Startup MBA 2.3 - Customer development and early-stage sales

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Startup MBA 2.3 - Customer development and early-stage sales

  1. 1. talking to customers http://startupmba.foundercentric.com
  2. 2. hello@foundercentric.com foundercentric.com @foundercentric ! Mailing list: http://bit.ly/fc-list
  3. 3. What is Customer development? Find early customers and confirm their intent to buy before building everything ! (without biasing them)
  4. 4. Paul Graham Until you’ve launched, the only 2 things you should be doing are writing code and talking to customers
  5. 5. ...
  6. 6. Pets.com (and everyone) “I wish I’d known that sooner!”
  7. 7. We can’t plan under uncertainty. We need a way to search.
  8. 8. Talking to people is a great way to learn if our business will work
  9. 9. But it’s hard to do right and easy to mess up
  10. 10. When we do it wrong, we get bad data to convince us we’re right
  11. 11. And when we believe those false positives, we get in big trouble
  12. 12. Part 1. What does bad data look like?
  13. 13. Types of bad data 1.Compliments 2.Fluff 3.Ideas 4.Trivia
  14. 14. Compliments Most meetings end in a compliment. Is that a good sign?
  15. 15. Mr. Compliment “Sounds great, I love it!”
  16. 16. Compliments are bad because they are false positives
  17. 17. Two types of compliments 1.Sincere 2.“Polite”
  18. 18. Remember: Even VCs are wrong most of the time. If their opinion doesn’t matter, nobody’s does! What matters is whether customers are going to use & buy it.
  19. 19. Mr. Compliment “Looks great! Keep me in the loop.”
  20. 20. Ignore & deflect compliments. Then get back to gathering real data.
  21. 21. Types of bad data 1.Compliments 2.Fluff 3.Ideas 4.Trivia
  22. 22. 3 types of fluff 1.Generic claims 2.Future promises 3.Hypothetical maybes

  23. 23. Anything generic is a lie. Get to the truth by asking for concrete examples.
  24. 24. Mr. Generic Fluff “I usually...” “We always...” “I never...”
  25. 25. You “Can you talk me through the last time that happened?”
  26. 26. Mr. Future Fluff “I would...” “We will...”
  27. 27. You “How did you make this decision last time?”
  28. 28. Mr. Hypothetical Fluff “I might...” “We could...”
  29. 29. You “Why can’t we just get started now?”
  30. 30. Types of bad data 1.Compliments 2.Fluff 3.Ideas 4.Trivia
  31. 31. Ideas Everyone will have an idea for your business ! But you’ve already got too many!
  32. 32. Shawn Carolan Menlo Ventures Startups don’t starve; they drown.
  33. 33. Don’t take ideas at face value. Dig beneath them to get to the motivations.
  34. 34. Mr. Feature Request “You guys should definitely have feature X!”
  35. 35. You “What would X let you do?”
  36. 36. Mr. Feature Request “When are you going to let me do task Y?”
  37. 37. You “How are you accomplishing task Y today?”
  38. 38. Types of bad data 1.Compliments 2.Fluff 3.Ideas 4.Trivia
  39. 39. It’s trivial data if... 1.You could have googled for it 2.You could have surveyed for it 3.It’s demographics or percents 4.You can put the results in a pie chart or graph
  40. 40. Bad Founder, proudly reporting trivia “80% of people say they have this problem!”
  41. 41. You, getting to the motivations “SO WHAT? Do they care enough to fix it? What else have they tried? Will they buy our product?”
  42. 42. Trivia can’t give you the “why”. Just google for it and save interview time for questions that matter.
  43. 43. Tip: Don’t choose customers who you aren’t able to talk to in person, or you’re guaranteed to get 100% trivia.
  44. 44. Bad data in review
  45. 45. Types of bad data 1.Compliments 2.Fluff 3.Ideas 4.Trivia
  46. 46. Fixing bad data 1.Deflect compliments 2.Anchor fluff 3.Dig beneath ideas 4.Google for trivia
  47. 47. Part 2. How conversations go wrong
  48. 48. When we ask people about our idea...
  49. 49. We feel like we’re being scientific
  50. 50. But really, we’re just fishing for kind words
  51. 51. Conversations go wrong by default. It’s your job to fix them.
  52. 52. How conversations go wrong 1.Being too formal 2.Exposing the ego 3.Being pitchy
  53. 53. Stuff you DON’T need 1.A formal meeting 2.Business cards 3.An interview script 4.To pay them 5.An hour or more
  54. 54. What you DO need 1.To know what you want to learn 2.To ask about their life
 

  55. 55. Tip: Pick customers you have easy access to. Then it’s simple to have quick, casual conversations without wasting time.
  56. 56. You don’t need a formal meeting to learn from customers. Just chat to them.
  57. 57. How conversations go wrong 1.Being too formal 2.Exposing the ego 3.Being pitchy
  58. 58. Bad Founder, fishing for compliments “I had an awesome idea for an app... So do you like it?”
  59. 59. Bad Founder, exposing his ego “So this is that secret project I’ve been working on... What do you think?”
  60. 60. Why do they lie? 1.They don’t have a strong opinion about it 2.They don’t want to discourage you 3.They don’t want to see you cry

  61. 61. = Mentioning your idea Exposing your ego
  62. 62. If you mention your idea, they’ll lie to you about it. Talk about their life, not your idea.
  63. 63. How conversations go wrong 1.Being too formal 2.Exposing the ego 3.Being pitchy
  64. 64. Remember the stages of a startup? 1.Discovery 2.Validation 3.Customer creation 4.Company building
 
 
 

  65. 65. Remember the stages of a startup? 1.Discovery ← You are here 2.Validation 3.Customer creation 4.Company building
 
 
 

  66. 66. Remember the stages of a startup? 1.Discovery 2.Validation ← or maybe here 3.Customer creation 4.Company building
 
 
 

  67. 67. Learning matters more than selling 1.Discovery ← Learning 2.Validation ← Learning 3.Customer creation 4.Company building
 
 
 

  68. 68. Real sales start way later 1.Discovery ← Learning 2.Validation ← Learning 3.Customer creation ← Selling 4.Company building ← Managing
 
 
 

  69. 69. Bad Founder, being pitchy “No no, I don’t think you GET it.”
  70. 70. Convincing folks your idea is good = Forcing false positives
  71. 71. Remember: Unless they are holding a checkbook, you have nothing to gain by convincing them your idea is great.
  72. 72. Bad Founder, being pitchy “Yes, but it also does THIS!”
  73. 73. You, recovering from starting to pitch “Oops, sorry, I just slipped into pitch mode. I get excited. You were saying...?”
  74. 74. If you’re talking, you’re not learning. Talk less, ask more.
  75. 75. Part 3. Let’s review
  76. 76. People lie to us for a bunch of reasons
  77. 77. People lie to us 1.We exposed our ego and they’re being nice 2.We’re being pitchy and they’re getting rid of us
  78. 78. Bad data is dangerous and must be fixed
  79. 79. Remember: Anyone will say your idea is great if you’re annoying enough about it.
  80. 80. Fix bad data 1.Deflect compliments 2.Anchor fluff 3.Dig beneath ideas 4.Google for trivia
  81. 81. Ask good questions which pass The Mom Test
  82. 82. ❝ ❞ Us Do think it’s a good idea?
  83. 83. ❝ ❞ Us Do think it’s a good idea?
  84. 84. ❝ ❞ Us Would you buy a product which solved this problem?
  85. 85. ❝ ❞ Us Would you buy a product which solved this problem?
  86. 86. ❝ ❞ Us How do you currently deal with this problem?
  87. 87. ❝ ❞ Us How do you currently deal with this problem?
  88. 88. ❝ ❞ Us Talk me through the last time you had this problem
  89. 89. ❝ ❞ Us Talk me through the last time you had this problem
  90. 90. ❝ ❞ Us How much would you pay for this?
  91. 91. ❝ ❞ Us How much would you pay for this?
  92. 92. ❝ ❞ Us How much money does this problem cost you?
  93. 93. ❝ ❞ Us How much money does this problem cost you?
  94. 94. The Mom Test for good questions 1.Talk about their life instead of your idea 2.Ask about specifics in the past 3.Talk less, listen more
  95. 95. Bonus. Strategic heartbeat
  96. 96. Question What’s most likely to sink your business?
  97. 97. Question What has to be true for the next big push to be a huge success?
  98. 98. Question What can you do this week to resolve one of those questions?
  99. 99. Customer development transitions naturally to sales/partners/funding. ! The same skills apply.
  100. 100. Questions?

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