You have an idea for a new business or for a new product for your existing business. You have assessed your idea on paper, but now what? How do you know if this is something that people will embrace? The customer discovery process is one way to assess market potential.
Lean Startup methodology involves taking your product/service idea to potential customers, performing customer discovery, and using that feedback to adapt the idea before deciding whether to move forward or not.
This is the opposite of the “if you build it, they will come” mentality.
Although the focus of the Lean Startup concept is usually geared toward manufacturing and software businesses, the principals of the customer discovery process can be applied to any type of business to gain insight and assess the market.
Hongli Lai outlines this process in a blog post, which also defines the goals of customer discovery as:
- To understand customer problems, needs and contexts.
- To look for early adopters.
- To gain a strong hypothesis of a good solution.
Talk to customers. By interviewing potential customers, you can learn more about them and the problems they face. Understanding their specific problems gives you insight into changes you may need to make to better meet customer needs.
Digest what you learn. After getting feedback from potential customers, the next step is to evaluate what you learned with your team and key partners. How do changes affect your original forecasts? What do the changes do to your overall strategy?
Share your solution. You should then go back to your potential customers to test your updated idea/solution. This time, you will ask questions to confirm that your product/service fills a true need and to gain more insight.
How big is the need? Evaluation of market potential comes next, as you assess whether you have found a solution to a problem that is urgent for enough customers. Is this something that only a select few will buy? Or, can the idea fit the needs of a large segment of the market?
Your local ASBTDC can assist you with putting numbers to the size of a potential market. We can provide market research to help answer the questions of how many potential customers there are, where they are located, and other factors about your target customer during this evaluation phase.
Working through your business idea and fully assessing market potential before offering a new product or service is time well spent.