Customer Discovery 101

A common challenge to startup and small business founders is the topic of customer discovery. So many founders fall in love with their idea instead of the problem and end up on a path that rarely leads to a genuine solution to a real problem. And I get it. Putting your idea out there to see whether strangers like it and would be willing to pay for it is intimidating. I’m not going to tell you that it’s not. You can find great resources about Customer Discovery all over the internet (Strategyzer!). Here is a summary of some of the most common mistakes I have seen in working with founders:

1. So you think your customer has a problem…

You are probably reading this because you have an idea for a venture that solves a problem for your customer. Problem and Customer — let’s take a minute to figure out what exactly we are talking about.

Customer

As part of the business model canvas we talk about customer segments. There is no such thing as an ideal target customer. It is a construct we use to build personas that allow you to segment the different types of people you want to talk to. Jordan Jez of Glass Smith — a mobile device repair service — hit the nail on the head:

“We fix the screens of mobile phones and tablets. Everyone who has one of those devices is our customer! Right? Wrong. We figured out that our ideal customers are people who have such a device with a cracked phone, who want to get it fixed, are willing to pay for it, and appreciate trustworthy fast service that meets them where they are — their office, their home, their hotel room. College kids don’t care if their screen is broken, and they are not willing to pay to get it fixed. People with less demanding schedules might enjoy spending some time in the apple store while their phone gets fixed. Not everyone with a mobile device is our customer.”

Problem

What problem are you trying to solve for your customer segment(s)? The more you learn about your customer’s life and habits, values and preferences, the more issues you will uncover. Let’s say your ideal customer is a young professional who cares about looking great in the workplace and really wants her clothes and accessories to be ethically made and sustainably sourced. What is the actual problem here? Does she not know where to find this type of apparel? Is she overwhelmed with the great variety of labels that indicate different fair-trade, non GMO, fair labor, ethical material, sustainable fiber certifications? Or is your ideal customer simply overwhelmed by how many stores are out there that she could buy from? These are three distinct problems and the potential solutions look just as different. Instead of trying to get validation for what you think the problem is or should be, listen to what your ideal customer says.

Validate

Always keep in mind that the best you can do is to assume. You won’t know who your customer really is and what their biggest need is until you go out and ask. Be very clear about your assumptions, then go out and test them.

A great tool to work through your customer persona(s) and their problem is the Value Proposition Canvas.

The Value Proposition Canvas, available via Strategyzer

2. Alternatives

“Nobody does what I do!”

If you knew how many times I have heard that phrase.

But that is missing the point. If your customer has a problem then he or she is currently coping in some way or other. Your job is not to invent a never-before-seen solution (even though that would be great!), your job is to figure out how they can solve this problem more efficiently. Better. Faster. With more satisfaction or even fun. Glass Smith did not say “Nobody does mobile device repair the way we do it!” and patted themselves on the back. They looked at how their target customers are currently solving that problem (spending hours in line at the Apple Store, DIY kits, dodgy back-alley repair shops with window neon signs), and figured out how they could improve that process and experience (working with contractors, providing them with training, a booking platform, high-quality tools and lifetime warranty parts, and kick-ass branding).

It is painful to watch founders try to convince me that there really isn’t anything out there at all. You are missing the point. Instead, I challenge every founder to make a list of the 20 most common alternatives that your ideal customer currently leverages. Make it part of your customer interviews and figure out what your customer likes and dislikes about these current alternatives. NOW you’re onto something.

3. Practical Implications

Here is some practical advice on how to make the most of your customer discovery:

  • Start with desktop research. Is there any (inter-)national data on the problem you are trying to address? Can you find data and facts about your target group and learn about their challenges using Census data or Gallup? If the problem is as relevant as you make it out to be, chances are others have looked into it as well. Learn from previous research and exploration. Don’t reinvent the wheel. Plus: Citing notable sources increases your legitimacy credibility in front of third parties.
  • Google it. Imagine you are your customer faced with that problem you are exploring. How would you go about solving it? These days, most of us consult google. What keywords would you use? What resources can you find online.
  • A day in the life. Similar to googling, imagine you are your customer. What does your typical day look like? Where do you get your news? Where do you work out, get your morning coffee, walk your dog, or get your car fixed? How do you get to work? What does your lunch break look like? How do you procrastinate? Where do you find like-minded people, inspiration, camaraderie? What do you do after work? What do you do for fun? Learning about your customer’s reality gives you an insight into how the problem you’re trying to solve impacts their daily life, and in what areas you can start looking for a solution.
  • Talk to strangers. Contrary to what our parents have taught us since day one, you will eventually have to talk to strangers to learn more about your customers. Keep these things in mind:
  • Always provide some context. If you only have 30 seconds to win someone over and convince them to talk to you, you better be prepared to explain why you are asking these questions and what you will be doing with that information. Make sure to explain that you are exploring and seeking to learn instead of promising that you are building the next Uber for [insert hip new service].
  • Test your questions. Start with friends and people you know to gain confidence. See whether they understand your questions, get a feel for how strangers might react. Listen.
  • If you are talking to strangers, even if it’s only for two minutes, try to collect some demographic information (gender, age range, level of education, average household income, employment and relationship status). Looking back at your data as a whole, you might see patterns among a certain group of people you spoke to later on. If you’re not comfortable asking, have a system to take notes about your observation.
  • If you only have two minutes, give people a chance to opt into learning more about your startup and stay involved in the discovery process if they are so inclined. You might be surprised how willing people are to talk about their experiences — good or bad — with [X] (ask me about Ipsy!). They might be happy to have you follow up with them when they have more time. Ask politely and they might give you their email address, write them a thank you email and plant the seed for a follow-up down the road.
  • Don’t spam. If you send out a survey to your existing network, choose carefully who you’re asking. Even if you use Facebook, choose your groups and networks wisely.
  • Ask for stories. You want unfiltered honest responses to help you figure out what the problem is and how it can be fixed. Ask open-ended questions, give people a moment to think (get comfortable with silence!), ask them to tell you a story. Instead of asking “Is it awful planning a kids birthday party?” try “Tell me about the last time you planned a kids birthday party.” Dig deeper with more stories:
  • “Can you tell me more about that?”
  • “How did that make you feel?”
  • “What were the biggest challenges in doing [x]?”
  • “What did you like about that experience?”

There is much more information out there if you really want to sink your teeth into customer discovery. And it’s worth it! Remember that a successful business is one that solves an urgent and relevant problem. Rest assured:

Customer Discovery never ends.