How do you gain your first customers without having a product?
The question itself seems illogical, paradoxical, and somewhat counterintuitive. It’s like being hired for a job without submitting a resume, or booking a speaker for a conference without any knowledge of his or her qualifications. Not only is the question perplexing, but it also seems unnecessary. Why would an entrepreneur need to have customers before the product is created?
But before I explain how to do this, let me first explain why it’s so important.
Contrary to the conceptions of most first-time entrepreneurs, it is important to establish a small customer base before creating a product. To clarify, this sort of customer base is different than a traditional customer base simply because you haven’t sold anything to them yet. Rather, these future-customers are people to whom you propose your idea and whose support you can gain prior to developing your product.
Gaining these first customers is a practical way to test the viability of your business model. By pitching your idea in its most idealistic form to prospective clients, you’ll discover if people truly have a need for your solution that they’re also willing to purchase. If people can’t understand or see the usefulness of your product before it’s developed, chances are they won’t when it is either. Of course, there are some isolated success stories that contradict this claim (Twitter, for example), but it’s still generally best to verify that people understand and see the need for your concept prior to development. If you have issues early on, don’t give up. Rather, modify your product or concept and try again until you succeed.
So, on to the crux of this article … how does one gain those first customers?
The following list contains five practical steps to putting entrepreneurs on track to successful customer development.
Step 1) Create Personas
Creating personas entails developing a detailed representation of who your ideal customer is. Don’t necessarily limit yourself to a single persona, though; it can be beneficial to create multiple along the spectrum of the problem you’re trying to solve. For example, maybe you’re trying to develop a new medication for muscle tightness. It could be beneficial to consider personas who experience muscle tightness for different reasons or in different areas of their bodies. The more diverse your early pool of personas can be, the better.
Here are some examples of what a personas from other companies look like:
Step 2) Develop a Needs Analysis of Your Personas
Once you’ve developed your personas, it’s time to conduct something called a “needs analysis.” While the term seems fairly technical, a needs analysis is a lot like what it sounds: putting together a list of the needs and problems you think each persona has around the idea you’re building.
For example, let’s say I’m building software to make sales teams more efficient, and my persona is Susie, the sales team leader. Some needs and problems for Susie might be:
- I need more insight into how my sales representatives are performing in order to see where they’re getting stuck and to provide them with better feedback.
- My sales team has missed its quota three quarters in a row, and I’m not sure why.
- I keep losing team members to my competitors. Retention is a huge issue.
As you can see, the needs analysis for this sales manager considers all the problems that she might encounter. Since these needs are only guesses, they will need to be validated by the customer during the interview stage (step 4). A firm list of needs and problems will guide you in building the best product possible.
Step 3) Recruit Customers
At this point, you should hopefully have a better grasp of who your customers are and an idea of what you think they need from your product. Therefore, the next logical step is to recruit those customers. It’s generally best to avoid recruiting friends and relatives (unless your product happens to solve their problem, of course); although they mean well, they mainly want to see you succeed and will have a tough time telling you the hard truth. Rather, it’s wise to reach out to friends and relatives to see if they know anyone who fits your customer personas. After exhausting your personal networks, turn to the Web. Profile searches on Linkedin, keyword searches on Twitter, forums online, and posting an ad on Google or Craigslist can all be great ways to find customers.
For more ideas, refer to this article, which contains 95 detailed ways to find your first customers.
Step 4) Set Up and Conduct Interviews
We’ve now reached arguably the most important step: setting up interviews. If you’re having trouble actually getting people to talk to you, remember that people respond incredibly well to incentives. Offering interviewees a mere $5 gift card can work wonders.
Once you find someone who agrees to speak with you, try asking open-ended questions about the problem your interviewee experiences before explicitly describing your idea. This will help you gain insight into the source of the problem and discover if your solution is actually what’s needed.
For example, let’s go back to the muscle tightness medication example. If you discover that your interviewee’s muscle tightness is chronic and doesn’t respond to medication, this person probably is not part of your target demographic. However, if you do find someone who you believe could benefit from your solution, try digging in and asking more questions that uncover why, when, and how he or she experiences this problem. Use the 5 why questions technique to get to the root cause of the problem, which will help you discover what solution (AKA: product) to build. At the end of the conversation, ask if he or she would be willing to try your solution once it’s developed. Those who respond affirmatively can be counted towards your initial customer base.
Step 5) Synthesize Results
The time has now come to take a step back and look at your results. Do you notice any trends? Which problems did people emphasize? What went well? What didn’t go well? What should you change about the product you were thinking of building? The answers to these questions will help you modify your process for the next round of interviews. Through continual repetition and perfection, you will not only gain a customer base from which you can rely on for feedback and support, but you’ll also gain a more precise grasp of the product you need to develop.
A Few Tips
This method of customer development can be slow and grueling. In fact, it may be several months before you’re ready to shift your focus to the product itself. So, here are a few recommendations for entrepreneurs who find themselves getting discouraged:
1. Have focus. You will hear countless problems during this process, most of which will be related to your solution in some way. It’s natural to want to develop a product that solves every problem you hear, but it’s certainly not wise. To avoid disaster, pinpoint a problem which you believe is the most pressing and for which you can develop the best solution, and go do exactly that.
2. Set goals. These don’t have to be elaborate. Rather, make a goal to have five more conversations about your product this week or to reach out to ten more potential clients. The ultimate goal, however, is to interview 100 customers before you launch. Setting goals will allow you and potential investors to physically see your progress and momentum. Additionally, having and achieving goals is the best way to prevent yourself from burning out.
3. Prove your assumptions. Everything you believe about the success of your business is an assumption that needs to be proven. To do so, develop data and make a record of conversations that prove the viability of your idea. These testimonies may be crucial as you reach out to investors during the product development stage.
This process is a great way to affirm that there is a market for your product, which will significantly reduce the risk of building the wrong product. In the end, though, launching a product is risky. Entrepreneurship is risky. Life is risky. But to sacrifice risk is to sacrifice reward. To quote the late founder of Apple, Steve Jobs, “The greatest artists like Dylan, Picasso and Newton risked failure. And if we want to be great, we’ve got to risk it too.”
I’d say the risk paid out pretty well for Mr. Jobs, and it very well could for you, too. But eventually, you’ll have to take the plunge, and there is no time like the present.
What are you waiting for?
… Ready? …
… Set? …