Identify your customer and market
What does it mean to “identify your customer and market”?
Early in your startup’s journey, your goal is to validate your business idea by getting out of the building and interviewing people who might have something to tell you about the problem would like to solve — and by making sense of what they tell you.
In other words, you first need to function as a learning organization whose goal is not to sell but to acquire as much unbiased information as possible to avoid spending time, money and resources on something that no one is willing to pay for.
The ABC’s of customer discovery
Easier said than done, right? At District 3, we have broken this competency down into 5 main skills that need to be developed to demystify what is “customer discovery”. You need to be proficient in the following areas:
1. Explore research-market fit
I can define the uniqueness of my innovation – my startup “super powers”, or how I do what I do differently. I can describe multiple potential market segments where my innovation could help to solve problems.
2. Prioritize customer segments
Using data from primary and secondary research, I can specify the characteristics and potential of different customer segments for my startup.
3. Prioritize the people in the customer segment
I can identify the key characteristics of and the relative importance of the ‘decision makers’ and ‘influencers’ in my customer segment.
4. Define your value proposition
I can define and quantify the value proposition for my target customer segment – this helps me identify the key features of my startup and product.
5. Interview effectively
I plan and run effective customer discovery interviews. I can extract actionable insights from my interviews.
6. Define your positioning
By analyzing how my offering compares to my most significant competitors, I can position the uniqueness of my solution in the context of my competition. I can identify the key features in my business model and solution that deliver my value proposition.
7. Analyze market risk and opportunity
I can identify the most important external drivers that impact the design of my business model, and specify both the significance and potential impact on my business success (positive and negative) in terms of the market size, the ability to capture market share, and the profitability potential in an industry.
These 7 skills are critical skills that will stand you in good stead long after you have validated (or invalidated!) your first business idea.
Author: Jane Somerville