Principle 5: Talk To Customers

Customer Development

Who are my customers and what do they want?

Why is this principle important?

The main trap early-stage entrepreneurs fall into is obsessing about the product at the expense of focusing on the customer. They build their business in a basement – spending lots and lots of time and money making it perfect – only to launch it and find no one wants it. Stop polishing your product, find customers first.

What should you focus on at this stage?
  • Map out the key assumptions behind your idea.
  • Identify the customer segments you would like to serve.
  • Figure out how to communicate with your target customers.
  • Understand their key challenges by genuinely listening to them.
Core Concepts

The only 2 questions that matter

All early work should revolve around answering:

  1. Do people want it?
  2. Can you make money out of it?

The early days of a project you can get bogged down by lots of noise. A simple way to combat this is to know what assumptions you are making that are the signals for your business success.

At Escape the City we had made two assumptions that we had to prove in order for us to feel confident that we were on to something:

  1. We needed to prove that people would believe that we could help them quit their job.
  2. That there was a way to make money out of it.

The first we learnt by growing a mailing list to 1,000 within a month- a good signal for early traction. The second we learnt by selling our first job listing on the mailing list.

What are your assumptions for making your project work? Write them out and only work on trying to get the answers to them.

Every bit of work you do in the early days should go back to answering the questions you are trying to prove.

Identify your Customers

What is at the heart of your idea?
Airbnb helps you rents other peoples rooms. Beerbods sends you great beer every month. Escape the City helps people build 21st century careers. Kiva makes it easy to loan money to those in the most need. What does your idea do?

Write your key 2 or 3 assumptions on post-its and stick them somewhere you will see EVERYDAY.

Only work on the stuff that is directly relevant to you.

Identify potential customers
Who are they? Where do they live? What media to they consume? What do they spend their time doing? What brands do they love?

Think of one perfect customer – you know they kind of person they are (they might be you), think about how they behave and the decisions they make.

Figure out how to reach them
Where do they spend their time? What communities are they part of? What events do they go to? These are the places you are going to do your first marketing activities.

Speak to your customers

Ask permission
People won’t fill in a survey if it hits them in the face. Ask if they’re interested in sharing their opinions with you. Good questions are the key.

Listen don’t pitch
If you ask your Mum what she thinks of your idea, she will tell you it’s brilliant. She is lying. Don’t ask people about your idea, ask them about the part of their lives that’s related to your idea (Not: Do you want to join my amazing book club? But: What was the last book you read?)

Engage them in the build
Offer them the chance to be part of what you’re doing – founding members, early access, brand pioneers, join your tribe. Crowdfunding proves everyday that people want to be part of projects that don’t yet exist!

Your Questions

Join The Tribe Forum for Q&A on the Customer Development principle.
http://tribeforum.escapethecity.org/c/the-startup-zone/5-customer-development

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