by Bill Aulet
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Visual One-Page Summary of Quantified Value Proposition
On the page below, draw diagrams that represent the ``as is" state and ``possible" state, and summarize the benefits to the customer.
At this stage in the process, you should now be feeling pretty good. You know who your customer is, and you have an overview of what product you’d like to build and what value it will deliver. You have made great progress, but you will need to refine all of this a great deal more to develop a go-to-market strategy and build and launch your product. Regardless, completing this step is still an important milestone—congratulations!
STEP 9
Identify Your Next 10 Customers
WHAT IS STEP 9, IDENTIFY YOUR NEXT 10 CUSTOMERS?
Create a list of the next 10 end users after the Persona who closely fit the End User Profile. Engage them in a dialogue on your plans and validate or invalidate what you have done so far.
WHY DO WE DO THIS STEP, AND WHY DO WE DO IT NOW?
Identifying and speaking with 10 additional end users in detail at this point with regard to the work you have done will provide you with extremely valuable data points to refine the work you have done in each step, and will validate or invalidate many of the assumptions you have made. By the end of this step, you should have a much-improved End User Profile, Beachhead Market, Total Addressable Market (TAM) size, Full Life Cycle Use Case, High-Level Product Specification, and Quantified Value Proposition, and either you will have greater confidence in your selection of Persona or you will have changed your selection. Doing a first pass on all of these steps was necessary to have productive conversations with the additional end users you will interact with in this step.
By the Book: See pages 113–117 of Disciplined Entrepreneurship for basic knowledge on this step.
See pages 117–119 of Disciplined Entrepreneurship for examples of how different companies and teams have addressed this step.
Finding 10 customers whose traits are the same as the Persona gives you crucial information to validate that you are headed in the right direction.
PROCESS GUIDE
The primary market research involved in contacting 10 additional end users and conversing with them about their customer pain will quickly refine and validate or invalidate the work you have done so far.
Start by identifying what you want to gain from talking with additional end users. What hypotheses about your work thus far are you looking to validate during this step? Use the second half of the Lessons Learned worksheet at the end of this chapter to list the main hypotheses you will test before engaging potential customers. Make sure that the conversations you have with end users focus on these hypotheses.
Next, make a list of potential end users to contact. You will need to list more than 10 people since you might not be able to contact or engage with some of the people on your list. Use the List of Potential Contacts worksheet to record their information, including where you found out about them (“source”) and, to the best of your knowledge, how closely they match the characteristics of your Persona and End User Profile. You should update this after each conversation.
It is important that you are able to find a truly homogeneous market (i.e., same product, same sales process, and strong word of mouth) in your Next 10 Customers. A common mistake startups make is pretending they have a homogeneous market when they don’t. Don’t delude yourself—be intellectually honest! Don’t settle for the first 10 people whom you can convince to talk to you. You need a homogeneous group of people who are very similar to your Persona.
You also don’t want to talk to people who are not the end user. While the person who decides to buy the product (the economic buyer) is important, as well as key decision makers and influencers, talking to them will not help you solve the end user’s customer pain, and therefore the product you design will not be readily adopted.
As you start to talk with the people on your list, take notes about each contact, using the Notes from Conversation with Potential End User worksheet as a guide. Use a new worksheet for each conversation. Pay close attention to the following categories to make sure you have end users who truly match your criteria:
Demographics
Psychographics
Overall Profile
Full Life Cycle Use Case
Quantified Value Proposition
At the end of the conversation, if the end user seems like a good fit, ask if they would be willing to provide a nonbinding letter of intent to purchase the product. As I remind you in Disciplined Entrepreneurship, you are still in inquiry mode, so suddenly asking, “Will you provide a letter of intent?” may well be off-putting. Instead, ask more softly and generally, “If a company were to offer this product, would you make a commitment to purchase it?”
After each conversation, jot down notes about whether the potential end user validated or invalidated any of your hypotheses. Also think about whether the end user might be a better Persona than your current Persona. There is nothing wrong with changing your Persona! Having an even slightly better Persona in terms of fit and/or accessibility to your team will pay enormous dividends going forward.
Once you have contacted 10 individuals who are good fits for your End User Profile, fill out the Summary of Next 10 Customers worksheet with summary information about each person you contacted. You want to make sure that when you put all 10 people in the same table, the information is consistent between them—they all are similar enough that they can be considered part of the same market—and that there was a strong amount of interest in purchasing your product across the board. If either of these two areas is weak, you may need to reassess some fundamental concepts in the work you have done so far.
Finally, complete the Lessons Learned worksheet by going back and filling out the first half with an explanation of the process you used to source these potential end users and the conclusions you reached about your hypotheses as a result of your discussions. This table will help you identify which steps you should consider revising. While you should be continually assessing your work at all times during this process, the table will help you clearly identify trouble spots that must be addressed before continuing.
GENERAL EXERCISES TO UNDERSTAND CONCEPT
See the back of the book for answers to these questions.
Interpreting the results of the List of Next 10 Customers: Two teams have put together their summaries of their Next 10 Customers after doing lots of primary market research. What conclusions can you reach about the strength of each team’s product–market fit? What questions do you have for them? Team 1: Lots of interest (see table on next page) Summary of Next 10 Customers: Team 1
Fit
Engagement
#
Demo-graphic
Psycho-graphic
Use Case
Value Prop
Overall
Contacted
Level of Interest—LOI?
Source
1 A
A
A
A
A
YES
A
From Persona
2 B
B
C
B
B
YES
A
School Friend
3 C
B
B
B
B
YES
A
Neighbor
4 C
A
B
A
B
YES
A
From Persona
5 B
B
B
A
B
YES
A
Family friend
6 B
B
B
B
B
YES
A
Alumni Database
7 B
B
B
B
B
YES
A
Classmate
8 C
A
B
B
B
YES
A
Classmate
9 C
B
B
B
B
YES
A/B
Friend of a Friend
10 C
C
C
B
B/C
YES
A/B
From Persona
Legend:
Fit: A = Excellent, B = Medium, C = Poor
Level of Interest: A = Signed a letter of intent, B = unwilling to sign letter of intent, C = refuses to buy the product
“Use Case” means that the Full Life Cycle Use Case resonated with how the end user operates. “Value Prop” means the benefit your product delivers is in line with that end user’s top priority.
Team 2: Discipline on fit but not as much interest Summary of Next 10 Customers: Team 2
Fit
Engagement
#
Demo-graphic
Psycho-graphic
Use Case
Value Prop
Overall
Contacted
Level of Interest—LOI?
Source
1
A
A
A
A
A
YES
A+ (NEEDS IT NOW)
From Industry Group
2
A
A
A
A
A
YES
A
From Persona
3
B
A
A
A
A
YES
A
Cold Call /E-mail
4
A
A
A
A
A
YES
A
From Industry Group
5
B
A
A
A
A
YES
Needs to Know More but Interested
Cold Call /E-mail
6
A
A
A
A
A
Early Stages
Needs to Know More but Interested
From Industry Group
7
A
A
A
A
A
Early Stages
Needs to Know More but Interested
From Persona
8
B
A
A
A
A
Early Stages
Needs to Know More but Interested
From Industry Group
9
A
A
A
A
A
Not Yet
Needs to Know More but Interested
From Industry Group
10
A
A
A
A
A
Not Yet
?
From Industry Group
Conclusions and questions for Team 1:
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Conclusions and questions for Team 2:
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Which team seems to have stronger product–market fit?
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WORKSHEETS
List of Potential Contacts
Name Title Email/Phone Source How closely do they match the Persona/end user profile?
Summary of Next 10 Customers
General Info
Fit
Engagement
#
Customer Name
Relevant Info
Title
E-mail/ Phone
Demo-graphic
Psycho-graphic
Use Case
Value Prop
Overall
Contacted
Level of Interest—Letter of Intent?
Source
1
2
3
4
5
6
7
8
9
10
Note
1: Like with other worksheets, this is meant to give some structure, but it can and should be customized as appropriate for your situation.
Note 2: Relevant Info is other relevant info that is not captured elsewhere, such as “Total Megawatts Installed” for the Methane Capture example from Disciplined Entrepreneurship.
Notes from Conversation with Potential End User
Make a copy of this worksheet for each end user you talk to.
Demographics (Be sure to determine which are relevant for your situation, but some general categories are gender, age, income, geography, job title, education, ethnicity, marital status, political affiliations, etc.)
Psychographics (As above this needs to be customized for your situation, but examples are aspirations, fears, motivators, hobbies, opinions, values, life priorities, personality traits, habits, etc.)
Proxy Products (What other products does this end user own and which does he or she value the most? Which products have the highest correlation with your target end user?)
Watering Holes (e.g., locations, associations, online platforms—sequence them in priority and indicate intensity of each)
Day in the Life (Describe a day in the life of the end user and what is going on in that person’s head.)
Priorities (What are your end user’s priorities? Assign a weighting to each so that they add up to 100.) _____________Weighting:_____
_____________Weighting:______
_____________Weighting:______
_____________Weighting:______
_____________Weighting:______
Feedback on Full Life Cycle Use Case
Feedback on High-Level Product Specification
Feedback on Quantified Value Proposition
General thoughts/conclusions/questions the end user has
