The top practices today in customer discovery for lean startup business models are covered in Giff Constable’s Talking to Humans. While less than a book and more of a concise and practical guide, I loved every bit of information it had to offer. I wanted share what I learned in my time reading it.
I’d mostly like to cover why practice customer discovery, how to practice it, and what role it plays in creating a viable startup.
Why do we practice customer discovery?
We practice customer discovery because empathetic, successful entrepreneurs know the customer’s problems and needs matter most. What doesn’t matter are ideas that solely please the founder. So instead of working on those ideas far away from the real customers, startups need to fish where the fish are. This can only be done by first discovering where the fish are.
How do we practice customer discovery?
Customer discovery is best achieved through face-to-face qualitative interviews with guesses at who the company’s potential customers would be. To best act on this method for customer discovery, one would need to take part in pre-planning, interviews, and analysis and insight.
Pre-planning is all about how we can prepare before getting outside of the building (to go talk to real potential customers). Questions we’ll want to ask are who we’ll want to learn from, what do we want to learn, and how will we get to them?
Who do you want to learn from?
We first need to discover who you’re going to be interviewing. Plenty of the customer development methodologies we’re talking about were created by Silicon Valley entrepreneur, Steve Blank who would recommend coming up with 100 names through use of social media. These names cannot be just anyone though, even if you think your idea is for “everyone.”
Ideally, you’ll search for the typical customer you envision will yield traction with your idea, your potential early adopters (people who will take a chance on your product before anyone else), and critical partners for distribution, fulfillment, or other parts of your business. To specify on early adopters, new founders tend to focus too heavily on the mainstream or majority customer base whereas “by definition, the mainstream is waiting for proof from early adopters before they try something” says Constable in Talking to Humans. While we can’t be perfect in targeting this group, the more focused we can be, the better.
What do you want to learn?
Prepare a set of interview questions using Osterwalder’s business model canvas or Ash Maurya’s lean canvas. Use these to understand what the most risky assumptions you are making and challenge those by designing questions for your customers that will answer those questions.
Generally, your questions should not simply target your risks, but should be asked in particular ways to reach the most practical information you can learn. We should be asking open ended questions.
Not only that, but we should ask about an interviewee’s stories from the past and not predictions about their future. The reason is that the past is real and has happened meanwhile people are very poor at predicting what their future will look like. You might ask people “how much do you currently spend to address this problem” rather than “how much money would you spend to buy our product?” You might ask people to walk you through experiences related to problems you’re solving to understand what they like and dislike about these experiences. These types of questions will yield the kind of answers we would want to learn about.
One can also learn about specific numbers by designing pass/fail tests. See how many people knew what they wanted before walking into the store. If 90% did, that knowledge is useful because it might tell you that customers are learning what they want from a resource outside of the store and that resource might be something to invest in.
Lastly, you want to learn how people behave in face-to-face interviews. Steve Blank will say to look to see if their “pupils dilate” or if they grab your MVP out of your hand.
How will you get to them?
There are many ways to find and recruit your interview subjects. Often you’ll want to spend less time trying to convince people you’re special, but rather interest people by letting them know that they and their information is valuable.
Try to get one degree of separation away from people like your aunt, uncle, mother, friend, etc. when looking for people to interview. People like this are too likely to treat you differently and may not give accurate information based on the bias that they know you. However, we can still acknowledge those close to us to introduce us to mutual connections that have that one degree of separation.
Creative solutions might involve meeting the potential interviewee in a location they’d likely be, setting up a fun gathering catered to this crowd in exchange for their conversation, or even finding them at the moment of pain for the problem you’re solving. Attending conferences and meetups can often help you find people. There is no single way to find interviewees.
There are plenty of guidelines on how to ensure an effective session. Generally, the most effective guideline is to set expectations about who you are and what you are doing, follow the interview guide you “pre-planned” and then listen and learn, taking good notes yourself or via a note-taker working alongside you.
Analysis and Insight
After an interview session, you’ll ask how do I make sense of what I learned? There are many exercises to do such as using spreadsheets to place your collected metrics, you can compare your numbers to your assumptions. You may be able to make judgements or pivots based on particular patterns. You can design personas or criticize assumptions in your business model canvas. Eventually you may be able to show interviewees minimum viable products and pull in more insight.
What role does customer discovery play in creating a viable startup?
Finding product/market fit via pivoting: Through seeing where your assumptions and actual customer input differ, you may pivot an assumption and do something more relevant for your customers.
Sizing the opportunity: Discovering what can be accomplished if everyone bought your product. For example, you wouldn’t want to work on a 4 year project after learning you’d only make $20k per year from it.
Understanding your customer: Understanding their “day,” needs/problems, finding out their interests, and interactions like what social media platforms or blogs they’re using or what stores they go to.
Understanding the market type and competition: Get a grasp of whether you’re in an existing, new market, or other. Compare yourselves to your competitors and more.
In a world where most startups fail, we need to be resourceful with our time, money, and effort in order to truly provide a worthwhile value for our customers. Therefore, success starts with understanding customers.