Frans Nauta

Founder ClimateLaunchpad, early stage cleantech startups

Why false positives kill start-ups and how a headache is the solution

Founders often ask me: Do you think my idea is good? I tell them all the same thing: It doesn’t matter what I think. There are only two things that matter: whether YOU believe your idea is good, and whether you can find customers that want to buy your product. If you don’t believe in your own idea, you’re never going to convince a customer to buy your product. And if you can’t find any customers, well, you don’t have business.

As it turns out, I’m not the only one chanting this mantra. There is a great tweet storm by Fred Wilson, one of my favorite venture capital bloggers.

Okay, so here you are, with a business idea that you totally believe in. That’s a great start. One of the reasons why you really need to believe in your idea is because you are going to run into lots of ‘no’s’ from potential customers, investors and/or the media. Heck, even the guys that started Google got bombarded with no’s. You should be prepared for that. Believing in your idea will give you the perseverance and grit to keep going.

False positives

We all know what it’s like if someone says ‘no’ to you. It’s never fun. But you know what might be even worse? Getting feedback that sounds like ‘yes’, but actually doesn’t mean anything. It has killed many start-ups. We call these fake yesses ‘false positives’, a term I first read in a great little book called ‘The Mom Test: how to talk to customers and learn if your business is a good idea when everybody is lying to you’ by Rob Fitzpatrick.

The idea behind The Mom Test is very simple and powerful: everybody lies. Or, a little more precise, being nice to others is a fundamental human trait. Think about it: your partner comes from the hairdresser with a drastic new hairstyle. You see them and it’s really not your taste. Enthusiastically they ask you: ‘Hey, what do you think about my new look?’ Are you going to say: ‘It’s awful, I hate it!’? Probably not, right? Being nice to others allows us to keep our relationships. Nobody likes to hear ‘No’, so most of us are nice to each other and say something that sounds like yes.

It’s this same mechanism that can sink start-ups, because false positives give entrepreneurs the impression they have a business, they start executing on it, and then find out they were wrong.

Everybody loves puppies

Start-ups are extremely vulnerable to false positives. When you do a start-up people want to be nice to you, and helpful. Why? You’re the underdog, which makes people want to be supportive of your idea. You’re like a small puppy Labrador. Everybody loves small puppy Labradors, because they are so darn cute. You can hardly blame them for being nice to you, right? But people trying to be nice to you don’t help you or your business. They are actually wasting your time (and their own). That’s why you have to train yourself to ask the right questions, so people will get beyond nice answers. And that’s why training to ask the right questions is a big part of the ClimateLaunchpad training.

The right questions

What are the right questions? It’s really simple: that’s the Mom Test. If your mother can give you an answer to be nice and supportive of you it’s the wrong question. Just add ‘Mom’ at the end of your question. ‘Do you think it’s a good idea, mom?’ Oh dear, what a terrible question. ‘Would you buy this, mom?’ Uh oh… ‘Do you think €22 is a reasonable price for this amazing product, mom’? Oops… ‘What would your ideal product look like, mom?’ Ehm…

So what are good questions? Questions that are about the past and the present situation. Just ask your potential customer about the problem, and do it thoroughly, so you really get a good understanding of what their pain is. ‘Do you experience this problem?’ is a good opener. ‘How often has that problem arisen?’ is a good question, because it gives you a sense of frequency. One of my favorites is ‘How are you currently solving this problem?’ ‘How are you currently solving this problem Mom?’ That’s right, even your Mom will simply start describing the problem without thinking of pleasing you.

Look for actual facts, frequency, and details. And feel free to keep asking ‘Why’ several times, until you get to the point where answers become repetitive. Good questions can only be answered with facts, not with opinions. That’s how you prevent running into false positives.

Once teams become experienced in doing this interview technique they start enjoying it. And they find out that people LOVE to talk about their work. It’s free education you’re getting.

Funny, huh? I mean, we all have this cliché idea of the ultimate pitch. Every movie or TV series about start-ups has this dramatic moment, where a brilliant improvised pitch saves the company. In reality, that never happens. I would argue that being a good listener is actually more important than being a good pitcher.

Nobody gets fired for hiring IBM
This customer discovery process, using the right interview technique, is incredibly important for startups. The reason is that it’s not easy to find customers when you’re a start-up. Like the famous saying goes, nobody gets fired for hiring IBM. People do get fired for hiring a start-up. It’s risky to buy things from a start-up as they can fail very easily. Your first customer signing a purchasing order is going to be someone who has a real problem on his or her hands and that has the mentality of an early adopter, willing to take a bet.

By doing a thorough customer discovery process, through which you truly start understanding your customer’s headache, you can identify those customers that are willing to take a bet. And you can do it without spending too much time or money. You’re just talking to people. What you do need is access to a network of potential customers where you can validate whether someone has a headache. Access to our ever growing global network is part of what makes ClimateLaunchpad such a unique and efficient way to validate and sharpen business ideas. It will help you find that customer and start your business.

Turn it on its head: find a headache

Remember how I started with the ‘Do you think I have a good idea?’ Well, you could turn that on its head. Arguably you can even start a start-up without a brilliant idea. Or, to be a bit more precise: the brilliant idea is to trust the process of customer discovery.

There are plenty of successful companies that started searching for a headache, without having a product. They just went out and talked to people: “Tell me, what’s bothering you?” And then they tried to figure out if they could build a company around it.

One fun example is DoubleDutch, a start-up in San Francisco. The founders ran into several headaches in their own startups. They used that as inspiration for starting a new company. They built three prototypes at the same time, figuring out which of these three was actually making the most customers the happiest. They ended up focusing on software-as-a-service for conferences and events.

You can always trust the process of customer discovery. Just make sure you ask the right questions.

Frans Nauta

PS: Did you like this column? Oh no, that’s the wrong question 🙂 Either way, feedback appreciated!

(this column was first published on www.ClimateLaunchpad.org, the Green Business Ideas Competition)

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