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How to talk to customers and learn if your business is a good idea when everybody is lying to you Book by Rob Fitzpatrick Summary by Max Völkel
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Institut für Entrepreneurship, Technologie-Management & Innovation
1
How to talk to customers and learn if your business is a good idea when everybody is lying to you
Book by Rob Fitzpatrick
Short Summary by Max Völkel v.2 2013-11-05
The Mom Test
KIT – Universität des Landes Baden-Württemberg undnationales Forschungszentrum in der Helmholtz-Gemeinschaft
EnTechnon – INSTITUT FÜR ENTREPRENEURSHIP, TECHNOLOGIEMANAGEMENT UND INNOVATION
www.kit-gruenderschmiede.de
The Mom TestHow to talk to customers and learn if your business is a good idea when everybody is lying to you – book by Rob Fitzpatrick – summary by Max Völkel
Institut für Entrepreneurship, Technologie-Management & Innovation
3 Prof. Dr. Orestis Terzidis
Introduction
Dr. Max Völkel
EnTechnon / [email protected]@kit.edu
Institut für Entrepreneurship, Technologie-Management & Innovation
4 Prof. Dr. Orestis Terzidis
Content Type Icon
Learning Objectives
Agenda
Learning Unit
Exercise
Case Study
Content Type Icon
Information
Attention/Important to know
Questions
Summary
Literature
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Introduction
Institut für Entrepreneurship, Technologie-Management & Innovation
5 Prof. Dr. Orestis Terzidis
After today‘s session you will be able to…
Learning Objectives
Do better customer conversations!
Based on „The Mom Test“ by Rob Fitzpatrick momtestbook.com and foundercentric.com Version 1.0 from August 1, 2013
Note: Talking to customers is a sub-topic of Customer Development.You still need to read other books for the whole story.
All content is taken from the book. If it‘s wrong, I misunderstood it.
Institut für Entrepreneurship, Technologie-Management & Innovation
6 Prof. Dr. Orestis Terzidis
Agenda
Introduction
What is the problem? - The Mom TestHow to talk?To whom to talk?Use your data
Summary
Institut für Entrepreneurship, Technologie-Management & Innovation
7 Dr. Max Völkel, 2013
THE PROBLEM
People try to be nice.Therefore they lie in your face without realizing it.
Bad data is worse than no data. E.g. „I would definitely buy that“
Let’s look at an example.
Institut für Entrepreneurship, Technologie-Management & Innovation
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You: Mom, I have a business idea. Do you have 5 minutes?Mom: Of course, dear
…You: You like your iPad and use it a lot?Mom: Sure, it’s great.
…You: Would you buy a cookbook app?Mom: I love cookbooks, sounds nice. Does it come with vegan recipes? Or something special for Xmas?
…
The Mom Test – What people say
Institut für Entrepreneurship, Technologie-Management & Innovation
9 Prof. Dr. Orestis Terzidis
You: Mom, I have a business idea. Do you have 5 minutes?Mom: Of course, dear
I’m proud of you and I don’t want to hurt your feelingsYou: You like your iPad and use it a lot?Mom: Sure, it’s great.
I use it to check email on the sofa. You: Would you buy a cookbook app?Mom: I love cookbooks, sounds nice. Does it come with vegan recipes? Or something special for Xmas?
Well, I have plenty of cookbooks. I don’t need a computer in my kittchen – it might get dirty! But hey, if my kid made it, I’ll try. App? I never bought an app. Don’t you need to enter your credit card for that? Let me try to change the subject.
The Mom Test – What people think
Institut für Entrepreneurship, Technologie-Management & Innovation
10 Prof. Dr. Orestis Terzidis
You: Mom, when have you last time used the iPad?For what?Have you ever used it in the kitchen?Have you ever bought an app? Which? Why? For how much?Do you use your cookbooks?Is there anything you dislike about them?What was the last cookbook you bought? When? Why?
The Mom Test – How to do it right
Institut für Entrepreneurship, Technologie-Management & Innovation
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HOW TO TALK?
Institut für Entrepreneurship, Technologie-Management & Innovation
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What to Ask? Important Questions
GoodImagine your company failed. Why did it fail? questionsImagine your company is a huge success. Why? questionsAsk those questions
“You should be terrified of at least one of the questions you’re asking in every conversation.”
BadDeep inside, you are afraid your idea might be crap.So you ask bogus questions.
These are the 2 questions than can convince your team do use this whole
process at all
Institut für Entrepreneurship, Technologie-Management & Innovation
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How to Frame the Conversation? Casual
Good: Keep it casualIdeal: One non-meeting about the 3 best questionsInstead of asking “Do you have time for a meeting with me?” ask simply your 3 questions, casually, during a conversationTakes maybe 5-15 minutes.
BadCustomer Development advises to have 3 meetings:
1) the first about the customer and their problem2) the second about your solution3) the third to sell a product
That takes a lot of time.
Always have your best 3 questions in
your mind
Institut für Entrepreneurship, Technologie-Management & Innovation
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How to Introduce Your Idea? Indirect
GoodA colleague told me and ideaI read somewhere...
BadI ...
Danger: Don‘t expose your ego – people try to be nice, but unfortunately, they lie in your face to do that
Bad Data: Compliments(back in the office) “Everybody loved our idea”Indicator you exposed your ego
Institut für Entrepreneurship, Technologie-Management & Innovation
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Listen more, Talk less
GoodYou listen mostly and ask questionsCustomer talks a lot
BadYou pitch and try to convince the customer of anything
Institut für Entrepreneurship, Technologie-Management & Innovation
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About what to talk? Specifics
GoodTheir lifeSpecifics in the past
How do you solve X now?Why do you bother?What are the implications?Talk me through the last time that happened.Talk me through your workflow.What else have you tried?Where does the money come from?
Who else should I talk to? expand target groupIs there anything else I should have asked? expand knowledge
BadYour ideaGenerics, Opinions
Would you ...
Bad Data: FluffGenerics
“I always/never…”Future
“I would/will..”Hypothetical
“I might/could…”
Danger: Who knows what they would do? People imagine themselves pretty different from reality
Institut für Entrepreneurship, Technologie-Management & Innovation
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When the customer has ideas
GoodWhy do you want that?What would that let you do?How are you coping without it?Do you think we should push back the launch to add that feature, or is it something we could add later?
Bad Data: Customer IdeasNo direct data about their problems
BadGreat idea, we will implement it and then hope you will buy it
“you aren’t allowed to tell them what their problem is – they aren’t allowed to tell you what to build”
Institut für Entrepreneurship, Technologie-Management & Innovation
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Get commitment and advancement
GoodMeeting fails
you learned a lot and saved lots of money
Meeting successyou got relevant data, e.g. you have nailed a problem
In every conversation ask for:Commitment — They are showing they’re serious by giving up something they value such as time, reputation, or money. Advancement — They are moving to the next step of your real-world funnel and getting closer to a sale.
BadMeeting “went well”
Otherwise:A pipeline of zombie leads Ending product meetings with a compliment Ending product meetings with no clear next steps Meetings which "went well" They haven't given up anything of value
Institut für Entrepreneurship, Technologie-Management & Innovation
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TimeClear next meeting with known goals Sitting down to give feedback on wireframes Using a trial themselves for a non-trivial period
Reputation riskIntro to peers or team Intro to a decision maker (boss, spouse, lawyer) Giving a public testimonial or case study
CashLetter of intent (non-legal but gentlemanly agreement to purchase) Pre-order Deposit
Commitments
Institut für Entrepreneurship, Technologie-Management & Innovation
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“EXAM”
Institut für Entrepreneurship, Technologie-Management & Innovation
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Good meeting or bad meeting?
“That’s so cool. I love it!”“Looks great. Let me know when it launches.”“There are a couple people I can intro you to when you’re ready.”“What are the next steps?”“I would definitely buy that.”“When can we start the trial?”“Can I buy the prototype?”“When can you come back to talk to the rest of the team?”
fail, no commitmentfail, no commitment
mostly fail
successfail, no cmmitmentsuccess in DE, faillure in US successsuccess
Institut für Entrepreneurship, Technologie-Management & Innovation
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In a real meeting the conversation moves to the product/solution- bad data
You are lazy and call instead of commute- Conversation becomes formal- You miss body language- You don’t become friends, so you’ll keep cold-calling+ But maybe it works for you
Bad: a customer-learning-but-I-really-want-to-do-sales meeting Good: let-me-find-out- if-you-are-a-good-advisor-by-asking-lots-of-questions meeting How many meetings?
3-5 for simple industry & focused customer segment10+ and still new results? customer segment too broad
Common Mistakes
Institut für Entrepreneurship, Technologie-Management & Innovation
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TO WHOM TO TALK?
Institut für Entrepreneurship, Technologie-Management & Innovation
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Warm Intros
Cold Contact
Find your customers
Choose your customers
To Whom To Talk?
Getting too many different results? Go back and choose a smaller customer segment.
Institut für Entrepreneurship, Technologie-Management & Innovation
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Start with the best smallest market and go global from thereOtherwise you cannot understand/fulfill the specific needs and everybody asks for different features .
How to choose a sub-segment:Why do they want it? e.g. What is their problem or goal?
Does everyone in the group have that motivation or only some of them? Within this group, which type of this person would want it most? Would everyone within this group buy/use it, or only some of them?
Choose your customers
Company Market Initial market
Google The world PhD students
EBay The world Collectors of PEZ dispensers
Evernote The world Moms sharing recipes
Institut für Entrepreneurship, Technologie-Management & Innovation
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For each customer segment:What are these people already doing to achieve their goal or survive their problem? Where can we find our demographic groups? Where can we find people doing the above workaround behaviors?
If you cannot find them, you’ll never advertise nor sell to them
Choose the segment that scores well forProfitableEasy to reachRewarding for you to build a business around (Buying process?)
Find your customers
Institut für Entrepreneurship, Technologie-Management & Innovation
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Cold calls – 2 out of 100 will talk to youSerendipity – there are often cool people already around youFind a good excuse
I do my PhD on …., can I ask you some questions?Immerse yourself in where they areLanding pagesOrganize meetups Speaking & teachingIndustry bloggingGet clever
“The goal of cold conversations is to stop having them.”
Step 1: Finding initial conversations
“If it sounds weird to unexpectedly interview people, then that's only the case because you're thinking of it as an interview instead of a conversation.
The only thing people love talking about more than themselves is their problems.
Institut für Entrepreneurship, Technologie-Management & Innovation
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7 degrees of separation – “you can find anyone you need if you ask for it a couple times.“
Industry advisorsUniversities (hint, hint)Investors
Try to avoid a “real meeting”, if possible (keep it casual)To get a real meeting & in a real meeting:
Vision what we aim for, broadlyFraming why we meet you, what we expectWeakness why we need youPedestal a complimentAsk try to get more commitment
Step 2: Creating warm intros
Institut für Entrepreneurship, Technologie-Management & Innovation
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USE YOUR DATA
Institut für Entrepreneurship, Technologie-Management & Innovation
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Prepping – together with your teamChoose the right 3 scary questions (If the answer is on Google, google it!)Due diligence on Xing/LinkedIn about your conversation partnerWrite down your assumptions about a person to validate them laterDecide on what commitment you want
DoingWho should show up
Those who make decisions (at least to some meetings)1-2 persons: 1) talking, 2) note-taking & fixing conversation
How to write it downNote: emotions, problems, goals, workarounds, obstacles, ideas/feature requests, budgets/buying process, follow-up tasks, referenced persons/companiesMaybe use 1 card for one information item
ReviewingReview notes, update written assumptions, update 3 questionsHow can you improve to learn better next time?
Customer conversations & your team
Institut für Entrepreneurship, Technologie-Management & Innovation
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Summary
PreppingSegment your customersWhat do we want to learn? – Your team needs to learn, not just you
DoingKeep it casualAsk
relevant questionsabout their specific past life
Avoid bad data (compliments, fluff, …)Reviewing
Good resultsfactscommitments (time, reputation, cash) / advancementnew conversation contacts
Institut für Entrepreneurship, Technologie-Management & Innovation
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Literature
The Mom Test by Rob Fitzpatrick momtestbook.com and foundercentric.com Version 1.0 from August 1, 2013
The 4 Steps to the Epiphany by Steve BlankRunning Lean by Ash Maurya
More references: http://bit.ly/entrep-links
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Information
License Information
Creative Commons License
Summary of 'The Mom Test' by Max Völkel is licensed under a Creative Commons Attribution-
ShareAlike 3.0 Unported License (http://creativecommons.org/licenses/by-sa/3.0/
deed.en_US).
Based on a work at momtestbook.com.
Institut für Entrepreneurship, Technologie-Management & Innovation
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EnTechnon – INSTITUT FÜR ENTREPRENEURSHIP, TECHNOLOGIEMANAGEMENT UND INNOVATION
KIT – Universität des Landes Baden-Württemberg undnationales Forschungszentrum in der Helmholtz-Gemeinschaft www.kit-gruenderschmiede.de
Institut für Entrepreneurship, Technologie-Management & Innovation
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Information
Thanks for watching.
Now, please:Give a comment to let me improve Tell me what you liked and what you didn’t likeLike this on SlideShare, Facebook, Twitter, …
Or buy the book (via my affiliate link )The Mom Testhttps://www.amazon.de/dp/1492180742/?tag=xamde01-21