Ash Maurya rebooted his blog as “The Space Between“–experimental format where he is exploring the space between ideas–and has offered a number of short reflective posts. Here are excerpts from three where he explores the value of planning and reflection, and the need to prioritize learning over the illusion of progress.
Much has been written about a startup making a pivot in direction after Eric Ries first coined the term
in a 2009 blog post “Pivot don’t Jump to a New Vision.” The word pivot has attracted almost as much wordplay as the word lean. What follows is a short list of good and bad reasons to pivot.
Larry Smith is an Economics Professor of Economics at the University of Waterloo who writes and lectures on Entrepreneurship, innovation, and Technology markets. What follows is part of a conversation he had with Alan Quarry in the AQ’s Blog & Grill series of interviews with entrepreneurs. His key point, that he makes in a somewhat cranky fashion, is that technology entrepreneurship is a complex undertaking that requires patience, careful analysis, and planning.
This is a webinar replay that was recorded on Wednesday, June 8, 2011 with Massimo Paolini, Miles Kehoe, Dorai Thodla, and Sean Murphy discussing Barry Moltz‘s “You Need to Be a Little Crazy: The Truth about Starting and Growing Your Business.” They share how they personally found the courage to start their businesses and their desire to make “working for yourself” mean not only a better job but building equity.
Theodore Zeldin gave a series of six lectures on conversation that were collected in slim book called “Conversation: How Talk Can Change Our Lives.” I found it offered a number of insights on what is needed for a serious conversation. And since serious conversation is one of the primary tools for early market exploration and customer development; I have curated a list of nine excerpts I think entrepreneurs will find useful.
My interview with Gabriel Weinberg was originally published Sep-8-2010. He was doing research for what became his fantastic book Traction. We talked for the better part of an hour and a half and I can remember he kept returning in different ways to what was needed to close your first dozen enterprise customers.
Q: My software consultancy has reached the point of needing to hire someone to help manage the sales pipeline. I’ve hired all kinds of technical related folks, but never for sales.
While asking for a letter of intent may seem like a useful shortcut to assessing prospect intent, it normally causes many more problems than it solves.
It will be twenty plus years before there is a 3D printer in most homes due to limitations of the cost of the machine, material, obtaining software and learning how to use the software. Other fundamentally problem that prevent 3D printers being adapted by the public are to understanding of design, physics, and material science and a change of behavior of making things at home.
Entrepreneurs who limit themselves to what they could learn if their prospects lacked the power of speech adopt what I call a veterinary marketing model. It’s not a viable approach to market exploration.
Any innovation effort is a painful struggle punctuated by false starts and dead ends. Your efforts are met with lack of interest even when a basic invention is working and active resistance when it starts to replace the tried and true. Like any childbirth the trick is managing the pain long enough to deliver.
Trust is built over repeated interactions between people. If your business requires long term relationships then you have to make sure that investments in automation are not deployed in a way that undercut your ability to have real conversations. Unfortunately, some uses of email automation tools are pushing sales conversations into the “Uncanny Valley” because they strive to simulate–but miss–a genuine personalized touch.
Q: We have a product for bloggers but I am having a lot of trouble getting leads. I have met bloggers from popular media companies at events, I have cold called them, e-mailed them, and e-mailed to on-line groups that I am a member of. None of this has worked. How do I interest people in my product?
I have a couple of suggestions:
Customer discovery interviews are essential to testing key B2B product hypotheses and understanding your target customers’ needs. Broadly there are five ways that you can reach out to potential customers to have a discovery conversation. All of them assume that you have a clear picture of who your target is and a few key questions that they will be willing and able to answer that will indicate they have a problem or need your solution may address.
Christoph Guetter suggests in “The eye is a window to the brain; but who’s looking?” that the micron scale resolution of optical coherence tomography (OCT) for in vivo cross-sectional imaging of the human retina may allow earlier and more accurate diagnoses of several common neurodegenerative disorders: Multiple Sclerosis (MS), Alzheimer’s disease, Parkinson’s disease, and amyotrophic lateral sclerosis (ALS).
Q: Should I ask prospects if they would use my product? How do I interpret “yes”, “no”, and “maybe.”
Q: I struggle with the value proposition for our product. Either I am too abstract “we offer a positive return on time invested” or too vague “help increase your ability to manage critical challenges.” Do you have any suggestions for how to frame or formulate a value proposition?
Here a few questions that a value proposition normally addresses
These are excerpts from Episode 9 of Outlier on Air: Tristan Kromer, A Lean Approach to Business. They are in the same sequence the took place in the interview but a number of stories and asides have been omitted to focus on what I felt were some extremely valuable insights from Tristan Kromer on clarifying and testing customer and value hypotheses.
Map the customer buying process, needs, and situation before you invest time sending a detailed proposal. A quick request can mean you are column fodder.
Q: We are still trying to close our first paying customer. We have a website up and have talked to a number of people. More or less out of the blue we got a call from someone in a large firm who had looked at our website. They asked a few questions about our product and then said “Great! Send me a detailed proposal including pricing!”
At last a stranger recognizes the brilliance of your solution in just a few minutes of conversation! How often I tell myself that. How rarely it’s true, especially when you are just starting out with a new product or in a new market. You have to ask yourself:
- Do they really know enough about what we do to be able to start a purchase order?
- Do I know enough about their situation to be able to calculate our likely impact on their business and their return on investment?
- How can I justify the price to value in the proposal?
- Have I addressed the critical implementation and proliferation roadblocks we will face from pilot to production use?
You May Be Column Fodder
More often than not you are actually “column fodder” or a makeweight needed so that they can prove to their boss or the purchasing/finance team that they did a thorough job and solicited three bids. Especially if you don’t know much about their situation and they have not asked for a detailed demo you need to proceed a little more slowly.
Map The Customer Buying Process
Before you submit a proposal I would ask your contact these questions to get a better sense of the situation, in particular you need to learn as much as possible about who will make the decision and how they will make it (the customer buying process).
- Can you describe the process for making a decision after we submit this powerpoint proposal, who else is in involved, what questions are they likely to have?
- Who has to make the final decision to actually sign a contract?
- Can you provide an example of a standard contract so we can understand your typical deal structure and terms and conditions.
- Can you give some examples of other deals that your company has done in the last three years that might serve as a model for how our business relationship would work?
Understand Their Needs and Situation
You want to be easy to do business with but that requires that you have a thorough understanding of their needs. I would not send a powerpoint presentation, but ask for time to present it (if only via Webex/GoToMeeting) so that you can answer any questions that they have in the moment. I would also dry run this presentation with your contact if they are open to it. If they just default to “send me a detailed proposal” it’s probably not a real opportunity.
For customer interviews we have a rule of thumb that if an hour or research saves a minute early in the conversation it’s a good investment. When you look at the list of questions you have prepared to learn about the prospect’s business and their needs, it’s easy to say to yourself, “I am really busy I can just ask these at the start to ‘set the table.'” But there are significant risks with this approach.
Preparations Cuts Risk Of Customer Interviews Ending Prematurely
While the interview may be nominally scheduled for 15 minutes or a half-hour and may run an hour if it goes well the first six minute or so are critical to communicating that you have done your homework on their situation and their needs. If you start to ask questions that are already published on-line you can appear lazy or unprepared. If you can do research on a prospect in advance, it’s worth spending an hour to save a minute in the conversation. You can even start the conversation by saying “when I prepared for this conversation here is what I learned about your firm” and give a brief summary of what you know about their situation.
It’s OK to say “I see on your website that you have hired four people in the last three months, how has that impacted …” or “I read a profile of your firm in the San Jose Business Journal Book of Lists, have you grown beyond the 12 people listed in February?” This shows that you have done your homework and don’t want to waste their time but need to confirm some of the key facts that may bear on their needs.
Information Sources To Consult Prior To Customer Interviews
- Do a thorough review of the prospect’s website.
- Search for any articles in the last two years at least to see what kind of press coverage they have received.
- Review the Linkedin profiles for the firm, the person you are talking to, and anyone with similar titles or in the same department.
- Review on-line postings in relevant forums for the industry.
- See if they have a blog, a twitter account, a YouTube account, and similar social media sits that are often used for business purposes.
Six Questions That You Normally Have to Ask In The Conversation
- Prospect’s description of the problem in their own words. This is rarely more than a sentence or two and capturing the essence in their own words is key.
- High level description of current work process or work flow in their own words. This forms the basis for any delta comparison or differentiation of your solution.
- Any constraints they mention: if you hear the same ones multiple times you will more than likely have to satisfy them.
- How they will tell that a new solution will leave them better off: this is different from asking them to specify the solution, it’s asking for “future state” or the end result they would like to achieve.
- What else they have tried to do to solve the problem: probe for why they were not satisfactory.
- Key metrics or figures of merit they would use to evaluate a new outcome.
“A month in the laboratory can often save an hour in the library.”
F. H. Westheimer
Entrepreneurs seem to divide into two camps:
- those who want to have a conversation immediately, and
- those who are quite content to research for months as long as they don’t have to talk to strangers.
Striking a balance is the key to maximizing your learning from a customer interview. Effective research prior to the customer interview allows you to
- Ask better questions
- Provide evidence of your commitment to developing a mutually satisfactory business relationship
- Detect when your prospect is leaving something out or perhaps coloring the situation too much. You are not a stenographer there to capture whatever they say without reflection, but if your only source of information is what they tell you then you risk “garbage in, garbage out” in your product plans and MVP.