How to Make the Most of Every Problem Interview

If you don’t want to lose a ton of money and time, your ideas should be guilty until proven innocent.Trevor Owens, Lean Startup Machine CEO

You were able to schedule meetings with early adopters all through next week; great opportunity to start selling, right?

The worst thing you can do with problem interviews is to try to sell. You don’t know what your prospects want, you have no idea what the solution could be, and you don’t even know if the people you’re meeting are people you would like to sell to. You have to find a jury and a problem to tackle before thinking about sales.

Setting the right context to the interview is paramount.

If the meeting is too much about sales, then you’re really narrowing the conversation by asking prospects to react to a solution to a problem. The meeting is no longer around finding the best opportunity possible for your startup, it’s about convincing the prospect that your value proposition makes sense.

You don’t learn through sales calls, it’s not customer validation.Jason Cohen, WPEngine Founder

If the meeting is too much about the product, then the prospect is completely separated from their job and the context becomes the product. The meeting is no longer about whether that prospect is considering solving that problem, it’s about helping you add features to a product for someone else.

To be successful, you have to shift the context to learning. In a learning context, the customer does most of the talking and you don’t have to know all the answers. You’re not trying to knock down the barriers; you’re trying to find out what they are in the first place.

The early adopter must remember the meeting as a validation meeting, not a sales pitch. In the first few meetings you shouldn’t mention your solution. You’re there to talk about their problems, not your solution.

Can a Game Help Entrepreneurs Build Better Businesses?

Earlier this week, I launched the Control Alt Deceit game on Indiegogo.

It all started with this game on Tesla and Edison. It got me thinking about luck in entrepreneurship, how the best companies don’t always win the market and how cruel competition can be.

Working in a tech startup, I kept thinking that everything we do (raise money, expand markets, build new products, outdo competitors, etc) feels like game dynamics.

The ups and downs of startups would make for a great game.

Come January, I had the urge to build something new.

Creating a game was not the least risky project (think Lean Startup!) I could have taken on, but it was the funnest.

Introducing Control Alt Deceit

The game really took shape in March when I started working with a game designer friend based in Hong Kong. In just a few weeks, we were able to get a prototype ready for testing.

Early card designs

The art wasn’t there. The game had no rhythm. But we had something to work with.

10 play tests and 6 versions later, the game started to take shape. Enough to get designers involved. Suddenly, simple black and white cards…

Early card designs

Turned into something else…

Designed Control Alt Deceit cards

I had become fascinated with the tech wars of the ’80s (Beta vs VHS, Apple vs Microsoft, Sega vs Nintendo), the early days of Silicon Valley and the sometimes questionable strategies employed by early tech businesses to carve our market space.

Everything was possible in the ’80s. It was also an era of strong aesthetics.

Nintendo ad

Setting the game story in the ’80s created a strong visual signature.

All that was missing was an equally strong name to communicate the tech/business theme of the game. After 2 weeks of brainstorms and mounting pressure from designers wanting to finalize the design, we selected Control Alt Deceit, a name that probably has two, three or four meanings.

Putting it all together

The Indiegogo campaign and video came together in the last few weeks. It was a lot of work, but the results are quite impressive:

The game is currently funding on Indiegogo. I would love your support.

Thanks for helping make Control Alt Deceit a reality.

Do You Have Product-Market Fit? Here’s How to Tell…

The life of any startup can be divided into two parts – before product/market fit and after product/market fit.Marc Andreessen, Andreessen Horowitz General Partner and Serial Entrepreneur

You were able to make some sales, get a few case studies and learn about the value of your solution — does that mean you have Product-Market fit? Does that mean that if you do more of the same your business will grow?

Unfortunately, your first few sales don’t automatically mean that you have P-M fit. P-M fit has more to do with the way in which you convinced your first few validating customers to sign on rather than with the outcome — the sale.

In the same way that selling dozens of products that never get used is not P-M fit, selling a product that doesn’t move the needle is not real success.

Now, is your business model scalable? Is it repeatable?

If you’re selling to customers in different market segments, the sales and marketing processes will not be repeatable. You will need different sales tactics, different techniques to counter objections, different product features and different assumptions about who the partners and system integrators are in the industry.

Ask yourself:

  • Was I able to consistently add value for customers in a single market segment?
  • Did the clients pay after the pilot was over or did they churn (move on)?
  • How engaged and satisfied were the clients with the product?
  • Did they refer our solution to other prospects?

If you have P-M fit, congratulations, you’re no longer searching for a business model. You were able to create a business.

Take a day off to celebrate, but don’t celebrate too long. There’s still a lot of work to do. You’re only at the Chasm.

How to Make the Most of Every Solution Interview With Prospects

The solution interview phase is another opportunity to deepen your relationship with early adopters.

With sometimes as little as 30 minutes per meeting, you want to spend the bulk of your time exploring the solution (your product) and testing the pricing model.

Since you know their pain, meetings with prospects that you already met will be more straightforward, while meetings with new prospects will be more exploratory.

To maximize learning opportunities, solution interviews should follow a structure similar to that of problem interviews:

  1. Greetings (two minutes): Small talk to deepen the relationship and make the prospect feel comfortable.
  2. Problem qualification (three minutes): Validate that the pain that your solution removes is a pain they have or have visibility on.
  3. Telling a compelling story (five minutes): Explain what was learned on the industry, your approach and what makes your solution unique.
  4. Solution exploration and demo (15 minutes): Show your solution Minimum Viable Product (MVP) and evaluate the match with the expectations and the value sought.
  5. Closing (five minutes): Share the pricing and close the prospect on a pilot or another meeting.

You have to learn and adapt with every pitch until you find a model that works and that clicks with your prospects.

The key here is to try and close the prospect on another meeting, a pilot project or a sale if the purchase makes sense for all parties. Don’t waste anyone’s time if you’re not ready to close.

How to Know How Much Prospects Will Pay for Your Product?

Let’s suppose that we could build this and it was that cheap… you could put it on your credit card. Would you buy it?Jason Cohen, WP Engine Founder

The goal with closing during solution interviews in customer development is to find out if your prospects are willing to pay and also how much they would be willing to pay. Is it a $50 or a $50,000 per month solution?

Unfortunately, it’s not just a matter of asking how much the prospects would want to pay for the solution (prospects won’t know and will always say the minimum).

You will get a better idea by asking them, as market experts, how much another company would be willing to pay for the solution or by submitting a range of prices and seeing how they react.

To close, you have to convince the prospect that their pain is urgent and requires action, give a price and wait for a yes/no answer. Stick to your pricing hypothesis and bluntly ask, “Will you buy?” then listen.

As you remain silent, notice the body language and reactions of your prospects. Do they have objections? Do they hesitate? Their questions and hesitations are highly valuable; they are the truest form of Product-Market validation.

Did they buy?

Serial entrepreneur and author Steve Blank’s technique to determine price sensitivity (how much a prospect would be willing to pay) is to push for an extreme.

  • Blank: “If it were free, how many would you get?”
  • Prospect: “I don’t know.”
  • Blank: “It’s one million dollars.”
  • Prospect: “You’re insane… I would never pay more than $1000 for this.”

It takes a lot of nerve to pull off this technique, but it’s a good way to figure out the maximum amount a prospect would be willing to pay for your product.

Why Entrepreneurs Need to Fully Commit to Their MVPs

I want to solve this, I’m committed and I have no job.Jason Cohen, WP Engine Founder

MIT Entrepreneurship Center Founder Ken Morse famously said: “Entrepreneurs should be pigs not chickens.”

What he meant by this is that entrepreneurs need to be committed like the pig in the breakfast.

The pig, who provides the bacon, gives his life to make breakfast, while the chicken, who provides eggs, can easily move from one meal to another.

Prospects can tell if you’re a pig or a chicken.

Building a minimal version of a product doesn’t mean that you should not commit to it. Commitment is an essential part of building credibility for your fledging startup.

You chose a prospect group and a problem, brainstormed a solution and created a Minimum Viable Product (MVP). Remember that those were all decisions you made; you could have gone in a completely different direction.

If you’re not committing, why should businesses commit? You get half the results when you put half of your heart into it. The only way to succeed is to fully commit.

Are You Leaving Money On The Table?

The first — and most important — obstacle for a startup is ‘we can do without it’. – David Chabot, B2B Technology Marketer

Business problems that matter have owners who have budgets and a willingness to use those budgets to remove a pain.

With my previous venture, HireVoice, we had users with problems, but those problems were not business priorities. The Human Resources (HR) teams we met either didn’t have budgets or were not in control of their own budgets (a red flag).

Companies generally prefer to invest money in acquiring new customers rather than spending on cost centres like HR. In businesses as in everywhere else, money is limited. Budgets need to be assigned, and departments have roughly the same budget allowance from year to year.

If, at the beginning of the year, Marketing gets 2%, IT gets 10% and Operations gets 6%; this is the money that’s available for the taking.

An exercise like the Money Map can help you discover where money is spent and who has purchasing authority in an organization.

You’ll want to go after the largest budgets available for your product. You may have to convince economic influencers to transfer spend to your solution, but the reward is there if you’re willing to go the distance.