Customer Validation for Startups

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Customer validation is the ONLY way to know that you have a real business that solves real problems. Even if you think you've validated, read these tips and go validate again.

Published in: Marketing, Business, Technology

Customer Validation for Startups

  1. 1. CustomerValidation & Development for Startups Founder Institute Workshop January 2015
  2. 2. “At least 2/3 of our ideas are never going to work.The other 1/3 will take 3 to 4 iterations” ~ Marty Cagan, SV Partners
  3. 3. WHO? WHAT? HOW?
  4. 4. WHO? WHAT? HOW?
  5. 5. Everyone can use my product! WHO? WHAT? HOW?
  6. 6. Segments Size Pay Accessibility Source: CustDevLabs SPATreatment WHO? WHAT? HOW?
  7. 7. Segments Size Pay Accessibility Tour Guides Health Centers Beauty Salons Source: CustDevLabs SPATreatment WHO? WHAT? HOW?
  8. 8. Segments Size Pay Accessibility TOTAL Tour Guides 2 1 3 6 Health Centers Beauty Salons Source: CustDevLabs SPA CONT’D Size Pay Accessibility Score <100 -$ OR -pain Weeks 1 1000+ $ OR pain Days 2 10000+ +$ OR + pain Hours 3 WHO? WHAT? HOW?
  9. 9. Remember! NO PITCHING. HYPOTHESIS. Validate and score the problem hypothesis/ values and wastes for the customer ASSUMPTIONS. Prove or disprove assumptions PAY. Find out if they will pay for your service/product WHO? WHAT? HOW?
  10. 10. On the street In a lineup/events YellowPages Rapportive Hack Craigslist, Quora, Reddit, Twitter, LinkedIn MTurk (B2C) Fake Ad & Landing Page WHO? WHAT? HOW?
  11. 11. Cold Email or Call (B2B - no pitching!) Online surveys Face to face interviews Observation Kickstarter/IndieGoGo WHO? WHAT? HOW? Pro Tip: if you’re sending cold emails or doing cold calls, you will have double success rate on follow ups.
  12. 12. Validation Board
  13. 13. INTERVIEW DO’S Understand motives Drilldown Observe behavior & feedback separately Look for negative feedback Ask for introductions WHO? WHAT? HOW?
  14. 14. INTERVIEW DON’TS! Ask leading questions Ask hypothetical questions Act like the project is your baby WHO? WHAT? HOW?
  15. 15. WHO? WHAT? HOW? How time-consuming is this process? HOWTO ASK INTERVIEW QUESTIONS
  16. 16. Better Way Tell me about this process... Interesting, why does it take x minutes? Right, have you tried alternative methods? Why or why not? How time-consuming is this process? WHO? WHAT? HOW? HOWTO ASK INTERVIEW QUESTIONS
  17. 17. Do you like this idea? WHAT?WHO? HOW? HOWTO ASK INTERVIEW QUESTIONS
  18. 18. Better Way How do you see this idea fitting in with your life? What does it change for you? Would you tell your networks about it? Do you like this idea? WHAT?WHO? HOW? HOWTO ASK INTERVIEW QUESTIONS
  19. 19. MORE INTERVIEW GOODNESS... UNDERSTAND the customer’s story in their OWN words Measure (rating 1 to 5) the IMPORTANCE of the problem (for each customer segment) Pinpoint their PAINS & VALUES and weigh the importance on each What OTHER solutions are they using? Have them define their DREAM solution If you are doing a demo of concept or pitch, do this last and NO PITCHING! Try to get a currency (cash, development, time, referrals) WHAT?WHO? HOW?
  20. 20. ! So Mr. Stevens, the premium CRM license is $5000, which can finally get you guys off that nightmarish paper system — I think you’re going to be able to save a ton of time. Thanks Rob, that sounds great. You guys are really delivering a lot of value for that price. Let me talk to my team and get back to you. ! So Mr. Stevens, you guys are able to stay on top of a huge number of deals and I was wondering — how do you manage it all? Well Rob, we’ve tried a bunch of digital systems, but the training was a pain and it always seemed like more trouble than it was worth. We really only have about 5 active deals per partner and the post-it wall works fine for that volume. LISTENING vs SELLING The StartupToolkit,The MomTest WHAT?WHO? HOW?
  21. 21. Observation Score Did the interviewee easily and definitively rank the problems you presented? 10, 5 or 0 Is the interviewee actively trying to solve the problem, or have they done so in the past? 8, 4 or 0 Was the interviewee engaged and focused throughout the interview? 4, 2 or 0 Did the interviewee refer others to you for interviews? 4, 2 or 0 Score >25 = GOOD BenYoskovitz, Lean Analytics MEASURE AN INTERVIEW WHAT?WHO? HOW?
  22. 22. “I wouldn't use it - but I know people who would” No one will use it. FEEDBACK
  23. 23. FEEDBACK “It’s a GREAT concept” Not practical. No one will use it.
  24. 24. FEEDBACK “I could really use this if it did...” Core product isn’t solving a real problem. No one will use it.
  25. 25. FEEDBACK “I would pay for this!” Great! Sign here ;) Need proof.
  26. 26. CUST DEV GIVE. Give services/onboarding for free in exchange for feedback and ‘guinea pigging’. SHARE. Communicate the implementations based on customer feedback. ASK. Get referrals, testimonials, videos, social sharing, etc...
  27. 27. EMPATHIZE. LISTEN. PERSEVERE. bethlouisethouin@gmail.com Twitter: @beththouin
  28. 28. RESOURCES Validation Board (Javelin) ~ LeanStartupMachine Usertesting.com MTURK.com Customer Development Reading List - Star tup Digest CustomerDevLabs.com SteveBlank.com

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