The following video transcript is generated automatically by a computer algorithm that learns and gets better on a daily basis. Please accept our apologies if some content below doesn’t make sense:
So if you’re going to any sort of examples of this or any thoughts, again, I think another classic example is Blockbuster. So we had Netflix.
They are one on holidays. They got stuck to their philosophy that it worked before and therefore it will work in the future.
And they then pay attention to them. Core problem. They were trying to solve. So which was basically convenience entertainment or with. And yeah. Anyway you want. But I agree as well with the concept that from our personal experience, every time you tried to solve problems. Yeah. You get way further with that business, Don, trying to put like a creative or clever idea out there. Do you think it’s going to salt something maybe that many problems without usually one of the top problems? I, I have or I think people could face he’s trying to communicate that new idea. So if it’s new, it’s hard to explain what it does and why that’s a problem. So I think you can spend a lot of money and energy there. That’s the main challenge. Whereas you will notice that very early on. So I’m not against trying to discover new tools because eventually you can pull it off. But your odds are not in your favour. So if you are going to try that approach, you better do a very lean Start-Up model where you I a lot in low budget very quickly. So you just rule out what or, you know, it doesn’t work until you find something that has potential. I knew you would realise that by. You can measure that potential by the early interaction of your audience.
So ah if you spend like you only need to spend one hundred dollars, I would say make maximum two hundred to see something works. And you can do ads online. Ask some groups etc. untested. And if there is engagement on do you can just put like a contact form for lead generation. And if no one is replying and if they’re what source. If they are clicking your ads and they are not feeling a forum for more information. So there and there is no engagement in your publications, then you know that that’s out there then.
I mean, you can twist it and treat the product with new features or this and that or change the communication. Usually, yeah, it’s more about that. You don’t have the problem you are trying to solve. This is not something that people perceives as a problem.
So if it’s not about the ad, it’s not about the image of the ad or the title. Yeah. Usually if you put a good enough. I’ve just one at one campaign, one title that should be good enough for having some traction. And if it’s not with one hundred quid, then you can go back to a whiteboard.
Yeah, absolutely. So you talk there about the sort of lean development model than the Lean Start-Up, as it was popularised by Eric recent state blank. And a big and as you said, a big part of that is. Discovering things about your business in the market quickly and making changes quickly to to move to match what’s going on in the market.
I saw another tweet, which is from a guy called James Clear, who’s the author of Atomic HABIT’s. We’ve we’ve talked about him and some of his tweets before. And I know on the Spanish version of podcasts on our channel, we’ve got a video. They’re going through his Atomic HABIT’s book.
That’s a very good book. And he tweets about he’s not coming from a perspective necessarily of specifically business. He tends to talk about more general kind of topics, but he’s again talking. He put this tweet out about five step process for everything, which I think, again, sort of reiterates and talks about that the speed of going through that loop of Observe, Orient, Decide Act, which is the sort of quick core underlying process that underlies, like the late development model originally developed by a guy called Colonel John Boyd, who was one of the developers of the F-16 American fighter jet many moons ago. And that was his kind of underlying thing for like dog fighting when you’re in fighter jets. It’s like the pilot who comes out victorious in dog fights tends to be the one who can go through that understanding and decision making loop quicker than the other pilot. So James Claires got a tweet, which kind of is a variation of that kind of loop, but something that’s more applicable, both the business but in life in general. And his tweet is here’s a five step process for nearly anything.
Number one, explore widely. Find out what’s possible. Number two, test cheaply run small quick experiments, sample things. Number three, edit ruthlessly focus on the best. Everything else. Number four. Repeat what works. Don’t quit on a good idea. Number five. Return to one.
So he has audiences of see, why did the just business. And you know, this this is something that’s true. This can be a personal development. This can be in personal finance. This can be in your business. Life is can be in your romantic life. Who knows? You know, you could probably apply this kind of thing anywhere. And he is suggesting, you know, first of all, you want to start out by spreading your net as wide as possible and trying to work out where the edges, the bounds of this thing might be and try and go beyond the bounds, see if there is an angle on this thing which you hadn’t even considered, if you hadn’t looked in deeply. Exactly. Like you said earlier on in a previous discussion test, cheaply run, small, quick experiments. You’re talking about advertising, spending a little bit of advertising or Google AdWords to see if something’s going on. He’s you know, in general, it’s you can always come up with a cheap test. A quick test. A quick experiment that you can do to see if some idea that you have about the world is true or not. You think that there are people out there who will buy this thing for X amount of money, given this argument? You can test that. As you said, Google AdWords spend a little bit money, try try to headline whatever it might be. He’s then saying, OK, once you got lots of little experiments out there, you can then say, which are the winners? Bush are the losers. Find the stuff that is working. Where are you? Where were you? Correct. Whereas there actually traction. Be quick to drop stuff that isn’t working. If you’ve got enough stuff and experiments out there. Be quick to drop the ones that are working and double down on the stuff that does work you like just fine where the limits of that is. Like if you doubled the budget, triple the job budget, 10x the budget. What are the impacts there? Does that sort of drive the necessary growth et. If something is working. Keep driving on that thing. Don’t get too distracted by shiny things on either side of the road.
If you found something that works like really sort of grind it until it stops working or until you sort of reach the diminishing returns on that thing and then just loop back through. What are your thoughts on that process?
I agree 100 percent on there is, though, that that you know, that the counterargument would be there if he does a field, Steve Jobs, for example, saying the customer doesn’t know what they want because they have never seen it, something like that.
And it’s tempting for entrepreneurs to to think about it that they know, you know, this is completely new. So I can compare it to anything else. So people won’t understand until they don’t see it. Therefore, we need to build it first.
So I think that can happen, but it’s very exceptional that extremeness deception and you will need a lot of money.
I’m not I’m not talking about hundreds of thousands or millions because you need to spend a lot of money, but you want it to go at a loss to build something great, paying people to build it. And then you will need a lot of money to advertise it or just communicate it out there and with a big risk of failure. So it’s not for everyone and I wouldn’t recommend it. So if you think you have something that people have never seen before and they will like it, you it still applies there. Lean Start-Up, because you got of course, you can test that because building such predict will cost one hundred thousand plus. So yourself spending that money to see if it works. You can do like take the most important feature that you think will work. But that’s the core feature of that project and how a small group with the demographics or the type of audience that you think will be the target audience as well. And just go pay them to see if they can use it or if and gather feedback.
And maybe they don’t they don’t use it. They don’t even want to get paid. So to use it. So just from very small experiments, a little.
That will feed you some nuggets of information. You can make very important conclusions on how to move forward. So if your core feature, even on a narrowly stage, is not well adopted, why will the overall product be so adding more features? It’s not going to make it more appealing if the underlying solution is not working or down the line. No asset or quality, whatever you want. Functionality is not appealing. So the Lean Start-Up will work for any business model. Any company award. And I think it’s not only recommended. It’s almost mandatory, especially for start-ups.
So talking about the Lean Start-Up, the third tweet that caught my eye was a threat from a guy called Chris backor.
I hope I pronouncing his name right. He’s an investor, I believe previously had a company which he sold to, indeed the mega job site. And he was tweeting a really interesting thread about his approach to customer development.
And so the customer development that he’s talking about in the tweet thread is comes from the line starts up. And it’s an idea from Steve Blanken, Eric Reese, who came up with the least us up. And customer development is essentially customer discovery and customer validation. So customer discovery is finding who your customers are, what needs that they might have exactly. As we were talking about earlier, the having a problem based mindset, talking to your customers, finding out what what kind of problems they have. And secondarily is customer validation, which is OK. Once you’ve found a group of people who might be interested in your approach, your thing, whatever it might be that you’re confident that it solves or you have some level of competence that solves their problem, that you actually go to them and you find out and you get the you know, you get it straight from the horse’s mouth. Does this solve your problem? Are you willing to spend money on it? What are the edges that you need to sort of smooth off? What is the pricing? Right. All of the kind of little tweaks that you need to do to a product or service to to sort of fit it perfectly in that product market fit, which is the ultimate way you’re aiming to get out. As part of the late development model and. It’s quite an art form. You know, you will find there are people out there who are really good at doing this and there are people out there who find it really quite a struggle to do this because it involves not cold calling so much, but actually going out and talking to lots of people, maybe getting some negative reactions. So if you’re you know, I’m very much in this camp, like, I don’t like doing sales in the classic sense of like going out and getting rejected and, you know, talking to people. And my idea of an absolute nightmare would be like a sort of tele sales selling something horrific, which I’ve done in the past. And it was, you know, sweat inducing. And it’s horrible.
But but it doesn’t have to be that sort of combative at all. And it shouldn’t be that combative at all. It’s like you’re looking for signals. And he just has some interesting takes on that. He is recommending a book, which I also recommend as well, called The Mom Test. It spelt The American Way MLM, and that’s got blah. I got to Rob Fitzpatrick, who has been around the scene for years.
And I met him a couple of times in London many years ago, maybe eight or nine years ago now, some sort of very start of events and beers and burgers that used to go on in our street. And he’s a really nice guy and he’s very approachable. So, you know, hit him up on Twitter or whatever. But he’s got a great book there, which is about understanding how to talk to customers and to get that learning and information out of them. And, you know, his his entire thesis of this is it’s like is if you’re trying to explain this thing to your mom. Right. You know, or if you’re trying to explain video calling’s your grandma, it’s like how how do you approach a sort of non-technical audience thing but get some usable feedback from them.
So, Chris, backor.
So it takes some of the learnings from this book and sort of pulls out some interesting angles or specific ways of doing things, which I thought was quite good. And he goes in some details, he says, and preplanned the top three things you want to learn from someone. So don’t go into a conversation, you know, completely open ended with no idea where you want it to go. You want you want it to be relatively focussed and know what it is that you want to learn from your customers. And he says, keep doing customer development and to stop hearing new information. You know, you go to you get bored. It’s like I know what this person is going to say. Once, you know, you can predict telepathically what it is that the person is going to say, then you know that you have a good understanding of who your customer is and what their problems are. And he says ideally have two people in any meeting. One leading the questions and one taking notes, because if you’re taking notes at the same time as you’re trying to have the conversation, then you’re going to not have a successful conversation. You’re going to miss the nuance. The other way doing this is recording your interviews with your customers permission and then going back and taking notes down as a secondary act. He’s also linked to this Twitter thread, will be in the show now. So looking there, he’s also got some great examples of specific ways to ask questions, to dig into features, ways to dig into the emotional signals, which can be important from your marketing and positioning perspective, like how are you going to convince people who don’t know about you to buy your product or service if you can sort of draw out the emotions in the words that your customers use, and that can be very powerful from a marketing perspective. What has been your experience with customer development, if anything?
Yeah, I think nowadays Sparty with networkers, let’s say let’s put an example just to make a practical case. I think it’s important to ask your audience. Just ask them questions. You don’t need to meet them personally. But if you have a website, you have traffic or in social media, there are many bots nowadays that you can out to made some lie. Yes. I ask, as you’re saying, like standardise the questions, try to guide them into what you want to learn from them. So but give them options. So our audiences, of course, entrepreneurs, but qu’est them? And we realised that there were like Entry-Level entrepreneurs, others looking more for growth strategies, others looking for personal development. So it was like within the entrepreneurship or entrepreneur category, there were a bunch of different interests and status. So that was very important for us to know. Also, I think you should give some good always some free products. So you get them to taste some of your products on what you are. Even if it’s free, what you are able to produce, how you communicate with them, and then you also perceive how they interact. Of course, then if you have paid for that, the expectation will be higher, but they have something to compare with. So I think that’s important. So quiz your audience gave some free products first so they can you.
Trial do or they can make a judgement. If it’s really what they want or if it’s, you know, your product redig would fit. So yeah, both. I agree. There are many tools out there. Many charities are doing a great job. But then you have other boards because they’re type form, which I think is a bit crunchy, but it’s useful. How was this one? Would try the outflow, something like that anyway. There’s several tools, but you should also. We took the approach us as well. On being very responsive and reachable.
So we put the simple contact forms everywhere. So just don’t be. Don’t try to out to make this much on their sense of just just just leave it. It’s good to plan some flow of information or a potential multiple choices, but then leave it open for them to expand as well. So you explore the tangents and some angles that can, you know, could be new for you, for your product features, you know.
So you’ve had experience building sort of custom customers and companies in both Latin America and Spanish speaking countries and also in the U.K. you invest in English speaking countries. Have there been? You’ve obviously done customer development across both of those kind of markets. Is there been any sort of similarities, differences? Is there like a difference in approach that needs to happen between those?
I think there are. Their behaviour is different, but the interests are almost always the same. So if you also compare like Google trends or keywords on how they search, you will see the same search terms translated almost like plain translation. So that’s surprising. But when it comes to interact with a product or the ways they like to be contacted. So, for instance, in Latin America, they use way less. They e-mail, whereas in the U.K. or U.S., they use it way more often. In America, they use more like Facebook Messenger or, of course, WhatsApp. So I will be so they use more their phone. There will be a better way to reach them out. They also many times prefer to call because e-commerce is in the UK. U.S. is very developed, whereas in Latin America now, Mongolia is doing a great job.
It’s like a 60 billion company. It’s almost kicking.
They’re so famous and so well in Latin because they built they inspired actually they went more for the China market, places like Alibaba and Tencent, and they tap into payments as well, like they did in China with a QR codes and eBay and so on.
So they got all these. They were they are monopoly of e-commerce marketplace in LatAm, but they invested a lot on infrastructure for the shipping and also now they tapped into the payments ecosystem. So they have a very they have ring-fence their audience and they have huge value added.
And they there are multiple countries.
So I think it’s really hard to compete. There will be a long standing monopoly. But so that improved credibility of ecommerce in LatAm way more. But there is outside that. Is there still a way to go? There has been, you know, less regulation. People were also the financial system is not as great. So if you I mean, if you put your details online and you and, you know, you get scammed on this and that and your bank and self responding, then neither do the website where you bought from.
Then you lose trust. So they rather want to give you a call many times. So they they feel more comfortable or they do more cheques on their hand. They they care less about privacy. I would say that UNECE less regulated as well than in the UK.
Yeah. If you send out an unsolicited email in the UK, you will get responses for sure.
And that’s, that’s some interesting cultural habits. But overall, they look to I mean, they have the same problems or similar problems.
And they they adopt similar solutions as well. So they shared that common problem base. I would say. So then you need to keep an eye on the cultural differences, but you can keep some. There are some universal rules. Like if you are efficient. No, if you are transparent, efficient. And if you get the product out there fast and cheap, that there will always be happy.
Yeah. Like Jeff Bezos was saying on Amazon today. It yet knowing their customer is important, but that they will always like their products at lower cost and sort of as fast as possible. So he was investing a lot in prime. I did one day, then on the same day at the lowest possible cost.
So that was kind of my universal rule. I think it can apply to any product or service as well, regardless country. So providing a great service that. Yeah, that’s always going to work. So then, yeah, I understand your customer on how they want to help. Actually, we run for networkers. We have their English and Spanish version and we run the crisis on their preferences were very, very similar, but also pricing as well. But yeah, that’s also probably something you can take away for creating new business models or new businesses. As we talked last podcast on them, a potential business idea was to replicate business models that work in one country and take it to another country. So. You can count with similar interests. So for building, if there is a business in the U.K. or U.S. that’s working. And it’s not in other countries. There is an opportunity for you to replicate that.
Great stuff. So, yeah, make sure that you talk to your customer. Learn what you can from your customer. Appreciate what sort of cultural differences might be there. If you’re reaching out to people who are different than you in any sense, then, you know, take the opportunity to learn what’s different. Don’t assume. And if you have enough of these conversations, then you can get a deeper understanding. Thanks very much for listening.
We’ll be back next week with some more nuggets of knowledge. In the meantime, please cheque our YouTube channel, which is where we post this podcast on our other podcasts. You can search for a net workers two words, or you can find the link in the show notes below. If you’re interested in a deep dive into all things entrepreneurial, including more detailed information, help mentorship and courses, please cheque out our Web site, which is at networkers dot com. See you next week.