Venture Capital, Start-ups & Dentistry

Great article on Participating in Hackathons

http://techcrunch.com/2013/01/13/participating-in-hackathons-is-the-best-way-to-become-pitch-perfect-for-vcs/

Over the last few months I’ve been involved with several discussions with entrepreneurs about “pricing” their product or service and one of the big takeaways have been not to price your product or service too low.

First, setting a pricing structure isn’t easy and takes multiple obvious things into account, but don’t forget to think about your customer and “how they buy” your product or service when setting your price.

It’s really different if you are selling to the end user or a businesses because the “value” of your product and “available funds” are very different for every buyer. If your customer is a business or team with a larger budget, they’ll easily pay more for something they think will help them. After all, if they are using a company credit card there isn’t much difference between $99 or $299 (to them anyway), but as the seller you just made three times as much on the sale.

Now, if your ideal customers are typically a Mom with 2.4 children, then a $99 price vs. a $299 price is probably a very big deal.

Steve Blank said, “No business plan survives first contact with customers.” That’s because your assumptions will never be 100% accurate and you need to get out and talk with your customers – early and often.

What’s the point?

• To uncover how “users” think and behave with your poduct
• To discover patterns in their behavior
• To validate or invalidate your assumptions about how users are using your product
• To provide your team direction and data instead of opinion or speculation

Here’s 5 tips on how to do customer development interviews.

1. One person at a time – Groups can be distracting and people within the group can change and influence others ideas and opinions. Avoid them and speak one-on-one with your customers.

2. Know what you want to learn – Decide on certain aspects of your product that you want to learn about  and stay focused on only those aspects.  You can not learn anything if every conversation takes off on a different tangent with each customer. I recommend trying to only learn about 3 specific areas at one time during your customer interviews.

3. Get excited to hear things you don’t want to hear – You will usually condition yourself to only hear what you want to hear and this is a bad idea. Remember, the goal is to learn some things about your customers and their experiences with your product that you don’t know. Sometimes it is not always positive and that’s OK, because you need to know about it before you can fix it.

4. Ask open ended questions – Customer Interviews aren’t multiple choice surveys. Minimize questions like “do you like this or that.” Instead ask questions like “what do you like about this or that – how does it help you accomplish what you need to get done?”

5. Listen more, talk less – God gave you two ears for a reason – use them. Don’t rush to fill the “space” when there is a pause in the conversation, let your customer do that and hopefully they will provide you with more information. Take notes and details about the conversation as quickly as possible so you don’t miss or forget anything.

Remember, you are learning, not selling. Get out and find out what your customers think!