Customer Discovery 201: Lesson Four
A Framework for Tracking Customer Discovery Decision Activities
Stakeholders in a company (founders, investors, advisors, and customers) are ultimately interested in customer discovery efforts turning into positive results for the business. To understand discovery data, measure it, and report on performance, founders must go beyond reporting customer discovery “Observation Activities,” like “number of interviews” and “types of different stakeholders interviewed” and report on customer discovery “Decision Activities.” I suggest these three:
1. Analysis and Synthesis Rigor
With so much focus on data gathering, stakeholders must maintain sight of how they process that data. Quantifying these sessions and the findings in these sessions may allow for trend analysis and identification of opportunity and challenge areas for the team.
Founders may not be familiar with the terms “analysis” and “synthesis” as they pertain to research, but they’re certainly doing some of the work. I suggest founders understand two or three broadly applicable frameworks (e.g., 2x2 analysis, clustering and affinity mapping, POEMS) and when to use them to evaluate their discovery data.
2. Insights Collected
I often see founders conflate observations with insights. Insights are more powerful than observations because they include important context about the customer. Insights help founders make informed decisions and prioritize actions.
The designers of VentureBlocks teach that “an insight is comprised of a need and the why. In other words, an insight is a statement that basically identifies a need but also articulates why the need is important.”
Probably just as helpful, they give guardrails on what an insight is not.
Incorrect insights:
- Don’t identify a need that users have;
- Don’t connect the need to the data;
- Misidentify a solution as a need.
3. Determining and Prioritizing Actions
Understanding how a founder analyzes and synthesizes data, forms insights, and then uses that information to make business decisions is a strategic three-legged stool. It can demonstrate a founder’s judgment, business logic, coachability, and more. It provides a wealth of opportunities for meaningful and specific discussion about the factors that move a business forward.
Knowing the steps you can take to better serve your customers is only part of the battle. Startups can experience many barriers to implementation, including resource issues and competing priorities. By reporting on the implementation of informed decisions, you are forcing a prioritization of customer needs in the context of company constraints.
Piloting the Decision Activities Framework
Ultimately, I have engaged in this research to investigate whether there is a potential intervention to the challenges I see with customer discovery in my own startup ecosystem. As the managing director of a university-supported startup accelerator, I have a unique opportunity to ideate, test, and iterate an outcome-tracking system with a small, tight-knit population.
We’re doing it now. Each of the five companies in the Desai Accelerator’s 2023 cohort performs customer discovery monthly and reports on the process, insights, and resulting actions.
They’re familiar with the following analysis and synthesis frameworks:
- Stakeholder mapping
- Thematic clustering and affinity diagramming
- AIEOU/POEMS/AAAA
- 2x2
- Modeling
- Decision Tree
On a brief form, founders note the needs they observed, who experiences the need, why and how they’re experiencing it, and how this information is new and relevant to the business. They’re responsible for sharing decisions from the process and the resulting actions with priorities, progress metrics, and deadlines.
We’re two months in as of writing this. I have my discovery to track as we go.
Other Potential Benefits May Be Achieved Through Decision Activities Tracking
Though arguably not as sexy, there are upsides to Decision Activities tracking beyond increasing the odds of business success. Tracking Decision Activities also:
- Mirrors Familiar Methods of Performance Measurement That May Increase Adherence
Founders are often expected to provide performance reporting with specific metrics to internal and external parties, such as financial pro forma, customer acquisition costs, and user growth. Investors, grantors, accountants, and other parties often require regular reporting by founders. Reporting Decision Activities replicates that familiar experience. - Provides Opportunities for Engaged Guidance from Investors and Advisors
Just as founders can make better-informed decisions with high-quality data, so too can advisors and investors provide better advice when they understand how and why founders act upon information. Founders may benefit from more detailed advice and earlier identification of missteps. Additionally, they will be able to provide investors with more concrete evidence of a path to product-market fit and invite those investors to participate more deeply in that process. - Removes Stigma Associated with Refuted Assumptions and Change
Formalizing the reporting of learned insights and how they inform business decisions intrinsically welcomes the notion of change. Having one’s assumptions refuted becomes a positive outcome because it means you successfully heard your customers. It’s great to be wrong if understanding why your assumptions are incorrect leads to a better connection with the people who matter the most. Reporting Decision Activities may help reduce the stigma and anxiety of a misfire. - Supports an Appropriate Balance of Stakeholder Influence
Measuring outcomes intensifies focus on customer-informed decision-making, generally considered the most direct path to product-market fit. The customer’s significance is kept appropriately at the forefront, which should help to maintain a desirable balance of stakeholder influence. (For more on the balance of stakeholder influence, see Customer Discovery 201: Part Two For Startups Customers Matter Most).
I deeply respect the challenging path startup founders choose and hope this framework can reveal some important innovation signposts early in the journey.
