1.1.28. Testing your Idea: Customer Interviews


Some of how you’re going to test your ideas in building prototypes and thinking about how you actually get your business, or product, or service underway. But before you do any of that, one of the most important things you’re going to do is to engage in customer interviews. Everybody should do at least three interviews before they launch their business. And interviews are remarkably powerful tools, even for experienced individuals. So one example is a startup company that I’ve worked with, that has a very powerful radically new diagnostic for a disease, that is a big killer in the United States. And when the startup launched, everyone who sort of talked to them said, “Okay, great. This is a very powerful tool that everybody will want. This is a really great way of diagnosing this disease.” Until the startup founders started speaking to doctors, and they learned a whole bunch of things that are important about the industry. They learned that while doctors would order tests, it was actually hospitals they would order the machines. So they spoke to hospitals, it turned out that the hospitals would only order the machines if they’re reimbursed properly by insurance providers. And speaking to insurance providers, they found very narrow ways in which this particular product would be reimbursed. So the result of all of this information actually resulted in a radical change to the business model of the startup. Because rather than approaching doctors, which is what it was doing before, instead create a tool that benefit the needs of the insurance companies that were doing the reimbursing. So this kind of interviewing is completely regulatory in many cases. Now why should you do at least three interviews? Because as a rule of thumb that one of my students once told me, after the second interview you feel like you’ve already heard everything because you’ve created connections and parallels between those two interviewees. And once you add the third one, then the complexity becomes clear. Now personally, I think you should do at least five to eight interviews. But if you’re not talking to customers, suppliers and other sets of people before you launch, you’re setting yourself up for trouble. So what’s interesting about interviews is, they don’t do the kinds of things that you often would hope they would do. They’re good for things that you might not expect and they’re bad for things that you might think they’re good for. So what are they bad for, and what are they good for? So what they’re really great for doing is finding out what people are doing today, and what they like or don’t like about. So it’s great for finding out what people love or hate about an existing product. So you can interview somebody and if they’ve used this product, they’ve used this a medical device before, they have gone to this particular coffee shop, they have bought this sort of desk, you can find out what do they like about the desk, what they do not like about it. Think about reading through Amazon reviews, that’s a very informative way to get information about a product. It’s also really useful if you’re creating something that’s entirely new to find out how people are solving their problems today. So one truism of innovation is that necessity is the mother of invention. And if you have a need, you’ll figure out a way to solve it. So any problem out there, people will figure out a way to address it. And so that can be a range of different things. They could be doing this by improvising, they could be ignoring the problem, they could be adapting a third party solution for their own use. But you could find out a lot in an interview about the solution they currently have to their problem, and why they’ve chosen that particular solution over other options, and get a feel for the customer environment and how it operates. So it’s really good for figuring out about what is, what are customers doing today, why have they made those choices, what are they liking and not liking about those choices. What they’re not good for, and often a mistake interviewers make is about, predicting future action. You can’t ask someone to decide what they’re going to do in the future and expect that answer to be useful. So you can’t tell them for example, well, if our product comes on the market and it’s as cheap as we say it’s going to be, and the competitors don’t do anything and your needs remain unchanged and your organization still has budget, would you buy our product? That’s not a useful question to ask, and you won’t get good answers. Interviews also don’t give you assumptions about demand. You can’t figure out how many times someone’s going to buy your product based on talking to a couple of people. You can’t figure out pricing. So people hope the interviews will give them price, you can get some pricing information by asking what people spend on current solutions. But the instant you start talking about price in a customer interview, it becomes a negotiation and you’re in trouble. Because you say $10,000 they don’t want to be a sucker they’ll say $5000, and now you’re negotiating rather than having a discussion. So pricing is usually very difficult to figure out in interviews. And you can’t figure out wished-for product features. If you ask people what features your products should have, they’ll probably mention okay, “I’d like it to fly. I want it to taste good. It needs to be free. It needs to give me superpowers.” Because they have no idea what the costs are involved. They’ll have a list of demands, they may have nothing to do with the conditions in which they buy. So interviews are really, really good for figuring out what needs people have today, and how they’re solving it, and getting inspiration from that, and what that costs them. They’re very bad for asking them to predict future things about your product or tell you how to design your solution. So interviewing has a couple of steps. The first step unsurprisingly is figure out who to interview. And there’s really three buckets of people you want to think about interviewing. The first are your potential customer or users. These are the people whose need you’re trying to solve. Note that users are not always customers. And the example I gave you before about doctors, doctors were using this medical diagnostic, but they weren’t the customers, they weren’t buying it, that was the hospitals and the insurance companies. But from this group, you can learn about their needs and you can learn about how they try and address them today. The second group is the potential buyers. So the customers might be buying your sweater, but the store managers, retailers, and fashion buyers are the ones buying it to put it into Macy’s or whatever store it’s going to be sold at. So you want to interview buyers as well because they’re the people who are actually spending the money. In very complex markets, a third group you might want to consider are the experts. So if there’s issues of regulation of industry structure, if there’s a weird puzzle about trying to understand why a market looks the way it does, it’s a great time to talk to industry experts. So that can be sort of industry experts, it can be academics, it can be taste makers, so who’s fashionable and who’s leading a trend, or even journalists they may all help you get a sense of the market. And we’ve include a link here, this isn’t written by me but somebody else came with a list of 95 ways to find interviewees. And we’ll include that list for you so you can read through it. Some will work better for you than others. But you basically start with your network and that’s how you go out and you eventually find the people you need to interview. The second step in interviewing is asking good questions. And one thing you need to do is actually plan out the questions you’er asking. So you want to ask similar questions to everybody you’re interviewing, that way you can compare answers across people. And it’s very important that you start not with your solution, but you start by asking people about themselves first. Put them at ease, help them understand the context, it helps you understand the context in which they’re operating in. So ask questions about them and their situation. And importantly, you need to listen and be quiet, you’re not selling, you’re listening. Don’t talk too much. And ask open-ended follow-up questions and encourage people. What happened next? And then what? And what do you do now? Things to encourage them tell their story. You’re there to learn from them, not to tell them things. So when you ask the questions, you’ve now set up the situation where you’ve ask them about themselves and asked about context, then I’d recommend asking about the problem. So you can ask a variety of open-end questions, none is more manageable than another, obviously what works for you. But one question you could ask is, what’s the biggest issue associated with whatever the problem you’re approaching is? Or tell me about the last time you encountered this problem? Or if I gave you a magic wand that can make part of the problem disappear, what part would you make disappear? So you’re trying to get information about the problem that you’re hoping to solve, the need the customers have. The second set of questions about, ask them how they’re solving their problem or scratching their need right now. So you don’t have a sweater that is as warm and cheap as our sweater, how are you solving that sweater problem for you today? If you’re missing a way of refinancing your student loans, how are you currently dealing with student loan financing? Or for the example that we gave earlier of Charge It Spot, when your phone runs out of batteries in a store, what are you doing today? So you can ask people, how they’re dealing with the problem now? What do they like about their current solution? What are the problems with it? And how do they find that solution, and they tried other approaches. So we’re asking them how they solve the problem. Only after you’ve found out about the problem, and find out about their current solution, you ask about your own solution and talk about it. It’s usually better to just introduce the idea and then let the interviewee ask questions, and you want to avoid selling it. Your goal is not to see whether you can convince them to like it, your goal is for them to see what your product solution or service is, and see whether or not they understand it, whether it matches their needs and let them ask the questions, and that’s the best way to evolve this forward. Finally, you’re going to draw conclusions based on your interviewers. So no matter how good your memory is, you need to be writing down your results right after the interview. So don’t write during the interview, wait till afterwards. Write down all of the things you can remember for the interview. Don’t start to draw conclusions or change the questions until all the interviews are done. You need to get that whole picture together. And once that’s done, then you start looking for patterns among the interviewees and the interviews. So what are we seeing that’s common, what’s different, what explains that, and you pulling all the data together to make conclusions. And this is how you get useful, powerful feedback very early on without any real cost about your product or service. If you’re not doing this, I guarantee you’re going to be making incorrect assumption. So you need to think about doing these interviews no matter what business or venture you’re planning on launching.

Jim Rohn Sứ mệnh khởi nghiệp