Guest Post: David Norris, Forward Partners
15 Jan 2015
Scratch someone else's itch
I used to sell and organise ski chalet holidays. Every day I would speak to customers about what they were looking for in their next holiday and how much they were willing to pay. I then had to deliver to their expectations and ensure their holiday was a success.
A few years later I found myself (in the first dotcom boom) building a ski chalet holiday booking website. Thankfully I had years of deep customer understanding to draw on and was able to design a search engine that reflected the way customers thought. That ski booking website is still going strong today, 15 years later. It had strong foundations.
“We’re building an MVP”
In my role as Investor at Forward Partners I am lucky to meet many entrepreneurs starting out on their journey.
To get the conversation started I ask, "what stage are you at?"
Often the reply comes, "We've just started. We're building our MVP and we are X weeks away from testing our concept in the market". (MVP = minimum viable product)
I then ask who their customers are, why the customers will buy the product and how they think they will reach their customers. I'm looking for evidence that they've spent time exploring these issues by interviewing potential customers.
In many cases, there are no answers to these questions because the entrepreneur has found a problem they passionately believe needs solving and so they are going to solve that problem based on how they see the solution. They "scratch their own itch" and they haven't done any meaningful research.
The trouble with this approach is that they are viewing the world from their own perspective and not the perspective of their customers. By building the solution they will test it and most likely find that it doesn't work. This is an expensive way to test things.
Get to know your customers first
I really rate entrepreneurs who instead first take time to develop a deep understanding of their customer's world. This deep understanding, requires a period of time interviewing potential customers, asking unbiased questions and methodically recording the answers. This process is known as "customer discovery".
Thankfully, this is a cheap process and it can be done quickly. With deep insights, an entrepreneur not only knows what problems matter to a customer but also why they matter and if the customer is willing to pay to solve the problem. The "why" is super important here. There are rational reasons as well as irrational emotional reasons. If you can understand the rationale and the emotions and then develop a product or service that addresses both, you will have a much greater chance of success.
Then and only then, is it time to launch a test. Scrap the term MVP and instead shoot for an "MLP" - a minimal lovable product. The test product is now based on addressing the customer's concerns in a way that they will most likely respond to.
Simple first steps
Think of a pop-up as your MLP. It’s a test. To get the best possible chance of success, you need to have fully understood your assumptions regarding your customers and how they might respond to your concept.
In retail, it's possible to interview potential customers and observe shoppers by asking them a few questions whilst they are out shopping. If you were looking to sell (say) a range of mobile phone accessories, you'd observe people buying mobile phone accessories. How many items do they look at? What types of product are they picking up off the shelf? What items do they buy?
You could intercept people that buy and ask them things like whether they were actively looking for these items or whether it was a spontaneous decision to buy, what they were looking for, where else they looked, what price they thought would be reasonable and so on. Why are they buying? Who are they buying for? How many other places have tried?
Also remember to speak to the people who look and don’t buy. Their behaviours and intentions are equally valuable and will give you clues as to where your biggest opportunity lies.
These actual behaviours and intentions are real. You’re aiming to discover a gap between what the customer is looking for and what is available. The gap is your opportunity. With a clearly defined opportunity your MLP is more likely to succeed.
Customer discovery is the first step of the journey.
To get started on this journey I highly recommend the following easy to read books. You could read both in an evening and follow their advice in the 2 weeks that follow.
The Mom Test - by Rob Fitzpatrick
Talking to Humans - by Giff Constable
These books will help you avoid many mistakes and will give you practical tips on how to do customer discovery well.
David Norris, is a Partner at Forward Partners who specialise in helping start-ups with a unique combination of funding and help from hands-on experts