The most important thing that I learnt about startups is that during the early phase of a startup, customer discovery is THE most important process of all, and failure to understand this can not only be costly but fatal.
Entrepreneurs often approach startups thinking in terms of what they bring to the world, in the form of a product or service that they are either excited about or have the ability to create. This product-first-market-second approach is a common mistake, as they run into the uphill battle of trying to fit an audience into a product.
Startups should always begin with a customer-centric approach — that is, to find out exactly what a customer wants first and understand the problem they are facing, then coming up with a product/solution to solve it. In this case, customer demand is already available, and traction follows through naturally if an entrepreneur does a great job with the product.
So why is it that entrepreneurs often neglect such a seemingly obvious principle? There are a few reasons behind this.
First, a lot of entrepreneurs make the assumption that they already understand the problem, with most cases being that they are experiencing the problem first-hand and is already the “ideal user” for their own business.
While this is a possible scenario, the use-case for one person simply cannot speak for the entire market’s needs, and often there will be requirements that the founders have not even thought about in the beginning. Furthermore, the founders own behaviours could even be a minority in the market, in which case will skew the perspective of the product immensely.
Second, customer discovery is a difficult task for introvert types, who form a large percentage of the tech startup industry (not surprising as a lot of people are from tech background). It is often advocated as good practice to have at least one technical background co-founder in a startup. These types of people are more suited to product development and growth hacking, but are arguably disadvantaged when it comes to communicating with customers and understanding user problems. They simply view this activity as less productive than rolling out a feature or rolling out infrastructure.
Third, customer discovery is usually a process that is difficult to scale. As part of startup mentality, founders are often attracted towards scalable solutions due to their limited resources. If there are things that can be automated, it would leave them with more time and focus on building great products. Naturally, they prefer executing tasks that can be scalable and de-prioritizing ones that don’t, which means customer discovery can often be left last in the list.
Unfortunately, this perspective is simply naive when it comes to building successful startups, and reflects the founder’s lack of responsibility when it comes to focusing on what truly matters. Before a problem is truly understood, whatever is built does not matter or and will not add value to real people. While founders might believe that they are making real progress in developing features, in reality there are not moving the business forward and are wasting even more time by building the wrong product.
The key is to maintain a tight feedback loop between customer discovery and product development. These two processes should go literally hand in hand, where a feature is motivated by new understanding of the customer problem, and customer communication is made as soon as a feature is rolled out.