How To Start Anything: A methodology for testing an idea before you fully invest in it

Who this is for:

  • People starting new things
  • Business startup teams
  • Sales organizations that are not making your goals
  • Sales managers looking for a better way to train talent
  • Products in search of new markets
  • New product development
  • Community and not-for-profit organizations creating new initiatives
  • Turnaround situations
  • Failing businesses

And more. This article offers a simple, proven methodology for starting things.

What is ‘Customer Discovery’ and why should I care?

Do you know what your customers want?

Are you sure?

Do you even know who your best customers are?

Do you know where to find them?

Do you know what motivates them, what makes them happy?

Do you know why they buy, donate, support, refer, or otherwise connect with what you do?

Most business owners and managers are going to answer yes to these questions. After all, it’s your business to know these answers.

But most of you are wrong. How do we know that? Because most businesses fail, over ninety per cent. The ten per cent that make it may know the answers to these questions. It’s likely that they know the answers to some or even just one of these questions.

The one per cent that are very successful would respond differently.


One honest response is:

“We know what we don’t know.”

A very valuable thing to know.

So even if you disagree with the above hypothesis let’s pretend for a minute that it is correct. That, in fact, most businesses don’t know much about their customers. Crazy, right?

The motivation for writing this article is the hypothesis that you don’t know enough about your customers and that if you did you’d be far more successful in business and in life. I didn’t make this up. It actually started with a very successful Silicon Valley entrepreneur named Steve Blank. Steve is an engineer and like a lot of engineers he likes things to be logical processes that can be improved through iterative refinement. He looked at the way business is taught and he saw a process that was illogical and broken. That process was business planning.

To make a long story short, Steve had an epiphany, several actually, and he wrote a book about them. Here are a few (paraphrased):

  • Business plans are baloney if you’re starting something new, building a new product, entering a new market, or repurposing an existing product, because they are full of guesses and estimates (which is just a nicer way to describe guesses)
  • Startups are not businesses because you cannot operate like a business until you have a proven model
  • Startups are a search for a scalable, profitable business model

Once he realized these things, he built a model for starting things, all kinds of things. And he tested it against real world situations and refined it based on that real world feedback. It became a movement variously referred to as Lean, Lean LaunchPad, Lean Startup, etc. It is now taught at Stanford and he has been featured on the cover of Harvard Business Review. He has written a comprehensive book on his theory and experience. Being an engineer, he wrote 600 pages about epiphanies. Based on my experience, which I’ll detail below, I was pretty sure I could pare the gist of his epiphany into about 15–20 pages. That’s what you’re reading.

Some background

I’m not an engineer but I have started things and they have been both failures and successes. This experience led to being involved with teaching Steve’s process to twelve teams comprising 36 founders of software startups*. It was an enlightening experience and quite successful. But I wondered, could this be applied to starting other things? That question led to this manifesto.

I had my own epiphany. In economic development circles, most new job growth is assumed to come from startups, new businesses. But I learned something from my experience working with those startups because of a decision made serendipitously during its planning process.

The group presenting the program, High Tech Rochester (HTR, now Nextcorps)), held a competition for spots in the program. There were ten slots for teams of two or more founders. Why two or more? There’s a good reason which we’ll get into. We had 29 applications and ended up choosing twelve. The two additional slots were made for two teams, that technically were not startups. One was an early stage medical device company, pre-revenue, but well-funded, and close to going to market. The other was a team from a successful technology business with many customers and over sixty employees. The parent company empowered three of their employees to go out and form a new company. They were paid and given twelve weeks to work full time on it. These two teams provided the experience that led to our epiphany.

*Eventually the program expanded and when ended had trained 36 startup teams with over a hundred founders.

150 Conversations

During the twelve week program the teams were tasked with going out and talking about what they were doing with 100–150 people in their business sector (Customers). Not selling, simply asking questions and listening.

The results?

The manufacturing technology company team opened a new market ten times larger than the one they thought they were targeting.

The medical device company refined their very complex story into a simple model, found a significant source of early stage revenue in an unexpected (and unregulated) market and went on to raise significant venture capital.

This was interesting. This startup methodology might be a game-changer for other kinds of businesses and even not-for-profits. This became my hypothesis and I began to go out to my potential customers (you) and test it.

Introducing The Customer Discovery Matrix

ma·trix: Something that constitutes the place or point from which something else originates, takes form, or develops

The process we settled on is something we dubbed the Customer Discovery Matrix. I use the word ‘matrix’ for a reason. As the above definition relays, a matrix is an origination point, the point where things start to develop. In the business world, especially with startups and product innovators, there is the general conception that these things originate in the mind of the inventor or developer. The ‘lightbulb going off in a thought bubble’ sort of thing.

Unfortunately this completely wrong from the perspective of trying to commercialize or popularize an idea. This is only possible if a group of people exists that want the solution and are willing to place a value on it, a value they are willing to exchange for the benefits it confers. These people, for our purposes, are Customers.

Customers are the Matrix, or beginning point, for any successful enterprise. Whether you call them supporters, consumers, evangelists, followers, friends, or anything else, without them you do not have a scalable, profitable business model. So it goes to follow that you must find these people, a process of Discovery. There must be enough of them and they must be sufficiently motivated and capable of making a buying decision (and paying for it).

Simple enough, right?

Simple but not easy. But if it were easy everyone would be successful and everyone’s success would be very limited. So, you should be happy that this requires some work because if you do the work you automatically are ahead of all of those who can’t be bothered. And I’m going to share how to do this in a logical manner. But first we’re going to share a secret about the whole lean, customer discovery matrix rigamarole:

If you do nothing except talk to 150 people about your idea over the next three months you are far more likely to be successful than someone who only talks to a few dozen.

That’s it. Even if it’s 150 random people and you don’t do a very good job explaining what you do or listening to what they tell you. You’ll still be way ahead.

But imagine if you do this with a logically targeted network of people who are likely to be customers for your product.

And you have a simple methodology for those conversations that ensures you get the most out of them.

And you have a way to learn, iterate, pivot, and otherwise refine your product and your message based on those conversations.

How well do you think you would do?

The evidence is overwhelming. You would blow by those people who can’t be bothered to test their beloved idea in the real world. And you would probably be successful.

Either that or you would fail.

But failing in three months is a lot better than failing in three years after spending boodles of money and burning through time you will never see again. The Matrix was designed to help you get there.

Those twelve teams

When we were reviewing our initial program experience advising and coaching the 36 founders in the HTR LaunchPad Program we realized a couple of things. These epiphanies are based on our own customer discovery process, our customers being the participants in the program and the 50 or so mentors, advisors, and experts, who went along for the ride:

  • Most of the teams did not hit their numbers (10–15 customer conversations per week for 12 weeks, total 120–180)
  • Some were way below those targets.
  • There was a direct correlation between the number of conversations and the success of the teams
  • Many of the teams were not clear on how to find the customers
  • Many did not get the most value out of the conversations they had

These things represented a failure on the part of our program and to some degree the methodology it was based on. This was because we did not have a model that taught these things well enough. In fairness to everyone involved in this very successful project, it was our first time and we learned as much as the teams in doing it. But it could be improved.

So we decided to try and find a way to improve the process so that the participants had a logical framework to follow and a way to keep track of progress with metrics. That framework led to our hypothesis, The Customer Discovery Matrix.

This is a work in progress and always will be.

The Basics: Your Toolkit

Any time you start something you need to get together some materials and tools. The Customer Discovery Matrix is no different, though the tools you need are less likely to be things like drills and wrenches (though there may be a place for them too). So here are the basics you need before getting started:

Toolkit: Team

This process requires that you assemble a team rather than going solo. There are very good reasons for this. When more than one person listens to a conversation they hear more than one version and they pick up a lot more information, both verbal and nonverbal. The team also helps eliminate what I call Inventor-Bias, the tendency to only hear things that validate your ideas.

Teams can be two or more people but we found that four seems to be the upper limit, depending on the complexity of what you are doing. However, an overly complex idea is far less likely to make it through this process. That’s why it’s called Lean. Even if you are dealing with complexity (and our medical device company had a very complex story), the customer discovery matrix will help you zero in on the core of the idea, that part you can describe in a few sentences. So, a bigger team may not correlate to greater success.

It’s a democracy: no hierarchy of roles or titles

When your team is chosen, all titles and hierarchy go out the window. For the sake of simplicity everyone’s title is ‘founder’. We like this phrase because it does not imply any kind of structure. You can’t build an org chart around founders. Because you don’t know anything yet, no one gets to be an expert, regardless of your prior experience. If you are senior management in your ‘real’ life, this liberates you from all that day to day crap and allows you to focus on the project. If you are just entering the workforce, you get to work with more experienced people in a new kind of context, as peers. This empowers all team members to contribute even the silliest observations and, hopefully, removes politics as much as possible.


All team members should be given a sabbatical from their regular responsibilities for the three months this process really requires to be effective. Our manufacturer gave his four team members a complete separation from the company even though they were key employees. They chose a new company name and rented temporary working space away from the office for four months (they took an additional month for preparation and follow-up).

One ancillary benefit of this was that the team had a member who was the second most important person after the owner in the parent company. He was being groomed to lead the company in the future. Because he was so deeply immersed in the operations, removing him from day to day accessibility was a serious decision. But when we asked him how that was working he told us that he never got to focus his attention on any one problem while in the office because he was the go-to guy for all kinds of stuff. By pulling him out, his boss not only got him focused on an important new project that would use all his knowledge, he also forced other employees to take up those roles themselves, improving their skills and experience.

As you might imagine, this represented quite an expense for the business. Four salaries and benefits for four months, the lost productivity from removing them from their day to day roles, and ancillary overhead expenses for the project added up.

Toolkit: Hypothesis

Once you have your team, you need to form a hypothesis, the idea you are going to experiment with over the next three months. In a traditional business planning process a hypothesis is formed and an operational plan constructed around it, typically before you know the hypothesis is correct. You might conduct market research, doing surveys and focus groups, but it’s still a very expensive guess. Customer Discovery seeks to remove the guesswork before significant resources are committed. For this reason failure is considered a viable and valuable outcome: Better to fail before spending a lot, than after.

So how do you build the initial hypothesis? It has four parts:

  • A problem
  • A market with that problem
  • A solution
  • A value proposition that is the measurable result of applying the solution to the problem. Value, in this case, to your customer.

At this stage, as you put this together, assume nothing you postulate is accurate. It is simply a hypothesis that gives you a beginning point for your customer discovery experiments. It also gives you a timeline for the discovery process:

  1. First test your problem hypothesis by going out and asking people if it is a real problem for them (more about this in a bit)
  2. Size the market that has this problem. This is challenging because you need to know size, urgency, ability to pay, and obstructions to change. We go into how to do this in the next section.
  3. Next test your solution by showing them a Minimum Viable Product (MVP, lots more on this next)
  4. Finally, using what you learned, evolve a value proposition, from the customer’s point of view (POV). This is your marketing story for when you start selling.

Toolkit: MVP

The Minimum Viable Product or MVP is just what it says: The least amount of product development required to give you some way to demonstrate your proposed solution.

You keep this dead simple because it is almost certainly wrong in significant ways that you are unaware of at this point. Any extra effort put in at this stage is not worth pursuing. The Discovery process is designed to help you make both incremental and major changes to the MVP, based on market feedback, before spending resources on a finished product.

So, what is a MVP?

  1. A story. Whatever form your MVP takes, you are going to need a brief story to demo it. The story formula is pretty simple- it’s an early version of your value proposition: We identified this problem, then we designed a solution that works like this, and the result, for you, is this. Get this one right by the end of your twelve weeks and you are golden. This also serves as your elevator speech when you go to market.
  2. A sketch. A drawing on the back of a napkin, a quick flow chart or storyboard. Just enough to point at it and get a response.
  3. A video. Tell the story visually. It can be very minimal. Our medical device company had a 3D image of a knee joint that rotated, a few seconds at most. But it conveyed a lot of information when accompanied by a brief story. Their first MVP was five slides filled with technical language and images. The video and story replaced all of it.
  4. A user-interface mockup. There are tools like Omnigraffle or Sketchup that make it very easy to mockup a screenshot or any kind of interface. Then you can tell the story by saying ‘first you click here and enter this, then this happens’, etc. Your customers will start suggesting changes and asking questions regardless of whether you have a working model. Humans have incredible imaginations and they are experts in your subject matter.

Toolkit: Theoretical Market Personas

Who are you going to talk to? We are going to get into this in detail but before you can start out contacting people you need some process for identifying them. This is really a form of market research but with a caveat: You need to identify actual people, individuals. This is a major difference from using Google or other databases to identify a market. Why? Because one conversation with a knowledgeable person will provide you with reams of information not found in data.

You find your market by hypothesizing who has the problem. You look at what they do, what their workday might look like, their background, etc. Our teams were encouraged to find a picture of their generic customer a la ‘Joe Sixpack’ or “Jill High Power Executive’. Then they created a backstory for them. This is all fiction of course, because until you talk to real people you have no real knowledge.

However, by putting them into your Toolkit you begin a market hypothesis and you can start thinking about where you find these people (more about that in a bit). Once you start to talk to them it is certain that many, if not all, of your assumptions are probably wrong. No problem, just change your persona to include what you’ve learned.

Toolkit: Business Model Canvas

You are going to be gathering a lot of information during Customer Discovery. You’ll learn about the value you provide, the ways people buy, pricing, distribution, who you may need to partner with, how much things cost, and much more. Keeping track of this can be daunting. But this process comes with a worksheet. It’s called the Business Model Canvas and it has its own really long book and website, both of which are only somewhat useful. Let’s focus on how to use this tool to track your progress.

Imagine the Canvas on a whiteboard or better yet get a big whiteboard and draw it. Whenever you acquire a nugget of knowledge find the relevant space on the canvas and add it, changing whatever was there to reflect your new knowledge level.

When we started with our twelve guinea pigs, we asked them to take a crack at filling this out before they had done any Customer Discovery. You should do the same. Be sure to keep copies of each set of changes by taking a picture of the whiteboard or saving versions if you do it digitally. If for no other reason it will give you a laugh later when you find out how wrong you were. That’s not a bad thing.

When you’ve had those 150 conversations, your Business Model Canvas is going to be a pretty powerful window into your business model. You may look at it and realize your idea isn’t practical. You may find you’ve changed gears radically and are now going in a direction you’d never expected. You might be just making refinements to a basically good idea. All of these results are good. If your idea is now a working model, then your Canvas becomes the template for an operational business plan, a template that is real world, not based on guesses.

Toolkit: Peer Teams

Want to multiply the effectiveness of your Customer Discovery process? Partner up with non-competing startups or organizations and do the process together, meeting weekly to present what you’ve learned since your last session. In our first program we had no plans for this kind of interaction. We had twelve teams with 36 founders and another dozen or so mentor/advisors in the room each week. The plan was for each to to do a PPT presentation of their weekly progress, be critiqued by the teaching team, and then to move on to an educational session. That’s the way Steve Blank taught it.

But the very first week something really interesting happened. After each presentation various people in the room started offering feedback, good feedback. The teaching/advisory team hadn’t planned on it and we were surprised, but it was pretty cool to watch. By the time the teams had completed the twelve week process they were a close knit group and a room full of Customer Discovery experts (sort of, in some cases). And we had no dropouts. This peer review and input added to the value of the program and enabled each team to draw upon the expertise and experience of the other founders.

We’re guessing that you are starting to see a pattern here. Everything about your business idea is a guess at this point and customer discovery is a series of experiments. Each time you run an experiment you change the items in your toolkit to reflect the reality. That’s the crux of the Customer Discovery process. Now we’re going to look at how to enter the Customer Discovery Matrix and build a scalable, profitable business model.

Matrix: ‘Get Out of the Building!’

Steve Blank’s really big epiphany was that you can’t learn anything about your idea by sitting in your lab, office, workroom, store, or the Internet. You have to get out of the building, literally. In his classes at Stanford he makes his students leave and go talk to people face to face, even if it means getting way out of your comfort zone. You may have to cold call, walk into offices, collar folks at their coffee joints, and call in any favors you can for referrals. Most people have a hard time doing this. But like a lot of hard stuff there are two things that happen when you do:

  • The value of what you learn is proportionate to the challenges you faced learning it
  • It gets easier every time you do it

The other thing you learn is that you, the founders, have to do this yourself. No passing it off on salespeople, call centers, PR firms, focus group organizers, surveys. You have to get out of the building and have real conversations.

Matrix: Conversations Are Currency

It is trendy to try and make a game out of difficult tasks. This is called gamification. We decided a little gamification might help illustrate how the Customer Discovery Matrix works. Like most games, it has a form of currency, in our case, the currency is Conversations. And like any currency they come in different denominations. Before we define them, we’ll define the game:

Over the next three months your goal is to have $10,000 worth of conversations with Customers. You will track this by adding up the value of each conversation based on its denomination. While this may feel like a gimmick, it really does give you a target and a motivation for going after the high value conversation rather than the cheap, easy, but low value ones.

Conversations have an assigned value based on how they are conducted:

  • Face to face with two or more founders present: $100
  • Face to face with one founder present: $50
  • Phone call with two founders present: $20
  • Phone call with one founder: $10
  • Email exchange: $2
  • Text or Tweet exchange: $.50 (per exchange, not per text/tweet)
  • Focus group: $.25 per participant
  • Survey: $.10 per participant

As you can see, this kind of valuation rewards actual high value conversations vs. easy but low value exchanges. The highest value is awarded to face to face conversations with two or more founders present, because having two of you there means you’ll hear and learn twice as much and you’ll cancel out individual founder biases (that tendency to hear things that validate your own hypothesis).

Of course we put this together to illustrate a point, but it can be a valuable tool because it focuses your team on finding and having high value conversations. These $100 conversations are much more than information gathering sessions. They offer the opportunity to build a network, acquire a reputation, find referrals for more conversations, discover early adopters, and even find buyers. Which leads us to the best piece of the Matrix: no selling whatsoever.

Matrix: No Selling

There is a hard and fast rule when having your Customer Discovery Conversations: No Selling. While this can be hard when you are naturally excited about what you are doing, it is critical to the process for several reasons:

  • Your product is not ready for prime-time because it’s still a hypothesis
  • You won’t get honest feedback if the customer perceives the conversation as a sales pitch
  • It liberates non-sales types from doing something they are not comfortable with
  • It keeps you from talking instead of listening
  • You are perceived as more ‘honest’

So, what if someone wants to buy something or asks you to develop it for them? There are a couple of things to keep in mind if this happens. First, keep doing the process and if no one else wants your product you may be looking at a one-off; the one customer in the world that needs their own version of your widget. This may sound good but remember what you’re looking for: A scalable business model. You can’t scale something built for a very specialized user.

On the positive side, you may have found an early evangelist or early adopter. These people are willing to put up with an imperfect solution because it fills a need. If you determine that they represent the tip of a big market iceberg, find a way to keep them involved but don’t stop everything and do what they want. They are likely to serve, down the road, as a reference customer, a referral source, or a trusted advisor.

Even if you are a salesperson or are using the Customer Discovery Matrix as a sales training program, resist any impulse to sell during this process.

Matrix: Who To Talk To, The Buying Decision Eco-System

So you need to talk to 100+ ‘customers’. Where do you find them? The answer to this question lies in understanding how people in the market you are targeting (which may or may not be the right market) make buying decisions. No matter what you are promoting, there are always multiple personas involved in a buying decision. Sometimes these personas inhabit the same person!

Personas are defined by their role in the decision-making process. They form a sort of eco-system in that their roles are interconnected. Once you start to understand the eco-system, you start to understand what kinds of people you need to talk to. You also gain the ability to ask for connections to those people from those you’ve already talking to. People like to be helpful, as long as it does not reflect poorly on them. So if you are respectful and listen well, they will usually be willing to help you learn more.

Let’s look at the personas found in most buying decision-making. Remember that any person may inhabit more than one of these roles and that it is useful when talking to determine which role they are taking on while talking to you.

  • Users. These are the people that will be using your solution in their day to day work to solve a problem. They are particularly important for learning whether you are addressing the right problem with a useful solution.
  • Recommenders. Those who do research, talk to users, listen on social media, read reviews, etc., and then make a recommendation. You will learn about competition, price issues, and your reputation (if you have one!) from Recommenders.
  • Buyers. The person who makes the decision and has the ability to authorize payment. Learn about terms, urgency, competition, hidden agendas, preferred delivery/distribution channels, set-up, support, and future business.
  • Referrers. There are many people connected to any eco-system who are not directly customers but who can refer you to others who may be. Professionals like attorneys and accountants, non-competing business partners, channel partners, etc. They can often help you with an outside perspective on the market as they often are also working within it in a different capacity.
  • Saboteurs. Yes, you have potential enemies. As Machiavelli said, ‘keep your friends close and your enemies closer’. The man knew what he was talking about. You talk to these people to learn how to anticipate their objections, learn why they may sandbag you, and to learn real issues you may not have been dealing with. A prime example was the entry of software as a service (SaaS/cloud) offerings in the 2000s. One of their promised benefits was less investment in infrastructure. The saboteurs were IT managers who saw their power dwindling. By understanding this issue you could counter their arguments, involve them in managing the applications, and take other actions based on your understanding of why they felt threatened.
  • Supporters/Earlyvangelists. One of the reasons you need to talk to lots of people is so you can increase the likelihood of finding highly engaged supporters or ‘earlyvangelists’, people who will talk up your product, make connections, and become early users. These are your likely first customers and can become reference customers*.

*Reference customers are customers who will let you use them as a reference

Our recommendation is to track who you are talking to and try and give them one or more of these roles, then look for the others in their buying eco-system and ask for introductions. You can track this on a whiteboard and draw lines to understand the connections. Fill out your contact list until you have talked to everyone you can reach in any connected group.

Matrix: How To Contact Them

The scary part: calling up strangers and asking for their help. This is where the No Selling Rule really helps and why you need to enforce it. If you are genuinely seeking advice and input, without pitching, you will get people to help you. But how to start?

Start with the easy people. Someone you know (one degree) or someone, someone you know knows(two degrees). If you don’t know anyone in the market you’re addressing you might want to ask yourself why in the world you think you should be solving problems for that market. So we assume you know several people associated with that market. Start by asking one of them, preferably the one with the strongest connections, to serve as an advisor to your project.

An advisor, for our purposes, is someone with market knowledge who is willing to get involved enough to learn what you are doing and why. They must be willing to help you make connections for your Customer Discovery process, at least early on. Once your advisor understands what you are doing (they become your first Customer Discovery session,after friends and family) than you ask them who you should talk to and if they can make a referral.

A Note About Referrals

When you ask for or get offered a referral, get right on it. Ask if they can send the referral an email or text while you are right there with them. With smartphones and ubiquitous connectivity this is simple. It accomplishes two things- it gets the referral out there while it’s fresh and it gets your ask off of your advisor’s to do list. Then make sure you get the contact info from your advisor.

A Note About Follow-ups

The value of referrals has a limited lifespan because we simply lose track of why someone referred to us is calling. Call or email within 24 hours max (calling is better, see Conversations As Currency above). Ask for 10 minutes of their time, preferably face to face. Make sure the request is from your team so they get contact time with each of you and make the email connection. If you wait longer your likelihood of success goes down algorithmically.

We’re going to cover what to talk about next, but while we are discussing contacts we need to cover a vital point. No matter how your meeting goes always ask them who else you should be talking to and try to get at least two names. Why? This multiplies your contact list with referrals for which you can use a name. As in: “We were talking to Joe Smith the other day and he recommended that we talk to you.” This gives you an opening and a shared connection. Asking for at least two names ensures that your reach multiplies with each connection.

Matrix: What To Talk About

We were a little surprised that this was an issue- after all entrepreneurs tend to talk up their ideas to everyone. But they are also hard wired to pitch, cajole, sell, etc. in other words to convince people that their idea is the best thing since Google. It can be annoying even if you appreciate the enthusiasm.

That’s one problem. Another is assuming interest on the part of other people. This happens because you’re so excited that you think anyone else should be too. But they’re probably not interested at all. Why? Because, like you, they are enthused about things that affect them personally.

Personally. This is the key. That’s why we never talk about markets, sectors, staffs, or interest groups. They’re all fine but no one makes decisions based on these things. They make decisions based on personal stuff:

  • Will this make me look bad or good?
  • Will I be a hero or a chump?
  • Is it sexy?
  • Can I use it to get an advantage?
  • Does it make me feel good?

You get the idea. It’s all about me, dude. This is normal human nature unless you’re the Dalai Lama– but he is an outlier. So when you talk with someone, you need to put them in the driver’s seat and listen. They’ll tell you what they want or think. When you aggregate this feedback and see patterns you’ll be onto something. Because these are the emotional triggers that your product must set off to be appealing.

So, your questions are brief and open-ended:

  • We think we’ve identified this problem. Is this something you are dealing with?
  • Is it a big problem for you? (note the wording- its personal)
  • How do you handle it?
  • Who else is dealing with it?

Ok, none of these questions are about your product. That’s because you need to know if the problem you think you are working is the right problem. This is why we do MVP: we’re almost certainly not working on exactly the right problem.

But that’s ok. The most important thing you are learning about is the problem. You need to show you are knowledgeable about the problem before you even think of presenting a solution.

If it turns out that you have a really good accord regarding the problem, then and only then should you present your ideas on how to solve it. Those questions look something like this:

  • We’ve been working on a similar problem. Could I show you our basic idea?
  • After you show the idea: Does this look like something you could use?

Now shut up. Let them tell you things. Don’t interrupt. Don’t tell, always ask more questions. Then stop.

The final set of questions is the ask for more contacts and more help:

  • So, what questions should we be asking that we haven’t?
  • Who else do you think we should talk to about this?
  • Are you available to talk again? We’re refining our understanding and this has been really helpful.

Listen. Take notes. Read them back on important points. Keep it brief.

Debrief team members after the conversations and make notes. Schedule calls with those they referred you to.

Matrix: Stay In The Problem Space For As Long As Possible

This is the key takeaway for the entire Customer Discovery Matrix: Stay in the Problem Space for as long as you can. When you go through your twelve weeks of Discovery you are basically looking to learn and flesh out three aspects of your business model: The problem you are solving, the nature of your solution, and the ultimate value gained by the customer. All are critical to the success of your project, but the first is far more important than the others, which naturally follow once you get the problem right.

Most businesses, products and initiatives fail because they are solving the wrong problem.

The ones that are successful have a really great product/market fit and that comes from intimate knowledge of the problem they solve, from a customer perspective.

This fit is like the fit of a good suit. The tailor measures everything, knows the way the fabric will respond, where to build in movement, and what is best for your physique. Only then does he take this knowledge and cut you a suit, a suit that fits like a glove and is supremely comfortable. Even more important, it is a suit that you feel good in. Get your fit together, before you start cutting and sewing.

This means that you need to be obsessive about uncovering what your customers think is the real problem, the one that if you solve it they will be eternally grateful (or at least until the next one pops up!).

Don’t solve multiple problems

If you have multiple problems, work on the one with the biggest pain point for your customers. When you see what we in the software business call ‘feature creep’, you’re seeing someone trying to solve multiple problems. They are adding bells and whistles to add value but the reality is that they are usually a distraction.

When you read the stories of successful businesses you almost always find that they started with one problem and focused on it. Google’s founders wanted a way to search the research data at Stanford where they were grad students. They spent their first years, all the way up to IPO, refining their approach to search until it worked. Everything else followed on that. Oxo Good Grips started with a potato peeler. If you’re old enough, you remember the stamped metal potato peelers that hurt your hands. They had not changed for 50 years. Oxo made a comfortable potato peeler that led to hundreds of products and a great brand reputation.

Google solved the search problem.

Oxo solved the comfort problem.

There are endless examples of this and no exceptions. In fact, when you read about companies that got off track it is usually because they became obsessed with adding features.

The Problem Space is an interesting place. We believe that immersion in it will make product development much more effective. Simply identifying the most important solution for your customer, one that solves a pressing need, will get you started as a business. Knowing as much as possible about the Problem Space will give your new business legs.

Matrix: Iteration and Pivot

So, you are talking to a lot of people in the food chain for your product and you’re learning things, some minor and a few major things. What is learning in this situation? It is finding out where you were wrong in your original and evolving hypothesis and changing it to fit the realities of what customers want and need. In the lean world this comes in two forms: Iteration and Pivot.

Iteration is just what it says, making changes and fine-tuning as you go. You do this to all aspects of your business model as shown in the different areas on the Business Model Canvas. You might be talking to someone about a product attribute and in the process find out how they prefer it to be priced. You might find out that companies don’t want to buy direct but prefer to go through a value-added reseller (VAR) who can bundle it with hardware or other things required to make it work. You might discover that product priced below or above a certain threshold have totally different buying decision processes. Each of these insights changes your Canvas and your model. As you gather them you hone in on that scalable, profitable business model.

Or maybe you don’t.

There is a saying, very macho, that says ‘failure is not an option’. Wrong! Failure is a very viable and likely option. And that’s not a bad thing. Consider a typical product development process that assumes things without rigorous market testing. Hundreds of thousands of dollars are earmarked, engineers and designers are assigned, and marketing works on branding and product launch plans. The product goes out and fails and those costs are sunk, never to be regained. And they come out of profits (as opposed to gross revenue) so they typically cost even more. Compare this to assigning two people to spend three months finding out that the proposed product plan was wrong. You cut your losses and move on.

Or you Pivot.

Out of our twelve teams two found themselves about halfway through the process having learned enough to know that their original ideas were not going to work. In one case the idea was ok but the sales cycle was impossible to work through. In the other they found that there simply wasn’t the need- they were solving a problem that wasn’t a problem. Both valuable lessons. And if they had stopped participating in the program, no one in it would have thought any less of them. In fact we would have respected them for admitting that they were wrong. But we didn’t have to. They pivoted.

A pivot is a hard turn in another direction based on the discovery that your hypothesis was wrong. In their cases both the teams did shut down their projects. But because they were in the process, they formulated two new hypotheses and immediately started over with customer discovery, utilizing the process they had learned so well. They simply accelerated it and the results were interesting. One of the teams had a beta test with all of the employees of one of the largest marketing agencies in the world (it was an HR-related product) and raised angel money. The other became an operating business for two recent college grads. Neither would exist without the ability to pivot.

A pivot isn’t always a total change. More often it means discovering you’re in the wrong market or that there is a different problem next to the one you thought was important, a problem you can pivot towards. Our team from the established manufacturing company had hypothesized that the market they were entering was small but profitable, with a total addressable market of around $50 million. However, during their discovery process they were referred to a very large customer, the type they had hypothesized was too big to be interested in their product. It turned out they were very interested. And they also discovered that the small companies they thought would be interested did not really have the resources needed to buy. Net result: A 10x increase in market size and a 10x decrease in the number of potential customers. Bigger market, more focused sales strategy. Oh, and by the way, they developed an entirely new application for their technology, in the same market, in the process. How? A customer asked them if the technology could be applied to a similar problem. With a little rapid prototyping they had a working MVP for a new application. Another form of pivot.

The End Game: Scalable, Profitable

Any company or team that talks to 100–150 ‘customers’, without selling, is going to have an incredible advantage over their competitors. It’s that simple. When you follow that process with a means for tracking and learning from it, the advantage increases. At the end of your three months you should have two measurements of what you learned:

  • A Business Model Canvas that has been erased and rewritten every week with all of the sections covered to some degree. In our program these Canvases typically started out sparse, got increasingly messy and then started to become more refined until they showed the way to scalability and profits or…the lack thereof.
  • A white board with a complete customer eco-system showing roles, connections and contacts. Imagine plugging that into a marketing and sales process. You have personas, target audience, understanding of their roles and needs, and a list of qualified prospects or referrers who know something about what you are doing. They are are already engaged on a personal level in many cases. Or you have proof that you should not spend any more time or money on that market.

These are both valuable outcomes. We learned that there is no business process that can generate and test innovation as quickly and accurately while preserving resources. So, get out of the building and start asking questions!

Former software marketer. Former musician. Writer, nine non-fiction books, two novels, Buddhist, train lover. Amateur cook, lover of life most of the time!

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