It seems like everyone can call themselves an entrepreneur these days - the barrier to entry for many industries is becoming easier to cross as technology improves. Anyone can come up with an idea that solves a problem, but focusing on insight development is how to launch a successful startup.
In part one of this series, I covered the concept of insight development and how identifying your target audience’s true desired outcome and connecting your solution to a core human need will allow you to come up with better hypotheses that will get you to product-market fit faster.
In this article, I’ll share 5 actionable steps for you to take and apply to your business idea in order to glean key insights about your target audience and turn them into customers.
Getting to product-market fit with insight development
As a Startmate mentor, one of the things I hear most frequently from startups that didn’t get accepted to our accelerator program is that there is nobody else out there with an alternative solution, and they are the first company in the industry to provide such a solution.
Bullshit.
There is always a next best alternative. The next best alternative before the first car was the horse. That’s why you need to dig deeper than simply presenting a gap in your industry and claiming you’ve found the solution to the problem.
That’s where insight development comes in.
But how do you use insight development for your startup? I’ve broken it down into 5 key steps to help guide you to success.
1. Find experts to interview and identify your target audience’s true desired outcomes
The best way to do insight development is by finding people who know a lot about your problem. You stroke their egos by telling them you’re building a product that is solving a problem in the X industry, and you’ve heard that they are an expert in that industry - could they spare 30 minutes to share some feedback on the product? People love to be thought of as experts but hate to be sold to, so the best way to gain their knowledge and expertise is by feeding into this perception of them being experts.
Once you’ve found a few industry experts to speak to, it’s important to structure your interviews in a way that will allow you to conduct user research for persona development. These experts have firsthand experience with the issue you’re trying to solve, so what they share with you should inform everything from customer personas to product features to go-to-market strategy.
The first step in insight development is to identify your audience’s true desired outcomes. To do so, I recommend starting the conversation with some personal background questions to build rapport and create a comfortable environment for your experts to share information. Then, get them to start thinking about a time or situation before they encountered your problem so you can clearly articulate what triggered or motivated the problem.
Once you’ve articulated the problem, you need to really understand why they want to solve it - their true desired outcome. Yes, they may need software that helps them manage their receipts better, but why?
Case Study: Airbnb
Let’s take Airbnb for example. It used to be that travelers would stay in hotels when visiting new cities around the world and these hotels would provide a sense of familiarity and comfort. But staying at the Hilton in San Francisco offers a very similar experience to staying at the Hilton in New Delhi, and travelers began to crave a more authentic experience to immerse themselves in the local culture. The true desired outcome here is to get the real, local’s experience when exploring new cities.
It’s important to get as much information as possible from your experts so you can understand their true outcomes for persona development. Really pay attention to their other answers, because the information they share about how they discovered the problem, the alternatives they explored and the benefits they say is absolute gold when it comes time to start marketing your product to this particular customer persona.
Above all else, remember that your goal in interviewing these industry experts is NOT TO SELL YOUR IDEA. It’s to stand and walk in their shoes so empathetically that you eventually start to feel, see and understand the problem for yourself. It's like that scene in the movie Ghost where Patrick Swayze is able to jump inside and take over Whoopi Goldberg’s body. You are trying to work out how to temporarily jump inside your potential customer’s body to see, feel and really understand what they are thinking.
From this extensive user research with industry experts, you will be able to uncover the desired outcomes they want from solving the problem. You’ll also be able to construct actionable customer personas that embody your ideal customers and target audience rather than just having meaningless demographic labels like “female 18-35.”
2. Link your customer’s desired outcomes to a core human need
Now that you’ve identified the true desired outcomes your customers really want, you need to connect it to a core human need.
The 6 core human needs are:
Certainty. The need for security, stability, and reliability.
Variety/Uncertainty. The need for change, stimulation, and challenge.
Significance. The need to feel acknowledged, recognised and valued.
Love and Connection. The need to love and to feel loved, and to feel connection with others.
Growth. The need to grow, improve and develop, both in character and in spirit.
Contribution. The need to give, to help others, and to make a difference.
When interviewing your subject matter experts, I recommend asking them about the emotions and feelings that come from solving the problem to identify which core human needs they’re fueling. Don’t just ask why they’re trying to solve the problem, ask what solving the problem does to change their life. Does it make them look smarter? Does it make them seem more significant? Does it give them more free time? Digging into the emotional aspect gives you insight into why the true desired outcome is what they really want - and how you can cater to those needs. If you can’t link it to a core human need, it could be a red flag that your idea isn’t impactful enough. This is a crucial step in creating a successful business.
Let’s go back to the Airbnb example. Previously, the success of chain hotels came from the core human need of certainty so folks would feel comfortable traveling to new places knowing that they had that sense of familiarity in their favoured hotel brand. But as travel became more accessible and popular, the desired outcome for this audience evolved into wanting the authentic, locals experience when traveling to new cities. This ties to the core human need of variety - they want something different from the existing cookie-cutter hotel option and to feel stimulated when traveling.
Linking desired outcomes to core human needs is what drives consumers to take action and turns them into loyal customers.
Persona Development and Desired Outcomes
I always suggest grouping customer personas around outcomes and their related core human need rather than around vague demographics.
For example, a man in his 20s who hasn’t traveled often and feels a little unsure about his new adventure has a desired outcome of feeling comfortable with the core human need of certainty. He probably has more in common with a woman in her 50s who also hasn’t traveled much than with another man in his 20s who is an experienced traveler that desires more authenticity and the “local’s experience” with the core human need of variety.
Developing personas around these outcomes and core human needs results in much more actionable personas as you head toward product-market fit.
Case study: LEGO
One of the most amazing examples of this art of observation was by a guy called Martin Lindstrom. In his book, he describes how he was hired by LEGO to help reinvent the brand and acquire new customers.
He asked a kid what his favourite item he owned was. The kid pointed to a pair of dirty, ripped sneakers and explained how the specific scuff marks on the sneakers indicated his mastery of skateboarding to his friends and how it took hours of practice and dedication to get those marks exactly how they were.
From this, Lindstrom discovered that the true desired outcome kids want is a trophy that celebrates the mastery of their hobbies - which links to the core human need of significance. With this insight, LEGO changed their product roadmap to include harder, more elaborate models that kids could show off to their friends. Finishing one of these models is an achievement to be celebrated and adored by your peers, not a simple task that anyone could complete.
Today, LEGO is the biggest toy company in the world, which is surprising as most consumer trends back then showed kids wanting instant gratification from things like mobile and video games. Building a large complicated model seemed counterintuitive at the time, however through insight development they learned that a LEGO model fulfills the core human need to feel acknowledged, recognised and valued - and this insight has made them billions.
3. Learn what actions your customers have taken to try to achieve this outcome
Learning about the other actions your customer personas has explored to reach their desired outcomes is essential to developing insights into user behaviour so you can offer a better product to attract new customers and retain them.
When interviewing your experts, find out how much time and effort they’ve spent trying to solve the problem. How important is it to them that the problem is solved? Does it have a significant impact on their lives or workflow? What about for other people?
Understanding how much impact a solution has on their lives and how much effort they’d previously put into finding a solution provides valuable context for you as you develop your product to suit the needs of your customer personas.
For Airbnb, their target audience was people seeking out an authentic local’s experience when traveling to new cities. Their options were to stay in a cookie-cutter hotel, rent a furnished apartment or hope that they know someone in the area who was willing to let them stay at their house or show them around.
4. Understand if or why actions taken didn’t achieve the desired outcome
Ask your experts what alternatives they considered before discovering the solution. What was appealing about each of them? What was not appealing?
By understanding the other actions taken and why they didn’t lead to the desired outcome, you can make your product even more desirable to each of your customer personas.
Going back to the Airbnb example, a person who has stayed at a chain hotel in exotic cities around the world will likely confirm that the experience is similar no matter what country they’re in. That’s because that’s the desired outcome the hotel is catering to - but that’s not what this new emerging target audience is looking for.
So then that person might have rented a furnished apartment to try to capture that feeling of actually living in that city, but those apartments are always decorated in a generic way without the cultural immersiveness and personal authenticity that they’re after. The desired outcome was not achieved.
The best case scenario would be for that person to either know someone personally or have a friend of a friend introduce them to someone who lives in that city who is willing to let them stay at their house, or at the bare minimum, recommend a few places to visit. This situation does achieve their desired outcome and leads to the insight from which Airbnb was born.
5. Define the insights to build your successful startup
You’ve interviewed industry experts, established desired outcomes and linked them to core human needs and analysed the actions that your customer personas have taken to reach those outcomes. All of this ultimately allows you to understand the problem you are solving better so that you can make better guesses and get to product-market fit faster - aka insight development.
Each of these steps provides a wealth of information about your target audience and how to best provide a product that they actually want. Narrow in on the specific insights you’ve picked up from this exercise and use them to build a successful business.
Because Airbnb was able to identify their audience’s true desired outcome of experiencing a new city like a local in an authentic way and connect this to the core human need of wanting variety in their travel experiences, they were able to launch one of the most disruptive companies in the world. The original Airbnb concept was to connect travelers to locals and stay in their homes. The locals would recommend places to visit and show their guests around, providing an authentic experience. These travelers would get a taste of the true culture and have a knowledgeable host to help create a fully immersive experience, fulfilling their true desired outcome in a meaningful way.
The process of conducting user research with your subject matter experts takes you through the workflow of insight development: identifying your audiences’ true desired outcomes, tying them to a core human need, learning about their next best alternatives and how they fell short is how you develop insights that become the building blocks of a successful company.
When you’re interviewing your experts, it’s important to take note of everything they have to say about the overall process from start to finish. Details they share about each step are extremely valuable, firsthand accounts of what your target audiences are thinking about and will provide the insights you need to successfully market your product to each of your personas.
I put together a sample list of questions for you to download for free here - these questions will guide you through the flow of the conversation but feel free to adjust them to suit your product and expert.
How will you use these 5 steps to gain insights about your ideal customers? Leave a comment or feel free to contact me at me@deanmcevoy.com.