How to approach customer discovery as an early-stage startup (and beyond)

Throughout my various stints as a CIO, I’ve had a number of opportunities to assist sales teams as they worked to land or close significant deals. But even more frequently, I was brought in to help with discovery — essentially determining whether a prospective customer was a good fit for our product.

In my experience, the sales teams that are most successful have a complete and well-established discovery playbook that allows them to determine whether a potential customer is the right customer for the organization to have at its current stage.

For fledgling startups, this is especially critical. New technologies are inherently fluid, and they require customers willing to make a long-term bet. Startups also have to move quickly and efficiently. The discovery process can’t be long and protracted, so its foundations must be sound.

Whether you’re pursuing customer number five, 50 or 500, the process of determining if there’s a fit remains largely the same. Here are some tips for approaching discovery in the early days and as your organization scales.

Start with key questions to determine fit

Determining whether your solution or technology is right for a prospective customer is critical. But it’s just as important to know whether that customer is a good fit for you. Questions to ask yourself might include:

• Is your tech displacing an existing product? If so, there’s at least a logical fit from a solutions standpoint.
• When was the last time they purchased new technology? As a startup, you don’t want to spend months going back and forth before deployment. You want your product in use and generating feedback.
• Are they forward-looking? Some customers truly want to invest in cutting-edge technologies. Some are just going through the motions because it’s what their bosses expect. Others are just trying to learn or plan for the future. Figure this out early on.
• Do they care enough about getting it right to spend the time and money required? New technologies necessitate ongoing investment and two-way participation to improve and evolve over time. Get a sense of how effective they would be as collaborators.
• Have they been burned in the past? Some companies have a tremendous appetite for new technologies but have simply tried too many that haven’t worked. Find out what other technologies they’ve tested, what worked and what didn’t.
• Are they the type of customer you’d want other prospects speaking to as a reference? If not, they’re not the ideal early customer.

Ensure conditions are in place for successful deployment

Let’s say the fit is right, the customer is excited and your solution will solve their problem. Part of the discovery process requires you to understand who you’ll need to work with on their end to deploy successfully.

Maybe implementing your solution within the customer’s environment calls for several changes to their network that neither you nor the purchasing team was privy to. You may have the simplest solution in the world but discover that the prerequisites aren’t in place. Do they have the people, resources and appetite to get there?

Ask the customer if there’s a change control process you need to input. Find out who can access key solutions and ensure they are consulted. Far too many times, it’s a very small change that needs to happen to get a project going and ensure the right people are involved, people who have a far deeper knowledge of the configuration than others.

Be clear about what’s in it for the customer

Understand the incentives and benefits of deploying your technology as it pertains to your buyer.

In addition to the key problem your solution is solving, you should also have an idea of when the customer should see their first visible win. Will your product increase visibility or budget for their team? Other positives for the customer might be making their employees more successful or simply the pride or excitement around being an early adopter of an AI solution.

Knowing the inherent benefits of buying your product will help you determine whether those benefits line up with a prospective customer’s own goals. If there isn’t a clear incentive for the customer to use your product effectively, they’re probably not the right customer.

Recognize the early signs of customer fit (or lack thereof)

As part of the discovery process, you should recognize key signals early on that indicate whether the fit is wrong or right.

Are they responsive via email? Are they fully answering your questions? You shouldn’t have to drag them along; they should be engaging with you willingly.

Sometimes it is purely about the timing. Don’t try to force a solution for small revenue. It will take time and money to make happen and likely will be a risk for churn as goals and priorities are not aligned.

Know the customer’s environment

Ask the customer up front what their stack looks like, what other technologies and solutions they’re using.

Ask other vendors if they work with them, speak to former employees and begin to put together a picture of what their larger technology environment looks like to determine where yours interplays.

At the same time, you should use this as an opportunity to share your learnings. Likely they have not been able to adopt a solution or upgrade to a particular technology in their existing stack. If you have experience of this from other discovery calls, share some of those learnings.

Understand the customer’s priorities

Be very specific about what you integrate with and what you don’t.

Be clear about which integrations go well and why, and what integrations you haven’t attempted yet.

This will help you determine which integrations the customer cares most about. You’ll be able to outline the sequence and timing as well as embed a review process.

Do the majority of the legwork beforehand

Most CIOs have made 40% of their purchasing decision before their first touchpoint with a vendor. They’ve spoken to peers, analysts, investors and other customers. Mentally, they’ve already made their decision.

Your discovery process should mirror theirs. Understand which of the up-front questions you can answer yourself and come to the table with a clear understanding of whether there is a good fit.

A best-in-class discovery process is short and simple because most of the work was conducted in advance.

Building and maintaining a good discovery process is critical in today’s fast-paced, highly competitive marketplace. Founders will save themselves considerable time and heartache by getting this right early. The winning formula is to demonstrate and calibrate the right customer fits, assemble a strong customer playbook right out of the gate and set yourself up for increased success through scale.