Know Your Customer

When transforming an idea into a thriving business, the Pre-Planning Process serves as a crucial roadmap. This series of functional steps guides entrepreneurs from conceptualizing an idea to crafting a vision and, ultimately, developing a realistic strategy for structuring a company and securing the necessary funding for launch.

At the heart of this process, and indeed at the core of any business endeavor, is the customer.

Understanding the customer is not just a step; it’s a foundational element of successful entrepreneurship.

The Critical First Step: “Know Your Customer”

Surprisingly, many entrepreneurs overlook this initial yet critical phase. Instead of thoroughly understanding their customers, they often rely on gut feelings and assumptions. This approach, while seemingly expedient, can lead to significant challenges down the road. Misunderstanding customer needs and market demands can result in misaligned products and services, ultimately hindering business success.

The Essence of Pre-Vision Interviews

Pre-Vision Interviews are a methodical approach grounded in the Jobs-to-be-Done (JTBD) theory, popularized by Clayton Christensen. This technique focuses on understanding not just who the customers are, but also their underlying needs and the jobs they are trying to accomplish. In this context, a “job” refers to what customers are trying to achieve in a given circumstance.

The Pre-Vision Interview technique involves identifying and interviewing customers of competitors. These competitors are currently addressing the problem your business intends to solve. By engaging with these customers, entrepreneurs gain invaluable insights into the strengths and weaknesses of existing solutions and can identify unmet needs and opportunities for innovation.

Applying JTBD Theory in Pre-Vision Interviews

The JTBD theory offers a lens through which to understand customer motivations and behaviors. Instead of focusing solely on demographic data or market trends, JTBD emphasizes the importance of understanding the customer’s context, the ‘job’ they need to complete, and the factors influencing their choice of solutions. Pre-Vision Interviews, thus, become more than just question-and-answer sessions. They evolve into a tool for deep customer understanding, guiding entrepreneurs to create solutions that genuinely resonate with their target market.

The Outcome of Effective Pre-Vision Interviews

By mastering the Pre-Vision Interview technique, entrepreneurs place themselves in a position to build a business that is deeply aligned with customer needs. This alignment is not just beneficial; it’s essential. It shapes every aspect of the business, from product development to marketing strategies, ensuring that the company is always attuned to the evolving needs of its customers.

The Concept of Pre-Vision Interview

Understanding the “Why”: The Core of Pre-Vision Interviews

Pre-Vision Interviews are a fundamental tool in the Pre-Planning Process, designed to delve deeply into understanding the “why” behind customer behaviors and choices. This understanding is pivotal for entrepreneurs to validate, refine, or pivot from their initial business ideas.

The Five Categories of Customer Knowledge

Functional Needs/Jobs/Problems: 

This involves understanding the practical or functional tasks that customers are trying to accomplish. It’s about identifying the specific problems they face and the jobs they need to get done.

Social Needs/Jobs/Problems: 

This aspect focuses on the social implications of customer choices. How does the product or service fit into the customer’s social world? What social jobs are customers trying to accomplish by using a particular product or service?

Emotional Needs/Jobs/Problems: 

This category delves into the emotional drivers behind customer decisions. What feelings or emotional states are customers trying to achieve or avoid?

Switching Behavior: 

This involves understanding why customers switch from one product or service to another. What factors or experiences lead to this change?

Wishes: 

Here, entrepreneurs explore the unarticulated desires or ‘wishes’ of customers. These are often needs or wants that customers themselves might not be fully aware of.

Pre-Vision Interviews as the Foundation of the Pre-Planning Process

Pre-Vision Interviews represent the starting point in the entrepreneurial journey. They provide an objective basis for entrepreneurs to assess whether their business idea is viable, needs modification, or should be abandoned early to avoid unnecessary expenditure of time and resources. This step ensures that entrepreneurs don’t fall prey to sunk cost fallacies, investing in ideas without sufficient market validation.

Incremental Framework: 

Substantiating, Tweaking, or Abandoning Ideas

Each step of the Pre-Planning Process, starting with the Pre-Vision Interviews, is crafted to incrementally validate the business idea. This structured approach helps entrepreneurs avoid the pitfalls of over-commitment to unverified concepts, ensuring that every stage of the process contributes to refining or re-evaluating the business idea.

Integration with MVP in the Information Technology Sector

For sectors like information technology (SaaS, apps, etc.), Pre-Vision Interviews can be seamlessly integrated with the Minimum Viable Product (MVP) methodology as outlined in “The Lean Startup.” However, it’s crucial to note that the MVP approach is not universally applicable to all business ideas. In cases where it is applicable, entrepreneurs often concentrate on developing the MVP but neglect the in-depth customer understanding provided by Pre-Vision Interviews. This oversight can lead to MVPs that, while lean, may not fully resonate with the target customer’s deeper needs and wishes.

Preparing for the Pre-Vision Interview

Identifying Target Customers

Identifying the right target customers for Pre-Vision Interviews can range from straightforward methods to more complex strategies. For consumer products, it might be as simple as observing customers purchasing competitive products in a grocery store. For B2B sectors, like fintech, the process requires more nuanced steps like identifying key decision-makers and influencers within organizations. Networking at industry tradeshows and leveraging social media platforms are effective ways to build these crucial connections.

Importance of Compensating Participants

Compensating interview participants is not only ethical but also enhances the quality of the data collected. Payment should be reflective of their time and, ideally, approximate their hourly wage. This gesture acknowledges the value of their insights and fosters a more open and genuine dialogue.

Developing Insightful Questions

Crafting questions for Pre-Vision Interviews is an art. The goal is to guide customers through a journey that covers several key stages:

1. Discovery: Understand when and how the interviewee first became aware of or started using a current product or service. Capture the ‘why’, ‘what’, ‘where’, and ‘with whom’ aspects for each problem level (functional, emotional, etc.).

2. Realization: Delve into the moment they recognized they had a problem. Explore the emotions, triggers, and circumstances surrounding this realization across all problem levels.

3. Exploration: Investigate their journey to find a solution. Capture details about any alternatives they considered, initial hurdles, and the emotional journey during this phase.

4. Adoption: Focus on why they settled on a specific product or service. Was it due to recommendations, or did it best fulfill their needs? Include any switching behavior and the reasons behind these decisions.

5. Habituation: Examine how the product or service integrated into their daily routine. Assess how often they use it and any changes it has brought to their lives, including any unmet needs or shortcomings.

6. Present Reflection: Reflect on their current relationship with the product/service. Are there unresolved issues or new needs that have surfaced?

Conducting the Pre-Vision Interview

Setting Up the Interview Environment

The optimal approach for conducting Pre-Vision Interviews, regardless of geographic proximity, is to use digital platforms like Zoom or Google Meet. These tools not only facilitate a comfortable environment for both parties but also allow for the crucial step of recording the interviews. Recording is key for later analysis, enabling you to revisit conversations and extract nuanced insights.

Structuring the Interview

Plan your questions meticulously, but remain open to the natural flow of conversation. Ideally, divide the hour-long interview into six segments, each lasting about ten minutes. Aim for eight to ten questions per segment. This structure helps maintain focus while allowing for flexibility to explore unexpected but relevant paths that emerge during the conversation.

Analyzing and Organizing Data

The recordings from these interviews are a goldmine of information. To effectively analyze and find patterns among your interviewees, utilize tools like our free PreVision Interview Board on Miro. This platform helps translate your interview narratives into clear, actionable data points, making it easier to align and compare responses across interviews.

Common Pitfalls to Avoid

During the interviews, it’s imperative to keep the focus squarely on the interviewee’s experiences and perceptions. Avoid discussing your product or business idea. People struggle to provide useful feedback on speculative or hypothetical concepts, and bringing up your product can skew their responses.

Also, steer clear of asking interviewees to play the role of an inventor. Your goal is not to solicit ideas on how they would change or design a product. Instead, when a frustration or preference is expressed, delve deeper into their experience. Ask questions like, “How did that make you feel?” or “That sounds frustrating; what did you do in response?” This approach keeps the conversation rooted in actual experiences and emotions, providing you with the rich, real-world insights necessary for understanding your customers deeply.

Analyzing Interview Data

Analyzing data from Pre-Vision Interviews isn’t just about crunching numbers. It involves a blend of intuition and systematic pattern recognition. The goal is to categorize responses and identify recurring themes that align with your predefined categories: functional, social, emotional, switching, and wishes.

Categorizing Responses

1. Functional: Look for phrases indicating practical benefits like, “it helped me to,” “it saved me time,” “it made this easier,” or “it was efficient in…”

2. Emotional: Pay attention to expressions of feelings, such as “it made me feel,” “I was so excited when…,” “I felt relieved because…,” or “it gave me peace of mind.”

3. Social: Listen for references to social interactions or impacts, like “My boss complimented me on…,” “My wife was frustrated with…,” “I use it when I’m with my friends,” or “It improved my social life by…”

4. Switching: Note instances where customers talk about using or temporarily switching to other products or services. Look for phrases like “I tried X but then switched to Y,” or “I occasionally use Z when…”

5. Wishes: Identify expressions of desire or unmet needs, such as “I like the product but I wish it had…,” “It would be perfect if only it could…,” or “I hope they add…”

Utilizing the Pre-Vision Board on Miro

With at least ten interviews for a robust analysis, map out your findings on our Pre-Vision Board using Miro. This tool’s color-coded sticky notes system allows for an organized, visual representation of your data. Miro’s AI feature can be particularly helpful, grouping information by phrases and assisting in pattern identification.

Objective Verification of Your Idea

The analysis phase is about determining whether your idea is viable, needs modification, or should be abandoned. This decision should be based on the common themes you uncover and your intuitive understanding of the market. Keep your analysis organized and accessible, as this information will be a cornerstone for future steps in the Pre-Planning Process.

From Idea to Vision: The Power of Pre-Vision Interviews

The Pre-Vision Interview process is a transformative journey that takes your business idea from a mere concept to a clear, vivid vision. This clarity emerges from a deep understanding of your customers, gleaned through the insights you’ve collected and analyzed. It’s about seeing your idea through the lens of the customer’s needs, wishes, and experiences.

With a clearer vision of your customer’s needs, the next critical step in the Pre-Planning Process is the Core Cost Analysis. This step is not about creating an intricate financial model but about understanding the basic components involved in delivering your Core Offering — the experience you aim to provide your customers.

What is Core Cost Analysis?

Core Cost Analysis is an interim step designed to gauge the feasibility of delivering your Core Offering at a price that is both valuable to your customers and viable for your business. It involves a high-level assessment of the costs associated with your product or service. The objective is to determine whether you can meet customer expectations without compromising on quality or incurring unsustainable costs.

Why is Core Cost Analysis Important?

This analysis helps you align your business idea with practical realities. It provides an early indication of whether your proposed offering is financially feasible and sustainable in the long run. It’s a critical checkpoint to ensure that your vision can be translated into a tangible, marketable product or service that meets customer needs at a reasonable cost.

Varied Applications

The Core Cost Analysis will vary significantly depending on the nature of your Core Offering. Whether it’s a physical product, a digital solution, or a service, this analysis helps you map out the essential costs involved in bringing your offering to market.

Learn More About Core Cost Analysis

To dive deeper into Core Cost Analysis and how it applies to your business idea, visit our dedicated page on this topic. There, you’ll find detailed guidance on conducting this analysis, along with tools and resources to assist you in this crucial step.

Remember, the Pre-Planning Process is about systematically building a strong foundation for your business idea. Each step, from understanding your customers through Pre-Vision Interviews to evaluating the feasibility of your Core Offering via Core Cost Analysis, is designed to bring you closer to a viable, market-ready business.

Step 2: Core Cost Analysis