Summary of 'The Mom Test' (v2 2013-11-05)

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How to talk to customers and learn if your business is a good idea when everybody is lying to you Book by Rob Fitzpatrick Summary by Max Völkel

Transcript of Summary of 'The Mom Test' (v2 2013-11-05)

  • The Mom Test How to talk to customers and learn if your business is a good idea when everybody is lying to you Book by Rob Fitzpatrick Short Summary by Max Vlkel v.2 2013-11-05 1 Institut fr Entrepreneurship, TechnologieManagement & Innovation
  • The Mom Test How to talk to customers and learn if your business is a good idea when everybody is lying to you book by Rob Fitzpatrick summary by Max Vlkel EnTechnon INSTITUT FR ENTREPRENEURSHIP, TECHNOLOGIEMANAGEMENT UND INNOVATION KIT Universitt des Landes Baden-Wrttemberg und nationales Forschungszentrum in der Helmholtz-Gemeinschaft www.kit-gruenderschmiede.de
  • Introduction Dr. Max Vlkel EnTechnon / KIT www.xam.de @xamde max.voelkel2@kit.edu 3 Prof. Dr. Orestis Terzidis Institut fr Entrepreneurship, TechnologieManagement & Innovation
  • Introduction Content Type Icon Content Type Icon Learning Objectives 1 Information 3 Agenda 2 Attention/Important to know 1 Learning Unit 1 Questions 4 Exercise 1 Summary 1 Case Study 1 Literature 1 1 Icon designed by Brightmix 2 Icon designed by Designmodo (http://designmodo.com) from The Noun Project 3 Icon designed by Philipp S from The Noun Project 4 Icon designed by Juan Garces from The Noun Project 4 Prof. Dr. Orestis Terzidis Institut fr Entrepreneurship, TechnologieManagement & Innovation
  • Learning Objectives After todays session you will be able to Do better customer conversations! Based on The Mom Test by Rob Fitzpatrick momtestbook.com and foundercentric.com Version 1.0 from August 1, 2013 Note: Talking to customers is a sub-topic of Customer Development. You still need to read other books for the whole story. All content is taken from the book. If its wrong, I misunderstood it. 5 Prof. Dr. Orestis Terzidis Institut fr Entrepreneurship, TechnologieManagement & Innovation
  • Agenda Introduction What is the problem? - The Mom Test How to talk? To whom to talk? Use your data Summary 6 Prof. Dr. Orestis Terzidis Institut fr Entrepreneurship, TechnologieManagement & Innovation
  • People try to be nice. Therefore they lie in your face without realizing it. Bad data is worse than no data. E.g. I would definitely buy that Lets look at an example. THE PROBLEM 7 Dr. Max Vlkel, 2013 Institut fr Entrepreneurship, TechnologieManagement & Innovation
  • The Mom Test What people say You: Mom, I have a business idea. Do you have 5 minutes? Mom: Of course, dear You: You like your iPad and use it a lot? Mom: Sure, its great. You: Would you buy a cookbook app? Mom: I love cookbooks, sounds nice. Does it come with vegan recipes? Or something special for Xmas? 8 Prof. Dr. Orestis Terzidis Institut fr Entrepreneurship, TechnologieManagement & Innovation
  • The Mom Test What people think You: Mom, I have a business idea. Do you have 5 minutes? Mom: Of course, dear Im proud of you and I dont want to hurt your feelings You: You like your iPad and use it a lot? Mom: Sure, its great. I use it to check email on the sofa. You: Would you buy a cookbook app? Mom: I love cookbooks, sounds nice. Does it come with vegan recipes? Or something special for Xmas? Well, I have plenty of cookbooks. I dont need a computer in my kittchen it might get dirty! But hey, if my kid made it, Ill try. App? I never bought an app. Dont you need to enter your credit card for that? Let me try to change the subject. 9 Prof. Dr. Orestis Terzidis Institut fr Entrepreneurship, TechnologieManagement & Innovation
  • The Mom Test How to do it right You: Mom, when have you last time used the iPad? For what? Have you ever used it in the kitchen? Have you ever bought an app? Which? Why? For how much? Do you use your cookbooks? Is there anything you dislike about them? What was the last cookbook you bought? When? Why? 10 Prof. Dr. Orestis Terzidis Institut fr Entrepreneurship, TechnologieManagement & Innovation
  • HOW TO TALK? 11 Dr. Max Vlkel, 2013 Institut fr Entrepreneurship, TechnologieManagement & Innovation
  • What to Ask? Important Questions Good Imagine your company failed. Why did it fail? questions Imagine your company is a huge success. Why? questions Ask those questions You should be terrified of at least one of the questions youre asking in every conversation. 12 Dr. Max Vlkel, 2013 Bad Deep inside, you are afraid your idea might be crap. So you ask bogus questions. These are the 2 questions than can convince your team do use this whole process at all Institut fr Entrepreneurship, TechnologieManagement & Innovation
  • How to Frame the Conversation? Casual Good: Keep it casual Ideal: One non-meeting about the 3 best questions Instead of asking Do you have time for a meeting with me? ask simply your 3 questions, casually, during a conversation Takes maybe 5-15 minutes. Bad Customer Development advises to have 3 meetings: 1) the first about the customer and their problem 2) the second about your solution 3) the third to sell a product That takes a lot of time. Always have your best 3 questions in your mind 13 Dr. Max Vlkel, 2013 Institut fr Entrepreneurship, TechnologieManagement & Innovation
  • How to Introduce Your Idea? Indirect Good A colleague told me and idea I read somewhere ... Bad I ... Danger: Dont expose your ego people try to be nice, but unfortunately, they lie in your face to do that Bad Data: Compliments (back in the office) Everybody loved our idea Indicator you exposed your ego 14 Dr. Max Vlkel, 2013 Institut fr Entrepreneurship, TechnologieManagement & Innovation
  • Listen more, Talk less Good You listen mostly and ask questions Customer talks a lot 15 Dr. Max Vlkel, 2013 Bad You pitch and try to convince the customer of anything Institut fr Entrepreneurship, TechnologieManagement & Innovation
  • About what to talk? Specifics Good Their life Specifics in the past How do you solve X now? Why do you bother? What are the implications? Talk me through the last time that happened. Talk me through your workflow. What else have you tried? Where does the money come from? Who else should I talk to? expand target group Is there anything else I should have asked? expand knowledge 16 Dr. Max Vlkel, 2013 Bad Your idea Generics, Opinions Would you ... Bad Data: Fluff Generics I always/never Danger: Future Who knows I would/will.. what they Hypothetical would do? I might/could People imagine themselves pretty different from reality Institut fr Entrepreneurship, TechnologieManagement & Innovation
  • When the customer has ideas you arent allowed to tell them what their problem is they arent allowed to tell you what to build Good Why do you want that? What would that let you do? How are you coping without it? Do you think we should push back the launch to add that feature, or is it something we could add later? 17 Dr. Max Vlkel, 2013 Bad Data: Customer Ideas No direct data about their problems Bad Great idea, we will implement it and then hope you will buy it Institut fr Entrepreneurship, TechnologieManagement & Innovation
  • Get commitment and advancement Good Meeting fails Bad Meeting went well you learned a lot and saved lots of money Meeting success you got relevant data, e.g. you have nailed a problem In every conversation ask for: Commitment They are showing theyre serious by giving up something they value such as time, reputation, or money. Advancement They are moving to the next step of your real-world funnel and getting closer to a sale. 18 Dr. Max Vlkel, 2013 Otherwise: A pipeline of zombie leads Ending product meetings with a compliment Ending product meetings with no clear next steps Meetings which "went well" They haven't given up anything of value Institut fr Entrepreneurship, TechnologieManagement & Innovation
  • Commitments Time Clear next meeting with known goals Sitting down to give feedback on wireframes Using a trial themselves for a non-trivial period Reputation risk Intro to peers or team Intro to a decision maker (boss, spouse, lawyer) Giving a public testimonial or case study Cash Letter of intent (non-legal but gentlemanly agreement to purchase) Pre-order Deposit 19 Dr. Max Vlkel, 2013 Institut fr Entrepreneurship, TechnologieManagement & Innovation
  • EXAM 20 Dr. Max Vlkel, 2013 Institut fr Entrepreneurship, TechnologieManagement & Innovation
  • Good meeting or bad meeting? Thats so cool. I love it! Looks great. Let me know when it launches. There are a couple people I can intro you to when youre ready. What are the next steps? I would definitely buy that. When can we start the trial? Can I buy the prototype? When can you come back to talk to the rest of the team? 21 Prof. Dr. Orestis Terzidis fail, no commitment fail, no commitment mostly fail success fail, no cmmitment success in DE, faillure in US success success Institut fr Entrepreneurship, TechnologieManagement & Innovation
  • Common Mistakes In a real meeting the conversation moves to the product/solution - bad data You are lazy and call instead of commute - Conversation becomes formal - You miss body language - You dont become friends, so youll keep cold-calling + But maybe it works for you Bad: a customer-learning-but-I-really-want-to-do-sales meeting Good: let-me-find-out- if-you-are-a-good-advisor-by-asking-lots-ofquestions meeting How many meetings? 3-5 for simple industry & focused customer segment 10+ and still new results? customer segment too broad 22 Prof. Dr. Orestis Terzidis Institut fr Entrepreneurship, TechnologieManagement & Innovation
  • TO WHOM TO TALK? 23 Dr. Max Vlkel, 2013 Institut fr Entrepreneurship, TechnologieManagement & Innovation
  • To Whom To Talk? Choose your customers Find your customers Cold Contact Getting too many different results? Go ba