Step 1: Write down monetizable pain hypothesis
Ask these questions:
- What pain faced by my customers would be so significant that they would return a cold call?
- Who would you call, and where are they in the organization?
- What problems are they working on, and when they wake up in the middle of the night, what are they worried about and what are they trying to do?
- What job is your customer tying to accomplish?
The answer to these questions is the monetizable pain hypothesis.
Step 2: Write down Big Idea hypothesis
- For (target customer; industry and the title on their business card)
- who (statement of monetizable pain)
- the (product name) is a (product category)
- that (statement of key benefit - that is, the compelling reason to buy).
- Unlike (primary competitive alternative)
- our solution (describe the big idea and statement of primary differentiation).
Step 3: Quick test hypotheses
Interviews
Objective: to validate a pain that customers are willing to pay to solve.
- Find a sample of customers (as in make a list of them)
- Cold call or email them
- Capture and measure the results (response times, response rates, and feedback)
- Ask for follow-up / references
- "Do you have this problem?" Describe the problem to your customer in words like, "We see this problem. Does that match your experience?"
- "Tell me about it." Ask your customers to share their concerns, their experience, and their current solutions. Again, focus on listening, not selling.
- "Does something like this solve the problem?" Describe the outline or framework of you rproblem. Again, don't get into the specific details but do give something customers can respond to, and ask for their feedback on whether is solves the problem.
Example script (Classtop):
My name is Jared Allgood. I am currently a student, and we are developing a software application that would make it easier for teachers to manage their courses through Blackboard. As I've interviewed instructors and administrators from several schools, I hear some of the same two complaints repeatedly: 1) The first complaint from administrators is that they're paying a substantial license fee to use Blackboard, yet less than 20% of instructors actually use it. 2) Second, from instructors I'm hearing that populating Blackboard with course content is painful. Because of Bb's linear process, you can't carry out multiple functions quickly. We'd like your input and feedback on the product we're proposing to build. Do you have a few minutes to meet?
Smoke Testing
Put up a landing page and offer visitors the opportunity to be the first to test out your product by giving their contact info and possibly answering a couple questions. Spend a couple dollars to drive traffic and measure results such as:
- Click rates
- Response rates (emails captured, etc.)
The Hassle Test
Once contact info is captured from smoke testing, the hassle test asks about the hypothesized problem, and asks customers to rate the amount of hassle they face when dealing with this problem.
Ultimately, pain is measured by:
- Severity of the pain
- Number of customers willing to pay (market size)
Step 4: Quick exploration of market dynamics and competition
Secondary research for the first three, potentially even the first five. For sales cycle, you'll probably have to call some customers.
Secondary research for the first three, potentially even the first five. For sales cycle, you'll probably have to call some customers.
- Market size
- TAM, SAM, SOM (explained simply here: http://tamsamsom.blogspot.com/)
- Market growth
- Competition
- Matrix
- Rules & regulations
- Patterns & culture
- Sales cycle
*All taken straight from Nail it Then Scale it by Nathan Furr and Paul Ahlstrom
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