Key to Startup Success: Customer Discovery

Customer Discovery

Like so many other factors, Customer Discovery, Validation and Development is not a static (one and done) operation. It is a continuous flow. The more you know about who will use your product, the greater the likelihood of success.

Customer Discovery, discerning what a potential user wants and needs, is absolutely key to creating a viable, profitable company. The fundamental purpose of a startup is solving a problem faced in the market. This may seem an obvious statement, but it is largely assumed rather than explicitly explained by the founders.

Several problems arise from this situation:

  • Failure to understand “exactly” who the customer is, allows the focus to drift rather than be directed laser-like on the core problem.
  • Principals within the company can have different interpretations, which can cause conflicting directives leading to an inefficient allocation of scare resources.
  • Misdirected marketing and advertising activities can attract “unqualified” prospects wasting resources.

Typically, as your product or service evolves, the nature and specifics of the “Customer” must be refined. Remember, you must always maintain the “connection between the subject and the verb,” the solution with the user.

The first task is to correctly link the identified problem and your specific solution to the potential user.

  • Who has the problem?
  • How does it affect them?
  • Does your solution actually fix “their” problem, not your depiction of the problem?

Our company, FundingSage, is focused on assisting startups efficiently navigate the process of getting funded. We have “discovered” that we have both a “user” and a “consumer” of our software product, TurboFunder.

User vs. Consumer

  • User: These are the entrepreneurs/founders that are trying build a company and create the documentation to get external funding. They use the product as a way to improve their chances of getting funded while minimizing the effort necessary to get it.
  • Consumer: These are the Investors that need a complete and coherent Due Diligence packet in order to assess a startup’s quality and potential for scalable growth. In essence, they consume the output created by the User.

Each of these are potential customers. In solving the problem for the User, we assist the Consumer. Therefore, in order to make TurboFunder compelling, we must simultaneously improve the efficiency of the Founder in creating the documentation and produce information of better quality and format for the Investor.

However, startup companies looking for investment span the spectrum of development (See the Funding Life Cycle ). Likewise, there is a range of investment level and focus for Angel and Venture Investors.

While our product will cover the entire gamut, we understood our MVP (minimum viable product) needed to focus on a narrower set of users. Therefore, we chose to focus on startups in the Concept and Early Stages in the MVP.

This required us to further refine the product.

Founders in these stages (excepting for serial entrepreneurs) tend to be less experienced. Consequently, we narrowed the MVP to include additional relevant information and resources to help them understand and develop the documentation they would need to get funded.

This also allowed us to center our initial rollout of the Beta version on a specific set of potential users. In doing so, we are able to target our Customer Validation process using survey feedback.

The bottom line:

Defining and understanding your potential customers is key to success of your start-up. Like so many other factors, Customer Discover, Validation and Development is not a static (one and done) operation. It is a continuous flow. The more you know about who will use your product, the greater the likelihood of success.

As The North Face slogan states, “Never stop exploring.”


Is Your Startup Investable? Take the Test and  Find Out Now!



Dave Clark

Dave Clark taught Strategy at West Point and is a co-founder of FundingSage, which provides valuable information, tools and resources to entrepreneurs seeking to start, grow and fund a business.