Learning about your customers may seem obvious to first-time entrepreneurs. However, for many founders, the moving pieces of a business sometimes gets in the way. We lose sight about what is important to the customer and, as a startup, we forget that we are providing value to the customer. During the Summer Venture Program (SVP), Keith Hopper, one of the advisors, delivered a customer learning workshop for our participants. During the session, Keith provided an overview of the process of customer learning and shared different methods to address learning goals.
Keith started the session by asking the group “why is customer learning important?” He showed an important quote by Steve Blank, “No plan survives first contact with customers.” Keith shared that the reality is that many founders who go through the customer learning process often feel disappointed that they didn’t go through the process earlier. Keith suggests in order to avoid this disappointment, go through the process of customer learning often, daily in fact. The key is to shorten the time to takes to understand your customer. As a startup, the focus for the founder should be to create an environment that optimizes learning. “Think of your organization as completely staffed and operationalized to learn, so you can actually how to BE a company,” Keith stated. Having this mindset can change the activities your startup goes through.
Keith had all of the SVP teams go through an exercise to identify key assumptions each of the startups had about their ventures. The focus during this exercise was “What about my product/business if proven wrong, will keep success from happening?” Based on these key assumptions, the participants then mapped out their assumptions based on impact and effort. The objective of this exercise was to help prioritize the assumptions and ultimately, identify learning objectives. By focusing on these learning goals, entrepreneurs can visually see where they should focus on their energies to make the most impact for their venture.
Once the learning objectives are identified, Keith shared that there are different methods to learn about your customers. The first is structured interviews. As it sounds, these interviews have initial questions that you have already thought about for your customers. Structured interviews are particularly helpful when:
- Trying to determine if you have the right user base
- Confirming the customer problem: is the problem you think the customer has actually a problem?
The second method is to conduct value tests. Keith shared that these are tests are
when you try to deliver value without actually building out your product. According to Keith, you can do this by showing your product or prototyping a demo. The objective in doing this is to see how customer respond. The other way is to manually, and creatively, provide value to customers without building a product. Keith suggests only to conduct this type of test with a few customers.
The third method is commitment tests. This is asking for some type of commitment, whether it is time, intros, maybe money. People always “promise” things. These types of tests will reveal how customers actually behave. Several ways to conduct commitment tests include:
- Having a pilot: in other words, selling an early version of the product
- Pre-selling: the most popular way is to crowdfund
- Letters of intent: this is primarily for B2B sales
Customers are key to any startup, regardless of industry. Without customers, there can be no venture. As you think about how you can provide value to your customers, remember that you need to continuously learn about them and their behaviors. The only way to do this is to go out and interact with them.