Do you know why most startup projects fail? Some attribute it to a lack of funding. Others might say that they didn’t have enough time to build their product or they didn't learn how to tell a great brand story.
But in the midst of all of those excuses, the real element that is lacking is customers. If you had customers knocking on your door to give you money for your product, all other problems would be solved. However, giving your project plenty of funding or devoting more time to it will not lead to more clients.
It all boils down to customers. If you are able to build something that they love, your company will survive, with or without funding.
Are you building your product blindly?
Everyday, countless founders make the mistake of building their product blindly. They spend hours, weeks, months - or worse, years - making their perfect product, only to release it on the small chance that someone will want to buy it. This means that thousands of fully built products end up in the trash heap because their customers never really wanted them. Don’t chance having your product end up in the dumpster - conduct some customer development so you can know that your customers want what you’re making.
Don't build you product blindly. Take the time to talk to your customers before building your product.
How can you get started?
Follow this guide until you have something that your customers love.
Determine your Product / Value proposition
You have a business idea. If you didn’t, you wouldn’t be here. You may have already started building it, but if you’re lucky, you haven’t started yet.
The first step into having your customers build your product for you is to create a simple value proposition for the direction that you want your business to go. This will put any potential customers that you talk to in the direction that you want them to go. At the end of the day, a happy medium for a successful startup is where what the founders want to build and what solves your customers’ problem meet.
The article, “Useful Value Proposition Examples (And How to Create a Good One)” by Peep Laja on ConversionXL provides a thorough explanation of what your value proposition is. In short, it is the way in which you present how your users will benefit from your product.
Examples of possible top level value propositions for the Founder Institute would be:
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Learn How to Build a Lasting Company
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Learn How to Start Your Company from Scratch
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Make the Leap from Employee to Entrepreneur
Do you see how the same business can be built from these three ideas? If you look at our homepage, you will see that we chose the third option because that is the one that agrees most with our vision while resonating with our clients.
When creating your value proposition, be sure to make it something that you think your customers will like or find useful.
Construct a Landing Page & Collect emails
Once you've established a value proposition, create a place that you can direct your customer to that will house it. Note that you could take your value proposition and directly contact customers to ask if it resonates with them, and get feedback from there. But for the sake of this guide, we will only go over how to put it onto a landing page and test different variations of it. This will also allow you to start building your very first audience through the form of an email list.
Your page and value proposition don’t have to be perfect and are likely to change. In fact, your entire product is likely to change. But it doesn’t matter what we think, it matters what our customers think. This slideshow will help you set up your landing page, even if you don’t have any coding skills. It also touches on the issue of split testing and how you can easily devise a split testing campaign. Split test two or three variations of your value proposition so that you can begin to identify trends in what your customers like and don’t like.
Find Where Your Customers Hang Out
Whether you decide to build a landing page or test your value proposition without it, you are still going to have to find the places where your customers spend their time. This may be a niche forum, an industry blog, or other similarly themed locations.
Download our list of 12 places to find your customers
Study the source of customers so you can determine how they communicate and what they like. Here is an article, “Do you speak your Customer’s Language?” by Monique De Maio recommends “employing tone, a voice, jargon, value propositions and marketing messages” that make sense to your customer.
For instance, since the Founder Institute is in the startups niche, we know that our customers will likely be talking about “raising funding”, “building traction”, “finding a co-founder”, or other related subjects. We can now tailor many of our messages from this knowledge.
Create Customer Conversations
There are many different ways to get valuable information from your potential customers. Below are two straightforward yet effective methods to acquire feedback on your offering.
The Customer Interview
This article from Founder Institute mentor Justin Wilcox, titled “How I interview my customers”, outlines the process that he uses to get the best information from his customers. In customer interviews, these are the questions that he employs:
1. What’s the hardest part about [problem context]?
2. Can you tell me about the last time that happened?
3. Why was it hard?
4. What, if anything, have you done to solve that problem?
5. What don’t you love about the solutions you’ve tried?
Justin posits that the hardest part of this exercise is filling out the problem context section.
Emailing Your Potential Customers
While this is a more concise method, it will likely yield very limited responses. However, it may motivate you to actually take the plunge and talk to customers as talking directly to customers is often a more daunting task.
An article by Gregory Ciotti on HelpScout, titled “The 7 Best Ways to Get Customer Feedback”, outlines email and surveys as some of the best strategies to receive customer feedback. Although surveys are for more committed customers, email or messaging customers is the most direct way.
For example, if you have found your potential customers on a forum in your niche, send them a message that directs them to your landing page to get feedback. A question like “what would it take to get you to sign up for this?” can be an effective way to see if it piques their interest. If they like it, many of them will just go ahead and sign up through your email form.
Fine Tune Your Value Proposition
These methods of getting customer feedback may seem like they are very time consuming tasks for a young startup. There are sure to be other more effective things that you could be doing, right?
It is crucial to your business to get some initial feedback. Before paying for ads, market your landing page or invest time into building a product.
This article on KISSmetrics, “The Few Sentences You Need to Dominate Your Market,” details several winning value propositions from a number of different companies and their quest to determing what their customers want.
Once you’ve gotten your intitial feedback, look for trends and tweak your value proposition based on this info. If you sample an adequate number of customers and 50% of them say that your value proposition is “boring” or “doesn’t compel them to sign up”, change it to something else until feedback improves and only 10% or less of your customers feel negatively about your offering. You are now on your way to improving your business and product.
Ask Your Customer Advocates and New Customers
At this point, you should have considerable feedback from your initial customers. After you have begun to tweak your product, go back and talk to those customers again and show them your new page. You should have fixed some early problems that were pointed out, and should now be on your way to creating a winning value proposition and, hopefully, a winning product. However, don't abandon your search for feedback as you company will continue to evolve.
This is round two of your customer feedback. If you have gone through the previous steps correctly, you will have something that is closer to what your target market is after. Continuously tweak and test your value proposition to make it even better and create something that your target market can't live without.
Go Fast
Speaking to your customers going through the above process can seem like a slow and laborious process. But there is good news.
You can now start paying for advertisements for your landing page and acquiring customers into your funnel much faster. Your conversion rates will be much higher because you’ll actually be promoting the correct offer for your market and you’ll be able to target certain pain points that you’ve learned from your customers.
One of the overlooked benefits of doing customer development before you build your product is that it actually makes your product development faster. Getting feedback like this will allow you to focus on building your core features that you know that your customers are going to like. You won’t have to spend time “guessing” during the development process.
Image from the book "Lean Customer Development" online version by Cindy Alvarez
In chapter one of the Lean Customer Development Book by Cindy Alvarez, she gives an example of how each hour you spend on customer development, saves you 5, 10 or 20+ hours of building your product. If you were to spend 10 hours on customer development it could easily save you 200+ hours of work.
Conclusion
Don’t build your products blindly!
Most founders are afraid to go and talk to their first customers, which causes them to spend way too much time being unsuccessful and less (or no) time being successful. Go through this process to avoid burnout with you and your team, and to build better products and your first audience.
No matter what you go through the process to achieve primarily, it is an invaluable step for your business.
