Finding a Need

Over the past 3 years, LeapMotiv has worked with many founders and firms to help them launch new ventures in the SaaS and AI space. A big chunk of the upfront work in the -1 to 0 (i.e. landing on your idea) is to run a series of customer discovery cycles to ensure that we are building something useful.

Why we start with customer discovery is because there is inherent risk in building a product in isolation. Imagine you start building an MVP and then 3 months later you start testing demand and no one buys it - there is a ton of risk here. However, if you start with customers, identify a repeatable need, you can reverse engineer a product that solves that particular problem. You are effectively de-risking demand through upfront discovery. 

In LeapMotiv’s Ideation Framework, we cite 3 major attributes to a validated hypothesis:

• Customer acknowledges the problem

• Customer believes it should be solved

• Customer has tried to solve it before

From there, we create a 'Pain Score' to compare prospects against each other. Prospects score higher if they hit all 3 attributes, but rank lower if they only hit one of the attributes. This scoring keeps us objective and helps us focus on the high potential prospects and customers with urgent, unmet needs where there is clear, quantifiable value. It also helps us identify which folks we should focus our time on. Higher pain score = higher potential opportunity. Below is a sample Pain Score chart:

Iterative Discovery Cycles

The goal of discovery when you are trying to come up with a startup idea is to unearth an unmet, urgent need. However, it’s extremely difficult to nail it on the first try. From our experience, the process of running discovery to unearth a solid problem that’s worth working on typically requires 2–3 months of iterative cycles. These cycles consist of ‘Briefs’ that house 1) a hypothesis that you are testing, 2) a specific customer segment you are testing, and 3) at least 10 prospect interviews. You come up with a series of assumptions → learn → then repeat until you have enough signal and confidence. 

Here is what your first batch of cycles (briefs) might look like:

Brief 1: 10x prospect interviews

• 4/10 validated hypothesis

• Subsegment of customers emerge with a recurring pain point

Brief 2: 10x prospect interviews

• Same hypothesis, but updated and more refined customer segment

• 6/10 validated hypothesis, with higher pain scores

Brief 3: 10x prospect interviews

• Tighter hypothesis, refined customer segment and vertical

• 8/10 validated hypothesis

Brief 4: 10x solution follow-ups

• Take the top 8–10 prospects from the last 30 discovery calls and ask them for a follow-up call to dig into your potential solution and run a light demo (of your prototype)

How much discovery is enough?

Entrepreneurs often make the mistake of confusing the discovery learnings as validating demand. What discovery will give you is a window into potential demand but it is not demand itself. Its goal is to uncover a top problem and ‘identify’ a need. Once you have completed the problem identification phase, it is imperative that you must move into a more rigorous sales motion to get commits from customers. 

Stop doing pure discovery (i.e. just collecting info) when you have a defined use case, pain point, and customer segment. You should be at the point where you are talking the same language as your prospects. In ‘Testing Business Ideas’ by Strategyzer they cite how the signal strength of interviews alone is quite weak, so we want to exit this stage quickly once we have acquired some core information. 

Here is a non-exhaustive list of things that you should be collecting info about during discovery: 

• Who the buyers vs users are 

• An understanding of their priorities and workflow

• What problems they face

• Some ideas on potential solutions

• What realistic pricing is / how much that problem is worth to them

• How you might get a product into their hands

Once you have the above info and some clear patterns on problem/segment fit, shift to selling and validating demand. We will be writing about Pivoting from Discovery to Sales in a future blog post.