How To Determine Your Competition During Customer Discovery

Want a simple way to determine your competition during customer discovery:  consider what your prospects would have to give up to buy and use your product or service.  The time and money you want prospects to spend on your offering have to come from somewhere:  prospects will normally  choose to take it from what they are currently doing to meet the need that they anticipate your offering will fulfill.

One Question To Always Ask During Customer Discovery

Always ask “How are you solving the problem now” in customer discovery interviews.

Listen carefully to how prospects mention competitors. A prospect may mention a competitor to encourage you to explain how you are different/better so that they can gain a better understanding of your offering. They may mention a firm that they think is a competitor just to clarify if they understand what you are offering. If they are using a competitor and are not interested in your offering after they have heard your presentation that’s a very different situation.

If a prospect does not have some kind of solution, however unsatisfactory, to the problem or opportunity you are addressing, then it’s very unlikely they will buy from you. There is always competition because there is always a status quo.

Steve Blank offers five tests for an early adopter–what he calls an earlyvangelist–in “Four Steps to the Epiphany.”

1. Has a Critical Business Problem
2. Know That They Have the Problem
3. Actively Looking for a Solution
4. Has Tried to Solve the Problem  and is Still Unsatisfied
   
5. Has (Or Can Acquire) Budget

Step 4 is key (bold added)  but all are important: there is a very big difference between a prospect who wants to solve a problem and has tried many things and a prospect who tells you they want to solve a problem but has done nothing to address it.

You may interview thirty people before you settle on a next step in the customer discovery process. You are looking for people who are interested in the differential benefits that your solution brings. That may be only two or three out of 30, but if they are willing to go forward and work with you I would pay less attention to the fact that another ten  out of the 30 are working with someone else. Look for the common characteristics of the people who like your solution and focus your messaging and market exploration activities on them.

The thing to worry about is not whether you have competition, you do, but that you provide differentiated value versus the status quo to a  market niche that you can identify and focus on.

• SKMurphy:  Other Customer Development Models
  I am looking for other books, methodologies, tools that address the early market exploration problem. In particular that address Clayton Christensen’s observation in the Innovator’s Dilemma that “markets that don’t exist cannot be analyzed” by offering techniques for exploring emerging markets.
• Bizelo: Getting Earlyvangelists the Easy Way
  What I find most interesting is that there’s very little support for getting earlyvangelists through typical customer acquisition approaches, such as Google Adwords or other Search Engine Marketing, SEO techniques, and other outbound marketing communication. The general consensus is that earlyvangelists need to be found and recruited through a personal connection. That’s the easy way. Everything else is the hard way.
• Gabriel Weinberg (interview for traction book): Sean Murphy on the First Dozen Enterprise Customers
  Blank has got this earlyvangelist formulation where they have the problem, they know they have the problem, they’ve tried to solve the problem, they are unhappy with their solution to the problem and they can get budget. That’s a very good checklist.
• Thread from Learn Startup Circle
  • Kyle Mathews: My first instinct was to just send them a survey asking essentially, “are you an earlyvangelist?”, at which point the earlyvangelists would obligingly raise their hands identifying themselves and come forward carrying open checkbooks. After thinking over this a bit, I started to worry that this direct approach is naive. Maybe the earlyvangelists don’t know yet that they’re earlyvangelists and I need to do more education such as sending out a product update identifying our progress to this point and the projected launch date.
  • Sean Murphy: It’s unlikely that a real earlyvangelist will raise their hand in the absence of a compelling vision for a solution to a burning problem that they have. It’s a term of art in customer development but it’s not useful as a conversational question. Send folks a brief update on what you can do for them when and explain how they can get started with your offering if they want to. Focus on what results you can reliably deliver them in a given time frame. Small benefits in a short time frame trump big benefits in a long time frame. Values of short range from 2 hours to five days.