Approaching Customer Discovery, Part 1
How Steve Cohn built Winware by talking to customers first
When serial entrepreneur Steven Cohn set out to launch his fourth startup, Winware, he spent the bulk of his time where few founders do at the outset of new ventures: talking to customers. Instead of hacking together his first prototype or hiring his first engineer to start writing code, Cohn, now a veteran of three exits, dove deep into his target audience.
Winware’s goal is to use a machine learning algorithm to optimize SaaS products to drive better product adoption, increased trial conversion and improved revenue retention. Cohn knew there was a problem to solve there, but he still had many unanswered questions. For example, he still didn’t have a full understanding of the challenges his target audience faced using data, analytics and marketing automation tools to drive product-led growth (PLG) conversions and customer retention. To get those answers, before building any product, he spoke to folks he believed were his target audience—more than 300 different companies, working on his own.
Cohn met with people in a variety of roles at each of these companies, and each conversation helped him narrow down his target audience so he could start focusing on his ideal customer profile (ICP). His daily routine consisted of anywhere between 2 and 4 interviews, which he recorded and later shared with the team he brought on. He spent the rest of his time finding folks to speak with.
Cohn tried multiple tactics to recruit interview participants.
Initially, he did cold outreach on LinkedIn.
After seeing a relatively low success rate, he began reaching out to his personal network as well as his investor’s networks.
Finally, he began experimenting with content marketing to drive inbound leads—not for sales (at least not yet) but for learning. Writing compelling content on LinkedIn began to attract the audience he was looking for. As they engaged with his work, he reached out to this warm pool of leads for further insight into their thoughts.
Building a startup in a crowded market required Cohn to build a deeper understanding of the problem Winware is solving as well as why and how existing tools do not solve these problems.
Implementing a practice of continuous conversation
As Cohn continued to build Winware, he continued talking to customers. He made customer conversations a regular practice for the rest of his team, too. This was crucial to the success of his startup—and it’s crucial for yours or anyone else’s. The depth of insight Cohn and his team collected over the hundreds of interviews they’ve done has allowed them to make better decisions, reduce burn rate on initiatives that won’t yield results, and focus their teams on the most probable path for success.
That’s not to say it’s easy to do all this. Having a continuous customer conversation practice does take time and a toll on the founders’ calendar. How can you put together a sustainable program within your company to develop this muscle and build in that continuous customer conversation?
Let’s take a look.
In terms of investment, the main currency here is time. The cost of doing customer interviews is rarely financial. Instead, it requires a deliberate decision, by the founder, to allocate some percentage of time to learning. This has an explicit tradeoff: time spent learning is time not spent delivering. However, the insight gained from the interviewing process will provide better direction on what to build and how to implement and design it.
In an early-stage startup, everyone in the company should make time in their schedule to speak with customers. This starts with the founder(s) but also applies to early engineering, product, and design hires. Once the team starts to grow, not everyone will speak to customers directly, but everyone should have access to the insight and the time to consume it. Cohn encourages his engineers to add to their JIRA boards a story called “watch customer interview” so that they can build time into their sprints to view recorded customer interviews from earlier in the week. Depending on your sector, you may need to provide some compensation to your interviewees. This often comes down to a gift card to Amazon or Starbucks, usually in the $50-150 range depending on the job title of the person you’re interviewing. Aside from running the actual interviews, you’ll need to account for the time spent recruiting and scheduling them. This may take up to 4 hours per week of your time. If that starts to become untenable, consider outsourcing this to an external recruiter. It will cost more, but it will also save you time and provide ideal candidates for you to speak with.
What does a customer interviewing process look like?
At the bear minimum, your interviewing process should result in 3 to 5 customer conversations per week. Here’s what that looks like on a daily basis:
Monday: Determine the most important thing you need to learn that week and identify who you’d like to speak with.
Tuesday: Begin recruiting efforts to find at least 3 customers to speak with, and reach out with an interview request along with any incentives you are offering for participation.
Wednesday: Follow up to confirm scheduling for the interviews. Start putting together the list of questions you’d like to ask during the sessions.
Thursday: Conduct interviews. Ideally, you’ll be able to schedule them all in one day. There will undoubtedly be exceptions to this.
Friday: Meet with the team to review the findings from your interviews and discuss how it will impact existing plans.
Rinse and repeat this process on a weekly basis. Make sure you record every interview and have it automatically transcribed. You can then use AI tools to look for patterns in the transcriptions that you may have missed over dozens of conversations.
Make the conversations valuable
Interviewing customers isn’t hard, but it does require practice. Think of it as a muscle: It already knows what to do, but the more you go through the right motions, the stronger your interviewing muscle gets. There are endless resources on how to run a great customer interview.
The most important thing to get out of your customer interviews are stories. You want your participants to tell you how they go about the tasks that you’re trying to support and improve, where their work is easy and where it’s hard, what they’re doing today to overcome the challenges they’re encountering, and (ideally) how well or poorly the competition is solving their problems.
To support this type of insight there are (at least) two powerful questions you can ask in every customer interviews:
“Tell me about the last time you [did the thing we are trying to help you with].” This prompt asks your participant to describe to you how they went about shopping for shoes online, inputting data, running a query or applying for a mortgage, etc. Whatever problem it is you’re solving for in that process, listen for them to tell you the one part that was easy or hard, and dig in further: “What made that easy for you?” or “Why was that hard to accomplish?”
“If you had a magic wand and could make this experience perfect, what would that look like?” Your goal with this prompt is to get a sense of what they imagine your service should provide. This is inevitably where they’ll start to tick off a wishlist of features…which is a good time for the second half of this prompt.
Every time you hear them say something like, “It would be so much better if the product allowed me to do [something],” respond with, “If you had that feature, what would it let you do?” You don’t need to learn what features they’d like to have but rather what goal they’re trying to achieve. Ultimately, you and the team will decide how to help them achieve that goal.
Cohn also likes to make an explicit request to sign the customer up as a beta user at the end of each interview. This and requesting an introduction to others who may be interested in the product are like a “real-world NPS survey,” he said.
Removing all obstacles to learning
As a founder you play a pivotal role in creating the culture for your company. If having a deep understanding of the customer is part of the culture you want to create, you have to make customer conversations, and learning, the path of least resistance. Build in incentives for your team to conduct customer interviews. Enable them to take time away from their other tasks to do so, as Cohn did at Winware. When new ideas come up for consideration and discussion, ask what customer problem these ideas solve. Mandate that new ideas need validation prior to implementation.
Most importantly, provide your team with unlimited budget and support for talking to customers. Whatever they need, the answer should always be yes. This is, after all, a very low-cost activity. The last thing that should stop you from getting to know your customers is budget.
You want to make curiosity about your customer a part of your culture from the beginning. When your team sees you and the executive team doing it yourselves, and providing the resources for everyone else to do it, they’ll understand how important it is.