Do People Really Care?
You’ve done the research and created your hypotheses, now comes the scariest part of any startups’ existence… Finding out if anyone really cares about your idea.
This is part 6 of our Lean Innovation Series.
Unfortunately, most of the people involved in your startup or the new division in your company are so invested in the outcome that they are all afraid to ask potential clients for their answer. Countless millions and even billions of dollars have been wasted chasing new solutions to problems that didn’t need to be solved. (Think about New Coke)
Phase Two of the Customer Discovery process exists to fix this problem and to find the answers to three pivotal questions:
- Do we really understand the customer’s problem?
- Do enough people really care enough about the problem for this to be a worthwhile business?
- Will these customers care enough to tell their friends?
In this phase you are not asking your customers to buy, you are simply testing the hypotheses you created in your Business Model Canvas and learning as much as possible about your potential customers.
There are 5 steps in this phase that will provide you with the answers you need to finish your Minimum Viable Product or to make a pivot in your business model. Each of these steps must be carefully planned and the learnings fully documented so the team can aggregate the learnings to determine how those learnings affect your product or service.
- Design Experiments for Customer Tests – For a physical product, the hypothesis could be that for every 10 sales call made, three people would actively consider buying the solution. For a web product, the test might be that using Google AdWords customer acquisition will cost 20 cents per click.
- Prepare for Customer Contact – In the physical channel you are setting your appointments and planning your script. In a web model, you are designing a cheap and dirty landing page which will test engagement and seek to gain as much knowledge as possible about the visitors.
- Test Understanding of the Problem and its Importance – For a physical product or service, this understanding comes from the questions you ask your contacts. How do they feel about the problem you are trying to solve? Is it an urgent need? Does your solution appear to be far better than other solutions they have considered? For a web product, these questions are answered by the responses to your “low fidelity / cheap” landing page. What were your acquisition rates and costs? Did you attract the customers you expected or a totally different demographic?
- Gain Understanding of Customers – In both channels, this is where you dig deeper. You get permission to speak to web visitors face to face and you ask deeper questions to the people you meet with. How do your potential customers spend their day? How much would they pay for your solution? Don’t forget – track everything!
- Capturing Competitive and Market Knowledge – In the physical channel, this is when you do the best you can to see the world through your buyers eyes. Read what they read, shop where they shop. Who else is in this market? Take your competitors to lunch. The digital world makes things a little easier using sites like Alexa and Compete to see who your competition is and how their site visitors are finding them.
Now, based on what you’ve learned are you ready to try to sell a Minimum Viable version of your product or do changes need to be made? Do you need to make a major pivot?
In the next post, we’ll dive into getting out of the building to test the actual product (not just your hypotheses).
If you’d like more information on Lean Innovation, pick up a copy of “The Startup Owner’s Manual” by Steve Blank and Bob Dorf.
Thank you for being a part of our values driven community!
Image courtesy of http://www.1872clothing.co.uk/.
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