You’re an early-stage startup and you’ve just raised your first round of funding. You’ve successfully demonstrated to investors that you have a great idea, you’ve had the lived experience to understand the market, you’ve won over a few early customers, and you’re the team to do it.
Great! The first thing you need to do now is launch customer discovery. That’s the process by which you talk to customers to find the right market for a product that solves the right problem for the user.
Yes, that means the reward for all of the hours you’ve put in talking to people about your product is more hours of talking about your product. But there are many reasons why it’s a must.
Here are a few:
Users are Not Buyers
When sitting down to plan out your customer discovery, you may think, “But wait, we’ve talked to a TON of users! That’s how we developed the product.”
Awesome. Understanding how users use a product, what features they want and don’t care about, and their typical workflows and metrics of success is huge. But user research and customer discovery aren’t the same thing. Buyers and users are rarely the same people. Customers are people who PAY for your product, whether or not they are the end user.
Users care about features. Buyers care about value. You need to understand who the decision-maker is and what they care about, just as much as you need to understand your user’s preferences and concerns. It doesn’t matter how great your product is if no one can be convinced to pay for it.
You Need Data, Not Stories
Customer discovery isn’t just talking to people; it’s a process and you need a plan. Until you’ve done 100 customer discovery calls, the information you have about what the market wants is a series of hypotheses with some anecdotal evidence.
While we’re not going to go deep on determining your p-value here, we’re trying to gather enough insight to determine with confidence that the data we are basing decisions on is not due to chance alone. Yes, you may have 10 paying customers, and you may have worked in the industry and been the ideal end user of your product. But that data is still qualitative. Most statisticians agree that the minimum sample size to get any statistically significant result is 100. That means you need to have at least 100 conversations to confirm that the assumptions you’ve made so far are valid enough to take you forward to product-market fit.
This data is meaningful to making critical decisions — decisions on product roadmap and feature sets, resource allocation and investment, or marketing and branding. By committing to a robust customer discovery process, the data you collect will be statistically significant, and will inform and transform your work for the next 18 months of decisions.
What Got You Here Won’t Get You There
No, revenue doesn’t let you off the hook.
If you have ongoing pilots or even some contracts with revenue, you may think you know what your customers want — they paid for your product, right? Wrong. Just because you have product-customer fit — that is, your product suits the needs and interests of one or a few or even ten customers — it does not mean you have product-market fit.
3 Steps to Customer Discovery
Okay, so the combination of users, buyers, and revenue all aren’t enough to equate to customer discovery.
But don’t worry, you’re not starting from zero. You’ve gotten early adoption, some champions, and hopefully the makings of some meaningful case studies.
How do we take this to the next level to make the next phase of product decisions?
You run a true customer discovery process, and do it with the rigor of a researcher, with a great hypothesis, to get significant results.
Here are three steps to running a customer discovery process that produces results you can use:
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Talk to Strangers
In order to grow, you have to sell to people you don’t know. That means you have to talk to plenty in customer discovery. How do you find them? Here are five steps to get there:
Start with your user’s boss. They are likely the person who approved the budget request for your product, or they have some awareness that your product exists.
Pick three titles based on the conversations you’ve had that are relevant, and target those. Like everything, this is iterative. There’s no reason you can’t adjust as you go, but don’t use not being certain about who to talk to as an excuse not to start, or worse, over-validate your own opinion as a user.
Build a simple form for outreach. You’ll be reaching out to multiple channels, but you want to collect all of the contact information in one place.
Create a standard email template that includes an overview of your company, what you’re trying to learn, what titles you’re looking to connect with, and a scheduling link for 15 minute calls. Forward this to everyone in your network! Here's an example:
We’re COMPANY, doing TAGLINE. We’re seeking FUNCTION leaders willing to conduct a short discovery interview so we can better improve our product and solicit insight on our pricing model. This is not a sales call.
The Titles we’d like to speak to are:
- Head of XXX
- Chief XXX Officer
- VP of XXX
You can book a 15 minute Discovery call with us here [LINK].
If you know of anyone who might be interested, please feel free to forward this email or make an intro.
Get your ask. Once you have your list, you have to identify your ask. Keep it simple: “Would you be willing to spend 15 minutes on a discovery call for my research?” It’s important that you don’t know the people that you’re reaching out to. It may be surprising, but most people are willing to spend 15 minutes with you. Plus, many will be excited to help you out by introducing you to the people they know. People like to be helpful!
Pick your channels: Now you’ve got the what and who. It’s time for the where. Here are three places to start, without leaving your desk.
You can turn to online communities, especially LinkedIn. Use LinkedIn Sales Navigator to build a list of 50 contacts that have relevant titles. Join relevant product-focused Facebook or LinkedIn groups or Reddit threads.
Make discovery part of your communications with investors so they can activate their network on your behalf. Two tasks, one ask — like it? Write in your investor update a forwardable email that people can send to ask for intros. Or, send your investors and friends a summary email that they can use to make the introduction for you. Make it frictionless for them to do it.
Attend a virtual conference that is focused on your space. Ask people in the chat if they would be willing to spend 15 minutes on a discovery call for your research.
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Stick to Your Script
Okay, you’ve got your first 10 responses, and now you've got them committed to a call. Now it’s time to start your interviews.
Just like your outreach, you can standardize this part of the process with a script. This will make sure that each call asks the same questions, and gathers the same information. That’s important so that you can gather consistent data, which ultimately allows you to compare responses across multiple interviews, identify trends, and ultimately draw conclusions that inform your decisions. It also allows you to delegate some of this work to others, even if they don’t work on your team, and achieve the same results. Even the founder can get involved, just make sure they stick to the script. Make sure to have two people on the call — one to capture and one to interview, as it can be awkward to use a voice recorder, and that can make people uncomfortable.
When you write the script, remember to focus on the customer, not product or users. This is all about validating the need for your product, not the product itself. The questions should focus on the customer – their pain points (i.e., their problem), what they want, their behaviors, and how they buy. The call should be focused on the customer, too. The customer should be talking 90% and you should be talking 10%.
And no matter what, do not sell. This is going to be so hard. Even if you hear the exact problem you’re solving, the use case you built for, do not pivot to selling. The moment you stop listening and start talking, you’ve ended the interview and lost the opportunity to get unbiased and accurate data. And you’ve misled the trust and time of the person on the other end of the line.
You can always follow up with these people later to tell them about the product. But for now the data they’re providing is more valuable than a potential sale.
Here’s a sample script you can customize to your product and problem:
Name:
Email:
Title:
Hi, I’m X, I am Y, at COMPANY. Want to first thank you for your time and share how much I appreciate your insights in advance!
At COMPANY we are working to understand how people interact with CATEGORY tools and the value they get out of them. In this conversation I have a series of seven questions that I’d like to ask you to get a better understanding of your personal experience for our research.
If you’re open to it would I be able to record our conversation for our internal use only? If not, I’ll be taking notes.
- What is your role and how would you describe your responsibilities?
- What is your current system / environment / process like?
- What tools do you use?
- Who interacts with the tools? Across what teams or in what ways?
- What is the most important value that your team or organization gets out of using your current tools?
- What is the thing that keeps you up at night when you think about your team and organization’s work?
- How are you currently managing that problem?
- How do you plan to manage that this year?
- How do tools get purchased at your organization?
- Who are all the key stakeholders?
- What are your security & compliance requirements?
- If you had a magic wand, what would you create to solve this problem?
- Do you have any peers or colleagues at other organizations that would be interested in sharing their thoughts with me on this topic?
- Can we keep you informed about the results of this research and how it informs what we’re working on?
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Keep it Out of Your CRM
Before you start interviewing, there’s one more thing. You have to set up a system to start capturing what you’ve learned and analyzing the results.
Create a survey with your exact script that the interviewer can complete during each interview, with the results feeding into a spreadsheet. Google surveys work well. Using a survey with your full script keeps interviewers on track, ensures all interviews are the same, and creates standardization across the process.
A spreadsheet as the output is important because it allows you to tag and code your data with common answers to calculate percentages of interviewees who answer a certain way and other metrics. This helps you turn qualitative data into quantitative results that can guide your decision-making — and turn into statistics you can cite in marketing, fundraising, and sales conversations.
This may run counter to how you’re built. As a lean startup running a targeted sales process, everything should live in your CRM. Except for this. You’re not selling, these aren’t leads, and the data is separate from your sales pipeline.
One Process, Many Uses
Why is this really different from user experience research? Because the results are used across the company, not by one team. And that’s important — with your new funding, you’ve likely hired professionals who will execute sales, marketing, and product. Arming them with data is one of the best things you can do to allow them to put their skills to work.
With the results of this research, the marketing team can create customer personas, and develop messaging that stands out to the precise pain point of a customer. The sales team can create content and messaging that moves the product from a want to a need. The product and engineering team can prioritize the features that will deliver value. Founders and executives can make important decisions about where to allocate resources. And ultimately, it can all feed back into the mission and vision that keeps the whole time excited to work every day, and inspires people to use the product.
That’s how you go from early adopters who are excited to try something new to a base of customers who will talk about how a product changed their lives. Invest a month or two in diligently interviewing customers now, and it can propel you to the next round of funding.
Here are a few other resources for more:
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