Workbook 2: Testing your Thesis – ensuring there’s real customer need

 

By now you should have had a great debate with your team about the core organisational, personal and Board level pains your software solution solves. You’ve looked at the world through the eyes of your core Buying Persona and assessed the challenges they’re facing in their working life. With luck, you’ve now created a Pain Statement in the form of a visualisation much like the examples we illustrated.  

What comes next is mission critical. Before you bet the bank on the fact your team have understood the market correctly, you have to make 100% sure that your prospective customers see the pain the same way. If you’re a new software business you’ll be doing this for the first time. But if you’ve been selling software for some months or years, this exercise is still vital as you need to reconfirm your original thesis is still valid. You need to reassure yourself, your team, and your investors you’re your thesis is correct and that your software genuinely solves visceral customer pain. You will also have a bank of questions that have emerged from the creation of the pain slide. These will include aspects of the process you’re not sure about, who is affected and how much time and money this is costing the business. You need this extra information. 

If you head off in the wrong direction and don’t get the confirmation you need, you’ll find progress incredibly slow. 

 

Building Evidence 

 

We can’t overemphasise the importance of testing your thesis with customers. It’s vital you build up a store of gilt-edged evidence that the thesis you and your team have proposed about the customer pain you solve, is both genuine and visceral. Why would you go and spend thousands of pounds on marketing and hiring an expensive sales team unless you’d looked your target personas in the eyes and checked your solution solved the challenges they’re facing? A drug company wouldn’t market their new medicine without years of research, and you wouldn’t go to court unless you’d built up a bank of evidence to help you win your case.  

 

So why do so many software businesses go to market without doing sufficient background research? Why do we simply think we know more than our customers do? And this is not a criticism, we’ve done exactly the same thing ourselves and bear the scars to prove it. As you heard in our Volkswagen story, it took a customer to tell us we were selling a vitamin and not a painkiller and we’d already spent thousands of pounds of marketing and sales team spend.  

 

Why SaaS leaders should lead this research  

 

Reconfirming your company’s Pain Statement with existing clients, prospects, and other people in your network, is something that every Founder should lead. But for some SaaS leaders, openly checking in with their clients and prospects is something many seem reluctant to do. Perhaps there is some fear around speaking to clients based on concerns about the renewal or a difficult customer experience they may have endured. Perhaps it’s just down to sheer workload but too often, Founders often leave the vast majority of client engagement to their customer services teams, and we think this could be a mistake.  

 

Regular interactions with clients create a strong bond between the Founder and the customer, personal relationships that grow over time. Most customers want you to do well and succeed – you have after all solved a significant problem for them and they invested the company’s money in your future. They put their own reputation on the line too, to purchase your solution and they remember the promises you made. You might even have been the one that closed the sale originally.  

 

So go back and see them when you can and, as we’ll discover below, you’ll learn a great deal. Great customers often become friends anyway, such has been the close working relationship you’ve enjoyed. And at the very least you’ll want them to recommend you to other companies and take your software with them if they move. We believe it’s critical that Founders stay tight to their top dozen customers and carve out time to go and see them. 

 

 

Buy The Mom Test

So how do you begin the process of testing your thesis?  

 

There’s little doubt that the starting point here is to buy a book called The Mom Test by Rob Fitzpatrick. This is a mandatory read for any software Founder. Go online and order it today – it’s only 125 pages long and it’ll take you a couple of hours to read it cover to cover. Everything you need to test your thesis is contained within these pages. It’s written from a brand new product viewpoint, but it works just as well for a more mature business.  

 

The subtitle of Rob’s book is ‘How to talk to customers and learn if your product is a good idea when everyone is lying to you.’ Nailed it. Your Mum, your investors, your team, and your friends will all tell you you’re on to a great idea because they love you and want to see you do well. But it’s your customers, if asked some brilliantly structured questions, who will provide you with the truth. And you have to ask them, straight out the gate, to be hard on you and to push back if they don’t believe something is 100% true.  

 

It’s a delicate process. As Rob says in the first paragraph of his multimillion, best-selling book ‘Trying to learn from customer conversations is like excavating an archaeological site. The truth is down there somewhere but it’s fragile. While each blow with your shovel gets you closer to the truth, you’re liable to smash it into a million little pieces if you use too blunt an instrument.’ 

 

As Rob goes on to say, ‘we all know that we ought to talk to customers and many of us even do talk to them. But we still end up building stuff nobody buys. It turns out almost all of us are doing it wrong’. We know for absolute certainty that we did.  

 

We’re not going to paraphrase every chapter of Rob’s book as we would encourage you to buy it and learn all the lessons yourself. But we will pick out the key themes that he teaches us in order to effectively test our thesis. 

 

Building your panel of interviewees 

 

The starting point is you need to find a small but relevant panel of customers, prospects and indeed anybody you know in your network who has actively performed the role of your Buying Persona within a business right at the centre of your ICP dartboard. We’ll discuss the importance of Ideal Customer Profiling later in this book, so if you need to flick forward to that chapter, please do. 

 

But if you’re planning to sell to Chief Financial Officers of medium sized businesses with 500 to 2000 employees in the utilities sector, you need to find 5 to 10 individuals who have performed this function in recent times. This initially may feel like a daunting task, particularly if you’re just starting out. But you need to find them either through using LinkedIn or asking your network whether they know anyone who’s performed this role. If you can’t get to the CFO, try getting to the Finance Manager, but it has to be someone who’s worked for a company the size of whom you’re trying to excite. After all, if you were a pharmaceutical company and were building a formula to improve the strength of adults, you wouldn’t test your medicine on children because the results would be inaccurate. 

 

If your business has been trading for a few years, you’re bound to have customers who you can add to this panel, and we’d also recommend you speak to the correct personas within any of your pipeline customers.  

 

You might be thinking that no one will help you here, but you’d be wrong. Most human’s inbuilt generosity of spirit means that they, if asked in a polite way, will be happy to help. You can explain to them that this is not a sales call in any shape or size. It’s a research call and you’re asking for their help. When we’ve run this exercise many times over the last decade, we’ve been blown away by the fact that most people are happy to help if you ask them whether they be prepared to share their experience and wisdom. We’ve asked them directly and we’ve also put posts on LinkedIn asking for guidance and have been amazed how many people have responded.  

 

However you go about building this panel, it’s mission critical that you identify these individuals as soon as possible and ask them for their honest feedback. It may take some time to get the right people together, but trust us it’ll be worth it. 

 

How and where should you meet  

 

There are two schools of thought here. One is to interview them individually and the second is to pull them together into a group. The global pandemic has meant that most people are very comfortable with video conferencing and hence if you’re less happy about getting multiple customer personas in a room, then a 45 minute Zoom call will fit the bill.  

 

It’s critically important that you record the call, clearly with your guest’s permission, as you’ll want to look back on the content many times later down the line. It’s incredibly hard to capture every nuance of a Zoom call particularly if you’re running the interview on your own. The ability to be able to rewatch the interview and notice, for example, any shifts in body language and tone when a question is answered is very useful. You’ll also want to share the interview with other members of your team so that they too can learn the wisdom you’ve downloaded. In a perfect world at the end of this exercise you will have a shared drive that contains 5 to 10 recorded interviews with your target buying personas for everyone to review. 

 

The other route to take, and some might say a braver choice, is to get your target personas together in a room at the same time. At MessageLabs we used to hire a meeting room at a racecourse, ask our guests to be ready to begin at 9:30 and then work with them for three hours across the question set we will outline below. After lunch they would be able to enjoy the racing, ideally over a couple of pints of Guinness where real relationships can begin to blossom. You don’t have to bribe them with a nice event, but sometimes it helps. You could just as effectively host them in your own office if travel permits, or you could find a centralised hotel meeting room that works for all participants.  

 

Many shy away from group research because they’re frightened that if they get all their customers together, it might turn into a moaning session where they compare notes about the difficulties they’ve had working with your organisation. But this can be avoided if you set the theme that you are asking for their help. Stick to a well-crafted agenda and tease out of them the challenges (both business and personal) that they’re facing. Again, consider external facilitation in this format. 

 

The mission here, either individually or in a group, is to confirm your company’s Pain Statement and that should be the focus of the meeting. 

 

Rules of the game 

 

In The Mom Test, Rob Fitzpatrick sets out some rules of engagement, and it’s vital you take these on board.  

 

1. You mustn’t, mustn’t lead the witness. This is not a sale. This is research and you’re looking for their insight and guidance. Do not go into the call or meeting with any preconceptions, bias or judgement. You’re here to ask questions and listen. 
2. To make these interviews valuable you have to insist upon dispassionate and honest feedback about the pain illustration you’ve created. Ask them not to be kind to you and ask them for an accurate score on how much each phase of the current process hurts along the way. 

 

The 1-1 Interview 

 

If you’ve decided on doing personalised interviews (although the same process applies in a group session), it’s a great idea before you start the interview to map out a clear track that you wish to follow. It might be a good idea to practice on someone internally, especially if this is your first time. 

 

Interviews normally last 45 minutes but may well go on longer, and that’s fine. But you must make absolutely sure that you find out all the information you need along the way. Write down everything you don’t know and need to find out across the conversation.  

 

To help you do this you’ll have two valuable pieces of content at hand. Firstly, your Pain Statement which you need to be ready to share. And secondly, your well-crafted question set which we’ll look at how you build later in the chapter.  

 

This is how the interview should run. 

 

• Start the interview by thanking them for their time and explain to them how much you value their insight and wisdom. Ask them if it’s OK for you to record the interview so others who can’t be on the call can also learn. With their acceptance, hit the record button.  

 

• Explain that you’ve tasked your team with gaining a better understanding of your customer’s daily lives and to do that you’ve created a visualisation. What you’d like to do is take them through a particular process and confirm how they operate today. Ask them if it’s OK to take them through the thesis. 

 

• Describe how you’ve sat in a room with representatives of every part of your organisation to make sure that you’ve captured an accurate picture of the business challenges as it pertains to your solution. The PowerPoint you’ve created from your whiteboard session with your team should now begin to grow stage by stage beginning with your interviewee at the centre of the screen and all the external and internal axes appearing left and right.  

 

• Ask your interviewee whether you’ve accurately captured everybody who’s involved in this process either internal or external and don’t hesitate to stop and listen if your customer wants to add something in. These nuggets of information are worth their weight in gold. 

 

• Now take them through the business challenges and spend an especially long time asking about the personal pain and frustrations felt by their team along the way. Ask them to describe how any frustrations manifest themselves, be it difficult meetings, poor feedback or awkward one to ones with their team.  

 

• You’re trying to establish here whether this is an accurate picture of the way their business works and all the emotional headwinds that come with it. Listen very carefully to the response. Nine times out of 10 your interviewee will want to add to your diagram and outline part of the problem they face that you’ve missed. It’s critical you capture this aspect for use on your next interview, as you can revalidate this extra challenge on your next call.  

 

In our experience the reason why this method is so effective is because your customer respects and values the fact that you’ve taken the time to understand their world and you will find rapport building exponentially. You may be the first software provider they’ve spoken to who has taken the time to find out what hurts and what’s not working. You’ve displayed real empathy in your presentation.  

 

What you really need to find out is which part of this process hurts the most. Which parts keep them awake at night and what would they most like to fix. What would happen if they won this battle, maybe internal respect, or promotion, and what would happen if they don’t fix it. Are people so frustrated with the process that they might leave the business? Keep Maslow’s hierarchy of needs at the forefront of your mind at all times and ensure you’re always asking questions aimed at the top of the pyramid. This is where self-actualization sits which equates to obtaining respect from peers or their team and sincere satisfaction that what was broken is now mended. 

 

An important caveat 

 

If you’re not getting the vibe that your customer senses this pain and they simply shrug and says things like “yes this is frustrating, but it’s not important enough for me to make a change”, then this is invaluable feedback too. If it’s not painful enough for their organisation to part with tens of thousands of pounds for your solution, then your software is going to struggle to sell. This is not to say that you should now give up, it’s just that the thesis as your team have agreed simply does not hurt your customers enough for them to disrupt their business and change course.  

 

It’s at this point that your questions about what really hurts and frustrates become even more important, because in those answers lies the goldmine. Very often it’s only a 10 or 20 degree correction that you need to make and to aim your product messaging at a slightly different audience using different words than you have in the past. Or if they don’t recognise anything that you’re showing them as being real, then you have a different challenge in front of you.  

But surely it’s better to know that now than to continue on your journey without knowing that your solution doesn’t hit the mark. The good news is that on far more occasions than others, your interviewee will be glad to help and will confirm that your thesis is largely correct and will have helped you add some excellent insights to your thesis. This must be added to the pain solution slide ready for your next call because you’ll want to test any nuances with other interviewees. 

 

Building your research questions 

 

Once you’ve run through the PowerPoint slide and gained the answers and feedback you need, you now need some further information.  To tease these answers out, you need to build a highly effective question set and we would recommend you write these questions down and have them in front of you when conducting the interview.  

 

The trick here is to structure questions in a non-leading way with open-ended answers and avoid the yes/no pitfall. Most people we’ve interviewed love talking about their life, their work, and the parts of the job they enjoy and the aspects they find most frustrating. It’s the latter that’s your gold dust.  

Rob Fitzpatrick’s The Mom Test will teach you far more effectively than us how to build this question set, so read his book and learn all there is to know about how to create effective questions.  

 

The most important questions to ask 

 

The most important questions centre on budget and objectives. Finding out from your customers whether budget has been assigned in this calendar year to improve the broken process that your software solves is invaluable. If the business is so frustrated with the status quo that they specifically put money aside to deal with this issue, then you already onto a winning start.  

 

Conversely, and just as valuable, if your interviewees explained the broken process is merely an annoyance and that they’ve managed to live with it and that no budget has been assigned, then you know you have more of an uphill struggle in front of you.  

 

We interviewed a prospect for a legal tech firm we were working with recently, and he was a big fan of the business and had been following its progress for many years. He was keen to become a customer and was looking for ways to buy – we had a tailwind behind us with this one. But when we tested the thesis and explored the pain, he honestly fed back that this was merely an annoyance to businesses his size. He explained they would get round to fixing it at some point, but at the moment it was not top priority, and he wouldn’t get budget for this. He felt that bigger organisations in his vertical would certainly want to fix this, but with regret this was just not for him. This was invaluable feedback, something that went on to save the legal tech firm we were working with an enormous amount of misdirected energy. They decided to focus on bigger organisations in the space and ignore (for now) the smaller end of the market. They would respond when this customer was ready and keep him in the communications loop. 

 

This is why this process is so invaluable as it will either confirm the thesis you’ve created is correct or it will save you many thousands of pounds of sales & marketing spend because the problem you solve just isn’t important enough. If you get indifferent feedback, it might be time to rethink your core proposition by finding out what are the real issues the business wants to solve this year. In many companies we’ve worked with, we discovered that the core proposition is not mission critical but that other functionality within the software would help them moving forwards. The very same legal tech firm discovered that the sub product they’d built to help firms with financial advisory spend added huge value to their proposition. So they added that in and the sales began to roll. This is highly valuable feedback for your product, marketing, and sales teams when they build and message your version two. 

 

Take time to build your own question set and what you’d like to understand. Remember to listen and not lead. This feedback is worth multiple thousands, maybe even millions, of pounds to you and your business. 

 

One more request 

 

At the end of the call, thank your guests sincerely for their time and ask one more question.  “Would it be OK for me to keep you in the loop on this research and to playback to you at a later date what our other customers have said. Indeed, we’re planning to pull together a Customer Advisory Board which meets three or four times a year and we’d love you to be part of that. Might that be possible?”  

I’m not sure I’ve ever had anybody turn this offer down, as most executives I’ve spoken to are keen to understand how other businesses deal with the same challenges and to interact with colleagues from the sector. If you do get five or six yeses from your tender interviews, you now have the structure of a Customer Advisory Board that you as the Founder must take responsibility to own and manage moving forwards.  

 

Customer Advisory Boards 

 

Many great software businesses have invested in a Customer Advisory Board that meets two to four times per year. We think this is an excellent habit to get into. Many customers are willing and proud to help steer your business’s vision and it’s an ideal way to keep pace with what’s changing in the sector.  

 

We would recommend that once a quarter, you convene a group of eight people (somewhere nice) and debate the issues of the day that are pertinent to your solution. We’d recommend four clients and four ‘bottom of the funnel’ prospects and ask the clients to talk through their own experience of using your software. Discuss the initial challenges they had and how your solution has helped. What added functionality would they like to see and what’s new in their world. You’ll find that your customers will inspire your prospects to become clients themselves and at the next Board, you can ask your new customers to talk and invite fresh prospects. 

 

The fact remains that doing this comes with many advantages. Your customers will respect the insight you have brought to their world and appreciate you caring about a broken process or issue. They’ll give you invaluable feedback on the merits of your software before you spend a dime on marketing. And if treated well, they’ll become long standing members of your Customer Advisory Board and full time disciples of your work. 

Make any adjustments 

 

At the end of this process, you’ll now have a whole Bank of evidence to play back to your team. As discussed, adjust your pain slides with every confirmed nuance that you’ve heard and if you need to focus the pain statement somewhere else, then do so.  

 

Your pain thesis has now been tested across several buying personas within your ideal customers and you should take great confidence from this process. 

 

Even if they don’t agree to join your CAB, ensure you at least book in a follow up session with your interviewee. Here you’ll playback the research from all the interviews you’ve done and where you’ll also introduce your solution thesis for how these problems can be fixed.  

 

Creating your Solution slide  

 

With your interviews complete and your pain slide adjusted to incorporate all the feedback you’ve heard from multiple customers and prospects, you now need to plan your second call. Hopefully most of the people you’ve interviewed have agreed to review your findings. 

 

It’s time for you and the team to pull together your Solution slide and this should exactly match and mirror the pains you’ve exposed during your interviews. Here’s where you’re looking to demonstrate a better way of doing things that reduces time, unnecessary paperwork, and a reduction in Excel spreadsheets and emails. This slide should evidence a much slicker process and include any necessary technical integrations to incumbent software, all of which reduces pain and frustration. 

 

It’s almost certain you have a Solution slide created already, but it’s critical here that you adjust it to take into account the feedback you’ve heard. Unlike the pain slide, the Solution slide needs to look clean, neat, and efficient – a well-oiled machine versus an absolute mess. It should make the customer smile and be able to quickly and easily understand how your solution is a far better way to run their processes.  

 

Here’s an example Solution slide from a property tech firm we’ve worked with. 

 

 

 

At every point, ensure that you highlight where time, money or paper can be minimised. Use the names of the Champions and the other team members that you’ve discovered along the way to introduce your solution to the buying persona. Explain how each of their lives are made easier. It makes it much more personal, much more relevant. Dropping the fact that your Economic Buyer will no longer have to have painful meetings with other colleagues or excruciating one to ones with their team. Ask them how this will make them feel – this should take your buyer right to the top of Maslow’s hierarchy of need and bring them warmth.                              

 

This Solution slide needs to be so good that it can be presented at board level and where possible should also include the multitude of advantages that it brings to other C Suite members. If your solution reduces cost, the CFO will be interested; if your solution improves the company’s brand then both the CEO and CMO’s ears will prick up. You are looking for a Board majority here when it comes to finding budget, so you need to widen then number of evangelists.   

 

The 2nd call playback 

 

On the second call with your targeted Economic Buyers, you need to achieve three things. 

 

1. You need to play back all the findings from all the calls you’ve made. Your prospects will be fascinated to know how other organisations are feeling the same pains and also understand how they are managing similar problems. If you found something from another call that you didn’t hear when interviewing them, ask whether this persona recognises that pain in their own organisation. It may be this critical extra element can tip the odds in your favour when your buyer is reminded there’s even more reason to purchase your software.  

 

With your new revised Pain statement slide reviewed, ask whether this accurately visualises the situation today. You need to walk them back through their broken process and get them to feel uncomfortable again. Watch their body language closely. They should be frowning, slightly hunched, and perhaps shaking their head about the situation they’re in. People are busy and they may well have forgotten your first call and need to be taken back into the middle of the maelstrom. And this is the best starting position possible to now present them with the solution. Only when people are feeling their worst, do they reach for the medicine. 

 

1. It’s now, and only now, that you should begin introducing your solution, at least in concept stage. You’ve taken the time to listen, understand their challenges, talk in their language, and empathise. This will give you huge credibility with your prospect. Too many researchers introduce the solution too early without fully understanding the challenges and this will only disappoint your customers because they haven’t taken the time to fully understand. 

You can now present them a better way. Again, using your research tone of voice, ask the customer if they could give you their opinion on the solution you have specifically designed to help. Your Solution slides should build here, step by step, showing where all unnecessary logjams can be eradicated, where speed can be achieved, and significant business and personal pains resolved.  

 

You need to be listening to their feedback intently here and again closely watching their body language. If they disagree with one part of the solution or explain a challenge as to why it’s not actually as easy as you’ve made out, you need to note this down. This is not necessarily a blocker to the ultimate sale of your solution, but you need to be totally aware of anything that might get in the way.  

 

For example, if you hear a comment like “the IT team won’t like this” then you need to explore that further. Find out why your interviewee believes this to be the case. What internal policies have been set or what have they heard in other meetings that made them make this comment. There’s a whole section later in this book on the headwinds as to why software isn’t bought today, and right near the top of that list you’ll find the IT team. If you’re selling technology without the IT team intimately involved and aware, prepare for significant delays. Almost inevitably, your software will need to integrate with part of the organisations existing infrastructure, and this is going to need buy in from the CTO.  

 

Listen carefully and ask probing questions and understand who else needs to be involved in a buying decision. At every stage, ask how much time and money your solution might save them and enquire about the value this might bring. You could do this in financial terms if that’s possible, or it may well be that one member of the team can be redeployed to higher value tasks because your solution speeds up the process.  

Think back to our guy at Volkswagen who said what used to take three people three days now takes one person 1/3 of a day. Make copious notes here because this is the foundation of your business case and where you can prove an instant return on investment. This is gold dust feedback, and you may need to adjust and add to your Solution slide further. 

 

With luck however and the careful preparation you and your team have made, you should now have presented your potential buyer with a game changing solution. Look for that smile and see if they lean back in their chair and say something like “well that makes a lot more sense”.  

 

Your customer’s mind is now turning to the elephant in the room which is how much will this solution cost them. 

 

1. The final part of the second call is to uncover how your customer makes purchasing decisions. Here’s where you’re looking to understand every aspect of your customers buying criteria, availability of budget, and the process is that will need to be completed to achieve that all important yes. 

 

Where will the budget come from? Who needs to be involved in the decision? Remember you need everybody listed here, including the CTO. Will they decide to proceed at Board level or is this something that can be signed off by the department? Will your customer need a business case created and will they need to present this to senior management? Can you help in the creation of this business case and what collaterals will they need? 

 

You need to find out everything and this is the optimum moment to do so. You’ve just evidenced how you can be of significant value to your prospect’s organisation, and they will be keen to help and support you. You need to build this case together, to be an ally in the battle versus inertia which you are inevitably about to face. 

 

Without doubt you’ll need to set up a whole series of meetings with other stakeholders in their business, and you need to begin mapping out who needs to be involved.  

 

But this should be a great moment and the wind should be in your sales. Keep up the pace and ambition here and make sure the next appointments are booked in.

 

Workbook Actions 

 

• Find a panel of 5-10 executives to interview who actually do the job today of the Buying Persona you’re looking to sell to. Use your network to find them. 

 

• Don’t fall into the trap of thinking you understand a customer’s visceral pain better than they do.  

 

• You need hard evidence to play back to your team, your Board and other key stake   holders to give them the confidence about a big sales and marketing spend. 

 

• Continually adjust your pain statement after every interview you run. You’ll learn so much along the way.  

 

• Don’t forget to ask your interviewees to join your Customer Advisory Board – many will be more than happy to do so. 

 

• Create a clean Solution slide, evidencing the advantages of your solution over the incumbent process 

 

• Watch the interviewees body language closely at every stage. They should be hunched during the pain statement and hopefully smiling about the solution. 

 

 

With this invaluable feedback secured, not just with this prospect but with the others who agreed to test your thesis, the next step is to revise your messaging and content. There’s little doubt it’ll need to change, and adjustments will need to be made, because you will now have heard a different story and know which buttons to press. We need to take what we now know and make sure that every message that faces the market is sharpened to play directly into the pain you’ve now clearly evidenced multiple times. 

 

We’ll explore how to do this in Workbook 5, but before then let’s take a closer look at defining what a perfect customer looks like.