Michael Zirngibl, co-founder of interact.io (SC 2014) , shares his learnings from a recent Seedcamp Academy onboarding session led by Rob Fitzpatrick. Rob lives and breathes startups. He’s a founding partner of Founder Centric, a YCombinator alum, and author of The Mom Test. Rob joined us at Seedcamp HQ to help onboard the eight new teams joining Seedcamp this February by sharing insights into customer interviews.
At interact.io we think a lot about conversations between sales people and their (potential) customers and how they can be improved (shameless plug: our software connects to sales peoples’ phones and then delivers the most relevant pieces of CRM and public information about a sales contact so they can adjust and perfect their ‘pitch’ in real-time), but our focus is mostly on companies selling well established products or services.
For early stage startups whose product hasn’t been fully built or developed yet, the main objective for customer conversations is to do smart ‘customer development’, which includes getting lots of meaningful feedback on your product idea or beta product from the people most likely to buy your stuff in the future.
So the Seedcamp Academy ‘deep dive’ session by Rob Fitzpatrick – one of the leading experts in customer interview techniques and author of The Mom Test, was a great way of getting a healthy dose of reality checks from some of the best in the industry on that topic.
Kicking off the first part of the session, Rob immediately got my attention by saying that he thinks the ‘WORST outcome’ that can happen at the end of any customer interview is the following statement:
“Your product idea is brilliant – let me know when it launches”
At first this sounded a bit counterintuitive especially when I realized that some of my most recent conversations with potential channel partners, which I deemed as ‘really good’ or even ‘great’ actually included a variation of exactly that statement, but it made perfect sense quickly, when Rob started stressing that
Every successful customer conversation or interview needs to have a commitment of sorts by the customer.
In most cases this might not be a monetary commitment (great when it is, of course!), since often you don’t have a ‘Generally Available’ product to sell yet and getting actual pre-payments on your lovely PowerPoint or beta app is a challenge for even the most talented and persuasive startup founder.
So Rob quickly helped us put together a list of alternative commitments (mostly in the form of ‘Time’ and ‘Reputation’ for the person you interviewed at the prospective customer) that every startup can ask for and which can be even more valuable in the long run.
If your interview does NOT end with a ‘NO’, you as the startup founder most likely haven’t done a good enough job or wasted an opportunity asking for the right amount of commitment.
This is the startup founder version of the Sales ‘ABC’ (-> Always Be Closing), but frequently is forgotten, since a lot of founders have a tendency to feel that simply getting ‘confirmation’ from potential customers is sufficient validation for their own brilliance.
The feedback on your product you received from a person who is not willing to give you any meaningful commitment in return for your time, does not deserve any prioritization.
This can be a tricky one, since most founders are generally grateful for any feedback they can get, but it’s actually great advice in the framework of Lean Startup where prioritization of functionality is everything.
The second part of the session focused mostly on actively driving the customer interview away from non-essential ‘fluff & chit chat’ and towards meaningful and specific insights.
Using a number of real-word examples and a mock interview with one of the other startups present, Rob quickly illustrated the key signals that every founder should watch out for in customer interviews that will most likely pinpoint the most valuable insights and the key areas worth drilling deeper into.
Rob recommended that each of the key signals listed below (along with strong associated emotions) should immediately prompt a set of smart and focused follow-on questions to further clarify the customer situation and hopefully lead to a realistic assessment if and how your product fits into the specific context.
Numbers – if the customer mentions a specific metric critical in their business
Goals – if the customer is able to articulate a key objective (especially ones that affect them personally)
Obstacle – if the customer mentions specific real world challenges that prevent them from being as smart, fast or efficient in their job as they could be
Person – if the customer mentions a specific person or role in their organization that is particularly impacted by an inefficient process
Workaround – if a customer mentions specific ‘hacks’ or other steps they take to get to a specific result or to circumvent an inefficient process
Actual Amounts of money – often the ‘kingmaker’ of all interview results – if a customer can identify a specific amount of money lost repeatedly because of inefficient processes (that could be addressed by your startup’s product).
Rob concluded his session by putting his finding and recommendations in the broader context of a S.P.I.N. selling (Situation, Problem, Implication, Need-payoff) strategy, one of the most commonly used sales methodologies used in the Western world and shared with us the most important question for every customer interview:
“What are you doing about [it] now?”
The more efforts, resources or money the customer puts into workarounds to address a specific problem, the better your chances that they will jump at and pay for your startup’s solution, when you’re finally ready to address their specific needs.
Just make sure to keep everyone at your early customer sites engaged and increasingly committed along the way.