Skip to 0 minutes and 7 secondsSo you think you have a great opportunity. An opportunity is any situation where entrepreneurs have the possibility to create net value in the future. And net value can only be created when you solve the problems that customers have. Please think about this. Do you understand the needs of your user? If you do, you can create a product or service that will generate value for them and for you and create a great business around it. If you do not, you may build your business around an offer that no one cares about and waste a lot of time and money. The key to opportunity recognition is, then, the understanding of the user's problems. Often, the user's problems are difficult to identify.
Skip to 0 minutes and 51 secondsSometimes, users are not even aware of the true nature of their problem. For example, there's a saying that goes, people do not want to buy a quarter-inch drill. They want a quarter-inch hole. Yet people still buy drills. Another example, people may not want to have a car. They want to get from A to B. In other words, they do not want the technology but what the technology can do for them. Entrepreneurs need to explore what people want to get done, understanding the job to be done of their customers is key to be able to create value. Which techniques could help you to recognise the user's needs? Qualitative surveys have severe shortcomings. Here are three examples.
Skip to 1 minute and 38 secondsFirst, the questions are often influenced by the entrepreneur's experience, which does not allow to discover new needs. Second, respondents cannot ask for what they do not know is technically feasible. Henry Ford allegedly said, if I had asked people what they wanted, they would have said faster horses. Third, surveys do not allow you to judge nonverbal cues that help you to assess the sincerity of an answer and provide additional information. Instead, LSM proposes depth interviews. With this, you can get an in-depth understanding of a topic that is important to the users. You start your interview with a pre-research into the field. A pre-understanding of the world of the customer helps you to select areas for inquiry.
Skip to 2 minutes and 27 secondsAnd skillful interview techniques help you to identify key areas of interest to the user. A critical reflection of the findings, for example with your entrepreneurial team, will lead to new insights. An even more in-depth qualitative research is the observation. You would go in the field and observe how users try to solve a specific problem. First, observations are open, and anything can happen. Biases that influence your questions are less of an issue. Second, skillful observers can identify unarticulated needs and have solutions in mind. Third, real actions, rather than reported behaviour, show an undisguised picture of the customer needs. These qualitative research techniques help you to test your assumptions about customer needs and other crucial elements of your business.
Skip to 3 minutes and 22 secondsArmed with this new information, you can either continue to develop your solution, or you need to reshape the solution so that it matches the real needs of your customers. These techniques are an essential part of opportunity recognition and development.
Customer research in the lean startup
In this video, we introduce you to the idea of customer needs, and techniques to identify them.
At first, a clarification is warranted: We have used the words “customers” and “users” interchangeably, and often the customers are the users. Where then are the differences? Basically, a user is the one that is actually using your product. A customer is one that is buying the product. Consider a kids’ bike: The user is the child, and its needs may be addressed by “cool” looks and ease of riding. The customers are likely the parents. Their needs may revolve around safety, environmental issues, and pricing. When you know about this difference, you will realize that you need to investigate your assumptions about users and customers, in case the two differ.
User/customers are seeking a solution for what they are seeking to accomplish – their “job-to-be-done”. They may want to get from A to B, they may want to have a hole in the wall, or they may want to have a good night’s sleep when they are abroad. However, many users/customers may not look beyond the obvious existing solutions. They will buy a drill, buy a car, or book a hotel room. If your entrepreneurial idea is about offering something that formerly had inadequate solutions – or no solutions -, you may have a great opportunity (Christensen et al. 2016).
It is difficult to identify the job-to-be-done, respectively the underlying needs that users/customers have. They themselves may find it difficult to make them explicit, and they are rarely in a position to realize what a product or service based on a new technology can do for them. When you want to identify the underlying customer/user needs, you can resort to qualitative market research techniques.
Belk, R., Fischer, E., Kozinets, R.V., (2012). Qualitative Consumer and Marketing Research. Sage, Thousand Oaks, CA.
Christensen, C.M., Hall, T., Dillon, K., Duncan, D.S., (2016). Know your customers’ “Jobs to Be Done”. Harvard Business Review, 94(9), 54-62.
© University of Twente