Customer Development Done By Founders – How to Build a Startup
Now, one of the interesting things about customer development that makes startups very different from large companies is that customer development is done by the founders. Why the founders? It turns out that there’s a couple of interesting things, and this is about human nature. There’s no technology involved. In a traditional startup in the old days, you would hire a VP of sales who would go out because you were smart, this was your idea, and you’d say, “Go try to sell this. Go talk to customers. I’ll just hire somebody to do this.” But remember, an employee doesn’t have the vision. They’re just executing what you told them. And guess what happens if they go out and talk to people who say, “This is the worst idea we ever heard,” or “No, we won’t buy it.” What happens is they’ll come back and tell you in the first time they do this, and you’ll say, “Well, you’re just not describing it right.” And you send them back out for another couple of days or weeks or months, and they’ll come back again. And if you’re like any passionate founder, you’ll go, “I hired the wrong executive. You’re fired.” Now just imagine we run the exercise this time not with a proxy head of sales or marketing, but we force you to get out, you the founder to start talking to customers. And if you got that same exact feedback, it might take you 3 customers or 5 or 30, but eventually, smoke will start coming out of your ears because cognitive dissonance is now coming into effect. It’s that you might realize that your story or vision isn’t right. But unlike a proxy, a VP of sales or marketing, you have the power to change the company’s strategy. You have the power to change the entire value proposition, to say, “What if we had these features?” And customers might say, “Nah, nah, nah, still not.” But then if you said, “Well, what if we had this?” they might say, “Oh, if you could do that, you could have my check right now.” If you’re a smart founder you’d say, “Let me get right back to you,” because what you’ll do is you’ll go test that new feature with 5 or 10 other customers. And all of a sudden you realize that you had the wrong feature set and just by adding this small, little change, you can now actually get a whole series of paying customers. Only founders could do that. And what we did in the past is we would wait till first customer ship, we’d wait till sales didn’t match the revenue plan, and we’d actually make these changes by firing executives instead of actually having the founders engage in Day 1. So it’s the founder who could change the product, make pivots, and hear customer feedback firsthand. And that’s the idea of getting the founder outside the building.