Basel: Take a step back, going back to customer discovery. I know you have eight steps for customer discovery. In your opinion, what's the most important one? What's the most vital one in customer discovery?
Brant: Good question. I don't know. I think it probably actually depends on the business model. I think it's probably up for each entrepreneur to decide. I think that the way Eric Ries has encapsulated this movement, so that it's really about eliminating waste. If you actually have a lot of time and money to burn, maybe you don't need to do this lean startup stuff. Most people don't view their life that way.
So, to me the most important thing is that, if you're in customer discovery or you're in customer validation even, and you can formulate a test that actually tells you on the negative side not to pursue that product, "If that test fails, I won't pursue that product." To me, that's actually pretty powerful. I think that it doesn't mean a small test. It means that the data you're going to get from it is sufficient enough to tell you whether to move forward, or whether to pivot onto something else.
I had a client who had been working on his product; it was a recruiting product. He'd been working it for a year or two years before I engaged with him. He had spent probably close to $100,000. He had a few users of his product. Most startups don't fail because they don't get any users. Most startups fail because they get some amount of market signal, but they can't figure out where that beacon really is coming from. And, "How do I get there to actually blow up my company?" And they spin in that valley of death until they run out of money or they just give up.
That's kind of where this guy was, and he's just sort of spinning there, trying to figure out where his market signal is. So, we put together a program and I sent him out doing customer discovery, customer validation. Doing interviews and learning about this. My biggest hurdle with him is trying to get him to charge for his product. He was so afraid of trying to charge for his product. Again, I'm not saying that everybody should do this out of the gate. It was just this one example.
Eight months, probably, eight months into our engagement, after we'd done a bunch of customer discovery, and he built some features based on his interviews. It came to the point that I'd finally convinced him to charge for his product. When he couldn't get people to pay, including lifetime customers that he would grandfather in at a lower price... there was this one group that was adamant, they loved the product.
They called him up and they said, "Listen. Even at your lower rate, I know that this is something you're going to want to charge for more and I know there's a whole path that you're going down here to monetize your business. I just don't think it's right for us to use your product anymore, because we're just not going to be that customer."
This was his most valued customer. He just realized at that point that he didn't have it. He didn't have the product. He didn't have the market. And he killed his product. Yeah, he was two years in. Yeah, he's $100,000 in the hole. But it's better than if it had been another two years and another $100,000. Sometimes the biggest wins, I tweeted this out a couple of weeks ago. Sometimes, the biggest wins in lean startups are actually learning you don't have it. You don't have a real product. You don't have a real market, and you need to pivot onto something else.
Basel: Sometimes, they're just being in denial and they cannot, you know...
Brant: Entrepreneurs are passionate. That's why I love working with entrepreneurs, they're passionate. But, they also need to have some sort of objective measures about whether they're actually killing it or not, whether they actually have something or not.
About the Guest:
Brant Cooper helps startups get started
As the author of the popular Lean Startup book "The Entrepreneur`s Guide to Customer Development.", he is a sought-after writer, speaker and consultant. The "CustDev book" is required course text at several universities, including the University of Chicago MBA program, Stanford University, De Paul, Boston University, UC Santa Barbara and
University of Oslo. Brant has been published in Venture Beat and Business Insider and frequently travels the world speaking to entrepreneurs at conferences, hackathons and workshops.
He has spoken at Qualcomm, the Kuala Lumpur Venture Capital Symposium, and Lean Startup conferences in Vancouver and Michigan. Other speaking events include the Forward Technology Conference in Wisconsin, the Lean Startup Challenge in Boston, and Lean Startup
Machines in London, New York, Boston, Chicago and San Francisco.
Brant consults for and advises startups on Lean Startups and Customer Development, serving clients in Silicon Valley, New York, San Diego, France, Australia and Singapore. Clients include Qualcomm, MOGL, HubKick, MotherKnows, i.TV, and Lean Startup Machine.
Brant Cooper is passionate about growing the San Diego tech community. He runs the San Diego Tech Founders monthly meetup that consistently draws 200 attendees. Brant is also the curator for the San Diego edition of the Startup Digest. Brant mentored at CONNECT for four years and holds open office hours at a weekly informal coffee meetup.
Brant has over 20 years experience in IT and a long track record of bringing innovative products to market. As a leader in Professional Services, Product Management and Marketing, he has directed strategy, design, marketing and implementation of numerous products for a variety of startups including Tumbleweed, Timestamp, WildPackets, Incode and InfoBright.
Brant Cooper blogs at Market By Numbers and tweets @brantcooper.
Comment on the Interview:
Customer Discovery
How to discover your customers? Brant Cooper will tell startups what should they do in order to find potential customers.
