The mistake most founders make, is they spend months or even years building something before they determine whether it matters to customers. For a hobby project that scratches your itch, that’s fine. However, if your goal is to build a sustainable business, remember, the answer is always outside, in the marketplace.
When I first joined Duo Security, they were doing just over $5 million in annual recurring revenue (ARR.) The product had some traction, particularly with some small and medium-sized companies where the founders knew some of the cyber security leaders. They’d spent the last year on a project code-named Barn Owl which unfortunately didn’t land. Chester, the director of Engineering was discouraged. “I don’t want people working on stuff that doesn’t matter.”
As I talked to one of the investors, Matt Cohler from Benchmark, it was clear that the company had lost a year working on a collection of features that customers didn't need. Compounding that, the head of sales changed the pricing and packaging just 24 hours before launch. No one was happy with the outcome, which I suppose is one of the reasons the founders Dug and Jon brought me into the company.
When I met with the product marketing and product management team that reported to me, one of the first questions I asked was “How many customer visits did you do last quarter?” The answer was none.
No wonder the product hadn’t landed. I immediately set an objective for the team that they had to each do 6 or more customer visits per quarter. “Go make friends with the sales team,” I said. “They’ll be happy to bring you into customer meetings.”
I used an approach I call “active listening” with customers. It involved creating a simple 1 page set of eight to ten questions. The goal was not to tell them about all the cool new features we were working on, but instead to understand the problems they faced. To listen, without bias, to what they said was important and what was not. If we immediately went into showing slides or a demo of what we were working on, we would get a reaction and we would fail to uncover the customer’s true situation. And what customer was really going to be honest in giving their feedback to our plans? It was like showing baby pictures. No one wants to tell you that you have an ugly baby.
The questions focused on the basics:
- What is your role in the company?
- What went well in your last security project? What didn’t go well?
- What surprises did you face? What took longer than expected?
- What systems must be secured? What systems are less important?
- What happens when you roll out new security capabilities?
- What’s a burden that you face that you wish you could automate?
And so on.
These are not hard questions. The goal was to get customers to open up and speak to us as they might to a colleague, or someone in a similar position over a drink. It was important that the customer spoke about their situation, not what they thought was happening at other companies or in the industry.
The goal in this process is to uncover pain. It is not to validate what you have built. In fact, it’s best if you do this exercise before you build anything. You must approach it with “beginner’s eyes” as if you know nothing about the customer and their space. Don’t make assumptions about what is difficult or painful in their world. Approach it like you are a journalist with no pre-conceived notions and no ego about being right or wrong.
Many of the customers were intrigued by this approach and sometimes they’d still want to get a briefing on what we were up to. But I made the team promise not to disclose anything. So we told the customers we would get back to them. For those who had interest, it probably increased their curiosity.
The reason this approach is so important is that when we whiteboard technical solutions in an office or over zoom, it’s easy to get caught up in the excitement of the pitch. We’re hoping the customer stops us in our tracks, says we’re geniuses, begs to get early access and calls the CFO to immediately approve budget. But that’s our dream. The only person whose view matters is the customer. What they care about is if we are solving a problem that has their attention.
Many times, I’ve asked customers whether some important idea we’d uncovered was actually a problem for them and sometimes the answer was “yeah, not really.” Often, they could ignore the problem, or perhaps it was a fifteen minute chore once a week. Or in some cases, they had a suboptimal solution, a manual process that worked well enough and they didn’t see much point in improving it. You might think you have a better solution, but if it’s not a problem the customer cares about, you are pushing rope, my friend.
What you want to identify are the problems where the customer gets emotionally worked up about the lack of a solution, where they lean into it, talk about the hours or weeks of effort, the drudgery, the pain. When you tap into a problem that really bothers them, you will know it. This is the difference between a “must have” and a “nice to have.” Believe me, in a tough market, you want to be selling a “must have” solution to a pressing problem.
If you are so lucky as to uncover a significant unsolved problem that is painful for a company, take note of it. Ask what would be different for the company if this was fixed. Ask who else has the problem. Find out how much it costs this person, their department, the company in lost productivity. And then… resist the urge to tell them how you’re going to fix it.
After you’ve done eight or ten such customer meetings asking the same questions, you may start to see certain patterns that emerge. I like to write notes directly onto the paper with the questions and then spread them out on my desk and take a step back. What problems are the most common? Are they shared by certain individuals or types of organizations?
You don’t need 100% consistency across all prospects to have a pain worth solving if it is representative of a type of person or business. If you’re seeing something occur in 25% of customers you spoke to that may be enough as long as you can figure out what causes someone to be in the group that has the pain. Is it related to their industry? Size of the company? The type of project they are undertaking? Tease out the common elements and then ask yourself how you can reach more people like that.
Steve Jobs quite famously said: “A lot of times, people don't know what they want until you show it to them.” I think this has resulted in an awful lot of companies going to great lengths to create products that no one wants. A better rule of thumb is to consider that customers, especially business customers, are far more expert about knowing the problems they face than any outsider could ever be.
Your job as a founder or leader is to tap into those problems, validate that what you’re building solves their problem and then, only then, show it to them. Believe me, if you really understand their problem, they are going to want to hear from you.
Have you found product-market fit in your company? What told you you were on the right track? Post a comment below.