exploratory customer development

Good morning Predictable Revenue community,

Have you ever sat down for a customer development interview, only to realize halfway through the conversation that you’ve been chasing something they don’t actually care about? When I first started doing customer development interviews, I thought they were all about validating my ideas. In reality, my first conversations should have been about identifying pains that were top of mind for them.

In today’s email, I’m going to dive into my process for Exploratory Customer Development Interviews. These are the first interviews that I use for finding the signs of a potential gap in the market. These are the first of four interview types that I use in my process to learn from people and slowly walk them into a sales process (with their permission). The following is an unedited excerpt from Chapter 3: Finding Product Market Fit. I’m sending the second draft of my edits for Act 1 (chapters 1-3) today and then will move onto Act’s 2 & 3. Interestingly, there were 103 edits/comment requests for the first Act and only 41 for Act’s 2 & 3 so it feels like I’m making good progress on the meatiest section of the book.

Here’s the tl;dr:

• Goal: Identify high-impact, unmet needs by letting interviewees reveal their biggest pain points naturally, using open-ended questions to avoid steering the conversation.

• Structure: Follow a loose framework of Context, Progress, and Impact to uncover the day-to-day challenges

• Gauge: Quantify the size of the opportunity by asking importance and satisfaction questions.

Exploratory Customer Development Interviews

Goal: Find a gap worth solving. 

I use these interviews when I first start to make sure that I’m focusing on the problem that is top of mind for the people I want to target. I use open ended questions and avoid steering the interview towards my problem space. A great outcome is one where the interviewee brings up your problem space first. An even better outcome is finding a problem space you didn’t know existed. If you’re surprised, that’s a good thing because it means it’s not obvious and is less likely to have competitive startups working on the same thing. 

Each interview has three parts: context, progress, and impact. Use these three as your loose guide to the conversation, you need to strike a balance between asking your questions and letting the interviewee talk. 

You’re looking for patterns in the data and the data is only as reliable as your interview process. If you ask a different set of questions to every person, there will be no consistency. On the flip side, if you only ask your questions, it can put you into checklist mode, which stifles the conversation. 

A great customer development interview gets the interviewee talking about their problems and telling stories. Don’t be afraid to go off script or to let someone go on a tangent, sometimes these unexpected directions lead us somewhere important. 

… for more on asking good questions / running a good interview → see the sales conversations chapter (note from Collin: coming later to this newsletter) or check out The Mom Test by Rob Fitzpatrick. The two processes have very strong overlaps in the skills required. Feel free to jump ahead to that chapter and come back. One last note, you can thank Michel for the following interview format too. 

Context 

To understand the context of the potential customer I get them to walk me through a day in their life. These questions set the table and direct the conversation to the high level problem space I want to understand. Here are some questions I learned from Michel: 

• When you walk in in the morning, what is the first thing you do every day?

• How many applications do you log into?

• What applications do you love and why?

• Who do you report to

• What are you MBOs

The questions work as a setup for the magic wand question. The magic wand question helps us understand what pains are top of mind for the interviewee or the progress they would like to make. One of the biggest mistakes I made when I ran customer development interviews for the first time was not asking questions that quantified people’s pain. I showed them my idea, they said they liked it and I checked off my “customer development interview” box. What this lead to was my team building a CRM system that everyone said was a “smart idea” but nobody wanted to buy. Turns out that “good idea” was code for “leave me alone”. 

Progress

As I ran more interviews, I got better at asking questions and listening. I could identify unmet needs and articulate them as jobs to be done but I struggled to get interviewees to clearly articulate their importance. A lightbulb went off for me when I read Dan Olsen’s book, The Lean Product Playbook, and came across The Importance versus Satisfaction Framework. Dan proposed adding two questions to help rank the unmet needs an interviewee mentions. 

Next time an interviewee mentioned an unmet need, I would ask two follow on questions: 

• On a scale of 1-10, how important is this to you? 

• On a scale of 1-10, how satisfied are you with how you’re currently solving it?

These two questions enable you to visualize the unmet needs you’ve found as a quadrant. What we’re looking for are unmet needs that are very important (10/10) and have low satisfaction (2/10) ratings. 

Impact 

Once you’ve found a high importance low satisfaction (HILS) problem, you’ve found motivation. The next step is to see if that motivation can be tied to sometime meaningful to the company, more revenue, higher profits, or reduced risk. I’ll ask questions like: 

• If you were able to solve X - how would that impact your department, KPIs, etc…

• If you were able to solve X - what would that mean to you personally? 

• How would that change your role / your department? 

If you can find a HILS problem that can be directly attributed to the bottom line, you’ve found yourself something special. 

History

Here are some questions that will help you better understand your interviewees and make your life easier when it comes time to build your first customer acquisition channel:

• Tell me about the last time you tried to solve this problem? 

• How have others in your organization tried to solve this? 

• What resources (time, money, training) went into solving it last time?

• Talk to me about your process for finding a solution… 

• If they found a solution ask follow on questions like “how did you hear about X?”

  • Where did they look, who did they ask, what did they buy, how did they find the last tool they bought, etc…

Note: These are variations of questions I’ve used in my customer development cheat sheet that I shared a few weeks back and were originally Mom Test questions.

This last question will help you understand their buying process and will hint at the future demand generation channels you’ll need to build. If they haven’t tried solving the problem with software, then ask about how they found a related product that they’ve already purchased. 

These interviews will help you find unmet needs worth solving. When you think you’ve found something, it’s time to move to Focused Customer Development Calls to validate that assumption. Keep in mind that moving forward in the process doesn’t mean you’ll never come backwards. Sometimes you’ll find a gap that looks real but turns out to be unsolvable or unprofitable to solve, in those cases it’s wise to return to Exploratory Interviews and look for a new gap. 

Exit criteria

There are two things I’m looking for before I move to Focused Interviews: a clear definition of the unmet needs I’ve found and a profile of the people and companies most interested in solving them. I find it helpful to document my assumptions in a shared document with my team before I move onto the next step. This keeps me honest and helps me remember what I thought was true when I first started out. I’ve done this recently for a new project, hit reply if you want me to turn it into a template for you.

Thanks for reading, 

Collin 

PS - we’re starting to work on visuals for the cover design, any suggestions? I’m pretty confident we’ll be sticking with The Terrifying Art of Finding Customers as a title. Part of me wants to try a Tim Burton style but most of me thinks that’s a terrible idea.