When validating new businesses, our chief objective is to spend our time first on the biggest risks for the opportunity. Invariably, one of those risks is “does anyone actually want the thing I’m selling?”
The answer to that question lies with customers, and so we try to try to parse out an answer with two activities:
After five years, we have increasingly systematized this work so we can do it rapidly and surgically. Previously, we wrote about our kill of XYLO. In that case, the kill wound up being grounded in quantitative analysis; the issue revolved around a lack of addressable intent-driven demand. However, most of the time a major pillar of validation entails getting out and talking to customers.
Voice of customer
Voice of customer interviews are the single most powerful tool we have in our arsenal to rapidly advance towards product-market fit. Voice of customer interviews, aka “VOCs” not only help us gain conviction that real customers want your product or service, but they can also identify a myriad of very useful information, such as:
Great, but how do you get those conversations started? Naturally, a logical first step is to start with our own networks. But, this ease of access comes with a tradeoff. Oftentimes these friendly conversations end up painting an overly rosy view of the concept. Friendlies have very little incentive to rain on your parade, and all the subconscious incentives to make you happy.
Therefore, we need to ensure we are comprehensive about who we initially talk to, so we know we are getting good data in return. As an example, here is the matrix we used for a recent company validation. (There were more segments than what is listed, but this gives you an idea of how we get started).
So, we now go to LinkedIn in search of radical candor. We use LinkedIn to identify and engage practitioners that fit our ideal customer persona. (e.g. Field Operations specialists at companies with >100 employees, or HR leaders at B2B SaaS organizations).
This usually ends up being remarkably tedious.
LinkedIn response rates are low across the board. We have typically observed response rates of 10-15% for even the best ideas with strong customer resonance. If we want to talk to 10 customers, that often means 100+ cold InMails. (Gross, InMails!)
Prospektor is our purpose-built tool for quickly identifying potential customers, sending outreach and following up. It has eliminated hundreds of hours of busy work for our team so that we can spend time with customers rather than trying to find them.
The product is built on top of Google’s search API and sheets.
Check out the demo below:
For now, this is a tool that we are using internally and have extended to PSL portfolio companies. If you're interested in working with PSL on a company, we'd love to hear from you at email@example.com.