How I teach Startup part 3
If you want to increase your chances of startup success, you need to have customers even before building your product. By go out and talk with “potential” customers, you will learn more about their needs and the market. The customers can also let you know whether your idea is good or not and whether they will buy the product or not. By talking to as many customers, as possible, you can identify what function your product must have. Nothing is better than having customers tell you what they want and do not want so you can have a clear idea of what to build, before writing a single line of code.
But how do you talk to customers? The fact is you do not talk much but just LISTEN. It may be illogical because most entrepreneurs love to talk about their idea just to confirm that they are right and their idea is great. But that is a big mistake, and my students often learn about this after a few weeks. Students by nature are optimists, so when the customers smile and nod their heads, they believe that customers like their idea. I explained to students: “When customers do not ask any question, it means they do not care about what you say and just want you to leave. Do not make a mistake when they nod their head in agreement because they just want to be nice so you do not bother them anymore.” When you talk, even with your enthusiastic about your idea, you force them to listen to what you say. But most customers are busy, so they just tell you that your idea is great to get rid of you. In that case, you fail to understand their problems and what they need. But if you talk less and learn how to listen to their concern, you will be surprised how much they will tell you about their problems. And when they know that you want to solve their problems, they will tell you everything, and what they need. That is why all my startup students must learn how to listen because it is the best opportunity to get the right requirements for the product. By understanding the customers’ needs and build a good relationship with them early, they will have customers who not only willing to buy the product but also willing to support the development of the product.
In software development, bad requirements can ruin a project. As a startup, this approach by asking customers provide clear requirements on how to develop the product that customers want. Instead of building something based on what the entrepreneurs think they can build and try to sell later, the entrepreneurs know what customers will buy, how many of them will buy, and how much they will pay so the entrepreneurs can reduce the risk of wasting time, effort and money.
When my students have a list of customers, many can approach investors to get funding for their startup. Most investors are always asking the same questions: “Do you have customers? How many? How much are they willing to pay? And how much does it cost and how much profit you can make? If they answer these questions clearly and accurately, most receive funding BEFORE they even complete the product And this is how I teach startup at Carnegie Mellon.
Sources
- Blogs of Prof. John Vu, Carnegie Mellon University
