When practiced effectively, customer development can be an extremely valuable practice for getting startup ideas, testing viability of an idea, or optimizing existing products or ideas. It can be used to gain deep customer insights to help build products people love. When done incorrectly, it can result in a lack of learning, false results, and wasted time. Below are five of the most common customer development mistakes I see entrepreneurs and innovators making.
1. Only talking to friends and family
If your friends and family fit within your target customer segment, and could potentially be customers, they can be a great starting point. However there are some downsides. Friends and family may be more prone to agree with you and compliment your product. This can result in false positives. When conducting interviews with friends family, try not to focus on your idea and instead try to understand what their problems are. Asking friends and family for introductions to potential customers is a great way to get more interviews.
2. Asking bad question
Ask questions that you can learn from. Don't ask questions that lead to biased responses or don't illicit customer insights. Before starting an interview, determine what exactly you want to learn.
Examples of bad questions include:
"Do you like [something everyone likes, ie making more money]?" -- You won't learn much that you don't already know, and hardly anyone will say no
"What do you think of my great startup idea?" -- An alternative, at the very least, would be to say that it's your friends startup idea, and that you think it's a lousy one, to make them more prone to invalidating your assumptions. Otherwise you won't gain any real insights and people will be afraid to invalidate you.
"Would you ever [behavior you want them to do]?" -- Without qualifying the question or providing context, you will simply get biased and binary responses. You don't want to just validate or invalidate, you want to gain insights that can help you build an awesome product.
3. Asking the wrong people
Feedback from people serving the same customers, or that used to be customers, or could be customers under future conditions can be valuable but you really want to be talking to potential decision makers. You can gain some great insight from such secondary sources, however insight from prospective customers is more valuable. The only opinion that truly matters, is your customers'. Asking between one and three qualifying questions at the start of an interview can help you make sure you're talking to someone in your target customer segment.
4. Pitching instead of listening
The goal of customer development is to learn from your customers about how you can build the best product possible. Learning happens when you are listening, not when you are talking. Your ears are your most valuable tool. You will of course need to do some talking to guide the conversation, but in general, listening is an extremely valuable skill to have in practicing customer development.
Pitching an idea instead of doing a thorough customer development process will result in lesser learning and biased answers that can lead you down the wrong path. The goal of customer development is not just to validate or invalidate an idea, it's to learn what's valuable to customers and optimize the offering. When pitching an idea, people won't want to tell you your idea stinks because their natural inclination is to agree and compliment you. In addition, you will miss out on learning key customer insights. After you feel confident that you're solving a real problem, and have a viable solution, pitching and pre-selling can be a valuable exercise.
5. Only using online surveys or focus groups
It's hard to get out of your office and go talk to actual customers. It's so much easier to just email surveys to people. But you will not learn nearly as much from surveys. In-person you can sense emotion and enthusiasm and you can learn more by asking follow up questions. Focus groups can lead to biased responses, especially if you're discussing personal matters.
6. Asking "how much would you pay?"
Trying to determine how much to charge for a product is very tricky. There are a few strategies that can be helpful, but asking how much someone would be willing to pay is not one of them. Asking this questions can result in the customer getting attached to the price they blurt out. The price the state will probably be the price they "wish" it was, which may be much lower than it's actually worth to them.
7. Not getting real validation
A customer might say "yes" to a question you ask them, but words are far different from actions. Asking someone to pay, even a dollar, will validate that you really have a product that they want.
To learn more, check out "Customer Development for Entrepreneurs": the book, and the video course.