Thanks to SFU VentureLabs for inviting us to speak at their recent webinar on Customer Discovery. For those who joined us and those who listen to the recording, below, we hope you find it helpful in collecting the evidence you need to validate you’re on the right track, find your lead customers and ultimately secure the much-needed investment.
I’ve been building up to this blog for a few weeks now, and I have to get something off my chest. I can’t tell you how many B2B tech companies I’ve met with that get this wrong. Deadly wrong. So wrong that it can – and in many cases has killed companies. How do you pick a target market? Here are three common high-risk approaches that we run into all the time: First-Past-The-Post: Try a few different segments in parallel based on gut feel. See which one gets traction. Then double down on that segment. Trial and Error: Try one segment. See if it gets any traction. If that doesn’t work, try a different segment. Come One, Come All: Go after all segments at once because, after all, everyone will want our product. All these approaches consume a lot of precious time, brain-power and money, undermining the confidence of your employees, Board and investors. Instead, I encourage you to take an evidence-based approach supported by a structured decision-making framework. This doesn’t have to be heavy-weight, but I assure you that investing in a well-informed decision up-front will pay dividends down the road. Let’s explore how to use the SPADE framework that we introduced in our last blog and overlay Evidology’s evidence-based framework. Situation We need to decide which market segment to target with company resources We need to decide two months from today We want to select a segment that is friendly to new technology adoption and has similar technical requirements to adjacent industry segments. We don’t have any year-1 revenue targets from our first segment but we do want to: (a) learn, (b) harden our product in a real-world environment, and (c) secure good reference customers. We want revenues of at least $1M in year 2 from that lead segment. (Note that it doesn’t have to be a big market, just an accessible market at this stage.) People Responsible: VP Product Management Approver: CEO Consulted: Marketing Manager, CTO, VP Engineering, CEO, Advisor/Mentor Informed: All staff, Board of Directors. Alternatives Hold a brainstorming meeting to lay out possible target markets and a description of each segment. List examples of possible friendly companies that are representative of each segment Define the assessment criteria you’ll use to evaluate each segment Complete the Customer Canvas and Conversation Plan Collect real-world evidence for each segment via customer interviews. Decision Regroup the Responsible and Consulted individuals to summarize findings and make a decision based on the assessment criteria Bring the recommendation to the Approver and walk through the approach and findings. Explanation Communicate the methodology and conclusion to the Informed parties. It could take anywhere between one and three months to collect the necessary input from stakeholders across the various market segments. The customer conversation process will help create a relationship with potential lead customers which, in turn, will help propel your sales/partnership journey and the validation you need for your next financing round. For more on our Evidence-Based methodology and help securing your lead customer, please contact the Evidology Group.
Life as a Founder or product owner is filled with daily decisions to test your leadership – each could make or break your business. In this blog, I’d like to share an excellent framework for your most important decisions. Next week, we’ll talk about how you can apply this tool in a GoToMarket context. In my previous companies, we had a favourite expression that the quality of the decision was directly proportional to the quality of the debate. Stay factual and share your perspective in a respectful and trusting environment – never ever let the discussion get personal. I’m a particular fan of Gokul Rajaram’s SPADE framework that he created many years ago while at Square. It’s simple, easy to apply, and it touches on the important aspects of leadership such as consultation and communication. Moreover, it’s structured enough that you can easily build it into your company culture. In retrospect, we had been following a very similar approach ourselves, in our companies albeit not as formalized. Gokul has conveniently productized the SPADE framework in a handy SaaS offering, that allows distributed organizations to improve their decision-making. SPADE is an acronym for Situation, People, Alternatives, Decision and Explanation. Let’s look at each of the five steps. (I should point out that I’ve made some minor modifications to Gokul’s framework and have simply highlighted those changes with an “*”.) Situation* The start of every decision is a question that needs to be answered such as Which market segment should we pursue? What should we name this product? Set a deadline so that decisions don’t drag on Spell out your criteria to measure success (targets, metrics, objectives and constraints)* People Responsible: Who is responsible for the decision and the execution of the decision? This person typically leads the SPADE process Approver: Who is ultimately responsible for approving the decision? According to Gokul, “Typically, the approver does not vote down the decision itself, rather they veto the quality of the decision” Consulted: Who has a perspective and valuable input that should be included in the decision-making process? Informed: Who should be informed of the decision-making process and outcome* Alternatives Brainstorm to generate a comprehensive set of feasible alternatives For each alternative, list out the pros and cons. Be quantitative and draw on evidence wherever possible. Draw on relative benefits such as High/Medium/Low and consider weighting based on importance Explore ways to mitigate the risk Consider assigning probabilities to possible outcomes for each alternative* Decision Form a recommendation by presenting the alternatives to the team, asking for their feedback and taking people’s input into consideration. On contentious topics, a private vote may be effective Run your recommendation and the process by the Approver Explanation Hold a Commitment Meeting with key stakeholders to communicate the decision. It is paramount that once a decision is made, everybody supports the decision and the whole company pulls in the same direction Prepare a 1-page outline that summarizes the SPADE behind the decision and communicate it to those tagged as “informed” in the People step I believe that tools such as the SPADE framework can help you make better decisions faster with stronger buy-in from your whole team and your Board. Incorporate a decision-making framework like this into your company culture and I think you’ll find your business will be better for it. For more on our Evidence-Based methodology or for help on your Sales and Marketing strategy, please contact us directly.
As Founders and Product Owners, we’ve always been told that the “Customer is always right” and we strive to bend over backwards to make prospective customers happy. But when you’re soliciting feedback on a new product concept, should you take what they say at face value? In this blog, we’ll consider five persona traits to watch for in your discovery calls and how to handle them. Agreeable Andy – Likes What You’re Doing Agreeable Andy is likely to go along with your product concept and validate many of your assumptions, hopes and beliefs. He may even go so far as to say “Sure, I’d buy it if it was available today.” You need to be mindful that Agreeable Andy doesn’t always do what he says. Also, people like Andy are trying to be helpful and supportive but they provide little constructive feedback. While their words may be gratifying, they could inadvertently undermine your customer validation efforts and send you in a dangerous direction. To get past supportive sentiment and dig down to real insights, always use open-ended questions that don’t lead the interviewee to any particular answer. Try to understand what key performance metrics the person/department/company uses, and understand how your solution can support those metrics in an objective quantifiable way. Ask questions to get at what would actually trigger real action. You can also consider throwing in some provocative challenge questions that cause the interviewee to think differently about the problem. Solo Sam – A Market of One Solo Sam has a problem that needs to be solved and you’re coming along at the right time to help him with it. He’s happy to tell you all about it and will give you valuable feedback on what a solution might look like. He might even pay for the solution (albeit at a discount) in return for his guidance. But if you can’t find a large enough, homogenous market, you don’t have a business. To root out people like Solo Sam, it’s important to speak with several potential customers until you are getting consistent feedback to confirm the problem is commonly applicable and the solution would fit with many other customers with little or no modification. Seemore Sally – Likes to Learn Seemore Sally loves to learn. She’s genuinely interested and asks lots of questions to understand what you’re doing. She’ll even give lots of praise about your solution. But the relationship is rather one-sided in that Sally doesn’t share specific insights into her real problems or how her organization would buy a solution such as yours. Don’t be seduced by her interest and praise as it can be an unwelcome drain on your precious time. During your customer discovery calls, make sure you’re in control and leading the discussion to get your questions answered. Ask probing questions, and if you’re not getting the specific evidence you need to support your business, then by all means, add her to your marketing list and share your white papers, but move on to others who can give you the insights you need. Mirage Mary – Hard to Pin Down Mirage Mary is passionate about her business. In fact, Mary is a complainer who is quick to point out the inadequacies of others, but is not in a position to do anything about it. She likes to talk and is happy to expound at length about all that is wrong with the company or the industry at large yet it’s hard to pin her down to collect the evidence you’re looking for to validate your business concept. There’s a lot to be learned from Mirage Mary with respect to the problem and although it may be hard to pin her down with objective metrics to quantify the problem, but it’s worth giving it a try. Don’t expect Mary to buy your product, but that’s fine as long as she can educate you and others within the organization or in competing businesses can corroborate your value proposition and are in a better position to purchase when the product is ready. No Problem Neil – Problems? What Problems? No Problem Neil is easy to spot and it will become evident within the first few minutes of your discovery call. He’s happy doing his job and likes the comfortable routine of the status quo. But don’t give up too quickly, there’s still something to be learned from Neil. Although Neil is hard-pressed to speak to any problems he would like to solve, Neil can speak at length about the current way things are done. He may even be able to help with value questions like “If we could shrink the time it takes to do “X” from one week to one minute, what would that mean for your business?” Conducting customer discovery calls is critical to the success of any new product concept, but knowing whom to speak with, what to pull out of the conversation, and how to pick up the right insights from the discussion is important. Occasionally, you may want to consider what not to take away from the discussion. For more information, please contact the Evidology Group and we’ll lead you through the Concept Validation process. We’ll also share more templates, tools, and best practices.
Learning from potential customers is arguably one of the most important and most challenging aspects of the new product development process. It is also certain to have the most impact on the success of your business. That’s why “discovery calls” are so important. Discovery calls are like feeling different parts of an elephant and require many discussions within and across representative organizations to truly understand the customer, their problems, what an ideal solution would look like and how they buy a solution such as yours. In this article, I’d like to share some best practices on how to find and recruit the right people to speak with in order to test your product concept. And then in future posts, we’ll explore best practices and structure of the discovery meeting itself. Feel Your Way Around The Elephant Many complex B2B solutions can touch and be influenced by several personas within an organization such as end users, business buyers, IT administrators and security professionals. Each will have a very different perspective on the nature of the problem and what they look for in a solution. Of course, in some organizations and for some solutions an individual may play multiple roles but still, the line of inquiry should span all aspects. Since you’re looking to learn, not sell, don’t restrict your discussion to just the budget-owner. Become Familiar With Elephants It often takes more than a dozen discussions to validate your product concept. You can quickly eliminate certain organization types and persona based on the response you get (both positive and negative). You know you’re “done” when you’re starting to hear the same feedback and you believe it’s representative of a homogeneous initial target market. Look for consistent insights in your discovery calls with different persona within and across representative organizations. Where to Find Elephants Finding enough suitable and interested candidates to interview can sometimes be a challenge. Here are a few good sources: Networking: It’s often easiest to start with friends who can share their insights, but be careful as friends may be inclined to tell you what you want to hear. Be certain to expand your network quickly, drawing on your professional network and the network of your investors and advisors. But moreover, at the wrap-up of each interview, ask if they can recommend others that you should speak with. Articles and Papers: Contact authors and people quoted in relevant trade publications and research papers. Conferences: Introduce yourself to speakers at conferences after their talk or in a follow-on email after the conference. Social Media: Direct Message people on LinkedIn or Twitter either based on their profile or ideally about a post they made. How to Approach The Elephant Be sure to reach out to prospective customers for an interview with respect and sensitivity. You’re seeking advice: In my experience, people are generally happy to provide advice but get turned off very quickly if they feel like they’re being sold to or feel like you’re trying to convince them of something. Make sure this is clear in your outreach communications. Position the discussion in advance: Explain the reason for your interview request in terms of the problem you’re looking to solve. If people are not responding to your interview requests, it may be because they are not experiencing the problem you’re describing or perhaps you’re not describing it in a way that resonates. Be sensitive of time: Try to keep your time “ask” to 20 or 30-minutes, unless it’s a friend, someone close in your network or someone you know is keen on the topic. After establishing rapport in the first short conversation, you’re well-positioned to ask for a longer call in the future. Personalization: It’s important that the person you’re reaching out to feels like you value their expertise. Hand-craft and customize each email and avoid bulk email campaign tools. C-Suite Bottleneck: You may find that senior executives are too busy to meet with you or respond to your interview requests. You may try contacting them and ask for them to refer you to others in the organization. Alternatively, you may have better luck connecting directly with others in the organization. Give back: In most cases, those who agree to talk want to be helpful and feel good about sharing their views and advice. In some cases, you may find people would appreciate you giving something back to them in return for their time. This could include a non-confidential summary of aspects of your industry survey; some relevant technology white paper or interesting article that demonstrates your subject matter expertise; or simply buying them coffee. Through a series of productive interviews, you should get a good feel for the elephant from many different angles. You’ll learn how the customers’ problems manifest themselves, how big a problem it is for them, what an ideal solution looks like and how they go about evaluating and buying a potential solution such as yours. Here’s a sample outreach email to get you started on your customer discovery journey. For more information, please contact the Evidology Group and we’ll lead you through the process to achieve rewarding customer discussions. We’ll also share more tools, processes and examples on how to structure effective discovery calls. If you prefer, we can bring our expertise to your organization as an Embedded Executive and spearhead the process ourselves for even deeper insights, saving you precious time.
