Entrepreneurship evokes a “How did they do that? Why didn’t I think of that?” mystique. Perhaps it’s the ingenuity and artistry to identify a problem and devise an elegant solution. Perhaps it’s the elusive glamour—the leadership, the self-empowering potential, the euphoric message that dreams come true. Perhaps it’s because we are oblivious to the messy process with frustratingly tedious effort that comes before glowing success.
While we celebrate the intrepid entrepreneur, the litmus test for success is product/market fit or, to quote University of Cincinnati professor Mary Elizabeth Debs, “So what? Who cares?”
Those blunt four words are a brutal indictment against a belief that something is important. No matter how well-crafted the sentence, it is a victim of a red ink edit if it doesn’t add to the story or argument—likewise entrepreneurs must choose the right words to explain their product.
In the startup world, Silicon Valley success story and academic Steve Blank addresses product/market fit with his now legendary four-step Customer Development process.
He makes it clear that a startup is not a small version of an established company, because established companies execute proven business models, while a startup is a temporary organization searching for a repeatable, scalable, profitable business model.
As such, the first step in the Customer Development process is Customer Discovery, which answers two basic questions:
- Do I, the entrepreneur, fully understand the nature of the problem I am trying to solve?
- Do people care about my solution?
THE ENTREPRENEUR’S SEARCH TO TEST ASSUMPTIONS
Successful entrepreneurs offer better solutions than the competition and compelling reasons why their mousetrap is better.
It seems obvious; but to do that, entrepreneurs must discover if their perception of the problem and solutions aligns with their customers’ perceptions and if enough people want the entrepreneur’s mousetrap to justify a business venture.
Blank advocates customer discovery using the scientific method where entrepreneurs create a series of hypotheses to test beliefs about their business venture. He them tells them to “get the heck out of the building” and engage in a face-to-face, listen-to-learn meeting with potential customers.
If hypotheses about the nature of the problem and customer sentiment about existing solutions are proven correct, the next round of “get the heck out of the building” is to discover if customers want the entrepreneur’s solution and why—or why not.
When hypotheses are proven wrong, entrepreneurs discard them and rethink possibilities (different solution, different features, different audience, different price point, different explanation, etc.). Then they form new hypotheses and repeat Step 1 Customer Discovery until their potential customers confirm each hypothesis.
Step 2 Customer Validation—the second half of the Customer Development search—puts those confirmed hypotheses to the test with real sales to validate if the business model has a fighting chance of success.
Writing hypotheses is a shortcut to flush out perceptions versus reality by forcing entrepreneurs to encapsulate reasoning in single sentences with true/false verdicts.
- Hypothesis: People who can’t or shouldn’t drive prefer riding in their own cars driven by private chauffeurs to taxis or Uber. True or False?
- Hypothesis: Students with mental health problems find college services inadequate and will welcome phone call therapy. True or False?
- Hypothesis: There is global food insecurity/illiteracy and aquaponics alleviates those concerns. True or False?
Chauffer vs Taxi. A likely first impression of chauffeur service would be “that’s an extravagance reserved for the wealthy.” If pricing overcomes that perception, the value proposition might be “You can afford to live the luxury.” But will elitism persuade enough people to validate the business?
If customers could request the same driver the way they request the same hair stylist, the value proposition shifts to trust. If taxis have issues with germs and bed bugs, another different target audience might be the person who values hygiene and the business might have a cyclic peak during flu season.
Phone Call Counseling. If students need mental health support, what makes existing services inadequate? Do students need help on an impulsive rather than a scheduled basis or late at night? Will students open up more easily in the comfort and privacy their own room? Does it matter unless insurance companies cover counseling via phone?
Customer discovery brings out the Sherlock Holmes in entrepreneurs because they have to listen, assess what they hear, and tweeze out the right questions. The resulting insights create the product/market fit.
“Counseling when you need it, where you want it” is a different value proposition than “Counseling to survive college.” And if there are, let’s say, three major problems, the mission could be “Counseling for depression, anxiety, and addiction.”
Global Food Shortage. The average person might think solving the world’s food shortage and illiteracy is a daunting goal for idealists. But that could be reframed so the value becomes personal: We are solving the world’s food problem one kitchen at a time with local, organic produce—or an easy aquaponics system if you want to grow your own—that can help reduce poor health, lost wages, and medical costs.
REFINING THE ENTREPRENEUR’S MISSION
Time and again, too many entrepreneurs misunderstand or misstate their mission. The question is why. Are entrepreneurs conflating their personal passion with value to the customer? Is there a failure to understand the nature of the problem? Or are they simply not finessing the English language to communicate their value proposition?
Customer Discovery with its hypotheses building and customer feedback lets entrepreneurs test their beliefs and harvest insights—which may be delivered as an off-the-cuff comment (too bad this is green, because if you had blue, we’d buy 1,000).
Customer Discovery helps ensure entrepreneurs have a viable business model before they pit the ticking clock against burn rate (the rate at which money is spent) in their race to success. Their ability to choose the right words and decipher customer responses can trip them up or push them over the finish line.
About the Author
Erikka Brickey has a master’s degree in English, diverse small business and non-profit experience, and a relentless curiosity to probe ideas in search of insights that drive meaningful solutions. Currently in publishing, she recently created educator materials for entrepreneurial customer discovery.