Customer Discovery

Up to this point we’ve made sure that there is a problem in the market for your concept to solve through research and that notable experts have verified that you’re on the right path. Now we begin the last test of early validation - customer discovery.

We’re using customer discovery as a methodical approach to ensuring the problem and solution you’ve identified aligns with what customers actually want at a price they are willing to pay.

Customer Discovery centers around 3 critical pillars of your business model - the Problem, Solution and Revenue Model. Since you’ve identified that customers likely have a problem worth solving, now it’s time to see if your solution is the right fit and that someone would pay for what you’ll produce. Customer Discovery will put those hypotheses to the test so you can refine your product before you even build it.

What you’ll likely find is that the initial few discussions with customers yield a great deal of “aha!” moments that will require you to heavily revise your plan. Soon thereafter, the value of successive customer interviews starts to drop off quickly.

Customers come in many flavors. They tend to vary based on their use cases for your product and of course their own demographic differences. Before you begin your surveys, we will want to help you identify very specific customer archetypes to ensure you get a good cross-section of feedback to synthesize.

The easiest way to begin segmenting your customers into specific archetypes is to start with use cases.

1. What are some of the ways people would buy your product?
2. What problem do people have before they find your product?
3. What are the different ways your product is used by customers?

Customer Archetype Attributes. Each archetype will have specific attributes that are meaningful to your product. Don’t torture this. If price isn’t a meaningful attribute, don’t try to build a customer archetype around that attribute. Focus on simple, obvious attributes that clearly represent your audience.

Identify Good Customer Candidates. Your ideal customers are typically found online in popular social networks, often lurking in the same places you will likely find them when you begin advertising. In this case we’re targeting a small number of candidates so a direct recruiting effort tends to work best.

• Social Networks (Linkedin, FB, Twitter)
• User Forums
• Google Ads (landing page surveys)

Validating your business comes down to genuine interactions with your potential customers. Whether it is a survey they complete, pushing out Facebook ads, standing on the corner talking to potential customers, or manually conducting a trial with a test individual - the options are endless.

Pick your Validation Method:

Landing Pages - With a brief landing page, you can include a picture or mockup of the product and mention the top features. Then within a landing page, you would want to have a name and email capture section (call-to-action) to see if people are in fact interested in what you have to offer. Or ideally, you have a button that allows for pre-orders. Pre-selling your solution proves people are willing to pay for what you have.

Digital Advertising - Ads via Social Media or Google Adwords is a solid method to explore the interest of your target demographic. It allows you to pump curated ads right to your target audience. This method helps to figure out numerous angles of the business such as: How much it may cost to acquire a potential user? What words, images, and emotional cues resonate with your target audience? If they click the ad - then yes. If no one clicks, consider refining and changing it up.

Surveys (surveymonkey.com, Google Forms, AskYourTargetMarket, TypeForm):

Surveys can be conducted online by sharing it within groups and social channels. Or alternatively, in-person interviews can be quite effective and you could potentially conduct those one-on-one or via a focus group. Ask yourself, where are my target customers? Do they work downtown? Are they located somewhere else? Go find them and talk to them!

Manual Test Trials:

To manually validate via a test trial, let’s look at an example. Let’s say you want to have a mobile app or software that will help a customer deliver and order groceries. Before building the app, you could first start by getting a test customer onboard and manually fulfilling each step. Once you have a test customer, you could manually take their grocery order from them, purchase their groceries, and then deliver it to their doorstep. Read more about the example here - Food on the Table.

Your customer discovery and interactions are intended to prove and refine 3 hypotheses about your business - the Problem, Solution, and Revenue Model. Your customer interactions are not limited to these 3 hypotheses however they tend to form the basis for further discovery so we typically start with these.

Every new business concept begins with a problem that needs to be solved. Your assumption is that your prospective customers will see that problem the same way you do and be in the market for someone to solve it. Here we want to get inside the heads of customers to see the problem through their eyes.

1. How do your customers see the problem? (Provide detail)
2. What aspect of the problem is most painful?

The solution you provide should be aligned with where the problem is most painful. This means that you must dig into the various features of your solution and ensure that where you’re focusing your product efforts are proportionate to where customers have the greatest demand.

1. How is the problem being solved today by customers?
2. Which features of the solution resonate most?
3. If the solution existed, what problems would still exist?

The revenue model questions will test for price sensitivity, frequency (such as recurring models) and friction (such as the complexity of paying for your product).

1. Would a customer be willing to pay for this?
2. How much is it worth?
3. Is this a one-time or repeat purchase?

Now that you’ve gathered all the responses and notes you took, it’s time to evaluate. You shouldn’t be changing every aspect of your business model and MVP based on one customer’s response. You have to analyze all your results--looking for themes--and letting these overarching insights inform product development.

If you compiled enough information from customers, you can begin utilizing the learnings to formulate the baseline for your business plan and what an MVP could look like.

• Do I have enough feedback to base assumptions off of?
• Did enough customers validate the need for my solution?
• What overarching themes popped up in results repeatedly?

Surveys and Q&As can only get you so far; they don’t always provide intent. This is why it is important to prove or investigate intent, which can require reading between the lines and digging into the “why” behind how the customer responded.

• Why did you customer react the way they did?
• What would trigger them to hand over payment?
• Are you solving a pain-point or problem effectively for them?
• What would prevent them from making a purchase?

Hindsight is 20-20 and the best part about that is, if you followed our steps and made sure to capture contact info for each of the survey candidates, you should be able to follow up with them and present your newly founded question or proposition for even more valuable feedback.

• How can you make these customers become loyal evangelists?
• Will these customers influence marketing efforts down the road?
• How will you further engage these customers to build a following?

As Silicon Valley entrepreneur and creator of the customer development methodology Steve Blank is fond of saying, “There are no facts inside your building.”

Now that we’ve mobilized and actually talked with our customers, we can advance beyond simply making assumptions about our idea and start strategically shaping our value proposition to better align with what our customers actually want.

These findings will act as the optimum baseline for our final task with idea validation: boiling down our value proposition into a super compact elevator pitch: one of the most important tools Founders use to communicate their idea and move their business forward.

Let’s dig in, shall we?