How I Talked to My First Customers Within Hours of Uncovering My Business Idea (and kept the conversation going)
One of the biggest mistakes you can make when launching your business is developing a product or idea without talking to your customer first. It goes beyond your first customer though (especially when you are your first customer and solving a personal pain point). Many of us want to protect our ideas until they’re perfect, but you gotta get out of your own head and start by talking to other people as soon as you can. You need to be talking to unbiased potential customers in order to catch the problems, trends, and priorities for the right solution. That’s exactly what I did when I first started. I put out my idea to others immediately within minutes and saw instant validation. In the first few months of working on my business, I came to learn something else important about the timing in talking to your customer about your business idea.
Talking to customers doesn’t end after the initial research stage. In fact, if you want to keep up, it never actually ends.
This was my key takeaway from this week’s Founder Institute session I attended on Research & Customer Development. Last week in our company building assignment, they got us to do short interviews with 15 people for our ideas. Just because the assignment is over, doesn’t mean the interviews ever end. Get comfortable continuing to talk about you and your idea over and over again and iterate until something sticks. There are multiple ways that you could (and should) be researching and talking to customers constantly throughout your product development. I’ll share a few ways that I started talking to my customers from the beginning.
“You want to be doing research: Cheaply. Often. Forever.”
-Trevor Coleman,
Co-creator of Muse: the brain sensing headband & Mentor at FI Toronto
I remember when I got the idea for Cost Canvas a few months ago, it came from a pain point that I personally experienced in my work and speculated that others might have as well. I was tired of manually updating spreadsheets and producing cash flow forecasts that expired quickly as the organization I worked for faced rapid changes almost daily. On top of that we subscribed to tons of online tools and apps to achieve our work and the costs fluctuated frequently. I was working on one of those spreadsheets at the exact moment that this idea came to me and I couldn’t already find a solution I would actually use.
The first thing I did was text my significant other (now co-founder and CTO): ‘hey I have a really good idea for an app that we should work on and you can help me with ’.
I explained the idea to him roughly and asked for his feedback, “do you think it’s a good idea?”. We immediately both got really into it (even the prospect of working on something together was particularly exciting). Here’s the raw, unedited and unscripted version of how it went down:
So my partner thought it was a great idea! (but he already thinks pretty much everything about me is amazing 💁🏽). While he was the best first person for me to talk to in order to recruit a co-founder, he was clearly biased. We set up a meeting for that very evening and in the meantime I wanted to validate this idea quickly with strangers before we even spent time working on it any further.
I went into a large forum where I was relatively unknown and where I knew several potential target customers were hanging out and posted a quick poll in a few Facebook groups for entrepreneurs and business owners. Within an hour I got at least a combined 25 responses across all the Facebook polls I launched. Several hours later, I got even more responses and messages about my idea. All of the responses said YES I would use this app and there wasn’t a single no (with the exception of one person who said they already use something else — spreadsheets, the very thing I wanted to improve upon)! I even sparked enough interest to find potential collaborators and initial potential customers that sent me personal messages.
Within an hour of having a business idea, I already recruited a technical co-founder and got instant validation from unbiased strangers — something that can take some startups several weeks, if not months!
It was important for me to know before my 6:30pm meeting with my partner that it was something worth digging further into and if it wasn’t we could go right back to whatever we were gonna do that evening anyway (Netflix and chill?). Polls are a great way to quickly validate early on whether you should throw energy behind something and if you have a customer audience to engage. The best part is that these polls were fast and completely free!
From there we began to brainstorm and created a laundry list of our app’s potential. Knowing we wanted to find the key features in order to build our first prototype and MVP, our next step was to to dig deeper at the customer pain points in order to understand how to prioritize. We launched a quick survey and analyzed the results to see patterns and emerging customer segments. This informed some of our earlier messaging but then we wanted to tighten our understanding further in two-way exchanges with our potential customer. In other words, we had to interview people and really get in their heads to drill down on their pain points, behaviours, and motivations. I will admit that we looked into so many resources and methods to go about doing customer interviews and every day I still continue to learn best practices on the best questions to ask in order to tease out the key information you need! Good thing customer research never stops and it can only get better.
If there’s one thing I would suggest you always have in your customer interviews, it’s inserting the follow up question - WHY?
Ask ‘why?’ at least once, if not twice, thrice, or multiple times until you get to the bottom of the motivation behind the way they do things.
While I did have a script to guide the questions I wanted to be asking, many times we would go off script and I’d find an interesting nugget of info that I wanted to continue to ask about in order to get to the bottom of their motivations. The more we collected data and talked to people about Cost Canvas, the better we were able to shape our product to fit the market and tap into its highest potential. As we went further from arm’s length and got comfortable asking more strangers in various niches, industries, and roles within our potential target audience, we were able to tease out both positive and negative feedback that shaped our product. In fact, after a point I really craved more honest negative feedback from unbiased users so I could really understand all the ways this thing could fail first and how to pivot us towards profit potential.
From consistent customer research, we were able to find segments of people we wanted to be talking to — we called them “Bootstrap Entrepreneurs, Business Veterans, and Finance Super Users.”
We realized that while our solution is great for supporting bootstrapping entrepreneurs, they often would not be willing to pay for a subscription to yet another app. We’d get these users on a free or freemium product, but not as paying users on a subscription model — yet.
Once businesses scale, we wanted to talk to what we called business veterans — entrepreneurs who have built profitable or at least revenue-generating companies and have more than a small chunk of pre-launch capital to work with. They faced different challenges in keeping up with expenses as costs fluctuate based on users, subscribers, storage, and a number of different cost drivers. This segment might be willing to pay for a subscription if we market it right.
Then we wanted to talk to what I called “finance super users”. These were my people: usually in-house finance managers, controllers or CPAs that consult business clients. If a business owner was particularly keen on money management, they might just overlap into this spectrum. It was clear that we didn’t have to educate this market already because they understood the importance of cashflow. They wanted a product that would be a value-add to their customer base or organization and save them time. Some of them already subscribed to add-ons to their accounting software and similar tools that we would integrate or compete with. Most importantly, the vast majority of these customers actually identified the highest willingness to pay for this product or introduce it to their non-financially savvy clients — cha ching!
The mistake we made early on in our customer interviews was not tapping deep into the motivation and decision making because our questions were too shallow. If you aren’t comfortable with sales, get used to asking about money early on. I didn’t insert this into enough of my first few interviews, but it’s important to ask questions about price sensitivities.
Ask questions like — If I had this solution available right now, would you pay me? What would you be willing to pay? Would you pre-pay me at a purchase discount to be the first to use this solution?
These money questions were the ones I forgot to ask in my first few interviews and when I began asking, that’s when I really started digging into my market potential and priming myself to better understand my revenue model. It’s not enough to have someone tell you they’d use your product because it’s useful. You need to prove your product has a selling point that actually sells.
Identifying your potential customer’s willingness to pay for your solution is what actually validates your company from having a viable idea, to having a viable business.
On a final note, while you do want to be respectful of everyone’s time, one thing I learned and noticed was more often than not, people love talking about themselves and are actually happy to be helping out! Once you talk to someone interested, ask if they’d be willing to keep in touch, provide follow up insights or stay in the loop with your company. I turned many potential customers and strangers with unbiased opinions into friends, colleagues, and future collaborators. You never know what follow up and opportunities will emerge.
So there you have it — that’s how I started with polls, surveys, customer interviews and then improved on those customer interviews. The customer research won’t stop here. We’ve really only scratched the surface. As we progress, we are going to look at doing A/B landing page tests, Facebook and Google Ad tests, Product UX and usability tests, and experiment with other methods to get deeper with data into our customer’s mind and motivations.
P.s. I’m challenging myself to talk to at least 3 potential customers a week as I launch my product. If you’re interested in chatting and potentially shaping my early product features, drop me a line at danielle@costcanvas.com or Tweet at me @daniellecadhit
