For this post I borrowed Steve Blank’s framework for Customer Discovery, found in The Startup Owner’s Manual, to illustrate the importance of vigorous customer development in early stage startups. Every so often, during an entrepreneur’s pitch, the target customer’s concerns are glossed over or worse it is apparent the entrepreneur has not interviewed enough target customers.
It is crucial to answer the following questions by conducting interviews with at least twenty target customers:
What are your target customer’s top problems?
How much will they pay to solve them?
Does your product concept solve the problems?
Do customers agree?
How much will they pay?
Diagram a day-in-the-life of a customer
Before and After the product
Simply observing the initial reactions of target customers, as the entrepreneur describes or demonstrates the product, will prove invaluable. The interviews will provide a wide array of perspectives enabling the entrepreneur to ascertain whether to persevere or pivot the concept. Ideally, initial interviews are conducted before a line of code is written and certainly before someone has quit their job. As the product and business model are developed, continue to check in with target customers to ensure the product is still on the right track.
During an investor presentation it is imperative to clearly communicate the pain the customer feels and the relief your product or service will provide. Be blunt, be specific demonstrate the pain of an individual customer: what their world looks like today and what it looks after they are using your product. Shy away from generalizations and instead introduce “Bruce” and explain what makes him tick, what’s important to him and how he will be beating down your door after he learns of your product’s existence. Clearly articulating the findings of your vigorous Customer Discovery process will set you up well for the remaining portion of your pitch.