9 tips to get better at the black art of customer development

Admit it: you have, at some point, thought that you just didn’t have time to talk to your customers. There’s just too much on your to do list. Anyway, if you would ask them what they want, they would say something like “faster horses”. And Steve Jobs didn’t ask consumers what they wanted, and you are on your way to become the new Steve Jobs. Right?

Well, not exactly, says Ian Collingwood, founder of UXdna. Not talking to customers – or thinking they don’t have to – is the number one mistake that businesses and entrepreneurs make. You should get out of the building – early and often. And here are 9 tips to get a lot better at it:

TIP 1: don’t outsource talking to your customer

Ian Collingwood: “You could argue that creating a customer is the sole reason that a company exists. So if you’re “too busy” to talk to them, don’t be in business. We have helped companies who outsourced their call center. To me, that’s the height of insanity. If you can’t be bothered to speak to your customers, then it’s pretty clear that someone will steal them from you.”

At that point, Ian says, he tries to convince his customers to take the call center in house. “Then they say: but that’s a real pain. You don’t know how difficult that is! Yeah, but that’s how it is. Contact with your customer is not a cost to minimise. It’s an opportunity to be maximised.”

The excuses he hears are plentiful, he says. “We’re too busy doing X – building product, reorganising. Or they’ll tell me: we have a department to do that. But I think everybody should be talking to customers. That’s probably the number one issue for a business.”

It’s not that people resist the idea. “Everybody agrees that it’s a great idea. But it’s not as simple to do – you have to learn to listen to customers and understand them. How not to simply confirm your own biases.”

“It also means that, as an entrepreneur, you can’t outsource this. We always teach more than we do – we will mentor you and hold your hand, but we feel you failed if you didn’t do it yourselfs, especially in the early stages. We say that in every slideshow: you cannot outsource this.”

TIP 2: decide who is not your customer

The first step as an entrepreneur is to decide who your customer might be, says Collingwood. The easiest way to start is to imagine who your service or product is NOT for. “It’s tempting to say: it’s for everyone. Then I usually ask them: ah, so you have a 100 percent conversion rate? (laughs). When they admit that, of course they don’t have a 100 percent conversion rate, they start to see that maybe it’s true that there are some people who the service or product is not for.”

TIP 3: think in behavior, not demographics

“Try to zero in on things that are more useful than “we’re targeting girls between 16 and 24 with middle to high income”. That’s not useful for you. Try to tell me what music they listen to: that’s very hard. Instead, think of behavior. That is really what supermarkets do, you know. If you buy razors, you’ll probably also buy shaving foam. If you buy diapers, you’re very likely to be in the market for babyfood and baby wipes.”

“Going back to our 16 to 24 year old girls: if I tell you that these girls are wearing mainly dark clothes, watching vampire films and that they wear heavy silver rings, you might have a clue to what music they listen to.”

TIP 4: every product starts as a niche product

Geoffrey Moore urges tech companies to concentrate on a “beachhead” – a small market of customers who regularly talk to each other (about you, preferably).

Collingwood agrees with the idea that you should focus on a very particular niche first: “As a startup, it’s the only chance you have. You have to find a customer as soon as you can. But it’s not too much to say that every mass market product began as a niche product. Even the iPhone. This wasn’t a phone for everyone. It didn’t have 3G, to name one thing. It was a phone for Apple fans and people who like design. The thing is: if you serve this particular niche very well, the problem probably exists in other areas too. Look at spreadsheets: they were developed for accounting and finance, now they’re the most widely used tool in the world. People use it for everything.”

TIP 5: avoid selling like the black plague

Collingwood: “There is a point where you need to sell, pitch the product and handle objections. But that comes later. While you’re doing customer development, you have to completely shut down that side of yourself as an entrepreneur. The best way to go about is to tell people: I have no product yet, and I have nothing to sell. No prototype, no code, I just want to understand this industry.”

“I think it will also help you to pin people down, if they can see that you honestly, from the heart, will not try to sell. Once you’ve done the first interview, ask for introductions to other contacts.

TIP 6: don’t waste your own time

Since it’s not always easy to catch an interviewee, you should make the most of it when you did manage to pin one down. “What I see all the time when I mentor people is that they tell me why I’m wrong and they’re right. I’m not there to prove that I’m wrong, but to help you question whether you are actually right or not. You should try to get in a mental state of practised self doubt.”

“Your goal should be to balance listening to the bad news and spotting the good news. If it becomes clear that your idea isn’t what they need, but they tell you a real opportunity: don’t discard it. One client spent a good deal of time doing customer development, going out, finding out. As I was looking at the notes, I said: what about this opportunity? And he said: no, I don’t want to build that. That’s fine, but don’t throw it away. Don’t be too narrow in your focus. You’re in the early stages, you’re exploring.”

TIP 7: check the problem that you defined

When you have the meeting, says Ian, it’s important to really get a feel for how important your problem is in your subject’s life. You can easily check how important a problem by asking: “When was the last time you had this problem? And also: what did you do to solve it.”

Ian: “Entrepreneurs often bump into a problem and think: ah, this must happen all the time. But ask people: when was the last time you had this problem? If they say, “last year”, maybe it’s not really such a common problem. Also, ask them how they solved it last time. If they say: I didn’t solve it, then maybe your solution will just not be compelling enough for them to bother.”

“A good example is parking. Yes, parking is a pain, and finding a parking space isn’t easy. There’s a number of startups who deal with this. But a lot of these solutions involve booking a space ahead of time. Really? Parking is a problem, but not such a problem that I will book in advance. So the current solution isn’t great, but your solution is not good enough for me to change behavior. If you require people to make a big change in behavior, you have to ask yourself: is it likely for them to do this?”

“I think humility and empathy are very important. For you, this product is immensely important. For most people, it’s not. Assume that your product is insignificant in their lives.”

TIP 8: look for patterns

You will end up with a lot of information. So much that you’ll have the feeling that your validation made your idea less clear than before you went in. How to deal with that? Look for patterns, says Ian. “Some sort of common occurrences around the nature of their problems. Most good methods to discover these involve writing them on post its and clustering the notes into themes. Sometimes what you’re looking for are two ends of a continuum of customer behavior and need.”

“Say you’re doing something about vacation rentals. You’d probably find that there are landlords with dozens of properties, but also people who rent out their home as a bit of a hobby. Focus on one type of customer, and think of a product that will be useful for that particular type of customer. What’s the most common problem for those landlords with multiple properties? We’ll focus our MVP feature on solving just that.”

“Suppose you’re so overwhelmed that you have no idea how your MVP should look – you have ten possible features but you don’t want to build an MVP with ten features. You could try to get people to make some decisions about which are the really important ones. Instead of just ranking them, you should also try to get a feel for how important they are for people. You can do that by saying: well, suppose you have 100 € for all these features, how would you allocate that money? And they would say: I would give 70 € for a feature that does this or that. That’s better than a ranking, because it tells you about the priority, but also about the magnitude of the problem.”

If you come away with the impression that all this isn’t easy, that’s because it isn’t, says Ian. “It is hard. You need some experience to get what people are saying – or what they’re getting at instead of just what they say. That’s part of the art of interviewing.”

TIP 9: try to make your test subjects expend ‘currency’

Beware of people who say they “would definitely buy” something. People are notoriously bad at predicting what they will and will not buy. Then how can you be sure that they are interested? It’s when they spend any kind of currency, says Collingwood. “Currency is anything that costs them something. Saying that they would definitely buy your product, or “give me a call when you’re launching” is free. A compliment is not currency. Currency is: a deposit, or some kind of commitment.”

“Or at the very least, and introduction to someone who makes the decision. That’s a small sign of validation. It’s not a sale, but they wouldn’t do it if your idea was crap. A definite next meeting is currency – if it’s in their diary, at least. Otherwise it’s free, you see?”

More on getting out of the building:

Customer Development Interviewing Tips from Ian Collingwood

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About the author

Raf Weverbergh

Editor of whiteboard. Raf Weverbergh was a magazine journalist whose work appeared in magazines like Rolling Stone, Playboy, Mail on Sunday, Publico and South China Morning Post. He is the co-founder of FINN, a corporate communications agency where he advises startups and multinationals on their PR and Mustr, the easiest media database for PR professionals. You can contact him on Twitter, Linkedin or Skype (rafweverbergh).

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