The purpose of this article
- The goal is to help founders as they are launching their startup.
- The article is structured to help with potential customers interviews starting in the first week of the startup.
- The information in this article can be modified to help a later stage startup, a scaling company, or an established mature company.
This article is not intended to make you an expert in interviewing potential customers and analysing interview notes.
You may download a PDF of this article from: How do you interview potential customers V2
What is a startup?
- A startup is a temporary organization designed to search out a repeatable, scalable and profitable business model with lots of potential customers who are willing and able to pay to solve their problems and needs.
- A business model describes how a company creates value for itself while delivering products or services to customers. What are you building and for whom. What customer problems are your solving? What customer needs are you addressing? What benefits and value are you enabling customers to achieve?
Why interview potential customers immediately?
You don’t want to spend time and money to build a solution for which there are no customers with a problem or needs for which they are willing and able to spend money. You don’t want to build a cattle ranch for selling meat and then discover that your customers are vegetarians.
The following two articles illustrate the value of talking with customers before you launch a solution.
What must you learn about customers and users?
You need to interview both C&U (Customers and Users). Customers are those who give you money. Users are those who use your solution but don’t give you money. You must learn about both of those groups. Google would not have advertisers if there wasn’t a large number of satisfied people doing searches.
What do you want to learn from your interviews?
There are 5 areas you want to learn about, in a variety of interviews.
- What are the C&U urgent problems and needs?
- What do the C&U believe is the value to them if their urgent problems and needs are addressed? Value can be both financial and non-financial?
- When during the course of the day do C&U experience urgent problems and needs? How do they feel?
- How will the C&U daily experience change as a result of your solution?
- What is the decision-making process? E.g. who are influencers? Who are recommenders and advisors? Who makes the financial decision?
The analysis of interview may reveal different C&U segments.
How do you analyse interview notes?
Validating and invalidating assumptions as well as identifying new facts required thematic analysis of the interview transcripts. Two analytical approaches are used:
- Inductive – the data validates or invalidates assumptions
- Deductive – the data identities new facts or findings, other than the initial assumptions.
The Further Reading section has links to articles on how to analyze user interviews and how-to use excel in this analysis. As the number of your interviews increases, you’ll be able to analyze them by customer segment, and other characteristics.
The customer journey description in the initial interview is documented in the customer journey map. The Further reading section has a link to examples of customer journey maps
The analysis of your interviews, combined with 3rd party market research, will help you determine the market size of each C&U segment. E.g. Potential revenue = (number of customers with an urgent problem or need that they believe they must spend money on) X (what they are willing and able to spend).
How do you document your interview learnings?
There are three sets of documents:
- The business model canvas, updated based on thematic analysis and customer journey mapping.
- The one-page summary thematic analysis of interview notes. This analysis validates or invalidates assumptions made in the business model canvas.
- The one-page page summary customer journey mapping, based on what the C&U say during interviews.
When do you interview C&U?
- You start interviewing as soon as you launch your startup, before you have spent any time or money to start build a solution.
- You continue to interview throughput the startup journey, as you start to build and validate that your solution addresses C&U problems and needs: Wireframe, proof of concept, functional prototype, pilot solution, initial MVP, enhanced MVPs, and product market fit.
- You continue to interview as your company grows.
- You never stop interviewing.
What is the overall process?
- Day one of your launch:
- Create the business model canvas. It will likely be 100% assumptions.
- Create the customer journey map. It will likely be 100% assumptions.
- List the assumptions from the business model canvas you want to validate or invalidate, with the open-ended questions you’ll ask.
- Define the structure you’ll use for your customer journey map.
- Define the format of the one-page report you’ll create from your thematic analysis of interview notes.
- Schedule interviews with C&U, selecting C&U represented by your business model canvas. Before you start to build something, you will interview 100 people. Most people will likely decline to be interviewed which means you may be reaching out to 100s of C&U.
- Develop an interview guide, customized for the initial C&U interviews focused on their problems and needs.
- Two people must be on the interview, with one person taking detailed notes of what the interviewer said.
- Document each interview.
- After each day of interviews,
- Update your one-page summary thematic analysis.
- Update your one-page customer journey map.
- Update your business model canvas, based on your thematic analysis and customer journey map.
- The interview guides will need to be revised as you learn from interviews and as your startup goes through different stages.
What’s an example interview guide for the first problem validation interview with potential C&U?
- Start with 1-2 minutes of personal ice-breaking, based on your research of the interviewee.
- Set the stage for the interview. What are the objectives and how will the interview work.
- Collect some demographic information about the interviewee, focused on their business or lifestyle in the context of the problems you’re trying to solve.
- Set the problem context by telling the story of how you identified the problem and why you think the problem is important.
- Validate the problem by getting the interviewee to rank the urgency and frequency of their problems. Ask the interview if there were other problems which you did not identify.
- Test the solution. Go through each problem in urgency sequence and ask how the interviewee solves it today, what the value of a solution would be to them, and what this value would be. This is a very free from discussion with you listening to the interviewee. The interviewee may be begging for a solution may not care if there is a solution.
- Conclude by asking:
- if OK to come back to discuss your solution.
- if interviewee would refer other people for you to interview.
What are the dos and don’ts?
- Do define your target C&U and select potential C&U who are representative. For example, if you are creating a venture capital fund which will focus on providing investor exits within 3 years, do not interview potential investors who seek a 20+ year exit in-order to facilitate inter-generational wealth transfer.
- Do face-to-face interviews. Video calls are a distant second best. Phone calls are a very distant third best.
- Do document the criteria for assessing the answers. This will avoid confirmation bias, in which you’ll ignore information which invalidates your hypotheses.
- Do not interview friends, family, or those you have a personal connection with. You need brutal honesty, rather than hearing from people who do not want to hurt your feelings.
- Do focus on the people who actually have the problem or need for which you are creating the solution.
- Do create questions which require quantitative answers or specific descriptions. Don’t ask for subjective or hypothetical feedback.
- Do create questions that help you understand how customers think, and why they take the actions they do.
- Do not talk about your solution in your initial meeting.
- Do not ask about price or what customers are willing to pay in the initial meeting. Do ask about the customers costs, budgets, etc.
- Do finish each interview asking “What should I have asked but did not ask?”
- Do create a data collection form for each interview. This will contain things such as: the description of the customer profile, your open-ended questions, which hypotheses were confirmed and why, which hypotheses were invalidated and why, which hypotheses you gained no insight into and why, what changes you should make for the next interview (target customer profile, hypotheses, questions to ask).
Other C&U understanding techniques to consider:
- Watch the C&U (or video record them) as they carry out their work.
- Actually do the C&Us work yourself.
- Focus on the C&U who is suffering the greatest pain and determine their work-around solution(s).
- Understand what the customers’ required outcomes are, as well the problems in achieving that outcome.
What are the challenges in interviewing potential customers
- The founders, or existing companies, passionately believe that they have created right solution. They believe there is no reason to interview potential customers. They are focused on building the solution and selling it. Their passion results in them being unable to listen to and understand what the customers are saying.
- The founders, or existing companies, believe any sales and marketing problems can be fixed by changing the sales deck and changing the website.
- The founders, or existing companies, are passionate that they have the right solution. Hearing brutal feedback from potential customers requires founders who are self-confident, self-aware that they don’t have all the answers, and have the ability to learn and adapt. I’ve observed many people who are not able to learn and adapt.
- The founders lack the personality and skills to contact a large number of strangers to setup and conduct interviews.
- Doing interviews appears to be lack of progress. Building a solution is more fun and appears to be progress.
Your next steps
- Ensure your team has the skills and experience to interview C&Us and to analyze the results. These may reside either in team members or advisors.
- Build your interview plan in conjunction with your survey plan. You will be surveying far more people than you interview.
1 “What is a business model canvas?” The following is a link to my article https://koorandassociates.org/tools/what-is-a-business-model/
Creating an interview guide and interview process
The book “Lean Analytics – use data to build a better startup faster” by Alistair Croll & Benjamin Yoskovitz
Chapter 15 “Stage One: Empathy”
How to transcribe an interview
How to analyze user interviews
An example of using Excel and pivot tables for thematic analysis of user interviews
Some example of customer journey maps