PRODUCT DEVELOPMENT
Decide Who to Interview to Acquire Unique Customer Insight
Learn who to talk to in order to acquire the unique customer insight your startup needs to succeed
Startup founders have a limited amount of time and will have to prioritize wisely. Ultimately, spending a lot of time talking to the wrong people leads to bad product decisions. Who you should talk to depends on your product or service, but can be divided into five categories:
1. Customers
2. Previous customers
3. People in your current target market
4. People in your future target market
5. Domain experts
Spend the majority of your time talking to current and previous customers if your primary goal is to improve retention. These people can help you understand what they like and don’t like about your solution, and help you modify it to increase your number of repeat customers.
While trying to acquire new customers, I recommend founders to use more time talking to potential customers. This is because potential customers can explain why they are not current customers and offer valuable insight into the startup’s product offering and marketing strategy. Such conversations also typically have a high sales conversion rate.
During the first phases of the startup lifecycle, the founders should improve retention and acquire new customers, putting slightly more weight on customer acquisition right from the start. As soon as a small customer base is built, from which the startup can gain valuable insight, most startups would profit from focusing more on customer retention activities. Building a product that the customers love and use regularly is usually cheaper than inorganic acquisition of customers and will also drive organic growth.
It’s better to make something that 100 people love than something that 1 000 like
According to Peter Thiel, startups should always start with a toy market where they can develop a monopoly. The more concentrated the market is in terms of where you can reach the customers, and how they are dealing with the problem, the better it is. Try to learn as much as possible from these initial customers, and then expand to new markets.
To make the expansions as successful as possible, it is important to talk to some people from the markets that you are planning to expand to. This will help you make sure that your product can easily be further developed into a product that will solve these customers’ problems.
It is possible to get valuable insight from people who doesn’t have the problem your startup is trying to solve. Founders should consider speaking to creative people who have a proven product development track record and possess strong domain knowledge in a relevant domain. Such people might have ideas that aren’t that easily visible to customers or potential customers.
If I had asked people what they wanted, they would have said faster horses
Most entrepreneurs have heard Henry Ford’s famous quote. Luckily, the car was made and quickly became the preferred mode of long-distance transport. The quote doesn’t challenge the value of customer interviews, but rather magnifies the importance of seeing insights acquired from customers in a bigger picture, and not act solely based on information from customers. Customers don’t always know what they want, but they have an impressive ability to talk about their problems.
While talking to customers, it is important to try to understand why they are saying what they say. Identify what insight that will lead you to truly building a better product and what information that is unimportant or only relevant for the interviewee at hand.
[1] Ivi Kim. “Is Customer Acquisition or Retention More Important?” (June 2019).
[2] Patrick Vlaskovits. “Henry Ford, Innovation, and That “Faster Horse” Quote” (August 2011).
