I don’t think the term existed more than 15 years ago; before that it was plain on market research. But that doesn’t sound very cool if you’re a SF startup. In fact it sounds awful – just the word “market” makes me shudder, something from the 80s or even the 50s when we seemed at least to Admen to fit into neat boxes. Like 'man', 'woman', 'child'.
Customer discovery is really about building a deeper understanding of customer, peeling away the layers to really get into the head of your customer, what they do, how they think – and fundamentally whether they like what you’re offering enough to buy it. Or at least tell you why not so you can change it.
It’s part of a bigger methodology that Steve Blank is famous for creating or at least articulating called Customer development that broadly says we should only start building when we know we’re solving a problem for someone who’ll pay for a solution.
Is it just a west coast term for market research?
I spent a couple of decades in corporate life poring over market research, dusty, static, usually too theoretical and pretty soulless. In pursuit of objectivity the human dimension of understanding customers is all too often lost, stripped down to charts and data tables.
Or at the other extreme, I was involved in a few ethnographic studies where we paid an agency to observe customers in their homes to get a really deep (and creepy) window into their lives – a bit like watching a David Attenborough doc. It’s at the other extreme because there was hardly any data. And it was ridiculously expensive.
OK, it’s not market research, then what is it – and why do I need it?
So customer discovery is more human, more agile and iterative and more focused on learning. Unlike market research it doesn’t really end either – it’s an ongoing process, not a phase (when your budget runs out).
And it’s cheaper – because you can do it yourself.
In many ways you should do it yourself too. For a couple of reasons:
You’ll hear directly from customers – and they might tell you more than to someone with a clipboard
You can flex based on what you need because it’s more informal
It’s the front-end to sales.
That last one should be the clincher for any founder. With market research you can never meet the people interviewed or surveyed because it’s all anonymous. Whereas if you do it yourself you can stay in touch. You can find co-developers, A/B testers, potential buyers and advocates – your early adopters who will love to help you if you solve their problem.
Is it hard?
One reason founders struggle with customer discovery is because there isn’t a simple method or many tools. A few good books maybe, but they don’t translate into practical steps for busy and easily distracted business builders.
So here’s what I think:
Start by trying to understand your target customer’s struggle and its causes. Then try to think through what progress will feel like for them when you’ve solved their problem.
Jot down 5-10 hypotheses based on the struggle, what triggers it and when – and what success and progress will feel like. “I believe that my customer ….”.
Turn your hypotheses into questions and make them binary so they can be answered Yes or No.
Find ten or twenty strangers and ask them – in a survey or if you can get them on the phone in a customer discovery interview.
Put your answers into excel and notice any patterns.
Then repeat.
Build more hypotheses based on what your customers said. Keep testing the original hypotheses until you’re comfortable they’re valid. For an insuretech startup 20 might be enough; for an app aimed at twentysomethings you might need 100.
The aim is to make progress with customer validation backing every decision. Cut the subjectivity, the decision shot from the hip, the flailing when nothing seems to work.
Follow your customer
And over time, if you’re lucky, a number of people you ask will show interest in what you’re doing – they’ll be happy to take a call, sign up to an email newsletter, take part in further testing, maybe even offer to co-develop with you. These are your early adopters – and they’re gold.
Next time I’ll give you some pointers on good customer discovery questions and hypotheses for validation – and what to avoid.
If you found this helpful please share it – and send me any feedback. I’m in my second year of customer discovery for my own startup Familiarize and am still learning what my customer wants!