Customers’ needs and startup success
An entrepreneur wrote to me: “You keep mention that customers are important for a startup but how do we contact customers if we do not have a product to sell?
Answer: Before building a product you should have some ideas. It is important to share the ideas with potential customers to make sure that the ideas are good enough to justify building the product. A good idea must meet the needs of customer or better solving problems to customers. However, before understanding the needs of the customer, you must know who your customer are.
The common mistake many entrepreneurs make is considered everyone can be a customer. That means they have not yet talked to any customer, or even have any idea about what to do but only assume about the customers. The idea does not means anything without meeting a need of customers. If customers do not need, they will not buy so it is essential to know who the customers are and if possible, getting them to involve in the development of the product as early as possible. Many entrepreneurs often start with an idea, believe they can develop it into a product then sell it later. They put money, efforts, and time to develop the product based on their “blind perception” and start a company that has no customers, no market needs and that is why most of them fail.
In my class, students who have ideas must go out and talk to customers to understand their needs BEFORE building the product. I always teach: “You only build something that customers want, the more customers, the better.” Students must spend the first four weeks on researching the market, identify a problem that they can solve then develop an idea on how to solve it. They must interview ten potential customers per week to make sure that the idea is good enough and meet what the customers want. They have to bring the customers’ comments back to class to discuss the functions and features that the product must have BEFORE even building it. If there is no customers or their idea is not meeting the need of customers, they have to change the idea or modify it until it has enough customers to justify the building of the product. Students must share with the class about who the customers are, what they say, what they like and so not like, and explain whether they will buy the product or not. Since they have to talk to ten customers per week, after a few weeks, they know whether their idea is good or not. Many students often frustrate as their idea is not accepted by customers, but I explain: “By asking the customers first, you do not waste time and efforts to build something nobody wants. By talk to many customers you may know what they want and change your idea into something customers will buy and that is the first step of starting a company.”
My students must meet all customers in person. They cannot talk to them via email or phone. By visiting them in person, they will learn more about their customers and where they work, how they do business and establish a good relationship with them BEFORE starting anything. They learn to listen and understand what the customer’s needs then modify their product based on what they learn. After ten weeks, most students understand the market needs and what the customers want and continue to discuss with customers about their product as they are developing it.
By following this approach, when they complete the product, most already have some customers who want to buy their product. Of course, this approach of continuously reviewing with customers requires a lot of hard works, but it also reduces the risks and achieves startup success by the time they graduate from the course.
Sources
- Blogs of Prof. John Vu, Carnegie Mellon University
