Customer Interviews: Spend an Hour to Save a Minute

Written by Sean Murphy. Posted in 1 Idea Stage, 2 Open for Business Stage, 3 Early Customer Stage, Customer Development, Lean Startup, Rules of Thumb

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

  1. 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.
  2. 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.
  3. Any constraints they mention: if you hear the same ones multiple times you will more than likely have to satisfy them.
  4. 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.
  5. What else they have tried to do to solve the problem: probe for why they were not satisfactory.
  6. Key metrics or figures of merit they would use to evaluate a new outcome.

Closing Thoughts

“A month in the laboratory can often save an hour in the library.”
Frank 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.

Related Posts

Q: Side Payment Requested In Negotiation

Written by Sean Murphy. Posted in Rules of Thumb, skmurphy

Q: We have been in customer discovery for a few months and have a situation in a negotiation that I am not sure how to deal with. A decision maker at a potential customer says he believes that our product can help but it’s not addressing a burning problem. The wrinkle that I have not encountered before: he says he would like to pursue this idea on his own so he wants us to compensate him for the ideas he is bringing. Any advice on how to look at the situation or how best to handle it?

Some Questions to Consider:

  • Who owns the ideas that he gave you?
  • Has he disclosed them to his company?
  • Are they his ideas or the company’s property?
  • Have you signed a non-disclosure either with him personally or with the company?
  • Did he give you the ideas freely or did he ask to be paid before he disclosed them?
  • Are there patents involved or does he plan to patent them?

If he is asking for a personal payment made to him, and not to the company, but it’s something you plan to sell to his company then you are walking into an ethical minefield. If he plans to pursue them himself it’s probably better to let him go on his way and talk to other folks who are not conflicted.

Act As If Everything You Do Will Become Public

As a rule of thumb it’s best to act as if everything that you do will become fully know to all of the parties involved or affected by your actions.  This side payment request does not sound like it would pass that test the way that you have described it.

If his company is not aware of the fact that he has ideas for improving internal processes or workflows and he is trying to sell them to you there are some potential conflicts there.

Normal Negotiation Flow For New Technology

Normally what would happen is that they would disclose to your their needs, specific ideas for functionality and perhaps implementation options, constraints that your solution  has to observe, and other relevant factors. You would either develop a custom product that is their property (work for hire) or you would develop a product you could sell to them and to others. The product might be sold at a discount to them to reflect their contribution, they might ask that you not sell it to named competitors for a a period of time (6,12,24 months).  In the first case you would be developing a custom implementation, in the second case you would be developing a solution that they would like to become an industry standard–perhaps after enjoying a temporary period of advantage over competitors–and they want to spread the cost of development across many players in the industry.

You Normally Don’t Make Side Payments

You don’t normally make side payments to individuals. One exception might be that the other party wants to leave his current job at your prospect company and come to work directly for you. But you want to be very careful about making payments to employees of firms or government agencies that you are trying to do business with. The employer may view it as a bribe or kickback. This is also true for offers of stock or stock options in your firm and payments to relatives or entities controlled by the employee but not part of the prospect company.

Related Blog Posts

  • Honesty In Negotiations
    I always assume that at some point in the future the folks I am negotiating will know the full truth of the situation and that very few secrets remain that way for long.
  • Building a Business Requires Building Trust
    Working with bootstrappers sometimes puts us on teams that are in desperate circumstances. Where they are able to translate time pressure and resource starvation into a bias for action from a change in perspective they often succeed–or at least move beyond the current crisis: success, like the horizon, is an imaginary line you can approach but never seen to cross. But where they use it as an excuse to take shortcuts that abuse prospects trust we sometimes have to part company.
  • The Lucky and the Wise
    It can be hard to assess whose advice to take about your business. One reason for cultivating at least a kitchen cabinet of informal advisors if not a more formal advisory board is that a diversity of perspectives can normally provide more insights into opportunities, risks, and options for managing them. Advice from a lucky entrepreneur tends to be very specific and suggest a “copy exactly” model, a wise entrepreneur will offer principles and several alternatives with one or two approaches recommended as most likely to succeed or least risky.
  • Treat Social Capital With The Same Care as Cash
    Trust Doesn’t Scale, It’s Knit by Aligning Actions With Prior Commitments

Arun Kumar: 9 Lessons Learned Bootstrapping Kerika

Written by Sean Murphy. Posted in Rules of Thumb, skmurphy

I interviewed Arun Kumar in 2012 on his experiences bootstrapping Kerika. It’s a long interview but really gives you a sense of his journey as an entrepreneur, his insights into the future of global teams and how they will collaborate, and a candid list of lessons learned. Here are nine key take-aways that he offered in that interview from bootstrapping Kerika since 2002.

Nine Lessons Learned Bootstrapping Kerika

  1. Don’t spend too much time on market research.  After some point, you are not discovering anything new; you are just hearing the same points being rephrased in different ways.  Move faster into building your first couple of versions.
  2. If the feature is really important, it’s not free. Be very careful about what open-source products or libraries you incorporate into your own product.
  3. Watch users where possible; don’t rely upon them to tell you what they are having difficulties with.  People often don’t articulate problems if they think they will look stupid in doing so, and sometimes people don’t even realize what problems they are having.  With face-to-face contact and conversation you can find out what people want to achieve, which is often different from what they are complaining about.
  4. Users will use your product in ways you never considered.  That’s a good thing. Even if that particular use case wasn’t the one that you envisioned originally, that’s an opportunity not a problem.
  5.  You can’t push on a string: when you are trying to find your product-market fit, you need to find a use case where someone is pulling on the other end.
  6. You will almost never fire someone too soon.
  7. Get all the details right.  Concepts are great, but execution is what matters.
  8. There are no instant successes: every successful company has a revisionist history that makes its founders look unusually brilliant.
  9. You can fail by misfortune, but are unlikely to succeed by chance.

Related Posts

 

Ten Mistakes Early Stage Bootstrappers Often Make

Written by Sean Murphy. Posted in 2 Open for Business Stage, 3 Early Customer Stage, Rules of Thumb, Silicon Valley, skmurphy

In the last eight years  I have moderated several hundred Bootstrappers Breakfasts. After doing a hundred or so and working with many clients who were bootstrapping I came up with a checklist for common mistakes bootstrappers and bootstrapping teams make in their first year or so.

Matt Wensing On Making the Transition to Growth

Written by Sean Murphy. Posted in Founder Story, Rules of Thumb, skmurphy

Matt Wensing On Making the Transition to Growth

Invest4Stormpulse has gone from an idea bootstrapped on founder savings and credit cards, to a project funded by friends and family rounds, to a small business strengthened by angel money, to a company that’s raised “meaningful” capital (our last round was just over $2 million). Here’s what I’ve learned since I’ve been able to leave the ‘drowning and can’t work on the important things’ mode.
Matt Wensing in “What I’ve Learned Since Raising Capital

Brad Pierce: Preserve Context in Writing to Manage Interruptions

Written by Sean Murphy. Posted in Rules of Thumb, skmurphy

Manage interruptions by writing down enough context to continue later: organized notes must detail status and next steps.

Brad Pierce:  Preserve  Context in Writing to Manage Interruptions

On longer time scales, when you must drop something for a while, it’s important, before doing so, to leave behind enough context for yourself to swap it back in. Write down some organized notes about where you were, what still needed to be done, etc. Keeping a log can be a big help, too, but it’s not a substitute for a high-level summary before suspending the task.

A good mental model for suspending a task is to leave behind the sort of information that you would need to hand it off to another person to finish.

Pretend that you are handing off the task to another person and you will be going away on a long vacation and unavailable to answer further questions, because when you come back to the task you will effectively be that other person.

Swapping in a new context is very expensive. Saving your state well when you suspend is actually much, much cheaper overall, assuming that you’ll need to come back to the task eventually.

Brad Pierce in Making the best of a bad interruption

I really like Brad’s advice and think it’s particularly useful for entrepreneurs in a couple of different situations:

At The End of a Meeting

Be clear on issues, risks, and action items before you adjourn. Don’t defer on getting agreement on critical risks, key concerns, and key tasks assignments. Rough notes that everyone agrees to means that the team is more likely to make forward progress instead of rehashing the key points of the last conversation (“I thought we agreed to…”) or arguing about things in email.

When Launching a Probe or Experiment

When you are launching a probe or experiment that may fail: plan your “time out” points and best alternatives in advance.  Some examples:

  • You are sending an e-mail request for a meeting or asking for action. Decide before you send it what you will do if you get no response: e.g. leave a voicemail, escalate, try alternatives, etc.. This is a variation on a premortem where you anticipate failure and what you will do to address it. But your state of information won’t substantially change with silence. While you still have the full context, plan out you next two or three steps so that you can also put them on the calendar without having to revisit the situation.
  • You are trying to fix a problem or defect. Decide on two or three options you can try that may fix the problem so that you can either shift to the next one or start two or three efforts in parallel. Obviously if the failure of your first attempt provides new information you may change your follow up, but it’s worth trying to anticipate now what are the most likely failure modes and writing that into your plan so that you don’t have to recover your full context to continue to take action.

Schedule Time to Document Your Context

Schedule time for documenting context in advance of predictable interruptions: allocate time to write down the key aspects of where you are before anything that will trigger a context shift such as scheduled conversations with other people, the end of the day, end of the week, the start of a parallel or overlapping project commitment etc…

Create “Buffer Days” To Clear Administrivia Backlog

Group Low Context Activities Into Clusters: I am borrowing this from Dan Sulivan’s “The Great Crossover.”

  • Focus Days:  you work with undivided concentration on key business activities.
  • Free Days: time you spend to relax and recharge with family and friends, no business activity.
  • Buffer Days: time you spend cleaning up, preparing, running errands, and otherwise make your focus days more effective.

Buffer days and free days are filled with tasks that don’t require you to store context. See also

Jerome K. Jerome’s View on Groundhog Day (Replaying Your Life)

Written by Sean Murphy. Posted in Rules of Thumb, skmurphy

Jerome K. Jerome’s “On The Disadvantage Of Not Getting What One Wants” offers a somewhat grim view the wish for replaying your life.

On The Disadvantage Of Not Getting What One Wants

“Ah, me!” said the good old gentleman, “if only I could live my life again in the light of experience.”

Now as he spoke these words he felt the drawing near to him of a Presence, […] “Your wish shall be granted. You shall live your life again, and the knowledge of the past shall be with you to guide you. See you use it. I will come again.”

Then a sleep fell upon the good man, and when he awoke, he was again a little child, lying in his mother’s arms; but, locked within his brain was the knowledge of the life that he had lived already.

So once more he lived and loved and labored. So a second time he lay an old, worn man with life behind him. And the angel stood again beside his bed; and the voice said,

“Well, are you content now?”

“I am well content,” said the old gentleman. “Let Death come.”

“And have you understood?” asked the angel.

“I think so,” was the answer; “that experience is but as of the memory of the pathways he has trod to a traveller journeying ever onward into an unknown land. I have been wise only to reap the reward of folly. Knowledge has ofttimes kept me from my good. I have avoided my old mistakes only to fall into others that I knew not of. I have reached the old errors by new roads. Where I have escaped sorrow I have lost joy. Where I have grasped happiness I have plucked pain also. Now let me go with Death that I may learn…”

Excerpt from On The Disadvantage Of Not Getting What One Wants
by Jerome K Jerome, collected in “The Second Thoughts of an Idle Fellow

There are no repeats, no replaying your life. Take responsibility, apologize, and make amends now. Every moment is precious and will be lost: count your blessings. Mindfulness and meditation can enable you to detect self-deception. Love now. Pray for guidance. Act now.

“You will turn over many a futile new leaf until you learn we must all write on the scratched-out pages.”
Mignon McLaughlin

Related Blog Posts

Don’t Waste Time Painting Tom Sawyer’s Fence: Proving Someone Wrong Is A Poor Motivator

Written by Sean Murphy. Posted in Rules of Thumb, skmurphy, Startups

Don’t waste time painting Tom Sawyer’s fence: proving someone wrong is actually a poor source of motivation. It’s OK to ignore conventional wisdom, but don’t get trapped into doing someone else’s work (or building their platform) just to prove them wrong. Build something instead of trying to win an argument.

Four Principles From Jonathan Wang’s “Start-Up Black Ops Creed”

Written by Sean Murphy. Posted in Rules of Thumb, skmurphy

Start-Up Black Ops

Jonathan Wang penned the Start-Up Black Ops creed, a website started on the belief:

“Every entrepreneur will, at some point along their journey, find themselves at the bottom of a big, dark pit–seemingly alone, surrounded by nothing, and without a way out.  That is the unavoidable norm when it comes to starting and running your own business. It is only at the bottom of this hole where you can learn and develop the skills to get out…and in doing so, you learn just how difficult entrepreneurship is and what it requires of your will and patience to succeed.”

Wang offers four principles

1. You are not alone – the process is equally difficult and sucks just as much to the next person.

I think it’s very important to network, to reach out for advice and assistance, and to understand that bringing something new into the world is always a challenge.

2. You can be creative – desperation will force you to try things you have never done before.

In “Innovation Needs Starvation, Pressure, and a New Perspective”  I explored Dave Snowden’s  perspective on Culture and Innovation;  he identified three  necessary, but not sufficient conditions for innovation to take place:

  • Starvation of familiar resource, forcing you to find new approaches, doing things in a different way;
  • Pressure that forces you to engage in the problem;
  • Perspective Shift to allow different patterns and ideas to be brought into play.

Of these, I think “a shift in perspective” is the most important. At a certain point pressure enables a shift, but as it continues to build it can extinguish creativity.

3. You don’t give up – you always ensure yourself a fighting chance when you at least try.

Not giving up is not the same thing as doing the same thing over and over without variation. “Try try again” is good advice only if you vary your approach. One way to avoid giving up is to develop a plan for alternative approaches before “Plan A” fails.  You can always update it based on what has not worked, but having a backup plan (and a backup for your backup) allows you to avoid the problem of “I cannot think of what to do next” when you are under the most pressure. In “Customer Development and its Discontents” I covered three common failure modes for engineering-driven companies as they approach the challenge of marketing and selling their product:

  • Get out of the BatCave: don’t try and figure it out without talking to prospects and your current customers
  • Test and measure: don’t rely just on your intuition, form falsifiable hypotheses
  • Iterate frequently: update your plans based on results to date, don’t be guided by the “Little Engine That Could” and keep trying the same thing hoping for a different result.

4. You will fail (not once, but many times) – you are better for it and will emerge smarter and stronger

For this to happen you need to conduct both pre-mortems, anticipating problems in advance, and periodic after actions  (also called post mortems, retrospectives, or lessons learned).  This also informs your customer’s perspective, as I noted in “The Technology is Nothing Without the Team

Most bootstrapping firms start out by delivering a service, or at least wrapping their product in a thick protective blanket of consulting to protect their customers from any sharp unfinished edges. And if you have ever used a product too early you know that the jagged edges of tomorrow can scratch some pretty deep wounds that are slow to heal and may leave impressive scars on what was once a promising career.

This is why early customers look hard at the people in your startup: they know that the technology cannot be divorced from the team and that how you respond when your product is producing unsatisfactory results is the most important question they have to answer. Because,  as Gerald Weinberg advises, “nothing new ever works ” and sooner or later you will have to respond.


See also “Three Take-Aways from Jonathan Wang’s Talk on Jaio Sports (Hardware Startup)

Corinne Roosevelt Robinson: Focus for Effect But Look Beyond Your Own Special Interests

Written by Theresa Shafer. Posted in Rules of Thumb

Focus For Effect

“Nothing is as difficult as to achieve results in this world if one is filled full of great tolerance and the milk of human kindness. The person who achieves must generally be a one-idea individual, concentrated entirely on that one idea, and ruthless in his aspect toward other men and other ideas.”
Corinne Roosevelt Robinson in chapter 1 of “My Brother Theodore Roosevelt.”

This passage is actually about her father, Theodore Roosevelt Sr.  She continues:

“My father, in his brief life of forty-six years, achieved almost everything he undertook, and he undertook many things, but, although able to give the concentration which is necessary to achievement, he had the power of interesting himself in many things outside of his own special interests, and by the most delicate and comprehending sympathy made himself a factor in the lives of any number of other human beings.”
Corinne Roosevelt Robinson in chapter 1 of “My Brother Theodore Roosevelt.”

Good advice for entrepreneurs: you have to focus for effect, making hard choices to drive a project or product forward. But if you are only interested in yourself and your own needs you won’t have much of a life.

Related Blog Posts

Kent Beck and Don Reinertsen on Value of Storytelling

Written by Sean Murphy. Posted in Rules of Thumb, Video

What follows is an exchange on twitter between Kent Beck and Don Reinertsen on Dec 12-2013 about their experiences as speakers at the Lean Startup Conference 2013 that I thought was worth preserving.

Kent Beck and Don Reinertsen on Value of Storytelling

Kent Beck (@KentBeck) Dec 12: The beauty of teaching through storytelling is that the listeners’ lessons aren’t limited by the storyteller’s imagination.

Donald Reinertsen (@DReinertsen) Dec 12: And, as in the old story of a donkey carrying a load of books, the payload can sometimes be more sophisticated than the narrator.

Kent Beck (@KentBeck) Dec 12: Good thing I don’t mind being a donkey :)

Donald Reinertsen (@DReinertsen) Dec 12: I rather enjoy it. Such moments permit one to unintentionally deliver an unexpected, and unreasonable, amount of value.

I did a roundup of speakers, videos, and blog posts from the Lean Startup 2013 if you are interested in learning more about their presentations or others.

Don Reinertsen Presentations

Don Reinertsen also has a number of good presentations up at InfoQ a “Beyond Deming” video at Lean Product Development Flow.  Here is his talk from Lean Startup 2013:

Kent Beck’s talk from Lean Startup 2013:

Related Blog Posts

Legal Advice: Start With a Plain English Agreement That Covers Key Deal Points

Written by Sean Murphy. Posted in Rules of Thumb

I am not an attorney. This is not legal advice.

Back when i had a real job at Cisco a few years ago I managed a webmaster who asked me to debug a problem with javascript embedded in the HTML for a page they had written. As we dug into about 30 lines of javascript it became clear that it was three sections from different programs with inconsistent variables names that had been glued together. The webmaster understood how to write good content and basic HTML and had viewed the javascript like a poem, assembling different stanzas from other pages in the hope they would form a coherent whole.

True story.

When I tell software engineers this story they often laugh. And then they realize that I am telling them the story because they have assembled a contract from different legalese they have found on the Internet in hopes of creating a legally binding and coherent whole.

I have seen firms give away the rights to their software because they didn’t understand the legal meaning of certain phrases they copied from a contract they found on the Internet.–this a true story that happened to a client a few years ago. The other side was happy to sign because they understood what “work for hire” meant, and happy to enforce it later.

Nobody likes spending money on attorneys, entrepreneurs are not alone in this regard. But you can always put a budget on their efforts (one rule of thumb is to spend 1% of the contract value on a legal review if you are bootstrapping) and ask an attorney to give you a prioritized list of risks. Many of the things that large firms pay attorneys to worry about are not worth spending attorney time on for an early stage startup.

Focus on key risks, not every risk. Also understand that to some attorneys ‘doing nothing’ can represent the least risk, but to a bootstrapper doing nothing means your runway keeps getting shorter. Doing nothing and taking no risks for long enough gives you the opportunity to ask for your old job back.

Find an attorney who is comfortable working with bootstrappers. Ask other bootstrappers who they use if need be.

Start with a plain English agreement that enables a meeting of the minds: it can just be a bulleted list of key points. If you are not an attorney do not attempt to write “legalese.” It just sets you up for signing a contract that you have drafted but don’t really understand.

A plain English document affords the layperson (non-attorney) substantially more protection and is always more useful as a starting point. Even if the other side starts with a contract take the time to reach agreement on key points in plain English so that you can tell whether you are negotiating substance or style when you involve your own attorney.

 

Quick Links

Bootstrappers Breakfast Link Startup Stages Clients In the News Upcoming Events Office Hours Button Newsletter SignUp