Bathing in the Fire of Feedback: Testing Customer Offers & Market Assumptions
Featured Author: Luke Kim
The Fire of Feedback destroys what doesn’t work and ignites what does.
But unvarnished feedback is hard to take. The truth is not always convenient.
Business builders must test our customer offers and market assumptions. It’s like being a phoenix in creative destruction. Every rebirth is a business iteration or pivot.
Recently, I consulted a mentor about a new business. He told me “your offer sounds neither enticing nor communicative.”
Ouch. I felt defensive.
But his advice paid off. I changed some things and got great customers.
Whether you’re launching a venture-backed startup, creating a solopreneur lifestyle business, or building something at work, facing the truth will help you win.
Want to see how? Let’s get tactical.
Customer Validation: Testing Your Offers
When your customer persona proves you wrong, that’s just as valuable as positive feedback. You can change direction without sinking further costs. When seeking customer validation, think like a scientist. The goal is not to prove yourself correct. The mission is to discover the truth and compare it against your own assumptions.
Here are some actionable tactics to test your customer offers:
Wizard of Oz Testing Simulating a product or service with human operators behind the scenes.
Example: IBM tested a “listening typewriter” to simulate voice-to-text technology. Users spoke into a microphone and a hidden typist transcribed their words.
Concierge MVP Manually delivering a service to a small group of users before building any technology.
Example: Zappos purchased shoes from local stores and shipped them to customers before building an e-commerce platform.
Prototype Testing Creating a basic working model of a product for users to interact with and provide feedback. Paper prototyping is even easier; it’s just mockups.
Example: Pebble started by launching a simple smartwatch, using it to gather user feedback and iteratively improve the product.
Pre-Order Campaigns & Waitlists Allowing customers to pre-order a product before it’s fully developed to gauge demand and optimize supply.
Example: Tesla used pre-orders for their Model 3 to project revenue and secure funding for production.
Customer Interviews & Discovery Calls Speaking with customer personas and potential users to understand their needs and reactions.
Example: Slack did extensive interviews with teams and organizations before building their product.
Surveys, Focus Groups, Communities Fielding targeted questions to collect feedback on ideas from a larger audience.
Example: LEGO uses its Ideas platform to crowdsource new product concepts from its community and vote on what to build.
Market Validation: Testing Your Assumptions
Don’t marry yourself to untested ideas, letting your thoughts calcify into false truths. Consider your preconceptions and be unafraid to threaten your own assumptions.
The viability of a business rests on assumptions.
Google thought we’d use a search bar as the gateway to the internet.
Uber thought we’d give and take rides in personal cars instead of taxis.
Airbnb thought we’d pay each other for spare rooms and private homes.
Prescient assumptions lead to new opportunities, especially when they’re contrarian. While testing and validation are important, always consider the possibility that you may be right and the world may be wrong.
When Airbnb kicked off, I saw it as pay-to-play CouchSurfing.
I thought it would fail.
Even famous investors shot down the idea of home sharing.
If Airbnb obeyed the leading voices in hospitality and venture capital, they would’ve stopped. But their assumptions were correct. By running an experiment in one city during a conference, they booked out and proved viability.
Here are some actionable tactics to test your market assumptions:
Smoke Testing Creating a simple landing page or ad to measure interest.
Example: Dropbox created a landing page with a video explaining their product before developing software.
A/B Testing Comparing two versions of something to see which performs better.
Example: Google tested displaying 10 results per page against 30 results per page to get user feedback and test for speed.
Crowdfunding Raising money from a decentralized base of people who want to back a project and get the outcomes of success.
Example: Oculus, a virtual reality headset, used Kickstarter to gauge market interest and secure funding.
Social Media Engagement Leveraging social media to gather insights and validate offers.
Example: Before launching the VaporMax, Nike used Instagram to post teasers which got overwhelming attention.
Competitive Analysis Researching competitors to identify opportunities and inefficiencies.
Example: Netflix analyzed competitors and discovered growing demand for high-quality original content, which resulted in Netflix Originals.
Fake Door Testing Testing demand by presenting a concept without fully developing it.
Example: Buffer added a “Business Plan” option to its pricing page, which led to a “Coming Soon” page, getting enough signups to justify development.
Strategically Ignoring Feedback
Not all feedback illuminates the truth. Feedback can backfire and throw you off course. Don’t be a slave to feedback, blindly trusting what other people say.
Getting feedback is a professional experience, not a personal experience. It’s not about you, it’s about your idea. Sometimes it’s like taking a cold shower, but it’s good for you and you’ll get used to it.
Maybe you’ll even love it one day.
Here are some final considerations:
- If you’re charismatic or attractive, people will give you agreement and encouragement when you don’t deserve it. When you pitch well and feel popular, that’s not the same as customer validation.
- When you get feedback, it must be from your customer persona, not a broad base of people. Irrelevant opinions degrade your research. Don’t pollute your mind with broad casual feedback.
- If you take feedback as a prediction of the future, you will be disappointed. For example, waitlist signups won’t covert into paying customers at a 1:1 ratio. People change their minds while you iterate.
- Be thoughtful about the feedback you incorporate. Try not to meet everyone’s niche desire. This results in a “Frankenbusiness” that trades focus and functionality for vanity and feature creep.
- Make sure there’s a clear path to convert the curious into customers. For example, a lead magnet is used to validate customer interest and engagement by offering valuable content in exchange for contact information.
How You Can Help Yourself
Take this online course with a cohort of peers. In one month, you will learn the secrets of a full-stack business builder who can reliably advance from idea to revenue. This course is 99% practice, 1% theory.
Feeling curious, but not ready to commit? Check out this free e-book which includes a workbook, reading list, and previous of the UC Berkeley solopreneurship course.