Keys to Customer Discovery

When you venture forth as an entrepreneur, exploring new innovative territory that you want to build into a business, it is crucial to validate that your product concept resonates with your target customers. That is the essential function of early customer discovery.

I just watched the movie Air, about the original signing of the legendary Michael Jordan by a scrappy, struggling athletic shoe company called Nike back in 1984. It was a great movie – with lots of nostalgia tugs for the decade I was in high school and college. A couple of great scenes also showcased some superb customer discovery work.

In Air, Sonny and his fellow Nike basketball talent scouts debated who they should target for potential endorsement deals. But, Sonny himself was far too expert in the basketball space to be able to rely on his own perspective regarding what regular basketball fans thought and would relate to. He needed to connect with the everyday committed basketball fan. So, when Sonny was picking up something quick at a convenience store and noticed that the store clerk was pouring over a basketball magazine, he seized the moment to have a chatty customer discovery conversation, illuminating the perspective of a committed fan. To get authentic input, Sonny did not tell the fan that he worked for Nike, was involved with celebrity basketball endorsement deals, or anything like that. Once he realized he had run into one of Nike basketball’s target customers, he just asked a few quick open-ended questions and listened carefully to the answers. Those customer discovery encounters were critical steps for Sonny to validate his hypotheses about the basketball fan marketplace, and they helped convince this basketball talent scout at third-place Nike to bet everything on convincing an NBA rookie Michael Jordan that a Jordan-Nike partnership could be epic.

Just like you may, with your startup-up, ultimately bet it all. The importance of early customer discovery is that you will be betting years of your life – and lots of your own and others’ blood, sweat, and tears — on what you are developing, and you want to know upfront early that this is an opportunity that your customers will easily understand and be willing to buy into. My recommendation is not to make that bet until you have tested your concept with solid customer discovery.

Lately, I have been engaging with various early-stage founder teams on this particular aspect of the entrepreneurial journey, which is why the customer discovery scenes in Air caught my attention. Here are some of the techniques and tips I have been sharing to help these founding teams to help them succeed in their customer discovery explorations:

First question >> Who precisely are the people you anticipate will fork over their money for your product?

This is the essence of designing a business. Unless you anticipate someone paying for your product, you are not designing a business. Since we are assuming that your startup is intended to be a money-making business someday, you will need to be able to identify the group of people who will have an unmet need that your product or service will meet. Your target customers are the people who will want to pay you for the value you are providing.

Most likely, you should assume that you and your founding team are not your target customers, even if you have great insight into your market space. At a minimum, this will be true because you will become an expert, and you will likely spend far more time thinking through the problem you are trying to solve and possible ways to solve it than your typical target customer. In addition, you will often bring your special insight and expertise to solve a problem for another group in the ecosystem so you aren’t the target customer.

Here are some examples to illustrate who are the target customers for different types of product innovations:

• If you are developing a medical device used in surgery, you want to talk to the particular type of surgeon who decides whether to use your device for a specific surgery. Talk to spine surgeons about spinal implants. Talk to orthopedic surgeons about a new joint implant. Talk to cardiovascular surgeons about new heart valve technologies. These are the people who will decide whether to use your device in any given patient scenario.
  
  
• If you are working on a scientific instrument, then talk to the scientists who are doing the type of science that would benefit from your instrument’s special features and who would be the ones who might want your instrument in their lab.
  
  
• If you have an app to help emergency patients get better care, talk to people who might go to the emergency room. If they are the ones paying for the app, then they are the ones you need to talk to.
  
  
• If you are designing a better wind energy power generation method, then talk to those who might be buying it. If it is utility-scale, you need to talk to the wind farm developers specifying the technology. If it is small scale, you need to speak to people interested in buying something like that, such as commercial or individual energy consumers.
  
  
• If you are developing a digital health product for diabetes patients that will be covered by insurance, then talk to both the patients who must use it and the insurance company decision-makers who must be convinced that your product should be covered.
  
  
• If you are developing an AI-enabled service for cleaning compliance, talk to cleaning crew managers at organizations who have a business need demanding clean.
  
  
• If you are building an electronics QC product to improve manufacturing, you must talk to the manufacturing engineers who spec and manage those manufacturing processes.
  

Delighting your target customers goes a long way toward having a compelling value proposition that will form the foundation of your business. 

Second question >> How will you find and engage your potential target customers to get their feedback on your product concept?

Once you are clear on who would be the buyer of your product, then that is who you want to talk to. To do effective customer discovery, start networking. Hopefully, you already know a few people who would be potential customers in your market space. Or this could be the first test of your entrepreneurial creativity. Ask the people you know if anyone knows someone who meets your target customer profile. Talk to your friends, colleagues, family members, neighbors, and social media contacts. Explore professional associations. Even make cold calls. When you connect with one, ask them who else they can introduce you to.

It is critically important to realize that if you are genuinely doing something that provides value to and meets an unmet need for your target customers, they will often be interested and excited to talk to you. One of my most reliable clues that we are onto something valuable is when the target customers get excited and want to discuss this potential new innovation. I have had people say, “Please don’t leave me out!” and “Call back any time for more input.”  These are good signs. It is a warning flag if you cannot get potential customers to talk with you without paying them. When you are on to a good idea, your customers will want to help you solve their needs as quickly as possible.

Be careful not to stack the deck in your favor artificially. You do want to find the full spectrum of potential customers. Those that love your idea. Those that are neutral. And a few that are not that interested. This is how you get a picture of what your potential customers think and how likely it is that you will be able to find a sufficiently large market for your startup.

Third question >> How should you conduct those early customer discovery interviews?

In the early stages, when you can connect with a potential customer, try to keep things informal. This is not the time for a formal survey. This is the time for discovery. Here are some suggestions and strategies for how to approach these early customer discovery interviews (which I am contrasting with later-stage design feedback interviews):

• You should be prepared to provide a high-level description of the problem you are trying to solve – and then validate your understanding with open-ended questions. Ask if they can relate to the problem you mention. Is it really a problem? How do they deal with it today? How do they wish they could deal with it? Do not assume that they care. Listen for signs that they do. Do not start with your potential solution.

• Most importantly, you must listen. If you are talking and selling your concept, then it is not a discovery interview. You want to seek to understand the perspective and point-of-view of your potential customer, not sell yours. Do not educate. Discover what they may not realize. Notice any patterns or points of confusion. These will be issues you will need to overcome later. Your empathy is essential; seek to put yourself in their shoes to be able to hear very carefully what they are saying and are not saying.
  
  
• If possible, meet your potential customers in their natural habitat. This allows you to observe their situation and gather insights into the context where your product will be deployed. There is nothing like seeing post-its everywhere or noticing the high level of noise and interruptions to get a feel for what your product design will have to contend with.
  
  
• Be careful how you react to what your interviewee says. You want to make it safe for them to be direct and honest. Respond appreciatively to anything they say, and especially any concerns they raise. Feel free to ask clarifying questions to understand what they mean (‘Can you tell me more about how that feels/works?’), but do not argue with them. Remember, they are the expert on their world, and you are trying to understand that world, not convince them they are wrong about their world.
  
  
• Release your need to show that you are an expert. It is far better to be humble and position yourself as someone eager to learn. If you can, it is ideal to position your target customer as the expert in the conversation.

• Some ask me how many interviews they need to do, and there is no exact answer. I keep going until I hear the same themes over and over. I start with about five to get the lay of the land and then keep going to at least twenty-five before I really commit to building the business. And then, my team and I continue to chat with people in our target market about what we are doing and the problems we are solving to continue to test and build nuance into our understanding.

Good early customer discovery is one of the most important keys to succeeding as an entrepreneur. Good hunting!