Identifying potential customers for your start-up

 Identifying Potential Customers

Customers are individuals that have a need for the offering that you plan to develop, and they are the person that makes the decision to pay you for the offering as well.

For the purposes of Customer Development, you should interview the person that will ultimately pay you. For most Projects at this phase, it may not be clear who will make the decision to pay you, so it is worthwhile to interview a range of people that may make the decision to pay you, referred to as Potential Customers.

Identifying the Potential Customers can be challenging. In an enterprise business, the human resources department may want your offering, but the CFO may make the purchase decision. In an advertising business, you may have users that need the offering, but a media buyer at an advertising agency would make the purchasing decision.

In order to find the real Customer, it is recommended that interview a range of Potential Customers to discover who will actually make the final purchase decision.

Interviewing Potential Customers

1. Hypothesize the Initial Problem

Conceptualise a few problems that you think your customers have. Write them out as your hypothesis. These hypotheses should not be randomly generated but should be based either on your experience (derived from observation) or preliminary research within the field you are operating in through secondary sources.

2. Figure out how you will set out to falsify your initial hypothesis (or validate it)

Conceptualise the most effective way to validate or invalidate your hypotheses. For instance, at the very beginning you will have to personally though your network identify and reach out to your potential customers. As a next step, you would simply go in with a semi structured interview. Refrain from stating your hypothesis or your solution. Instead try to understand the process of working for your customer. Try to verify the problem you think they have. If you get a hint that they do indeed have that problem, dig deeper. 

3. Ask to Describe Any Existing Solutions

Once and if you find out that your customer has that problem or challenge, find out how they resolve it with the status quo. Figure out their solution process. This will give you insights into the gaps that exist with the solution they currently have. Try to estimate what the current solution or way of working around it costs them. This can be in terms of opportunity costs: financial, expressed as efficiency, speed or simply time saved.