2X Founder Insight: Customer Development BEFORE Product Development

Henry Ford's quote is often inserted in conversations when discussing customer feedback -"If I had asked people what they wanted, they would have said faster horses." 

First-time (“1X”) founders often over-look the real meaning behind Ford’s statement. While customers don’t know how to solve the problem (i.e.product/solution), they certainly know what problems they are facing (i.e. unmet needs).

In the case of the Model A, the customer knew they wanted to reduce the time from point A - to - point B. However, they didn't have the vision of how to solve this beyond their current purview of "faster horses."

So, who best understands this? Second-time (“2X”) founders. There are two mindsets we see in the startup world: 

1. 1X founder: Build a product, then validate a problem

2. 2X founder: Validate a problem, then build a product 

Guess which one of the two is more successful? 2X founders. 2X founders have the odds of success stacked in their favor because they've already made the mistake of prioritizing the product over the problem in their first endeavor. 2X founders will tell you that it's a lot easier to unlock success when you know who you’re specifically building for and why they care. (i.e. ICP)

Below are some of the insights we've gained from working with 2X founders. 

The Product is More Flexible Than The Market 

A truth in reaching product/market fit: the market must desire the product. 2X founders know it is crucial to test their insights/assumptions on the market problem, not the product when running Customer Discovery. Hint: The only customers you should receive product feedback from are paying customers.

Consider the following responses you may receive from your target market: 

• A product created before feedback on customer problems: "I agree this is a problem, but I'm not motivated to solve it today."

• A product created after listening to feedback on customer problems: "We have tried to solve this over the past nine months, and we've not been able to achieve X result successfully.

When most 1X founders launch, they prioritize product development OVER customer development - and while they know the importance of speaking to and validating their insights with customers early, they naturally default to where we're their most comfortable: building and receiving feedback on the product. 

I know this is a common misconception but between the market and the product, the product is the more flexible component of product/market fit. You can build anything. The market is what ultimately decides the worth of what you build, expressed in terms of "willingness to pay." 

Let’s dive deeper. The market is more fixed than the product, as they will only pay for known unmet needs. If you start by developing a product, you lose optionality. You pigeonhole yourself and don't leave much room for error. 

When you start with a validated market, you are using those proof-points to fuel what you're building. If you're lucky enough, you may even find a market willing to pay upfront to develop a solution (i.e., sell it before you build it). This is the golden ticket.

Ensure Your Building For a Known Problem 

When it comes to problem awareness and urgency, the market will fall into 1 of 5 buckets: 

1. Actively seeking a solution; believe you’re best 

2. Interested in solving, unaware of the best way to solve 

3. Aware of the problem, not motivated to solve it today

4. Feeling symptoms, not aware of the problem

5. Don't believe a problem exists

Before you set out to build your product, you want to ensure that the problem you're solving falls into level 2 (or 1, but that’s unlikely). How do you know if your target market falls into level 2? Well...there are a few leading indicators you can look for:

• Have they tried to solve this unsuccessfully in the past?

• Can they clearly articulate the risks of not solving it today?

  • There is a quantitative gain OR loss the company will face

• Are they willing to engage in a pilot (time) OR money today?

  • Skin in-the-game

However, too often I see 1X founders fall into levels 3-5. They may gain some traction (albeit slowly), but it's not sustainable. There is a reasonably large chasm between 2 and 3. This adds ~12 months to the sales cycle and you run the risk of meeting exhaustion. If you find yourself on level 3, you have two options:

• pivot to a new ICP who might be feeling a higher intensity/frequency of the pain (i.e. move to level 2) (hint: most sustainable alternative) OR

• leverage relationships with current ICP and "rebuild" product to support a repeatable, urgent need you heard across the group (note: ensure build is based on your insights and is NOT consensus-led)

Learn from 2X Founders When Developing Product 

So what does a 2x founder know that a 1x founder is still figuring out? 2X founders know the importance of having a desperate market before setting out and building a product. Doing so increases the likelihood of achieving product/market fit, as the solution is tailored precisely to the market's needs. 

You can develop any product, just ensure someone cares.

Looking for better ways to gain market feedback? Consider checking out some of our other posts HERE.