CUSTOMER DISCOVERY: HOW TO FIND CUSTOMERS & BUILD PRODUCTS THEY WANT
Posted on: November 25, 2019
How stressful is it to keep asking yourself:
Am I building the right product that solves a pain?
Is it what customers want?
Am I wasting my time and money?
In this article we'll look at customer discovery to answer this and understand:
So what happens despite these stressful questions above?
You keep a completely cool and composed appearance and show the world “I got this!”
For you to “got this” that’s where Customer Development methodologies come in.
Where the key question to answer is:
“Will customers actually buy it?”
In fact, every hour spent on customer development saves 5–10 hours of writing, coding or design.
So much so, that ignoring customer development was listed as one of the Top 20 reasons why startups fail according to CBInsights.
Yet, some still believe they already know what the customers want and the best thing would be to build the product asap.
In the words of Warren Buffet:
“Don’t test the depth of the water with both feet”
As long as the products you build are for customers, then logically, the 2 go hand in hand. We can’t focus on one and forget the other.
The good news is that understanding the customer development model is easy and acting on it takes much less time than expected.
Let’s jump in!
“When your product solves a problem that costs customers sleep, revenue or profits, things are definitely looking up”
Customer Discovery is the first of the 4 stages of The Customer Development Process pioneered by Steve Blank in the 90’s.
He started it after noticing countless startups fail because of not understanding how customers think.
It’s a focused process that helps you test your assumptions about your business using direct feedback from customers.
There are 3 crucial points to Customer Discovery:
Can you relate to this?
When I first started with business, all I did was think.
I used to think about how the idea would help people, how it would function, where it could go wrong, who it would annoy and on and on.
An unstructured, unproductive and disconnected train of thought.
Today, we can figure out in minimal time, if the idea is even worth a business.
Here's where to start:
The Lean Model Canvas by Ash Mauyra (adapted from the Business Model Canvas by Alex Osterwalder) is excellent for this.
It forces you to direct your thinking towards urgent aspects of the business.
Almost instantly organizing your thoughts and relevant assumptions around your business idea.
These assumptions can then be assessed for idea credibility using customer discovery interviews.
Best of all, it’ll take 30 minutes flat.
Here's a step by step breakdown for completing your canvas.
Mixing this canvas with the Validation Board by the Leanstartupmachine is an impressive combo.
The Validation Board is another powerful tool that is super easy for tracking how your core assumptions progress based on the responses from your customer discovery interviews.
Furthermore, it ensures you measure the success of your assumptions by having a pre-set definition of the lowest possible outcome to consider your idea proven.
These tools simplify creating a quick overall view of your business and determining what needs to be verified to decide if the idea is worth pursuing.
Now that you're armed with your business assumptions
It’s time to find customers to interview to test your ideas.
Here’s the thing:
Alot of the time early entrepreneurs start with almost no business network.
On the surface, although this looks like a disadvantage, it can be blessing in disguise.
Because interviewing your personal contacts can bias and influence the results you collect.
Instead, ask family and friends for introductions to their network.
When I first started I out, I didn’t know much about business but I did realise that talking to potential customers would be a good way to know if what I wanted to do was worthwhile.
I only knew a handful of people that were in business which wasn’t enough to reach my target of 50+ people.
I asked the few that I knew, I asked my brothers, my friends and anyone I could think of if they could introduce me to their network.
And that’s how I generated a 50+ list of my target market in under a week.
Surprisingly, the result was a 100% response rate from this list.
Every call was answered and people took the time to have a chat because of the introduction.
It’s a different story that my product still flopped, but that was because my interview questions were rubbish not because I couldn’t find people to interview.
How do you approach a person you don’t know?
To have any chance with cold outreach on social channels, make it clear that you’re not selling any products or services.
Frame your outreach for what it is, research. Here's a great explanation by Alexander Cowan.
In fact, research is the best way to frame your approach to customers regardless of the type of interview format you use.
I tested this with my LinkedIn network by contacting 10 people that I did not know personally but fit my target audience.
5 responses of which 3 went on to complete the customer discovery questions.
30% response rate is not bad.
However, you can expect to face problems with response time and feeling annoyed with this approach.
Because following up 3+ times with people that said they’d be “happy to help” is not fun.
Here’s an example of a template you can use:
To ensure you’re not wasting anyones time, include a screener question in your customer discovery outreach..
In the above example, my screener question is asking if they are currently using or have used a third party provider recently.
Those that say no, thank them for their response and you move on.
Those that answer yes to the screener make it through to the next stage where you have a conversation that leads to asking questions such as:
And that's how to use social to reach out to your target audience.
Note that this approach can be used across social channels, social groups, forums etc.
But, this brings us to a crucial point.
What do you do if you have literally zero network to start from?
What if you’re family, friends and social connections do not have access to the type of customer you want to talk to?
What if you have a very specific type of customer?
Like startup founders that used Buzzsumo in the last 2 weeks.
In this case, reaching out to friends for introductions and your social contacts probably won't work.
What to do?
Here’s where your Lean Canvas helps again.
Because if completed, you would have listed where your customers can be found (see your Lean Canvas — Customer Channels).
Let's stick with the startup founders example for a minute:
You might list the following customer channels:
See the potential you can tap into?
And that’s not even a complete list.
(Bonus: here’s a pdf for you for easy reference of all the above options for finding customers PLUS 3 added options not mentioned in the article)
The idea is to create your list of customer channels for the type of customer you seek, decide on the most effective channel and head straight there.
If your customer requirements are specific like the earlier example, then creating strong screeners will help your recruitment efforts.
Keep 2 things in mind:
If you’re ok with spending some money, here are two more options for finding interview candidates:
This option is fantastic because:
For a deep dive into this, see the explanation by Michael Margolis from Google Ventures and Jake Knapp.
There, now you can find customers whether you have a network or not.
How do you conduct a customer interview to validate your hypotheses and business?
It’s frustrating isn’t it?
When people say “It’s so easy! Just find your target customer, talk to them, learn and Boom you’re good to go!”
We’re more interested in hearing, how and what we should learn from these interviews?
How do we ask our questions and take control of the interview?
Have a look at this:
Your hypotheses to test (from your Lean Canvas) can be divided into 4 categories of questions:
To get the highest value from your customer discovery, prepare your key questions (and follow up questions) in advance.
Gear your questions towards obtaining the answers for the above categories.
Breaking down your questions into categories provides clarity on what you want to learn during your interview as explained in this Customer Discovery Handbook.
(Bonus: I’ve put together a list of 20 categorized interview questions at the end of this article so that you avoid missing any relevant info from your customer interviews)
Let’s talk about How to ask questions and how to interview customers to uncover the info you need.
“The best indicator that you’re done is that you stop hearing people say things that surprise you"
The aim is not to ask 50 questions and badger the person generous enough to share their time with you.
Neither is it to spend as much time as you can in the interview.
This presentation from Carnegie Mellon University suggests 15 minutes interview time is sufficient.
I find 30 minutes works for me because it gives both the customer and myself time to relax, think and open up in the discussion.
And finally, interview quantity.
How many customer interviews should you target?
This Nielsen study suggests 5 are enough to gather relevant data but this is not set in stone.
If you march “in person” to the customer channels you listed, you could have 10+ interviews and amazing data about your customers in your hands within 2/3 days depending on your niche.
I have to admit, that when I first tried this I took over a week because I was taking up time just figuring out what my next step would be.
Luckily by reading this post you won't have the same problem.
Again, check out the articles by Michael Margolis at Google Ventures.
They’ve got the full research sprint (including preparation time) nailed down to 4 days total with interviews taking just 1 day.
How do you know when you’re done?
Your job is to pay attention to similarities in the responses.
Once a pattern starts to appear, you’re on the right track.
There are many reasons why entrepreneurs overlook customer discovery. But understanding how customers think is part of making successful products. No matter how tough it seems, you are tougher.
What needs to be done and why. How to find customers and interview them. How to verify your core business assumptions and learn what they want. By doing this, you’ll provide solutions that make a difference and empower customers.
And for that, they will buy your products. All in all we’re talking about a process of only a few days. So trust yourself. Kick that self-doubt out. There’s absolutely nothing to hold you back. Interview your customers.
Make needed products.
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