This piece is inspired by Startup Edition in response to, “How do you discover what people really want?”
"So I have this awesome idea for a new startup: Uber for hot dogs! Love hot dogs? Hungry? Get a delicious dog delivered to your door within 30 minutes. It’s gonna be HUGE! What do you think, Sarah?"
"Yeah… sounds interesting" she replied.
"Cool! Would you use it?" questioned the enthusiastic Kyle.
"Sure, I like hot dogs." Sarah apathetically replied.
"Booyah! [:D] I knew you’d like it."
There are several obvious customer development mistakes with this hypothetical example - nothing surprising. In reality, Sarah may very well love hot dogs and become Kyle’s most devote customer. But this feedback isn’t very useful.
There are several tactics for discovering problems worth solving and validating customer needs, but not all are equal. Each provide a different level of fidelity. When testing your hypotheses, it’s important to choose the right tactic and recognize the quality of the feedback.
I’ve found that signal quality is highly correlated to pain. In other words, the more pain - effort, work, investment - demonstrated by the user, the more reliable the feedback.
Lets take a look at things people do to test a hypothesis:
- Talk - Practicing customer development is incredibly telling when instrumented properly. But remember, words require very little effort from the user. In fact, it’s generally less painful to provide positive feedback than the critical, honest truth. As the saying goes, actions speak louder than words.
- Tell Friends - People care about their reputation and avoid things that might discredit it. When people invite their friends or make an introduction, they invest in the social capital they’ve built, putting their name at risk. Identify how willing or excited the user is to share is telling of their interest in the idea.
- Submit Email Address - The landing page test is one of the most common tactics for measuring user interest. It’s an easy way to get feedback quickly for a potentially large group of users; however, results can be deceiving as users may only be intrigued by the site design or message, not because they want the product or service.
- Complete a Survey - People generally don’t like surveys unless they’re genuinely interested in the topic or helping make the business come to life. Users’ willingness to invest the time is a positive sign that they care. And when crafted well, surveys can provide extremely valuable feedback of what customers actually want.
- Hack a Solution - If users are hacking together their own solution, they’ve already invested time and/or money (read: pain) to solve a true problem. Hacks provides deep insight into user’s motivation and perception of the ideal solution.
- Spend Money - We value our money, losing it is painful. Those that pull out their wallet prove the demand, validating the idea. Note that this does not need to occur after the product is built but can be instrumented through manual tests (see Wizard of Oz experiment) or crowd-funding campaigns (e.g. Kickstarter).
These artifacts plot a diagonal line up and to the right, where the graph’s y-axis is pain and x-axis is signal quality.
It’s important to know your audience to identify the severity of pain illustrated in each of these categories. Pain materializes in the form of spending time, social capital, or money and the level of pain demonstrated in each of these varies by person. For example, a busy venture capitalist values her time more than money where a broke college student is more willing to offer their time than pitch a few dollars.
So back to the hot-dog mastermind. What should Kyle do? Sarah expressed interest. Is that feedback enough to validate his genius idea? But that’s just one person’s opinion. Perhaps he should talk to more people. Not a bad idea but unless he moves higher up the y-axis of pain, the signal quality will continue to be low.
When doing customer development, consider the level of pain invested by users before drawing conclusions and how you can increase signal quality. The more pain, the better.
Read more on this topic from an awesome group of entrepreneurs at Startup Edition.
Photo credit: Shelley