The Ultimate Startup Idea Test: Talk to Customers

In many respects, startups are a hypothesis or an educated guess.

An entrepreneur decides to create a startup after experiencing a problem or recognizing an opportunity. This provides enough insight or inspiration to jump on the bandwagon. Armed with optimism and a vision, they throw themselves into product development.

While excitement about an idea drives a startup forward, it is also important to test the hypothesis. The most effective approach is simple: talk to potential customers. Is this a problem they are having? Would they purchase this product? What products do they currently use?

customers

By asking questions, a startup discovers whether they’re on the right path, need to adjust their focus, or missed the mark. It is feedback that reinforces the hypothesis, or forces an entrepreneur to reload.

As a mentor for Startup Next over the past couple of months, the value of talking to potential customers has been clear. During the initial meetings, the entrepreneurs were confident about their ideas because they solved problems.

A key part of the Startup Next’s program is forcing early-stage entrepreneurs to venture out into the world to talk to customers.

In some respects, it is an exercise that forces entrepreneurs out of their comfort zone. It is one thing to develop a product, but another thing to actually talk to the potential customers – strange, but true, reality.

It has been interesting to see startups receive different reactions from customers. Some startups had their ideas validated, while others discovered targeted audiences have little interest in their product. It has made for interesting discussions and changes in strategic direction (aka pivots).

One of the startups, for example, is developing an e-commerce service. To get a better sense of their potential customers, they talked to customers at an Ikea store. They took an interesting approach by talking to customers who had made purchases, as well as customers who were returning products.

The exercise delivered some interesting insight into the kind of customers to pursue – single males between the ages of 25 and 44 who value convenience. As important, the exercise told them who wouldn’t be their customers – women – and why.

While the e-commerce idea is still valid, the startup realized that a focused approach to sales and marketing efforts improves their chances of success. It seems like a basic proposition but this insight is only delivered by talking to customers.

The problem for many startups is they operate in vacuums. They are so enthralled with their ideas that the outside world becomes a distraction or a hurdle to their vision. But customers rule the business world. No matter how good the idea, it is impossible to force a round peg into a square holes (although many startups try really hard to make it happen!).

Talking to customers is an exciting and intimidating proposition because there is a good possibility they will say things you don’t want to hear. This is a difficult exercise for entrepreneurs because it is a shock to the system – no one wants to hear their baby is ugly.

But it’s much better to have customers provide all-importance guidance early, rather than discovering you are selling a product with not enough appeal.

For start-ups and fast-growing companies looking to jump-start their marketing, I offer strategic and tactical services. Everything from building marketing engines to telling better stories through messaging/brand positioning, and reaching audiences by developing engaging content.

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