Startups are primarily competing against indifference, lack of awareness, and lack of understanding — not other startups.
Chris Dixon’s post, and specifically his quote above, on competition, speak to the importance of customer development. Jack Welch illuminates for us the extent to which one must understand the customer, in his book Winning. And I paraphrase, “Be granular, know what each of your customers eats for breakfast”. These thoughts reflect the pivotal role customer input plays, no matter the size of your company.
Startups are unique though, they continuously face a lack of resources (time, knowledge, the right manpower, the right money, among others). For this reason learning and development must be achieved early on and iteratively. Most in the startup world are aware of the philosophy around customer development. There are many a blog post, and two books in particular, elucidating the philosophy of customer development pertaining to the “lean startup”.
The concepts explained in these books are extremely helpful in overcoming “lack of awareness and lack of understanding”. The entrepreneur (that’s you!) must dig in and understand the problem the customer is aiming to solve. Equally important is that you understand whether this problem is one customers are willing to pay you to solve.
Books and words are nice, but Morpheus would agree “there’s a difference between knowing the path and walking the path”. A couple weekends ago, I, and 50 others, got to do just that at the first ever Lean Startup Machine weekend. 54 hours worth of customer development, hell-bent on delivering a kick-ass Minimum Viable Product. A few words come to mind after this exhilirating experience. Addiction might be one of them. Eye-opening lessons were everywhere, here are a few nuggets:
- “Getting out of the building” is easier said than done. Push yourself out the door. It takes effort and practice.
- Know the difference between testing your hypothesis and seeking evidence: before leaving the building be open and be ready to have your product assumptions crushed and invalidated
- Do not ask questions in a way that projects your product on to the customer’s problem
- Listen, listen, listen and learn
- Listen, listen, listen and know what to filter out: the customer is important but their words are not gospel
- An MVP can be as simple as a sign-up page
- Getting people to put money down makes them customers: the ultimate customer validation
In retrospect, our team should have done more customer development: more calls, more face-to-face time with potential customers. It really is like most other things, it takes doing and practice. Experience is invaluable. Ideally, after pivoting and iterating, you will get to a place where you have a better vision of the customer and their needs. You’ll be closer to the problem and all its intricacies, and would have gained a ton of understanding. On top of this, during this process, you probably would have learned a lot about any competition, and you’ll be in a better position to face these external challenges.