A famous quote attributed to Henry Ford reads: “If I had asked people what they wanted, they would have said faster horses. “However, Ford didn’t make a faster horse. He asked about people’s true desires. Customer development is not so much about knowing what people want but rather why they want it.

Tristan Kromer came up with an insightful twist to Ford’s line: “Ask, ‘Why do you want a faster horse? What would you use it for?’ If the customer wants a faster horse to move cargo across town, a car might be a great invention. When the customer wants a faster horse to win a horse race, a car is a terrible invention.”

Asking the right questions and listening to people who will potentially use your product is the only way to develop it right. We already shared some insights in How to Talk to Users. It’s time to dive deeper and discuss problem interviews and why every project needs them and how to conduct them.

Why Do Products Fail?

We already mentioned that around 90% of startups fail. “It was a stupid idea,” you can hear already-former product owners lamenting. And in most cases, it was not the idea itself that had failed but how they handled it. 

Here’s what many business owners miss: the idea is just a hallucination. Imagination draws the picture of customers queuing for the product and saying: “Shut up and take my money!” But in reality, many products are invisible, misunderstood, and — worst of all, and, alas, often — irrelevant. Even if the idea initially seemed genius.

Since 2018, CB Insights, a tech market intelligence platform, has gathered 111 startup post-mortems — real-world stories of startups that didn’t make it. After clustering the data, the platform’s analysts distinguished a pattern to these stories.

They identified 12 main reasons startups fail. The top five show that failures mostly happen because startups run out of money, get outcompeted, have flawed business models, can’t comply with legal regulations, or because there’s no market need for their product.

Most ventures fail because there’s no product-market fit. You create a product people don’t need, don’t know people’s interests, don’t research their needs, or ignore their preferences. Your product must satisfy a strong market demand to make your business successful.

What Is Customer Development?

By the most common definition, customer development is a customer-oriented approach to business implying testing an idea or prototype of a future product on potential customers. According to this concept, the product must solve the customer’s problem. The Lean Startup’s methodology believes businesses should first identify the problem and then develop the problem, not the other way around. Simply put, knowing your customers makes development goal-directed and focused. The approach also includes deep market research and comprehensive competitor analysis.

What Is a Problem Interview in Customer Development?

As the name suggests, this interview aims to establish if there’s a problem and if potential customers are aware of it. A properly done interview will help you estimate the cost of solving the problem and, ideally, understand how users think. People often don’t realize they have this problem or have never tried to find a solution. That’s why it’s not about asking direct questions but rather finding an intelligent way to filter the “white noise” and get to the root.

According to Steve Blank, at the very beginning, all you have is just a series of untested hypotheses. You guess who your customers are, what features they want, or what price they are willing to pay. And most likely, you are wrong in your guesses. Here’s what a problem interview can help you understand:

1. Is there a problem?
2. Is there a need, and how strong is it?
3. How do customers estimate it?
4. How do they solve it now?
5. How comfortable are they with the existing solution?
6. Which emotions do they experience (positive or negative)? 

Here’s a bonus. By using in-depth interviews, you can find unfair competitive advantages — super-knowledge of customer scenarios your competitors don’t have. Uber is a real-life example: all of a sudden, people don’t have to look for taxi stands, make phone calls, or wait for an operator to respond. The difference between the competitor’s reality and Uber’s idea was so dramatic that the startup skyrocketed.

Customer Development Strategies: Where and How to Find People?   

You’d be surprised how many product teams fail already when they need to find the right people for the interview. There are two underlying principles for finding the right respondents.

Delegate

Product teams’ time and energy are valuable resources that may run out quickly if spent on routine tasks like finding interview respondents. HRs and assistants are the best choices to delegate such a task. If your HR team doesn’t have internal resources, freelance recruiters will cost you much less than a failed business idea in the long run.

Know Who You are Looking For

A problem interview is an effective instrument for creating a clear portrait of your target audience. Later, it helps determine the pricing and other metrics.

When you check an MVP (landing pages, spontaneous scenarios, or mockups), you need two types of users:

• Existing: those with expertise in the product;
• Potential: those with a need for the product.

Whether you develop a new segment or create a B2C product with an unclear audience — when you don’t know the segment, look for people as different as possible:

• demographic;
• scenario;
• income level;
• location, etc.

Interviewing people who are fundamentally different in main characteristics helps you understand how they see the problem (if they see it at all) from various perspectives.

When you know the segment, you need representative sampling. Although it’s impossible to make a 100% representative sample, there are ways to get to it as close as possible, for example, by location or scenario.

Pro Tip ✔️ Try to conduct 40 interviews for a new subject area. This number works well to outline segments and distinguish scenarios that won’t work for your product.  ✔️ Schedule 1-1.5 months for searching and interviewing people once you deal with a complex subject area.  ✔️ 20 interviews are usually enough for a known subject area. ✔️ 10 interviews will do if the segment is clear and you need to confirm your data.

Five Ways to Find the Right People

Proper preparation for the research stage significantly saves time and makes the process more coordinated and organized. Here are the five most efficient ways to find respondents.

1. The easiest way that many people neglect — ask your friends. They might even spread the word and engage their friends.

2. Use social networks. It’s a fast and efficient way to reach many people. You can also target respondents more precisely by using communities like Facebook groups.

3. Collaborate with influencers. Guru marketers, super-engineers, or university rectors have public profiles and contact bases. This way is effective when you need to reach a specific or niche audience.

4. Socialize at conferences and parties. Professional conferences are a great source of respondents if you know your segment. Parties make communication easier.

5. Engage existing users. Banners, pop-ups, or emails focusing on people who already use the product might also do the trick even with lower conversion.

Customer Development Process: Creating a Scenario

The purpose of the problem interview is to get insights. It’s not merely a pleasant talk but a process of finding unfair advantages that will sell your product. It means you must hit as many aspects as possible, especially if you explore a new subject area.

Some startups decide to use online questionnaires, Google Forms, chatbots, or emails and never proceed to interviews after receiving this data. These are the types of quantitative research. And they are not as efficient as you think. You can learn human emotions and real-life attitudes only through in-depth personal interviews or qualitative research.

Pro Tip Avoid conducting quantitative research ahead of qualitative research as surveys represent your pre-existing knowledge and don’t create new channels of getting insights outside your own worldview.

Three Steps Towards the Scenario

A successful interview requires extended preparation. Otherwise, you risk hitting the wrong questions, missing essential pain points, and getting misleading results, which, as a result, will negatively affect the sales in the end. Here are the three steps you should consider before building the interview.

1. Use mind maps. They are a quick and easy way to visualize your brainstorming and structure information.
2. Segment people. For example:

• Users/non-users, happy/unhappy users, never used and never will;
• Frequent/rare users;
• Uber/taxi users;
• PC/mobile users;
• Business/economy class;

There’s an infinite number of possible segments and their combinations depending on business types, industries, interview topics, respondents’ roles in the company (executives, marketers, support specialists, salespeople, analysts, etc.), problems, and services they use.

3. Write down all hypotheses and everything you know about each segment and transform them into questions. For example:

“Business class airline customers pay $1000 for a ticket and board first” transforms into “How much do you pay for tickets?” and “How does the boarding process happen?” 

Customer Development Model: Four Principles of the Problem Interview Structure

The interview should be carefully structured and organized to provide you with the insights you look for. There are five main principles to make it effective.

1. Use only open questions. Yes-or-no questions often distort information and don’t provide real-life examples of how people think or solve the problem. Remember the rule of 5 Ws (+1 H) questions: who, what, when, where, why, and how. For example:

• How do you do it?
• What was the best about that solution?
• When do you need the solution the most? 

2. Ask only about facts and experience. Try to avoid generalization by asking people how they usually solve the problem. Instead, it’s better to create hypothetical situations involving various circumstances to learn about people’s experiences.

Pro Tip Don’t ask direct questions about the future like “Would you buy this product?” or “Would you use the service?” People tend to please the interviewer and answer “yes” even if they won’t do it in reality.

3. Understand people’s motivation. Motivation is the need’s driving force. Learning your potential customer’s motivation helps you develop more specific features. For example:

• How are you doing it now?
• Were you looking for a solution?
• How long did it take you to find a solution?

4. Explore people’s emotions. You will understand people’s desires much better if you know which emotions they experience under certain circumstances. Being delighted with a taxi driver opening the door for you or terrified because a driver uses the phone while driving — these are the emotions behind customer behavior.

Problem Interview Essential Checklist

The secret of successful customer development is addressing people’s real pain points. They represent real-world problems people deal with every day (or frequently enough, for that matter). Helping them solve these problems is your golden ticket to happy, loyal customers and a profitable business. Here’s the checklist of questions vital for discovering customers’ pain points.

1.      How do you solve your problem now? How much do you pay for it? How much time do you spend doing it? How happy are you with the solution?

2.      What will happen if you can’t solve the problem?

You shouldn’t ask this question in every interview. However, when working with large numbers of respondents, it helps filter and prioritize segments.

3.      What’s the most inconvenient while you are solving the problem?

This question helps you access people’s subconscious “cache” and extract valuable information about customer pain points. When you ask a person this question for the first time, don’t expect too much. People need more time and deeper questions to reveal what causes them discomfort.

4.      When have you last faced the problem?

Use this question to estimate how frequent the problem is.

5.      Why was/is it hard to solve the problem?

6.      Which emotions do you experience when facing and solving the problem?

7.      Rate your emotions on a 10-point scale. What is a 10 for you?

Here’s where you get to the most critical part. This information indicates how ready people are to pay for a product that is supposed to solve the problem. Experts advise focusing on the problems rated higher than 7: that’s where the main monetization potential concentrates. However, lower-rated problems work well for mass B2C products.

Pro Tip Repeat questions 4-7 multiple times throughout the interview. As a result, after a 40-minute talk, you will get on average 10 pain points already ranked and labeled by frequency. And you are good to go with the backlog for your project.

Five Golden Rules

Getting to people’s emotions is challenging. You need to make them feel comfortable enough to share their desires, fears, and sentiments. Here are some more pro tips on how to perfect your and your respondents’ interview experience.

Rule #1: Make notes and never use a voice recorder. Making notes is crucial for both registering necessary information and making people feel important and heard. Voice recorders, on the contrary, make people uncomfortable and may affect their answers.

Rule #2: Create user personas. Collect data on tastes, gadgets, habits, etc. This information will help you define specific features of your product and significantly improve the marketing strategy at later stages.

Rule #3: Avoid the anchoring effect. An anchor is a cognitive bias that works when supermarkets use prices like $1.99 or $599. A person with incomplete information extrapolates the conclusion to the picture of the world. For example, showing a respondent a screen with Terms of Service or Privacy Policy and asking, “How frightening is this information?” will make them stop thinking about the interface functionality. Instead, address their feelings: “How comfortable is this interface?” or “Is this logo beautiful?”

Rule #4: Don’t sell your idea. The best scenario is when your respondent has no idea what the interview is going to be about. By structuring communication this way, you avoid many complications like biased opinions or people telling you what they think you want to hear.

Rule #5: Talk less and listen more. It’s the most important rule. Silent moments often initiate the most valuable insights. People provide serious ground for value propositions, promotion strategies, MVP descriptions, and much more. Let them share their thoughts with you.

Afterword

A problem interview is a powerful customer development tool and an essential first step of your project. By talking to people, you can validate your idea and monetization potential. A well-structured and thought-through interview provides business owners with priceless information about who their customers are and how they want to spend their money. 

Our long-term experience has shown that customer development and, particularly, problem interviews are first and foremost essential skills for any project’s leadership. Being responsible for products’ tech side and project execution, the Rocketech team is always happy to share our real-life experience and expert insights on how successful projects implement customer development and how to avoid common mistakes.