1 00:00:06,020 --> 00:00:10,550 In the last hour of this lecture, I'm going to look at the customer discovery process in detail. 2 00:00:10,580 --> 00:00:16,280 We've just looked at the preparation for it. And first of all, we're going to look at testing that. 3 00:00:16,280 --> 00:00:21,050 The problem that you think exists for customers and you're serving with your product actually exists. 4 00:00:23,250 --> 00:00:27,260 So question anyone, how do you test that? 5 00:00:27,300 --> 00:00:33,770 Your customers have the needs that you think they do. We're going to go and speak to them. 6 00:00:34,010 --> 00:00:43,969 It's obvious. And. You may have heard or read this phrase, get out of the building in relation to the Lean Start-Up. 7 00:00:43,970 --> 00:00:47,030 But now is the time you need to get out of the building and go and speak to some people. 8 00:00:47,240 --> 00:00:53,220 That's how you find out whether or not they've got the needs. You don't go and get a market research agency to do this for you. 9 00:00:53,240 --> 00:00:57,170 You need to do it and you need to go out there. And that's that's your starting off point. 10 00:00:57,950 --> 00:01:01,970 It's about having lots and lots of face to face conversations with target customers 11 00:01:02,420 --> 00:01:07,760 with an open mind and being ready to learn from what you hear from them. And you should have as many conversations as you can. 12 00:01:08,990 --> 00:01:12,050 Five isn't enough. 20 might be. 50 is much better. 13 00:01:13,650 --> 00:01:17,850 And so what you want to get out of the conversations that you're having at the beginning? 14 00:01:18,090 --> 00:01:25,770 Well, the interviews are an opportunity to develop a really deep understanding about the lives of your customers, 15 00:01:25,770 --> 00:01:29,730 their work, their working lives, their home lives, what's what's their working day like? 16 00:01:30,750 --> 00:01:37,110 What technology do they use in working at home? What annoys them and what do they dream of? 17 00:01:37,110 --> 00:01:42,329 What their hopes and aspirations? The more you learn about your customers, the better able you are to serve their needs. 18 00:01:42,330 --> 00:01:51,750 And this is why many really successful entrepreneurs are building products for themselves because they have a deep understanding of the customer. 19 00:01:51,750 --> 00:01:56,520 They are one that they're able to construct a product which really serves the needs of that customer. 20 00:01:57,000 --> 00:01:59,190 And this is your opportunity to develop that understanding. 21 00:01:59,910 --> 00:02:09,240 And really importantly, you're looking for signals from the customer that they are experiencing the problems that you think that they are. 22 00:02:12,350 --> 00:02:20,479 Now you might think there are some there are some products that that so that aren't actually serving a need or a problem. 23 00:02:20,480 --> 00:02:23,990 They're actually delivering a pleasurable experience, perhaps. 24 00:02:24,470 --> 00:02:27,740 Well, that's still serving a need. It's an emotional need. 25 00:02:28,130 --> 00:02:31,430 Understand it and then go and test to find out whether or not it exists. 26 00:02:32,910 --> 00:02:37,520 And I've taken teams of people out into the street to do this. 27 00:02:37,880 --> 00:02:40,010 I've conducted a lot of interviews myself, 28 00:02:40,280 --> 00:02:48,430 and I can imagine what some of you might be thinking about the very idea, hard work and probably a bit nervous. 29 00:02:48,440 --> 00:02:54,769 What will it be like? Will anyone want to talk to me? And some of you might be thinking, it sounds like a bit of a waste of time. 30 00:02:54,770 --> 00:02:59,450 I already know my customers and it's all I really need to go through this. 31 00:03:00,140 --> 00:03:07,370 And on every single occasion that either I or a team that I've been working with have gone out and talked to customers. 32 00:03:07,640 --> 00:03:12,770 We've learned something which is fundamentally changed our ideas about the product that we're building. 33 00:03:13,310 --> 00:03:17,440 So it is never a waste of time, I would say is essential. And. 34 00:03:19,850 --> 00:03:26,380 Just to give you one example, I have an events business that runs technology events and we are launching a new technology conference. 35 00:03:26,390 --> 00:03:30,980 This is to a market that we understand to customers that we already sell to. 36 00:03:31,730 --> 00:03:38,330 We know inside out. But the ending of the events business took the time out to go and interview 37 00:03:38,330 --> 00:03:44,989 20 of our target customers and find out and find out about that their lives, 38 00:03:44,990 --> 00:03:48,290 what they're interested in. Well, what motivates them to go to conferences? 39 00:03:48,650 --> 00:03:51,800 And as a result of those conversations with people that we thought we already knew, 40 00:03:51,980 --> 00:03:55,850 we drew a line through one of the streams of content in our conference completely. 41 00:03:55,880 --> 00:03:59,720 It just wasn't very interested, and we thought it would be it wasn't going to work. 42 00:04:00,110 --> 00:04:04,820 And we and we potentially stopped ourselves from launching a conference which which would ultimately fail. 43 00:04:07,270 --> 00:04:11,290 I'm so conducting those interviews. Your job is to get the customer talking. 44 00:04:11,300 --> 00:04:16,630 It's not to speak yourself. You're looking for a free flowing conversation where you're mostly listening. 45 00:04:17,680 --> 00:04:22,300 Don't stick to a structured interview. Ask open questions and let the customer talk. 46 00:04:22,600 --> 00:04:29,389 And it's and it's in those snippets that you get from the customer when they go off on a tangent that you get the real gems. 47 00:04:29,390 --> 00:04:33,310 So get the real learning and make it very open, free conversation. 48 00:04:34,810 --> 00:04:40,900 One good open question to ask is asking them about the biggest problem that they face in the particular area of work you're focusing on. 49 00:04:41,230 --> 00:04:47,710 That can get you quite quickly to an answer that's useful, but then don't be happy with the first answer that you get. 50 00:04:47,740 --> 00:04:54,700 Dig deeper. To give you an example of this, we were out in the street talking to people about their health concerns, 51 00:04:54,700 --> 00:05:02,130 the biggest health concerns facing and I spoke to one lady, he said her biggest problem was was staying fixed. 52 00:05:02,950 --> 00:05:06,159 I said, well, can you tell me about when the last time you experienced that problem was? 53 00:05:06,160 --> 00:05:11,180 And she thought for a moment and said, you know, now that I think about it, it's actually not much of a problem. 54 00:05:12,190 --> 00:05:15,670 Yeah. No, I don't really have any problems associated with with them, with my health. 55 00:05:17,080 --> 00:05:19,360 If I'd stopped at the first answer, I wouldn't have found that out. 56 00:05:19,600 --> 00:05:25,000 I asked another guy 5 minutes later down the street and he said, My biggest problem is motivating myself to get fit. 57 00:05:25,030 --> 00:05:28,990 I said, What's the. Can you tell me about the last time you experienced that problem? 58 00:05:29,320 --> 00:05:33,250 And he said, Well, last week and gave me a very specific, specific answer. 59 00:05:33,250 --> 00:05:36,160 That was a real problem that he was experiencing. So dig deeper. 60 00:05:38,800 --> 00:05:43,000 The big the big one here, which I think you've probably heard before, is about not selling your idea. 61 00:05:43,510 --> 00:05:47,830 If you mention it at all and mentioned it at the end of the interview and at a very high level, 62 00:05:48,400 --> 00:05:51,790 most of what you hear back is going to be it's going to be useless. 63 00:05:52,270 --> 00:05:54,790 It'll just be somebody congratulate you on having a good idea. 64 00:05:55,300 --> 00:05:58,810 That's got nothing to do with whether or not they're actually going to buy from you at some point in the future. 65 00:05:58,840 --> 00:06:02,530 So at this point, I'm not sure whether or not it's worth doing. 66 00:06:04,650 --> 00:06:09,810 And what do you want out of this? Well, it's a good idea to keep a record of your of your interviews. 67 00:06:10,860 --> 00:06:15,820 When I'm in the car, I usually kind of get into the car and make a recording of my recollection of what's just happened. 68 00:06:15,840 --> 00:06:20,520 Or I find a quiet space and out. But write it off immediately. 69 00:06:21,060 --> 00:06:26,430 And you may well leave the interview with somebody having agreed to be an early adopter for your product. 70 00:06:26,440 --> 00:06:30,690 So that's that's that's one of the things you should make sure you collect is people's contact details. 71 00:06:31,190 --> 00:06:36,150 And you'll probably have to go back to your business to canvas and change a few things based on what you discover. 72 00:06:37,440 --> 00:06:41,790 And we also find it really helpful to build a picture of our target customers, 73 00:06:41,790 --> 00:06:48,790 which we call a persona that's just a one page description saying this is a typical customer we're going to give her, you know, 74 00:06:48,930 --> 00:06:53,640 give us give her a photo, give her a name, describe her work environment, her tech environment, 75 00:06:53,970 --> 00:07:00,360 and describe what we've learned so that other members of the team and we can remind ourselves of of who is that we're targeting? 76 00:07:01,170 --> 00:07:05,430 And then finally, you need to create a school, cause it's great. 77 00:07:05,430 --> 00:07:09,810 It should be in a central place. We put awesome Google spreadsheets of everyone on the team who gets them. 78 00:07:11,490 --> 00:07:18,899 You should decide up from what goes into that school cards. But it's definitely include badges for how painful the problem is for the people 79 00:07:18,900 --> 00:07:23,730 that you're talking to and also whether or not they've found a workaround. 80 00:07:24,060 --> 00:07:30,240 Workarounds are really good signs that you're on something because if a customer is feeling a problem acutely enough, 81 00:07:30,570 --> 00:07:37,950 then they will have figured out a way to solve that problem for themselves, either using a convoluted workaround or by using an inferior product. 82 00:07:38,190 --> 00:07:44,669 So, you know you're on something. If you start hearing a lot of workarounds and also record how excited people are, you know, 83 00:07:44,670 --> 00:07:48,960 you need to be you need to know that there's real motivation there around that need that you're exploring. 84 00:07:50,660 --> 00:07:54,649 Interviewing customers is not the only way that you can test the existence of 85 00:07:54,650 --> 00:07:59,060 a problem that they have and that they care enough to do something about it. 86 00:07:59,810 --> 00:08:07,370 The other option is it works in particular for digital products or real world products or services that need to be activated online. 87 00:08:08,540 --> 00:08:14,300 And here you create something called a low fidelity MVP, which is a minimum viable product. 88 00:08:15,140 --> 00:08:21,740 And we'll talk a bit more about that later on. But essentially, it's the minimum smallest version of your product, 89 00:08:22,100 --> 00:08:26,540 which will get people excited enough to buy it or use it so that you can start learning from them. 90 00:08:28,400 --> 00:08:34,130 Although for a low fidelity MVP, we're using the word viable in the loosest possible sense. 91 00:08:34,880 --> 00:08:41,090 And the classic example is Dropbox, which Reese cited in his The Lean Start-Up Book. 92 00:08:41,420 --> 00:08:47,540 Cedric Houston, he's the founder of Dropbox, created a video demo of Dropbox working perfectly. 93 00:08:48,410 --> 00:08:53,630 Dropbox is a is a service that you use to backup your files from your personal computer in the cloud. 94 00:08:55,430 --> 00:08:59,600 And he released the video and had it link through to register your interest form. 95 00:09:00,140 --> 00:09:06,200 And overnight he had 75,000 people enter their email address into that form literally overnight. 96 00:09:07,730 --> 00:09:11,930 He hadn't built his product yet. He was just finding out whether or not there was any demand for it. 97 00:09:12,920 --> 00:09:15,170 And I think he probably found out that there was. 98 00:09:18,890 --> 00:09:24,140 Another form of a low fidelity MVP is the landing page, as can be a really simple web page like this. 99 00:09:24,420 --> 00:09:27,950 And this is something we just did as a as a random test. 100 00:09:29,920 --> 00:09:35,290 This identifies the needs, the customer need that you've just discovered and explains the solution that 101 00:09:35,740 --> 00:09:40,870 you're planning to solve that needs the clear call to action to sign up now. 102 00:09:40,930 --> 00:09:50,380 But typically you pay for a bit of traffic to go through to that landing page using AdWords or Facebook ads or something like that, 103 00:09:51,190 --> 00:09:54,310 and see how many of the people who arrive on the page attempt to sign up. 104 00:09:54,640 --> 00:10:00,760 And that's a measure of whether or not they identify that need and they think the solution that you're offering can solve it. 105 00:10:02,350 --> 00:10:05,740 You don't have a product to this point. When they click through, this is the kind of thing that they'll see. 106 00:10:06,100 --> 00:10:07,700 And there's a few things to note here. 107 00:10:07,720 --> 00:10:13,690 One, we're collecting the email addresses so these can be our early adopters for when we actually start building the product for real. 108 00:10:14,350 --> 00:10:22,210 To the fact that somebody actually leaves an email address on this form is a good sign that even though they know the product doesn't exist, 109 00:10:22,990 --> 00:10:26,170 that they've got a need that's fairly acute because they really want to get their hands on it. 110 00:10:27,140 --> 00:10:30,100 And three, we've tried to learn something else. 111 00:10:30,100 --> 00:10:33,790 If you remember what I was saying about making sure that you're maximising your potential for learning. 112 00:10:33,790 --> 00:10:36,940 So here we're asking them to explain a bit about why they want the product. 113 00:10:38,530 --> 00:10:47,200 And this has been produced using a tool called Quick MVP and which you can is very low cost and you can try it online. 114 00:10:47,920 --> 00:10:55,360 To give you another real world example of this, we were exploring a project where we've been asking, we'd spoken to lots of lots of customers. 115 00:10:55,370 --> 00:11:03,070 We identified three potential value value propositions, each of them distinct based on what we'd learned from the customers we spoke to. 116 00:11:03,520 --> 00:11:07,000 We created a landing page for each one, just like the one I've just shown you. 117 00:11:07,330 --> 00:11:14,350 And we paid for some AdWords and Facebook traffic to go to those landing each of those three landing pages on one of them, 118 00:11:14,350 --> 00:11:20,290 we had 20% of people sign up, another 1% failure or another 10%, a bit of a lukewarm response. 119 00:11:20,680 --> 00:11:27,250 So you know which one we took forward. And when we took it forward, we knew we could get customers to start using it when we actually launched it. 120 00:11:27,490 --> 00:11:32,200 And we also knew how much it would cost to acquire those customers because we'd just run some Facebook tests. 121 00:11:32,200 --> 00:11:35,740 So we know we know we know the cost per user acquisition. 122 00:11:37,040 --> 00:11:43,650 And it costs about $600 to run that test and about three days to put together and get the results. 123 00:11:44,360 --> 00:11:48,170 And we knew like the voice book search at that point, we had something. 124 00:11:48,350 --> 00:11:51,410 We knew there was a need. We knew people would act on that need.