Business idea validation is truly one of my passions. There is something about this process that is intensely satisfying. It fires me up to know that I have not spent a cent on a business idea, yet I have already managed to establish that it may be a success or a failure. Certainly, there is no failproof way to get 100% confidence in the demand level from your potential customers. You can, however, get a decent understanding by testing the waters. No matter how much you love your idea, set those emotions aside and don’t make any moves until you make a thorough analysis. Otherwise, you could lose money, time, and other resources.
There are a few ways to validate a business idea. In this blog post, I will talk about one way for now: customer interviews. This involves sitting down with those people you consider your future potential customers and asking them questions that will help you understand if they would purchase your would-be product. If you use your questioning skills wisely, you will not only understand if the potential customer would buy your product but also, how to tailor it for the customer better.
There is one extremely crucial mistake you can make though; asking the customer directly: “Would you use my product?” Why is that a value killer? Because the question has two responses, yes or no. The potential customer will most likely answer yes. Firstly, yes could come out of politeness, and secondly, yes is more likely to save their time without obligations and avoid further questions from you. The worst part is there is no reverse gear when you drop that question. A potential customer’s input would be lost. Your questions must be posed in such a way that you will get honest client feedback that will lead you to the right decision.
For demonstration purposes, let’s imagine that your business idea is opening a coffee shop in your neighborhood.
1. Drafting the questions
Before you even start searching for potential customers, it would be a good idea to compile your questions. Your questions should be – you guessed it – open-ended and calibrated! Let’s cover some example questions and see how their answers will help you validate your business idea (a.k.a coffee shop). Beware, these are just examples, and there are many more questions you can ask depending on your actual circumstances.
What coffee shops do you usually pick up your coffee from?
The answer to this question will help you understand your existing competitors. It would be wrong to rely solely on your own research. Plus, you will uncover customer preferences. Not all people may like Starbucks. There may be a local coffee shop not connected to any corporate chain that you may notice being mentioned again and again. Why is that one so good then?
Why do you like those coffee shops?
Naturally, here you would be able to see the reasons people choose the coffee shops they usually visit. If your coffee shop will not at least match the customer expectations laid out by your existing competitors, your business may fail. And you may be surprised. The answers you collect will not always be related to the taste of coffee. Some people may like the cups it is served in, the atmosphere of the coffee shop, the staff, the fact there is easy parking, and many more.
What is your usual order?
Your menu should consist of items your customers adore. The variety of answers you will get here may actually help you structure it. It’s not right to assume you should serve strictly Espressos, Americanos, and Lattes, not in this iced Ristretto with vanilla and caramel syrup world. Plus, you will find out if there is anything else customers order except coffee, such as desserts or snacks.
How much would you be happy to pay for your coffee?
This a solid question to test customer attitude towards the industry prices. Coffees would normally fall into a range of prices, depending on a lot of factors including quality. Here you want to check what price range you should stick to so you can adjust your business model if needed.
In your experience, what could these coffee shops do better to increase your satisfaction?
The answer here could spur stories from the past, stories of disappointment. This information would help you ensure that your coffee brand supersedes the rest. Sometimes, even those coffee shops would not know where they are failing their customers. Therefore, this question helps you by giving you premium access to the customer’s wishes.
What could make you change to another coffee shop?
When it comes to this type of non-unique business, you have to face the fact that there are many coffee shops around. You are not exactly selling an era-changing, revolutionary product (unless you have a secret coffee recipe). By asking this question, you are effectively motivating the customer to explain what you need to do to beat your competition.
2. Picking the candidates
Now that you have completed your list of interview questions, it is time to recruit some interviewees to put your questions to good use. Of course, you cannot just choose random people. You optimally need people who could be your real would-be customers. Therefore, when looking for said people for our example business, these people must be coffee drinkers, they must take out coffee regularly, and they must also visit coffee shops within your neighborhood. You must tick off all three of these requirements for a person before investing time into an interview.
But how to find these people? Getting someone to spend time answering your questions is not a simple task. People are egocentric. It is you who needs this interview, not them. What do they get out of it? That is why I would recommend you start with fitting friends, acquaintances, and relatives. Surely you know at least one person who fits your requirements for an interview. That person may refer to one or two more, and so on. Overall, you should have a set goal on how many interviews are enough. I would say, in this case, no less than 20, and no more than 50.
If you run out of options, you could look for relevant candidates on social media: Facebook or LinkedIn groups of coffee lovers. Could there be a coffee-related event/meet-up in town? That would be your gold mine of would-be customers! On such an event, you would not even need to label your chats ‘interviews.’ Just babble on. You could also offer to pay for someone’s coffee in a coffee shop in exchange for an interview, but you want to be careful not to scare people off this way (or spend money meaninglessly if your idea does not get validated).
3. Conducting the interviews
You have your list of questions. You have your interviewees. Time to dig brains! This means trying to stick to the script. You can, of course, ask additional questions in the process if your conversation leads to it. The reason you have pre-written questions, however, is that you have already contemplated the most focal information you would like to hear. So, your job now is to pop those questions one by one and listen carefully. Should you take notes? Hell yeah! It is probably not very effective to rely on your memory. I would even print out multiple copies of the pre-written questions with sufficient blank space for notes underneath each question. Scribble the most relevant and interesting information you discover right there.
You will be interviewing a bunch of different characters. Some may be chattier than others. If your interviewee is chatty, you are lucky! You will have a wealth of information coming your way after every question. But what to do if you are stuck with someone who answers briefly and non informatively? Surely you do not want to waste that interview. All that is needed for these types of individuals is a helping hand. Help them to expand their answers by mirroring and labeling. For example:
Mirroring
You: So, what is your usual order?
Interviewee: Oh, I am a simple guy. I just get a black Americano.
You (mirroring for expansion): Black Americano?
Interviewee: Yeah, straight up. I am not a big fan of milk but I do need my caffeine. I also normally pair that up with a croissant and a bottle of water.
Labeling
You: So, what is your usual order?
Interviewee: Oh, I am a simple guy. I just get a black Americano.
You (labeling for expansion): Sounds like you do not like “decorating” your daily caffeine dose.
Interviewee: Yeah, straight up. I am not a big fan of milk but I do need my caffeine. I also normally pair that up with a croissant and a bottle of water.
4. Logging the results
Keep the feedback you collect nicely organized. Stick your notes into a file or something. As soon as you finish your interviews and sigh in relief, it will be time to analyze your discoveries. Generally, the best approach would be to compile all the answers to every single question into one readable doc. This way, you can analyze better, seeing commonalities in people’s responses and making the necessary deductions.
There you go. You have just done (or are about to) awesome research and pushed yourself to speak to those people you would need to be satisfying. I can bet the information you collected made you at the very least adjust your business idea, yet hopefully not drop it. But hey, if need be, and you can see that the business idea is a dead end, this is still great news! You have spent nothing and have no regrets. No amount of validation is sufficient though, so keep an eye out for my next blog post about business validation method number two.
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