Customer development is crucial to any startup business. Customer development tells a founder what their customer base really needs. The best tool to get this information is customer interviews.
On today’s The Startup Chat we discuss how to conduct a customer interview. We also explain why founders need to do customer development interviews. Customer development is not about validating an idea. It is solely for the purpose of knowing the customer and coming up with the best solution to their need.
We are going to tell you how to get the ball rolling and what it is you’re looking for in these interviews.
Here are today’s points:
- What is customer development?
- Why you need to understand your customer.
- Why customer development never ends.
- How Hiten has used these interviews for his fundraiser project.
- How to get started.
- Focusing on the problem, not a solution.
- Why genuineness matters.
- How and why to conduct a customer visit.
Tools for Customer Development:
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Steli Efti: Hey, everyone. This is Steli Efti.
Hiten Shah: This is Hiten Shah. Today, on the Startup Chat, we’re going to talk about how to do customer interviews. These are specifically around what many people call customer development. Before we really jump in, I’ll tell my story about it and how I got excited about it and learned how to do it. Then, I’m sure Steli’s got some thoughts. So I got into this a bunch of years ago. I was accidentally doing it for my first few companies back in … between 2003 and 2008. So for about five years when I think the Sass market and the market for kind of software was much less competitive. I would do a lot of things around customer support asking why to customers when they sort of had problems.
That taught me a lot about software and my business and how to improve it. Fast forward a little bit back to 2008. Basically 2006 onwards, the lead startup movement started happening with Eric Reese blogging a lot about how startups should be created especially as there was a downturn. Everyone had to get more efficient if they wanted to keep running their startup. At that time, customer development came up because a lot of the lead startup principles, the original ones, and a couple of them came from this course on customer development by Steve Blank, who’s a professor at Stanford … and I think Berkeley as well.
He wrote a book back in the day called Four Steps to the Epiphany which was all about this process he called customer development. This customer interview is just one piece of it. But the way I got really great at it is I hired a product manager at Kissmetrics a few years into the company … about a year in actually when we had really figured out the product we wanted to go after in the market. She was … her name is Cindy Alvarez. She actually wrote a book called Lean Customer Development. Her and I would learn a lot together about customer development and customer research, specifically customer interviewing.
One because she was really good at it. Like she … this is not an insult, but she’s kind of like stone cold when she does these interviews. That’s going to be my first sort of point which is when you want to do interviews and get emotion and stories out of your customers or potential customers, it’s very important to actually be quiet. If you ask a question, you should shut up and wait until they answer it. If they don’t answer it in an amount of time that you want to talk, ask the question in a different way; but don’t lead the witness. Don’t give them a specific answer. Don’t try to talk too much around kind telling them what to say or anything like that.
Instead, just keep asking the questions. But I learned a lot of these things by doing customer development with her and another product manager we had. Just one of the key tenants of it is like don’t lead the witness. Don’t lead the customer down a path. Instead, be like what I would call stone cold which is like basically act like you have no emotion or act like you have no opinion. You’re going to get a lot better insights from customers. So, to me, that was one big learning that I had that still is something that I practice every time I do these interviews. Oftentimes, I’ll even do this.
I’ll ask a question in a customer interview, then I’ll hit mute on myself. I might say some stuff, but they can’t hear me. I’m waiting for them to respond because I like to talk. Anyway. So my story is that I got really great at it once I realized that everything gets really competitive. Once things get competitive, your best weapon … your best tool is your ability to understand customers better than anyone else in the market.
Steli Efti: Yeah, that’s the … I truly believe and we’ve talked about this before. I feel that whoever understands the customer the best will eventually have them as their customers. Right. If your competitors know the problems of your customers more intimately than you do, sooner or later they’re not going to be your customers anymore. They’re going to be their customers. It’s as simple as that. So interviewing in the early process and even beyond that – this is a separate topic, but I feel in the startup world it’s gotten more popular that we need to do “customer development”.
Talk to potential customers and truly understand what they’re problems are and how they are thinking about the solutions out there. How they think about the solution you’re thinking about building. Just truly understand the customer a lot better before you build the solution and launch it. But as you launch it and you see some success in it and it grows, customer development is not done. Because the market is changing; your customers are changing. Your company is changing; your product is changing. So you have to in an ongoing fashion forever keep doing some customer development to make sure that you truly still fully understand the customer or now understand the customer even better.
Now, understand the new customers that you’re gaining since you’ve grown the product to be serving a much larger market or different market. So this customer development thing is not like a this is how you start and you never have to do it again. You always will have to do it because you will always have to understand your customers really well.
Hiten Shah: Yeah. Exactly. You don’t have an option anymore. So I’ve done a bunch of customer interviews lately around fundraising. I’ve done other interviews. I’m actually about to start a whole other set of interviews on a very specific category my business partner and I are excited about. I’d love to give people obviously some tips and things like that on how to do this. There’s interviewing that you do early on in a business when you’re just starting out. So let’s talk about that. Then, I think we should also talk about what happens later, right, when you have a product and stuff like that. So I’m just going to rift really quick on the beginning part.
So, for me, it fundamentally starts with you need people to talk to. If you don’t have people to talk to, then you can’t really do any interviews. So your first actual order of business is how do I talk to people. How do I find them? So there’s a number of different strategies for finding people. We’ll have a link in the show notes for this one. But one of our old product managers has a whole like 95 ways to find your first customer or customers or find your first interviews. There’s an event called Lean Startup Machine where in a two-day period you’re supposed to find customers and literally do interviews and validate or invalidate an idea.
So I’ve participated in all of those. Honestly, it’s just a hustle. You have to identify who your customer is and figure out some rough idea of a guess or hypothesis about some problem they might have. Then, you can create a bunch of interview questions out there or write up a bunch of interview questions and go find these people. So finding the people is really about … my favorite method, I also have a bunch of audience in different places. I do have a lot of Twitter followers. I have a bunch of email lists. Also, I have a lot of friends on LinkedIn and Facebook. So if I post something and say, hey, I’m doing research on X.
So when I did research on fundraising, it was two tweets. It leads to 50 interviews which is something which is usually unheard of. Usually two tweets lead to five interviews. This was literally an order of magnitude higher because the payment is there. Obviously, I have a lot of followers as I said earlier. So it is a little bit easier in those cases. I want to be respectful of that because many of you that are listening probably are like I don’t have shit. What do I do? Right. What I used to say is you are literally trying to beg, borrow, lie, and steal.
That’s my line on getting these interviews because these interviews are really critical early on to figure out directionally if you are right or wrong about what you’re thinking you want to build. So in the new project I’m doing, it’s a consumer product. I have no way to reach this audience. I actually don’t want to use the channels that I have today and the ways I would do it for any kind of startup or tech related topic. So what we’re doing is we’re going to put up a website. We’re going to start driving traffic to it. It’s going to be a simple type form survey type thing. We’re going to literally ask people for their … I have a whole blogpost on this too about how to validate your business idea.
But we’re going to ask people to fill out a survey or an application form to either talk to use for consulting. If that’s appropriate, that’s one approach. Another approach is you basically ask people for their opinion. You say, hey, we’d love your opinion on how you walk your dog. Let’s say I want to provide a dog walking service. It’d would be like we want your opinion on how you walk your dog so we can help you do it better. We’re building something for you or something like that. Then, you make them fill out a bunch of stuff. One of the questions is can we follow up with some questions for you.
Then, what you would do is put up a website or type forum or survey monkey thing. Then, you would send traffic to it. Or use that as a link in cold emails you might send out or whatever it may be. You can ask them questions and learn, but it’s still like you have to learn a little bit about marketing if you don’t already know this audience. Learn how to drive a little bit of traffic. Some people have actually done it on Twitter. So what they’ll do is they’ll try to identify people that say things like I hate dog walking or I’m walking my dog right now. Something like that. They’ll do searches on Twitter. They’ll find those people.
Then, literally using their Twitter account reply to them. Hey, I’m working on something to help solve the problem of dog walking. Can you talk to me? Then, you can either have the DM you or go to your link. Usually, having them DM you or do something like that works out better. All it’s about is getting on the phone with them and figuring out how to get on the phone with them to basically do these customer development interviews. So that’s sort of one approach, but what you’re trying to do is whatever you can to get these people on the phone with you.
Sometimes if you’re doing something that’s like local with doctor’s offices or something like that, you might just walk in there and try to get 10 minutes with somebody and ask all these questions. So that’s sort of the number one question people have. How do I get people? It’s a human interaction you’re going for. So find all the different ways that you can do it. My favorite is still using advertising or using Twitter or even Facebook to solicit people to talk to you. Here’s the one key point, don’t ask for their feedback. Don’t tell them too much about what you’re doing because you’re not trying to like incept them or bias them in anyway.
Just try to ask for their opinion. One of the things … one quick tip before I move on … in B to B, if you just ask people about their day … like if you ask a marketer, I’d love to talk about what you do every day, you get a very high conversion rate because people love talking about themselves.
Steli Efti: Yeah, especially if they feel listened to which is very rare. It’s very, very rare. So I just want to comment on these two points. I think that for people that are listening and Hiten has a self-awareness to a point about himself. You listen to Hiten and go it’s easy for him to set up a paid advertising because he’s an expert in that. It’s easy for him to tweet something and get 15 interviews because he has hundreds of thousands of followers. How do I do it? Stop with the excuses. You do it the same exact way just at a different scale. Right. So if you’re on Twitter and don’t have lots of followers, you can just search on Twitter who are the people that could be my potential customers.
If it’s people in marketing, just search for people that tweet about marketing that are marketing experts. There’s so many lists of like top Twitter people to follow in marketing and top people to follow in this. You don’t just ping the experts, you see who follows them because they’re usually also in that profession. You just interact with people on Twitter and Facebook. On LinkedIn, you go to these groups. You just hustle. Make up for the fact that you don’t have a massive installed audience already by hustling and going where the audience is and interacting with them one by one. You can ask your friends.
We’re just all two or three people connections removed from almost anybody in the world today. It’s five connections anymore. If you want to sell something to CTOs and oy don’t know anybody, just ask yourself who do I know who works in a company that has a CTO. Just go and talk to them and see. If it’s an engineer, hey, who’s the head of engineering? Can I talk to these people? Then when you talk to head of engineering, you ask can you connect me with somebody else in the company that’s higher up. There’s events you can go to. There’s lots and lots of ways to reach people.
They might not be easy; they might not be convenient or they might be. Right. But the main point is don’t come up with excuses. Just come up with solutions. Right. You don’t have to come up with a way that gets you access to thousands of people. Start with one. Just talk to one person that’s relevant and then to another. If you can get to 10, that’s great. If you can get to 100, that’s amazing. Go out there and hustle and figure out a way. There’s people that have done this very successfully that had just immigrated to this country and knew nobody and were nobody.
Within a few months, they had done an amazing amount of customer development just by hustling and doing the work that’s necessary. So I just wanted to comment on that. Anybody and everybody in today’s world can go and find potential customers for their solution. Talk to them. They’ve really put the work in. The second comment is just like Hiten said, when you reach out to talk to these people, there’s a big difference when you do customer validation or customer interviews. There’s a big difference between your intent being to get people to tell you your idea is great and your intent being understanding that person better and their problems better.
There’s a massive difference. We’ve talked about this before. Hiten has said this before. You should care more about solving the problem than your own solution to the problem. If you do, you will approach them and realize my number one goal is really to get to know this type of customer and really get to know their problem very intimately. Then, I might propose my current solution to them. But if my current solution is not the right one, I don’t care. I’ll come up with another solution. The thing that I care about is solving this problem more so than my version of a solution.
If you come into these interviews with the intent to learn, truly learn, more about them and not with the intent to get validation for your specific idea, I think it can make all the difference in how valuable these interviews are going to be. Because you’re going to get what you’re seeking. If you’re seeking validation, you’re going to find validation. You’re going to make people tell you, yeah, that idea is not bad. You’re going to go boom. My idea is validated. Everybody loves my idea. You’re going to trick yourself into working on something without truly having the knowledge that you think you have.
What are some beyond … when you want to do customer interviews to reach the right audience trying to truly learn and be open minded and be listening instead of talking. Are there some other quick tips on framework? Should it be very long? Should it be short? Are there some questions you always use in these customer interviews that people can apply in very different way? Or is it very individual? What are some other tips that we can give people on ho w to do the interview itself?
Hiten Shah: Yeah, absolutely. Then, we can at least talk a little bit about how to do it when you already have customers. It’s still the same process of the questions and everything that I think you and I are going to chat about right now, but it’s a little different because you already have the customers. So I think, for me, the one goal I have … the main goal … is I know I’m going to have to do at least a dozen interviews. Every single time I’ve done it, I hit about 12, 13, 14, or 15. Like that interview number. If I’ve picked a narrow enough market which is usually pretty easy to do these days, I start getting bored. I’m like I keep hearing the same thing over and over again.
I better go analyze everything I heard. So when I thought about it like that very early on, I realized that all I’m really trying to do is trying to get some specific data like what’s your marketing budget and things like that. But those are not really interview questions. Those are just like demographics type of things like data. What I’m really trying to do is I want stories. So I love to ask questions like please tell me about a time when a marketing campaign failed. Then, I shut up just like that. I wait. They think and think. They never say I’ve never had a marketing campaign fail. Right. But sometimes they’re embarrassed.
Then, I say something like don’t worry. This is just between us. This is really important for me to understand. But you notice I didn’t try to hint at anything. I just kept doubling down on that. Then, I would say something like if it’s a little difficult for you to think about a time when a marketing campaign failed, why don’t you tell me about when a tool failed on you when it should have worked for you. So that’s another way to say it a little bit different. Eventually, I’ll get into the failed campaign because I’m really trying to understand where their problems are. It’s really about finding problems.
You can’t find problems unless, I believe, you’re getting stories out of people. Those stories … one story doesn’t matter. !0, 15, 20 stories from customers about one thing like failed campaigns, that’ll tell you exactly where the problem is with marketing campaigns, especially if you just ask it like that. So, to me, it’s about very open ended questions even if the person lays out a 10-minute rant about a failed campaign. I love that. I want more of that. So I try to talk about 5 percent of the time. I want the person I’m interviewing to talk 95 percent of the time.
So I’ll spend way more time asking open ended questions that are leading them, right, that are just very sort of … not generic but very specific but open ended to the point where they have to tell me a story. When I do that, I get some of the best content. There’s a lot of other ways you can ask questions, but that’s my – one trick I would give you is just remember you’re trying to get stories out of people. If you can get the same category of story like failed campaigns if you’re building a marketing tool for campaigns. Then, you’re going to get gold in all the data that you get from the interviews.
Steli Efti: I love it. I think it’s super powerful. I’ll just reiterate my earlier point on your intent truly matters here. People will be as open or as closed around sharing these problems very intimately or not so intimately more generically depending on the read they’re getting on how closely and how carefully you are listening and how much you care about what they have to say. If you come across to somebody who truly like leans in open eyes, open ears, open mind, and open heart; they feel like this person really, really cares and has the time and the patience to listen and dig deeper when he or she doesn’t fully understand something.
They’ll fill out the question because they really want to understand me. They will open up and tell you some things they’ve never thought about or never told anybody else. So I think making sure that you take the time on these interviews and you’re not really rushed and scheduling them in five minute blocks and just try to get to your three questions and get answers and get to the next three questions, but you really take the time and really come into the conversation with my singular focus is to understand this person as well as possible and truly understand their problems as intimately as possible.
If you come in with that intent and you ask questions that elicits stories, they will share things that are really powerful and they’re going to be really enlightening. So, yeah. I love that. I love that point. I think that’s the difference between a good customer interview and a bad one is do you really care about the answers that you ask the questions for and do you ask questions that are kind of just, as you said earlier, giving you some data points so that you can run off to the next interview. Or are you eliciting stories? With those stories, you’re really gaining a better understanding of the context of the problem as well.
Hiten Shah: Yeah. I want to add that this really aligns with what I said earlier about basically people love talking about themselves. Right. The stories that they tell you and we love stories as humans. So, for me, that click of just getting stories out of people was the game changer on customer development because when we were doing the fundraising interviews, we would just ask people tell us about your experience fundraising so far. We didn’t have to say shit for like 10 minutes because they were just going off. I did this. I did this. This person was bad. This didn’t work. This person helped me.
Then, my pitch did this. I did 10 iterations on it. We couldn’t have asked all those questions. Do you know what I mean? We could not have asked them. These calls were supposed to be about 20 minutes. Many of them went to 25, 30, or 35 minutes. One, because we were giving advice to them at the end. Also because people were just going off. They had lots of experiences. Another sign that you’re on the right track is when people have a lot of stories to tell you. They have a lot of content. Right. You’re like I want it. Okay.
So I want to give some time to you already have customers so what should you do? Right. What are the tips? Yeah, I’ll start with one that really got me at Kissmetrics which is we actually just started having customers come in and show us – us meaning as much of the team as possible, especially the people that didn’t get out and talk to customers often enough like engineers or even sales people who didn’t talk to customers about the product. We had them come in and show us how they use the product. To me, that’s a form of interviewing. In the same way, tell us a story. Well, don’t just tell us a story, show us how you use the thing.
That was a game changer. We had engineers that literally were chomping at the bit to go fix a stupid problem that we hadn’t fixed for like a year because a customer right in front of them is like this sucks. This sucks. Look at how many clicks this takes me. We opened it up. I was in the room and would tell the customer, look, we’re not here for you to be nice to us. We’re here because we know you love the product, but you’ve got to tell us how we’re going to make it 10 X better for you. So don’t hold back. Nobody is going to get their feelings hurt because we’re here to make it better.
When I did that, the whole thing changed. People were making things better right away. We even … at a company off site… we had a customer come and talk on stage about some marketing attribution sources thing. He was just going off at how every tool sucks, and we suck at it. Right away, some engineer had an epiphany and that engineer was basically I know what to do. I’ll fix this in five minutes. Literally, we better fix this. So then, they huddled and figured it out in five minutes. Then, they wrote a bunch of code and it was deployed within the next couple of days. So this visceral reaction that you get when you do this is amazing.
Steli Efti: Yeah. I absolutely love these tips. I think that I let my two thoughts or tips on this, and we’ll wrap up the episode. I think one thing that I’ve talked about before and written about – we can link up to the show notes – was visiting your customers. Do customer visits. Doing that and having as many people in the company do that as possible. We often times when we do team retreats and we kind of get everybody around the world together at a city. We’ll make a concerted effort to see how many customers do we have in this place. How many of them can we visit?
We’ll split up the team and go in groups and visit the customer just to get to know the customer, their problems, the people that work there, be exposed to the culture, and also not just talk to the ultimate buyer of the product. In our case, that might be the founder of VP of Sales, but really talk to all the users and see the product being used in the wild. See people’s screens with our software on it and what other software they’re using, what their workflow is, what they struggle with, and what they hate. There’s no better truthful … everything that’s wrong about your product than seeing it the wild and seeing people use it in the wild and visit these customers to truly understand them better.
The second thing you just said is something we just started. It’s really interesting. We just hired a bunch of engineers. We’re talking about how to make sure that these new people that we hire on the product team get more exposure with our customers. One thing that we started to do is we have these success managers that do account reviews with customers. They’ll take a lot of time and really kind of take inventory of how the customer is using the product and try to spot opportunities to increase the value that the customer gets through the product or help them with a certain issue or problem or understand kind of what they’re most pressing feature request and why.
So what we started just to do is on rotation have engineers join these success calls, right, that are usually with some screen sharing. The customer shows how they use the product and what they do. The success manager is talking them through different solutions and how to make improvements to it. We just have more and more engineers now or all the engineers on the product team join these success calls with a certain frequency so that they’re more and more exposed to our customers, their problems, and how they currently actually are using the product.
So it’s definitely something that I think is incredibly valuable. It’s easy to miss. It’s easy to put this further down on your priority list because there’s so much stuff everybody needs to work on and get done. But if you’re getting the wrong things done or you don’t truly understand your customer anymore … if you’re losing touch with your customer, I think that’s maybe a good way to put it. If as your company grows and progresses … if you’re getting out of touch and losing touch with your customer, you’re putting your business in massive risk. You’re probably going down the wrong directions with many things, especially with product. So it’s definitely absolutely crucial to keep doing this.
Hiten Shah: Well, there you go. I think that really sums it up why we’re even here to do business. We have customers. If we don’t know anything about them, then we’re building the wrong things. So we should spend more time getting the whole team like having … I think a lot of this boils down to empathy. It’s like do you actually have empathy for your customer to the point where you want to believe when you’re wrong. Believing that you’re wrong has a lot to do with this too because often times what I find is people deep in the company that are working on core parts of the product, usually engineers or even sometimes product managers and designers, they don’t usually have enough empathy.
Thus, they don’t know what’s important to work on versus what’s not. This process even after you have a lot of customers is really, really, really important. Spending time to double down is great. I’m going to give my tip because I know we’re about out of time or over. My tip is this: don’t just talk to customers who love your product. Talk to customers who hate it. Find them, bug the shit out of them, and get them to talk to you. Because those people that hate it are the ones that you really get a lot of value from. The reason for that is the ones that love it – I’m not saying don’t talk to them; you want to make sure they still love it. But it’s the ones that hate it that can tell you where your thinking is wrong and where you really need to improve.
Steli Efti: Absolutely love it. I’ll just double down on this tip. Something that we do is we just have one meeting a week as a company. It’s Monday mornings. It’s very short. It’s 30 minutes. One thing every team reports what they’ve done last week and what they’re doing this week. But also, every team reports a customer story. Some teams have this format where they’re report a high and a low with a customer. So they’ll say … a sales will say here’s a prospect that really loved X, Y, and Z and decided to buy because of these reasons.
Here is a prospect that decided to go with a different solution because they really hate it that we don’t do X, Y, and Z; or they really needed this, and we don’t have it. The same thing will go for the support team. Here’s the customer that had the biggest pain and was in the worst spot because something went wrong with our product last week. Here’s a customer that really was empowered and loved it and was really grateful for what we’re building. So we kind of try to highlight both things on a weekly basis with the entire company.
Hiten Shah: I love that. Yeah. Customer stories are so key.
Steli Efti: All right. That’s it from us for this week.
Hiten Shah: Happy interviewing.
Steli Efti: Bye-bye.
[End of Audio]
Duration: 30 minutes