The Lean startup methodology drives most tech startups today, and rightfully so. However, this methodology has been around just long enough to the point that people are messing it up. It’s called “lean” for a reason: it’s simple. Keep it that way. When I lead my 1DX (1-day Accelerator) seminar, it’s about getting to the truth quickly and effectively by working on the most basic things that drive any successful business. Here’s all the accelerator your startup needs, if you go about it with everything you have and be honest with yourself about your results and your objectives.
Learn the Startup Customer Discovery Methodology
No, I do not expect you to master startup customer discovery in 5 minutes. Customer discovery is about learning. If you think your “startup” is a “business”, you’re already on the wrong foot. Steve Blank said it very clearly:
“A startup is an organization formed to search for a repeatable and scalable business model.”
Until you have a repeatable, scalable business model, what you have is not a business. It’s a startup. Therefore, your only job – your only objective – is to learn.
What Startup Learning Looks Like
- Discover a problem worth solving – we build startups that are painkillers, not perfumes. Unless you are solving a problem, relieving someone’s pain, you are selling perfume. Perfume is a luxury anyone can do without, and when an economy goes south, only really rich people buy perfume. Find a problem.
- Discover a market need – Once you discover a problem – a real, big, market-wide problem, then you move on to the “need”, which is a solution. You don’t have the solution. Repeat: you do not have the solution. Yet. That comes next, after validating the problem. See #2 below.
- Make assumptions (hypotheses) – A hypothesis is a very specific theory waiting to be tested. I say “very specific” because testing vague ideas is just guessing and believing your own press releases. Your hypotheses must closely resemble the scientific method. Hypothesize something that you can definitely prove or disprove. At this stage, your hypotheses will be about the problem you think you’ve identified.
- Test (customer interviews) – The only – ONLY – way to test a startup hypothesis is to get out of the building and talk to real people who may (or may not) have or live or know about or see this problem you think you’ve identified. Your questions will be really simple, like, “How do you do X today? How long does it take? How much does it cost? What happens if it doesn’t get done?” You’re learning about the problem and how the problem gets solved today. Note: how the problem gets solved today is your biggest competitor. Changing people’s routines is very, very hard.
- Learn – Your only goal in talking to these people is to learn. If they end up being an actual target audience for your startup later on, then you have learned all about them and, with any effort at all, built up the beginnings of relationships with them. That will come in handy when you have a real solution to a real problem. We call this process “customer discovery”, because, in the end, you’re discovering who your customers are and everything about them that you need to know to build a business that meets their needs.
Develop a Problem Statement
Here’s a great resource article for how to develop your problem statement. The importance of the startup problem statement cannot be emphasized enough. Here’s why: when you correctly identify and articulate a problem in a market space, those people who live that problem every day will hear you loud and clear. On the other hand, when you’ve crafted a great problem statement, those who do not get it do not have the problem you’re intending to solve, and they self-identify out of your target audience. They are not your customers. Contrary to how that might feel, it’s really good when you learn who is not your customer for your startup. That’s almost as important as learning who is your customer.
Develop a Hypothesis for a Solution
If you’ve executed well on steps 1 & 2 above, then you should have a solid problem identified. Please note that, at this time, you do not have a solution. You haven’t written the first line of code or put the first design on the back of a napkin. You’ve discovered and validated a problem. Now, can you solve it? How? Again, you don’t know yet, so this step is about learning.
How did you learn last time? By talking to potential customers. Do that again, but this time, you’re talking to the same people you talked with before. Those people have or live this problem, and now you’re going to them with a hypothesis about a solution: “If you could do X, would that solve this problem for you?” Note: it’s at this point where Henry Ford and Steve Jobs would tell you to go pound sand. If you’ll recall, Ford famously said, “If I had asked them what they wanted, they would have told me to build them a faster horse!” Jobs’ words were something like “They don’t know what they want until you show it to them.”
You are not Henry Ford or Steve Jobs.
Discover A Customer Segment
Can you serve every possible customer in your entire addressable market on day one? Just say “no.” You can’t. First, you can’t reach them all, and second, if you could reach them all, you don’t have the capacity to serve them all. So where do you start? One customer segment. A small group of customers that exemplify the best examples of the problem you validated and the use of your solution.
And guess what? You’ve already spoken to them! That group of people you’ve now talked to 2 or 3 times? If you’ve done it right, they’re looking forward to hearing how you’ve solved their problem. These people are your first users, your “friendly” customers. These are the folks you trust with the first, crappiest version of your solution because you know it will work, even though it will be sloppy, ugly, and buggy. Your startup’s best customers will forgive those things if you solve their problem.
Develop 3 Solid Customer Discovery Questions
This one might seem out of order, but I’ve saved it to the end for some very specific reasons. The questions you ask in customer discovery are vital to the success of the whole exercise. Here are 4 guidelines to follow with your customer discovery interview questions:
- You are not selling. There is nothing to sell at this point. You are learning. Ask questions accordingly.
- If your audience can answer your question with “Yes” or “No”, it’s wrong. Always ask open-ended questions. When you land on a problem, people will want to talk about their problem.
- Customer discovery is NOT market research. Do not confuse the two. Customer discovery has a very clear objective: discover and validate a problem, then discover and validate the solution.
- Always ask “why?” and keep asking “why?” Again, you’ll be surprised at the answers you’ll get. You will learn more when you ask “why?”
- To get the interviews, remember point “a” above: you’re not selling. You’re working on a project, learning about this certain space or thing or process in a very specific market. You’re asking people to talk about what they do all day every day.
Know Your Customers First
Customer discovery is the first step to building a startup into a valid business model. The principles of deep, hard core customer discovery built most startup accelerators. The better you know your customers, the better you can solve their problems, and that’s how great businesses are built. These steps are the core of customer discovery. Execute them to the nth degree, and you can build a great business.
Most “entrepreneurs” fail at this stage.