By the end of this week, you should understand:
• How to analyse the feedback from your initial customer interviews
• Why it is vital to pivot your underlying business based on this feedback
• How to have renewed clarity on your problem and working towards meaningful validation
• What to do next
Building on last week, we will have a strong focus this week on understanding the feedback from our initial customer interviews and how this can improve our overall business case. We will look to refine the problem we have previously identified ensuring that we are on a course which will bare a quality business and concept.
Everyone knows the statistics of startup failure, they’re well documented. Among these statistics, one seems to remain constant at the top of all lists - no need. In other words, solving for a problem that doesn’t exist.
Forbes undertook a research piece in 2017 which interviewed 101 startups which failed. When asked the top reason startups fail, the resounding number one response with 42% was...No market need .
Let’s work to avoid this pitfall with data-driven decisions.
EXERCISE: DISSECTING DATA FROM INITIAL CUSTOMER DISCUSSIONS
Customer feedback is vital for business validation and growth. Last week, each business was set the task of contacting five prospective customers in each of its customer segments. With the guidance of your mentors, you should now have some quality data with which to refine your problem validation and overall business.
COLLATE YOUR DATA
It’s is essential to get into the habit of collecting as much data as possible when having discussions with customers. This takes many forms, but can include:
Customer name and contact details
Customer age and location
Any problem areas the customer mentions through open and exploratory questions
Current solutions utilised
Any interesting remarks etc.
By doing this, you will begin to amass large data pools and see trends from customer segments in particular. To help, set up a data table similar to the below. During and after each interview, populate a basic table (similar to below) to allow easy analysis once you begin more interviews.
You want to get a feel for the data before starting to decipher it. Scan through the feedback to get a sense of how diverse the responses are.
As a general rule of thumb, if each potential customer is giving you very different feedback, you’ll likely have to analyse a higher volume of feedback in order to see patterns and make it actionable.
You must understand though, that this is highly likely. The chances of you receiving matching feedback from multiple potential customers straight away is extremely low. The reason being, most of your businesses are disrupting niche areas. As such, you may have to be slightly more broad with your business case to meet customer problems. All businesses need to pivot [2.].
COLLECTING CUSTOMER FEEDBACK
CATEGORIZE YOUR DATA
Let’s now go a little deeper into the feedback you’ve gathered from your potential customers. What we want to introduce here, is categorisation. Essentially, we want to determine where the common themes are and capitalise on them. To do this, go through each customer dataset, and write down three or four key words/themes which jump out at you.
This may be due to repetition of the theme, particular excitement or drea of the theme, or something interesting you note which you wish to explore further
Do this for each dataset, and note these keywords/themes. We now want to see which themes arise most often. Note that keywords or themes can be closely aligned, so some common sense is required to bunch common themes together.
In order of most commonly mentioned to least commonly mentioned, rank these themes in a table and outline how often it was mentioned. This is most commonly presented as a percentage per contact.
You will quickly begin to see a theme emerging here, and potentially a new order of priorities for problems you have been provided.
Additionally, you will note that within these interviews, you will being to make logical connections between the stated problems, and your proposed solution. However, you need to let go of this, and understand this is about determining the overall problems, from here the solution will become more obvious.
EXERCISE: THEMES AND INSIGHTS
SUMMARIZE AND PRESENT YOUR DATA
Your team will now be in a position to summarise the collated data, and begin to present your newly established problems.
By copying your initial set of top five problems, begin to build your new problem list based on the common themes from your potential customers. Given you won’t be using explicit examples, you need to use logic to take a theme, and mould it into a quantifiable problem based on the numerous discussions undertaken.
Once you’ve created a new list of the five problems facing your primary customer base, compare it to your initial list. It must be noted, that this can be tough for a business to do. Altering fundamental business thoughts can feel like a loss. However it must be understood that any alteration based on customer conversations will ultimately help the business produce a product or service which will be well-received!
Note - it is vital to not settle on a small number of customer conversations. Once you being, you should enjoy having these conversations, understanding the problems facing your customers, whether your solution aid, and continue to refine your overall business to ensure you have a product or offering which will be of genuine use.
EXERCISE: PIVOTING YOUR STRATEGY
Over the next few days, you will determine how your offering may change based on the customer feedback. Without using any prior material, begin to determine how your offering can be slightly altered to better provide a solution. These may be minute alterations, or they may be more genuine pivots in business strategy. Either way, this is fine!
Ensure you are doing so without preconceptions, and begin to see where you see the changes which will ensure you have gained customers moving forward.
Take your time with this. Discuss with mentors. And most importantly, discuss within your team to determine an updated direction.
Once completed, you will have the opportunity to discuss with your mentors. When doing so, outline the initial business and solution you were proposing. Follow this with the set of themes which became common among your potential customers.
To add some fun, quiz your mentors on what they see as potential pivots on the business based on the feedback. It may be that you hear some additional thoughts which could be included in your overall strategy.
Finally, run your mentor through the changes you have discussed as a team and outline why these changes are being made. The mentors will be tough on you here, as we want to see changes that are beneficial from a social, environmental and economic standpoint. After all, when we are creating business which are to provide impact, we can’t forget why we began building these business in the first place.
1. The top reason startups fail
2. Making customer feedback actionable
Collate - bringing together different pieces of information so that the similarities and differences can be seen.
Customer segmentation - the practice of dividing a customer base into groups of individuals that are similar in specific ways, such as age, gender, geographic location, interests and spending habits.
Decipher - discover the meaning of something which is difficult or hidden away.
Categorize - to arrange in specific categories or classes for analysis purposes.