Summary of 'The Mom Test' (v2 2013-11-05)

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Institut für Entrepreneurship, Technologie-Management & Innovation 1 How to talk to customers and learn if your business is a good idea when everybody is lying to you Book by Rob Fitzpatrick Short Summary by Max Völkel v.2 2013- 11-05 The Mom Test

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How to talk to customers and learn if your business is a good idea when everybody is lying to you Book by Rob Fitzpatrick Summary by Max Völkel

Transcript of Summary of 'The Mom Test' (v2 2013-11-05)

Page 1: Summary of 'The Mom Test' (v2 2013-11-05)

Institut für Entrepreneurship, Technologie-Management & Innovation

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How to talk to customers and learn if your business is a good idea when everybody is lying to you

Book by Rob Fitzpatrick

Short Summary by Max Völkel v.2 2013-11-05

The Mom Test

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KIT – Universität des Landes Baden-Württemberg undnationales Forschungszentrum in der Helmholtz-Gemeinschaft

EnTechnon – INSTITUT FÜR ENTREPRENEURSHIP, TECHNOLOGIEMANAGEMENT UND INNOVATION

www.kit-gruenderschmiede.de

The Mom TestHow to talk to customers and learn if your business is a good idea when everybody is lying to you – book by Rob Fitzpatrick – summary by Max Völkel

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Introduction

Dr. Max Völkel

EnTechnon / [email protected]@kit.edu

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Content Type Icon

Learning Objectives

Agenda

Learning Unit

Exercise

Case Study

Content Type Icon

Information

Attention/Important to know

Questions

Summary

Literature

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Introduction

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After today‘s session you will be able to…

Learning Objectives

Do better customer conversations!

Based on „The Mom Test“ by Rob Fitzpatrick momtestbook.com and foundercentric.com Version 1.0 from August 1, 2013

Note: Talking to customers is a sub-topic of Customer Development.You still need to read other books for the whole story.

All content is taken from the book. If it‘s wrong, I misunderstood it.

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Agenda

Introduction

What is the problem? - The Mom TestHow to talk?To whom to talk?Use your data

Summary

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THE PROBLEM

People try to be nice.Therefore they lie in your face without realizing it.

Bad data is worse than no data. E.g. „I would definitely buy that“

Let’s look at an example.

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You: Mom, I have a business idea. Do you have 5 minutes?Mom: Of course, dear

…You: You like your iPad and use it a lot?Mom: Sure, it’s great.

…You: Would you buy a cookbook app?Mom: I love cookbooks, sounds nice. Does it come with vegan recipes? Or something special for Xmas?

The Mom Test – What people say

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You: Mom, I have a business idea. Do you have 5 minutes?Mom: Of course, dear

I’m proud of you and I don’t want to hurt your feelingsYou: You like your iPad and use it a lot?Mom: Sure, it’s great.

I use it to check email on the sofa. You: Would you buy a cookbook app?Mom: I love cookbooks, sounds nice. Does it come with vegan recipes? Or something special for Xmas?

Well, I have plenty of cookbooks. I don’t need a computer in my kittchen – it might get dirty! But hey, if my kid made it, I’ll try. App? I never bought an app. Don’t you need to enter your credit card for that? Let me try to change the subject.

The Mom Test – What people think

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You: Mom, when have you last time used the iPad?For what?Have you ever used it in the kitchen?Have you ever bought an app? Which? Why? For how much?Do you use your cookbooks?Is there anything you dislike about them?What was the last cookbook you bought? When? Why?

The Mom Test – How to do it right

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HOW TO TALK?

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What to Ask? Important Questions

GoodImagine your company failed. Why did it fail? questionsImagine your company is a huge success. Why? questionsAsk those questions

“You should be terrified of at least one of the questions you’re asking in every conversation.”

BadDeep inside, you are afraid your idea might be crap.So you ask bogus questions.

These are the 2 questions than can convince your team do use this whole

process at all

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How to Frame the Conversation? Casual

Good: Keep it casualIdeal: One non-meeting about the 3 best questionsInstead of asking “Do you have time for a meeting with me?” ask simply your 3 questions, casually, during a conversationTakes maybe 5-15 minutes.

BadCustomer Development advises to have 3 meetings:

1) the first about the customer and their problem2) the second about your solution3) the third to sell a product

That takes a lot of time.

Always have your best 3 questions in

your mind

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How to Introduce Your Idea? Indirect

GoodA colleague told me and ideaI read somewhere...

BadI ...

Danger: Don‘t expose your ego – people try to be nice, but unfortunately, they lie in your face to do that

Bad Data: Compliments(back in the office) “Everybody loved our idea”Indicator you exposed your ego

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Listen more, Talk less

GoodYou listen mostly and ask questionsCustomer talks a lot

BadYou pitch and try to convince the customer of anything

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About what to talk? Specifics

GoodTheir lifeSpecifics in the past

How do you solve X now?Why do you bother?What are the implications?Talk me through the last time that happened.Talk me through your workflow.What else have you tried?Where does the money come from?

Who else should I talk to? expand target groupIs there anything else I should have asked? expand knowledge

BadYour ideaGenerics, Opinions

Would you ...

Bad Data: FluffGenerics

“I always/never…”Future

“I would/will..”Hypothetical

“I might/could…”

Danger: Who knows what they would do? People imagine themselves pretty different from reality

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When the customer has ideas

GoodWhy do you want that?What would that let you do?How are you coping without it?Do you think we should push back the launch to add that feature, or is it something we could add later?

Bad Data: Customer IdeasNo direct data about their problems

BadGreat idea, we will implement it and then hope you will buy it

“you aren’t allowed to tell them what their problem is – they aren’t allowed to tell you what to build”

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Get commitment and advancement

GoodMeeting fails

you learned a lot and saved lots of money

Meeting successyou got relevant data, e.g. you have nailed a problem

In every conversation ask for:Commitment — They are showing they’re serious by giving up something they value such as time, reputation, or money. Advancement — They are moving to the next step of your real-world funnel and getting closer to a sale.

BadMeeting “went well”

Otherwise:A pipeline of zombie leads Ending product meetings with a compliment Ending product meetings with no clear next steps Meetings which "went well" They haven't given up anything of value

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TimeClear next meeting with known goals Sitting down to give feedback on wireframes Using a trial themselves for a non-trivial period

Reputation riskIntro to peers or team Intro to a decision maker (boss, spouse, lawyer) Giving a public testimonial or case study

CashLetter of intent (non-legal but gentlemanly agreement to purchase) Pre-order Deposit

Commitments

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“EXAM”

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Good meeting or bad meeting?

“That’s so cool. I love it!”“Looks great. Let me know when it launches.”“There are a couple people I can intro you to when you’re ready.”“What are the next steps?”“I would definitely buy that.”“When can we start the trial?”“Can I buy the prototype?”“When can you come back to talk to the rest of the team?”

fail, no commitmentfail, no commitment

mostly fail

successfail, no cmmitmentsuccess in DE, faillure in US successsuccess

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In a real meeting the conversation moves to the product/solution- bad data

You are lazy and call instead of commute- Conversation becomes formal- You miss body language- You don’t become friends, so you’ll keep cold-calling+ But maybe it works for you

Bad: a customer-learning-but-I-really-want-to-do-sales meeting Good: let-me-find-out- if-you-are-a-good-advisor-by-asking-lots-of-questions meeting How many meetings?

3-5 for simple industry & focused customer segment10+ and still new results? customer segment too broad

Common Mistakes

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TO WHOM TO TALK?

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Warm Intros

Cold Contact

Find your customers

Choose your customers

To Whom To Talk?

Getting too many different results? Go back and choose a smaller customer segment.

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Start with the best smallest market and go global from thereOtherwise you cannot understand/fulfill the specific needs and everybody asks for different features .

How to choose a sub-segment:Why do they want it? e.g. What is their problem or goal?

Does everyone in the group have that motivation or only some of them? Within this group, which type of this person would want it most? Would everyone within this group buy/use it, or only some of them?

Choose your customers

Company Market Initial market

Google The world PhD students

EBay The world Collectors of PEZ dispensers

Evernote The world Moms sharing recipes

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For each customer segment:What are these people already doing to achieve their goal or survive their problem? Where can we find our demographic groups? Where can we find people doing the above workaround behaviors?

If you cannot find them, you’ll never advertise nor sell to them

Choose the segment that scores well forProfitableEasy to reachRewarding for you to build a business around (Buying process?)

Find your customers

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Cold calls – 2 out of 100 will talk to youSerendipity – there are often cool people already around youFind a good excuse

I do my PhD on …., can I ask you some questions?Immerse yourself in where they areLanding pagesOrganize meetups Speaking & teachingIndustry bloggingGet clever

“The goal of cold conversations is to stop having them.”

Step 1: Finding initial conversations

“If it sounds weird to unexpectedly interview people, then that's only the case because you're thinking of it as an interview instead of a conversation.

The only thing people love talking about more than themselves is their problems.

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7 degrees of separation – “you can find anyone you need if you ask for it a couple times.“

Industry advisorsUniversities (hint, hint)Investors

Try to avoid a “real meeting”, if possible (keep it casual)To get a real meeting & in a real meeting:

Vision what we aim for, broadlyFraming why we meet you, what we expectWeakness why we need youPedestal a complimentAsk try to get more commitment

Step 2: Creating warm intros

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USE YOUR DATA

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Prepping – together with your teamChoose the right 3 scary questions (If the answer is on Google, google it!)Due diligence on Xing/LinkedIn about your conversation partnerWrite down your assumptions about a person to validate them laterDecide on what commitment you want

DoingWho should show up

Those who make decisions (at least to some meetings)1-2 persons: 1) talking, 2) note-taking & fixing conversation

How to write it downNote: emotions, problems, goals, workarounds, obstacles, ideas/feature requests, budgets/buying process, follow-up tasks, referenced persons/companiesMaybe use 1 card for one information item

ReviewingReview notes, update written assumptions, update 3 questionsHow can you improve to learn better next time?

Customer conversations & your team

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Summary

PreppingSegment your customersWhat do we want to learn? – Your team needs to learn, not just you

DoingKeep it casualAsk

relevant questionsabout their specific past life

Avoid bad data (compliments, fluff, …)Reviewing

Good resultsfactscommitments (time, reputation, cash) / advancementnew conversation contacts

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Literature

The Mom Test by Rob Fitzpatrick momtestbook.com and foundercentric.com Version 1.0 from August 1, 2013

The 4 Steps to the Epiphany by Steve BlankRunning Lean by Ash Maurya

More references: http://bit.ly/entrep-links

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Information

License Information

Creative Commons License

Summary of 'The Mom Test' by Max Völkel is licensed under a Creative Commons Attribution-

ShareAlike 3.0 Unported License (http://creativecommons.org/licenses/by-sa/3.0/

deed.en_US).

Based on a work at momtestbook.com.

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EnTechnon – INSTITUT FÜR ENTREPRENEURSHIP, TECHNOLOGIEMANAGEMENT UND INNOVATION

KIT – Universität des Landes Baden-Württemberg undnationales Forschungszentrum in der Helmholtz-Gemeinschaft www.kit-gruenderschmiede.de

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Information

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