Customer before product

TLDR: Founders who focus on customer discovery and validation before building the product are more likely to succeed. Faster.

I recently had a spat of meetings with founders with an interesting commonality — they had built or are building their product, but had very limited understanding of their customer. Many assumptions and strong technical chops, but not enough backing from actual customer conversations. Upon prodding, most common reasons cited were:

1) Customers won’t talk to us without a product; or

2) The product will answer all questions because it solves the biggest challenge the customer is facing (assumption).

Instead of investing time in talking to target customers, learning their needs and problems, and proving /disproving their assumption that the customer is desperate for this product, they are convinced that building the product will answer all questions. The outcome is often some combination of the following (6–18 months later):

1) An over-engineered product, most of which the customer doesn’t need or care about;

2) A technology / tool, not a product, that is hard to explain to the customer (or to anyone);

3) A good-to-have product, not addressing a top pain-point for the target customer;

4) Founder’s product bias and self-justification of the need, despite data pointing elsewhere.

This CBInsights report (thanks CB Insights) suggests that 42% of startups in the study failed because of a lack of market need, and another 14% for ignoring customers (seriously?). That’s 56% of failed startups who may have reached a different outcome if they focused on the customer. In other words, you can half the odds of your startup’s failure by focusing on the customer discovery and validation. Why aren’t more founders doing this?

While I am all for founders who can build the product, I prefer working with founders who can build efficiently behind a solid grasp of their customer’s needs, pain points, intensity of pain, propensity to pay for the pain killer, buyer & user profiles, market segments, deployment dependencies, selling propositions, and other domain specific variables. Founders who focus on the customer before the product tend to move much faster overall (i.e., reach product-market fit faster), and with much less wasted engineering effort. Needless to say, its a great way to build a pipeline of customers and educate them while learning from them at the same time.

Customer discovery & validation also helps founders tell a more convincing story, with customer as the central figure. Even if they have built very little product, just enough to prove the core concept, these founders are significantly more confident of executing efficiently.

I hope to see more founders “get out of the building” and give customers their due importance, specially at the earliest days of building a company.

/Nitin Pachisia