Interviewing customers is a little bit like taking vitamins or brushing your teeth. We all know it's good for us, but we don't like doing it.
It seems confronting and uncomfortable and unless we know WHEN and HOW to interview people, we will not generate any insights that will help us make better business decisions.
For a startup, there’s one key benefit to interviewing customers, which is so important that it’s impossible to overstate it.
One good conversation with the right people can very literally save your business.
Get to know your customers and their needs and you’ll quickly know which of your key assumptions are wrong before you even build anything. You’ll get a free reality check and save months of time and precious resources you’d normally spend developing your product.
As a result of a few good customer interviews, you will know exactly who your customer is, what their problems are and how willing they are to solve them. You’ll know what to build and what not to build.
A classic business framework distinguishes three types of risk a new business faces: financial, product and market. Since our concern here is product-market fit, we’ll focus on product and market risk and how the nuances in these risks shape the need to interview potential customers.
Market risk is expressed in these three questions about your customers: “Do they want it? Will they pay me? Are there lots of them?”
Ventures with high market risk are providing new products and services or identifying new opportunities to solve existing customer problems.
There are two ways to address market risk:
Product risk is the risk that you may not be able to deliver the full product/service to your customers with the resources that you have available. Ventures with high product risk know what they’re building and compete on price or value. For example, if your main selling point is a 10 times cheaper solution than what already exists on the market, your main risk is that you may not actually be able to deliver what you promise. In other words, if you deliver what you promise, you know you have a business. The risk is your ability to deliver on the promise.
Three high-level ways to address product risk are:
Here’s the good news. Once you actually get the hang of it, interviewing your customers is straightforward, fun and extremely rewarding. Once we get past the initial barrier, it’s nothing like what we think it is. Let’s look at the four rules for getting real insights out of your potential (and actual) customers are:
Your goal when interviewing customers is not to get a compliment on your brilliant startup idea. It’s to learn how people actually behave and what their real motivators are. When your goal is to learn about your customers, you don’t even need to say you’re working on a startup, or tell them what your business is. What matters is learning more about your customers’ reality and what’s really a problem for them and what isn’t.
People love expressing opinions. Problem is, they rarely act in line with the opinions they express. We’re also more optimistic about the future, making speculative insights unreliable. If you’re looking to generate real customer insights ask about specific behaviours and situations in the past. Ask your customers to describe exactly the situations around the problem you’re solving — it may not even occur to them as a real problem worth solving. If it is a problem though — dig deeper. Ask if they looked for a solution and if they’ve paid for one. If they just complain about the problem but never searched online for a solution, it’s likely the problem isn’t a real one. If they did pay, what convinced them? What was a detractor? What was their concern? Were they happy with the solution?
A good interview is for you to learn about the specific behaviours of your customers. And you can only do that if you listen, not talk. But as you’re probably excited about your business, you will be tempted to share what you’ve been working on. This would be a mistake unless you’re seeking to specifically verify if the customer is ready to make a purchase decision. The interview is not a pitch.
A good pitch should end with a clear sign from the person you pitch to — either a yes or a no. A lukewarm ‘maybe’ or a ‘keep me updated’ will only result in you getting needlessly excited or sidetracked. But to get a clear signal, you need to ask directly. Pitch your offer and at the end ask — If you love the idea so much, I can take your order right now. Would you like to proceed? Or at the very least — Will you introduce me to the decision-maker in your company? When pitching, get a clear commitment or a ‘no’. A clear ‘No’ is worth more than a ‘maybe’ — remember you’re trying to build a real business and those are not built on compliments.
You’ve had to hustle together some money to start this business — it’d be much better if you spent just a bit of it learning what you really should be doing, than burn through all of it doing the wrong thing. Customer interviews are the perfect opportunity to learn some of these things early on.
The great way to always have the most important questions in front of your mind is to prepare in advance. Make a list of the 3 most important things you want to learn from each type of person — eg. customers, investors, industry experts, stakeholders, and decision-makers. Don’t worry about ‘getting it right’ — put down questions that seem the most important to you right now, they’re a great starting point. As you go through it, the questions will evolve and you will continue to refine them as you learn.
For more in-depth information on how to talk to customers, I highly recommend ‘The Mom Test’ by Rob Fitzpatrick. It’s a quick and easy read and will give you tons of useful tips.
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