a podcast not a therapist.

Now that we’ve talked about the problem and it’s time to talk about the solution and how you can get to work on it.

Let’s talk about Extreme Quality.

We’ll start with a quick minute on your reaction to the term “Extreme Quality,” we’ll do an ad from some old friends, and then we’ll get into how you can build your business that way.

I bet the phrase Extreme Quality feels a bit… unrealistic. Maybe even intimidating.

It also might sound like it’s in direct conflict with the other 250 episodes of this podcast where I encouraged you to do lightweight intent tests and not worry about perfection or a polished product and to move fast to validate hypotheses, right?

Luckily, it’s not at all.

Extreme Quality and everything we’ve preached over the years all line up neatly like sparrows on a telephone wire. Because quality, for entrepreneurs, is misunderstood.

There’s a quote from Jeff Bezos that I love where he says “I very frequently get the question: 'What's going to change in the next 10 years?' And that is a very interesting question; it's a very common one. I almost never get the question: 'What's not going to change in the next 10 years?' And I submit to you that that second question is actually the more important of the two -- because you can build a business strategy around the things that are stable in time.”

Knowing how to build and deliver stuff of high quality will never be devalued. People will always want it. And it’s a skill that takes time to learn and practice. And it’s hard an uncomfortable - so, let’s do it.

Let’s talk about what quality is and what it isn’t and create a simple equation for it.

Let’s highlight some companies that have done it well.

Let’s break it down and create a path for you to chase it right now.

And let’s do it all,…after… a word from our good friends at Byldd.

Who, not coincidentally, know how to make high quality stuff themselves. And that’s how you do a segue, steve carmichael.

What Quality Is and What It Isn’t

The Quality Misunderstanding

To talk about extreme quality we’ve got to start by defining it. This is harder than you might think, so we’ll start by asking a question.

When you think of really high quality stuff, what comes to mind?

I was curious about this, so I asked a bunch of our founders and got a smattering of the same types of answers. I heard brands - rolls royce, bentley, rolex, chanel, louis vuitton - I heard products - iphone, sub zero refrigerator, I heard places or experiences - four seasons and ritz Carlton, and I heard about individual product makers - for example, a craftsman in upstate new york who makes tables out of a single piece of cherry, or a glass artist who makes custom chandeliers.

These answers show the quality misunderstanding - people conflate quality with the objective inputs of a product, or the status that product gives it’s customers.

Rolex is high quality because people know it’s expensive and if you wear one you can afford to wear one. The Four Seasons is high quality because it’s expensive and you know it’ll check all the boxes - great location, food, room, service. You pay to be seen walking in and out of it and for people to know you require the best of everything. Side note - We had a travel startup a while back started by travel agents that said they’d always send the most boring people to the Four Seasons because those people had no clue what they actually wanted in a vacation aside from people to know they were rich.

These measures of quality are irrelevant for entrepreneurs. When we think of building a quality product, we shouldn’t measure ourselves up against Rolex or Apple - it makes no sense. We need a different rubric.

The right way for early stage entrepreneurs to think about quality isn’t in product terms but in terms of potential.

The Quality Equation for Entrepreneurs

Quality potential for entrepreneurs is the gap between how a customer solves a problem now and how they’ll solve it with our help. The distance between how bad things are and how good they can be.

The Quality Potential is that spread.

Our Quality Equation is, not surprisingly, a close cousin of our happiness equation.

If you remember, our happiness equation is:

Happiness = your reality minus your expectations.

If your expectations are high, it’s likely you’ll be miserable regardless of how good your reality is, because it’s unlikely to measure up. The first step to being happier is lowering your expectations. The simplest way to define happiness is when you surprise yourself - something is better than you expected, or you do something you didn’t think you could. It’s all about the spread.

Our Quality Equation is similar - it is:

Quality Potential = a customers best case scenario - their current reality

The only way to build a high quality product is to start by looking for the conditions that can support a quality product. You can’t grow a coconut tree in the arctic and you can’t build a high quality product where there isn’t quality potential.

Here’s an example.

When I was drafting out this pod I answered the same quality question I’d asked the Tacklebox founders - what do I think of as high quality - and I had the same answers - rolex, louis vuitton, and so on. .

Then, I thought about it in terms of the products I’d used that’d helped me cover the most distance. That captured the most quality potential. And then there were two clear winners. We’ll talk about the second next week, but this week we’ll talk about the car guy.

You might remember the car guy from a previous episode where we broke down his business. I’ll link to it in the show notes. But, recently, we had to use him again.

If you didn’t listen to the last episode, the car guy is a guy who helps you get a car. He helps you pick it, negotiates the price, helps you finance, then delivers it. All you do is sign one piece of paper. We did this a year or so ago with my wife’s car and he wound up finding a typo in a lease ad for a car in Montana and getting a dealership in New Jersey to match it, saving us thousands of dollars.

Well, we now have two kids that and a 90 pound bernedoodle, which means my Honda CRV is no longer cutting it. We take Rubes everywhere and the queen needs her space. So, we reached out to the car guy to figure out what to buy.

He sent along his standard intake form that asked a bunch of questions about exactly how we’d use the car and how we live our lives - specifics about our weekday routines, where we go on weekends, the car seat brand and the stroller model and the pack and play we tote to my parents house when we stay over with the kids. He asked when we had groceries and if any kids played hockey or skiid. He asked for the exact locations of everywhere we’d gone in the past 4 months and his tool spit out a giant Google map, overlayed with charging stations and trip durations.

After we finished, we had a short call.

I’d assumed we were in line for a massive car - a tahoe or a suburban or something like that - but he quickly ruled those out. They were expensive, first, but they were also, apparently, awful in snow. This surprised me, since they’re 4 wheel drive, but the car guy explained that since they were built on pickup truck chassis, their 4wd was meant for towing heavy stuff, not driving 45 mph on an icy road. We’d be much safer on something build on an all wheel drive car chasis. A hybrid would save us X amount based on our driving patterns, we needed Y square footage based on our average pack size, and after reviewing everything along with his internal rankings, there was only one answer - the toyota grand highlander.

I hadn’t even heard of this car, but it was clear it was the right one. Plus, it came in a semi-carolina blue.

Now, he told us, he’d reach out to all his contacts at dealers and pit against each other to get the best deal. He’d handle all the paperwork and all we’d have to do is esign a contract at the end. The car would likely come from another state, he thought probably vermont, but he had a shipping service that would charge less than 10% of what we’d saved off sticker. His fee ended up around 5%.

The right car, at the best possible price, shipped to us.

Oh, and one more thing, he asked. Did we we want him to sell our CRV and deduct it from the price? In fact, we did. He gave us a template for the pictures we needed to take, then got us an offer higher than the one carvana had quoted. And, of course, the person dropping off our Toyota would pick up the Honda.

THAT is extreme quality. A startlingly useful service.

At the end of our short call, I told him how valuable he’d been - we were so stressed with the new kid and everything - and he replied

“Parents who just had their second or third kid are a huge chunk of my business. And since I work so closely with them I know exactly what they need. I know the cars that are best for them, I know they likely need to sell a car, I know the questions to ask to decide between models. When it’s a couple planning for a first kid, I can help them with stuff like car seats. For a second or third kid, I need to know about the routine. I take it very seriously.”

I mentioned the relationships he had with dealers, and he continued:

“Yeah, I sort of built my whole business to support that moment -the, ‘I just had a life change and I need a new car now’ moment. To get a good deal, I need to know dealers and understand what a good sale looks like for them. I need to know what type of financing gets them a bonus. I need to know that Ford people get raises based on number of cars sold and that Toyota dealers are compensated more for repeat buyers and on and on. I can now send an email saying I’ve got someone ready to buy X car for X price and it’ll be done and signed by Friday, who needs this sale? They all know me and trust me and give me deals because I make their lives so easy. Just like I make my clients lives easy. That’s the whole thing. Make this really hard, frustrating, annoying thing impossibly easy.”

And now, let’s talk about moments.

The Six Components of a Moment

There’s a quote by Charlie Munger I’ve got on a post-it on my monitor that says: find a simple idea and take it seriously.

That’s what extreme quality is. Choosing a moment you’ll take extremely seriously.

The car guy’s moment is when parents with a new kid realize they need a new car. In that moment they’re worried about getting ripped off by the dealer and financing the thing properly and choosing the right car and new vs used and negotiating with a person who negotiates cars for a living and selling their current car and whether their baby is eating enough or too much. The car guy recognizes that moment and takes everything but the baby food question off their plate.

The quality potential in that moment is enormous. As always, quality is about removing not adding. And the car guy understands all the hassle levers of that moment and removes them.

The best part about high quality products - the ones that help customers cover the most ground from bad experience to good - is that they’re imminently shareable. We can’t stop talking about them. When someone takes something really hard off our plate, we want our friends to experience the same thing. The organic growth totally fuels the business.

This is our second episode on the car guy and I’ve probably referred 15 of my friends to him.

And it’s all from recognizing the right moment for the right customer and taking it seriously.

When we break the moment down, there are six components to it:

1. Who the customer is

2. When they feel the pain

3. What their current process to solve the problem is

4. What the worst parts of that process are

5. What the ceiling potential is and, finally,

6. Your insight into how to solve the problem in a better way

Number six - your insight into how to solve the problem - is something people think entrepreneurs start with. You begin working on a business because you have a better mouse trap. Then, you find people who need it.

But, the extreme quality approach is the opposite. Number six is a reaction to numbers one through five. You start with those.

The tighter you get on who the customer is, the deeper you understand the pain, the more clarity you have into the process, the better you can describe a great outcome - those all help you figure out how to solve the problem in a better way. That’s what we call at Tacklebox Earned Wisdom.

This means that, early on, you need your product to be a feedback machine that acts to narrow in on the first five components. That’s why concierge MVPs work so well - they’re built around interacting with your customer and watching them solve the problem live.

The car guy built out the infrastructure for his business - the relationships with dealers and deep understanding of their incentives, the intake forms, the doc signing process, the car transport - after working in a concierge way with customers.

Which brings us back to AI and anxiety and zigging and zagging.

The approach most startups are taking is - I have the concept for this thing that people want, let me email 10,000 people and see who wants it. Let me stay as far as possible from the people who might tell me something I don’t want to hear. If no one responds, I can just say it was a test and move on with my life.

The extreme quality approach is to flip the funnel upside down. To spend time in the weeds finding a customer with a ton of quality potential, zooming into the moment where they feel the pain, then figuring out the infrastructure to support that moment - the product - as you work with them.

Anxiety makes us misunderstand ambition.

Entrepreneurs think ambition is potential for scale and fundraising and growth. But ambition is focus - choosing a moment that really, really matters - one that’s complex- and helping customers make a leap. Immersing yourself in that moment to understand the texture of it.

Then, once you build a system that supports the moment, you can scale it however you’d like. But that comes later.

Too many entrepreneurs focus on the floor - the least good thing they think people will get value from at scale.

Extreme Quality is about focusing on the ceiling - the thing that creates the biggest gap, the largest before and after for a customer that needs it.

Raise the ceiling, not the floor.

—

A Clarification and The End

A quick clarification on the distance you can help a customer travel.

I do not mean net distance - so, don’t say “this person that doesn’t know they need a new car should really have one. Let me educate them on why they need a car, then sell them a car, and that’ll be more distance covered.”

I mean to find customers with the biggest distance between bad and good for a process they had to do anyway. I had to buy a car. The process without the car guy would be miserable, but I would’ve navigated it. He didn’t have to convince me to buy a car. I was already out buying an iced coffee, as we say.

I also don’t mean to find a customer that can’t afford a car and try to figure out how to help them get one. That’s not it, either. We need to find a customer with quality potential who is happy, willing, excited to pay for you to take the hassle off their plate. That needs to be our first customer.

Look for good customers in bad spots and understand the painful moment.

Clarifications over.

Now, the end.

You give the advice you need to take. I don’t have this all figured out and it’s a constant push to add more value to the right people and charge them properly for it.

But, I’m confident this strategy is the right one. And, I think it’ll actually allow you to make full use of AI. Because while it might seem like I’m trashing AI, I’m only trashing it when it’s used for a strategy of spray and pray. It makes that too easy, and I wish it didn’t.

But, if I were helping the car guy automate his process, there are a ton of places to leverage AI to make his specific customers lives better. To use it as a feedback tool to make better suggestions or to get better financing and on and on.

AI isn’t the problem. Avoiding discomfort is.

We’re all anxious. We’ve all got gladiators shooting tennis balls at us. And that’s not going to change.

The way to embrace it is to recognize what anxiety encourages you do to, and to do the opposite. To get closer to your potential customers and embrace their feedback, even if it’s negative, because it’ll push you towards something worth building. To keep pushing to build stuff that actually matters.

And thanks again to everyone who reached out. It meant a lot. It’s good to be back.

And steve carmichael, you know what? screw it. We’d love to have you on the pod to talk french etf’s or whatever the hell you do.

Have a great week.

We’ve got a free trial at Tacklebox now. Head to gettacklebox dot com, head to programs, and try out the method for two weeks free. Give your idea a shot.