You wake up with an amazing idea – a cookbook app! It will have videos, recipes, it will sync everything to your phone so you can have an on-the-go shopping list. Plus it’ll be cheaper than a regular cookbook, only 10$. No one has come up with it yet, you’re genius! You’re an inventor! You’re going to be rich and, in the blink of an eye, you find yourself googling a perfect island to purchase for your early retirement.
You pitch the idea to your family and friends and they’re all super excited. They tell you “It’s brilliant! Just what I needed!” You spend your whole savings to build it. Finally, you look at your analytics and they’re terrible. No one’s buying the app. Not even your mom. You’re blaming your mom for pushing you into the abyss.
Why? What in the world have you done wrong?
Robert Fitzpatrick is the man who knows the answer. He even wrote a book about it, and it’s called “The Mom Test”. You’ve probably read tons of other books and articles that say: “Go out and talk to the customers to test your idea!” According to Robert, if you’ve been doing that, instead of blaming your mother – blame the books!
“The Mom Test” is a lifesaver when it comes to customer development and early-stage sales (and your business too :D). It is based on the key premise – talking to customers is often misleading because they’re not telling you the truth. They are not being dishonest because they’re mean, but because they don’t know what they want.
How to Collect Useful Data?
Building a product or launching a company is extremely expensive. You don’t just spend your money, you “sink” your time, emotions and soul into your business. “That’s why we would like to figure out whether or not people are going to buy stuff before we build it”, said Robert.
In reality, it’s not that easy and Rob explains it using just one sentence: You asked bad questions! If you run a focus group and ask bad questions, you get bad results. What you’re actually doing is collecting more and more bad data, “which makes you more confident, but it doesn’t make you smarter”.
Robert sums it up explaining that by asking about customer’s life instead of pitching your idea, you collect more useful information. In that way, they don’t fear they will hurt your feelings and there’s no reason for them to be dishonest.
Don’t Lie to Your Customers Even If They Lie to You
More from Spark.Me speakers:
Spark.Me 2017: Sharad Sagar on Connecting With Opportunities
Spark.me 2017: Robert Fitzpatrick on Talking to Customers Even If They Lie
Spark.Me 2017: Peter Kim on Things That Are Awesome
Spark.Me 2017: Dr. Max McKeown on Shaping Our Future
The Second Day Of Spark.Me Left Us Wanting For More
Lies of your customers are not the only one-way tickets to failure. Actually, according to Robert, what kills more startups than everything else combined are expenses. When a big company has a bad idea, they spend 10 million dollars on advertising in order to convince people to like it. But when you spend millions of dollars on lying to your customers, you better pack your bags, because you’re not just getting embarrassed, you’re going out of business. Not even that amount of money can help you convince people to believe in your bad idea.
As Robert said, startups also tend to make that mistake. They start acting like a big company.
He emphasized: “Every other mistake you can make when starting a company or launching a product is forgivable when your expenses are low enough.” According to him, that’s the beauty of a small, new company – your expenses are low, you’re immortal!
Focusing on the Wrong Stuff at the Wrong Time
In early attempts, when we first start a company or we’re first building a product, we’re trying to figure out if we’re focusing on a problem people care about. Is there a market for this? Do budgets exist? Am I focusing on the problem people care about? As Robert perfectly explained, those are very open-ended questions that have nothing to do with your idea and have everything to do with your customers.
He noticed that the biggest mistake people make here is start pitching features of their product until they make sure you tell them they’re awesome. They don’t get that they are just being annoying and take the answers people gave to get rid of them seriously. What happens after collecting bad data is building a bad idea and going out of business. To quote his comparison:
“When you’re annoyed at a bar, you can always get a fake phone number!”
Aside from the pressures of our ego, we’re surrounded by social pressure to grow faster, as Fitzpatrick emphasized. He said that if you have one employee who works from the cafe, it means you can afford yourself to make mistakes because they’re cheaper when your expenses are low enough. It gives you time to figure out if people really like your product, and only after you realize they do, you should focus on the growth.
It Doesn’t Matter What Customers Think, It’s About What Their Actions
Whenever you pitch your idea you get opinions and compliments, not data. Robert says opinions don’t matter, even if they come from a supreme expert in the industry. If you pitch your idea to someone who secretly hates you, you’ll get a terrible feedback.
Venture capitalists are the most experienced and the most qualified in the world at predicting startup success, and their success rate is about one in five. Robert believes that customers’ actions matter, not their opinions. He gave an example to prove this claim. People often rush into traveling apps (for Robert it’s a trap). For example, you asked your friends: “Isn’t it annoying to plan a travel?”, and they answered: “Yeah, it’s so annoying.” And you were boosted with excitement to solve that and get rich. Afterwards, you’ve built a traveling app and nobody uses it.
What you forgot is to ask them about their lives. If you just asked them: “Have you ever googled for an app to make it easier?”, they would give the answer: “No. Why would I do that? It takes five minutes to book a travel.” That’s the people’s behavior you can’t change.
How to Approach Your Customers
Finally, you’ve finished your product. You optimized it, confirmed it has the right features, it’s at the right price point. And then you need to present it. That’s the time when opinion matters. You need to find out people’s opinion about your product.
Robert’s advice is to ask people about something they care about. He said if they care, they’ll give you something in advance. He even noticed a format people use when they want to avoid buying a product. It’s a compliment plus a stalling tactic (“That’s so innovative, let me know when it launches!”, or “Wow! That’s so cool, never seen it before. Shoot me an email when it comes out!”)
They make you feel good and actually commit to nothing. They end a meeting in the most polite way, without giving you a thing. That’s dangerous because after they leave, you think they’re actually going to buy it. With Rob’s help, you’ll be able to figure out whether they’re going to buy your product or they’re just using a compliment+stall tactic.
Learning what customers care about doesn’t take an hour. When you find yourself in a café with a potential customer, you shouldn’t wait for fancy office or calendar meetings in a corporate atmosphere. You should ask them what they care about right there, in a café.
For Robert, the whole “meeting thing”, as he calls it, is a formality you don’t really need. It is actually getting in the way of what you’re trying to do. He gave an exquisite comparison – if you’re buying a present for your friends, it’s easy because you know what they care about. When you’re buying a present for a stranger, you always buy a gift card. When you’re developing a product for customers you don’t understand, you end up with a “gift-card version of product design”.
Customers are not your enemies. They’re not lying to you on purpose. You just need to understand them and have a good approach to collect useful data. So treat them like your friends!
There is much more to hear, so I encourage you to check out Robert’s talk on Spark.me 2017 stage. And while you are at it, check out other speakers as well!
Spark.me is one of the most carefully curated business/internet conferences in Southeast Europe. It presents an awesoME place for people all around the world to brainstorm new ideas, share experiences, and enjoy listening to the world-class speakers. The conference is the crown part of .ME’s Corporate Social Responsibility program, and we are proud for making it happen since 2013. If you want to find out more about what lights our spark, check out: www.spark.me