How to Talk to Customers and Validate Your Business Idea (When Everyone Is Lying to You)

Will your next startup be a success? The truth is, you can never be 100% certain until you test your idea — but you can save yourself 12 months of time by talking to your customers first.

In this episode, Rob Fitzpatrick joins us on the podcast to share how you can validate your business idea by getting better feedback.

Listen to this Episode:

How to Talk to Customers and Validate Your Business Idea (When Everyone Is Lying to You)

 
 
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We discussed:

  • Why you shouldn’t sell to customers you don’t understand
  • The brilliant payoff of going out into the real world to talk to people
  • How to ask intriguing questions that get your customers to open up
  • Why your personal network is far more valuable than you realize
  • The surprising reason your breakthrough idea isn’t about profitability
  • Exactly what type of customers you should go after to build quickly
  • How to identify your core skills and monetize your top strengths
  • Why beginning conversations with your pitch is a major mistake

Resources:

Full Transcript:

Louis: Bonjour, bonjour! And welcome to another episode of EveryoneHatesMarketers.com, the marketing podcast for marketers, founders and tech people who are out to seek shady, aggressive marketing. I’m your host, Louis Grenier.

In today’s episode, you’ll learn how to learn more and send more from your customer conversations. But you’ll probably also learn how to start a business from my expert on the show today. And you see, I’ll give you a bit more details in the next few minutes.

So, my guest today has been running both bootstrap and VC backed companies for the last 10+ years. He’s a YCombinator alumni. He’s raised funding in the US and the UK. He’s been, products used globally by brands like Sony and MTV.

So, he’s quite a veteran when it comes to entrepreneurship and marketing in general. Interestingly enough, he was a programmer who was forced to actually talk to customers. And when he knew he was supposed to talk to them, none of the books or none of the resources he stumbled upon were helpful.

So, that’s why he wrote the book, The Mom Test. Which is really about how to get more learnings and more sales out of your customer conversations. Rob Fitzpatrick, welcome aboard.

Rob: Thank you very much for having me.

Louis: I know you’ve been talking about your book The Mom Test, maybe 100, thousands of time on podcasts. I want you to spin things a bit differently together. I mentioned in the intro you have a lot of experience when it comes to starting businesses.

And it’s interesting because a few times on the podcast, I like to ask a very specific question to my quest when I know they have what it takes to start companies. ‘Cause they’ve done it in the past multiple times. So, I’ve asked the question that I’m gonna ask you to guests including Seth Godin or Rob Walling — I’m sure you know both.

I want to ask you this question as well. Which is kind of a challenge and it might be a bit tricky to answer, but I’m sure we’ll find a way to do that.

Imagine for a second that you are an anonymous person. Nobody knows about Rob Fitzpatrick, you haven’t written a book, you don’t have a network per se. You just have yourself and your knowledge that you have right now.

And imagine I give you the challenge to create a successful company in six months or less with just $1,000 roughly in the bank. And trying to generate maybe 10x that or 10,000 plus in the next six months, right?

Based on the experience and expertise you have right now, how would you do it? And step by step, starting with step one.

Rob: I think the most overlooked thing is to choose customers that you already understand and who you have access to. By access to, I mean you can pick up the phone and start calling them. And they will at least answer the phone call and answer some of your questions.

It takes so much time to break into a customer group that you don’t understand. ‘Cause you’re like, “Okay, well I’m starting from zero. How do I even get them to take a meeting with me? How do I even have this conversation?”

There’s so much. My first company, we were trying to break into the advertising industry. And it took us two years just to understand enough to get taken seriously. Whereas, if it’s a group that you already have some sort of credibility, understanding, and expertise with, at least you speak their language.

And that makes it really quick. Even if you don’t actually know the individual people. So, step one would be choosing a customer group that I already understand. Then step two would be, looking for either potential partners or co-founders who already have some of the assets that I would need to build a business.

For example, if it was for my customers. Maybe I need a retail space. It’s a pain in the ass to go out, get your own retail space, set it up and renovate it. But, if you can find someone who’s already got it and who isn’t using it fully, then you can figure out some sort of partnership.

And save yourself 12 months and 25 grand or whatever. And you can do that both digitally and in the real world. People always try to build everything from scratch themselves. But, there’s usually a way, if you’re credible, if you’re thoughtful, and if you understand what the partners are scared of.

There’s usually some way to partner with people who already have what you need. And then you’re able to hit the ground running a lot faster.

Louis: So, let’s go back to step one. First of all, I enjoyed the fact that you weren’t very scared of the question I asked you. Which, it’s a good sign.

Rob: I’ve done it before. I’ve been dead broke and like, “Okay, I have one month’s worth of money. How am I gonna pay my rent next month? Where can I start that will pay my bills in 30 days?” I’ve been through that a couple times.

Louis: That’s why you’re talking from experience. Which is fantastic. Let’s go back to step one and drill down a bit more. Basically, talk to customers who could be close to you. So, let’s take an actual real example.

From your personal experience. Tell me about a time where you had to do that and what were the type of customers you had to reach out to?

Rob: Let me make a comparison so that it’s clearer. In my first company, we went through YCombinator, we raised VC funding, really good investors. Some of the guys behind Index like good top-tier global investors. We had a lot of cash in our bank account.

We were trying to break into the ad industry. We were trying to talk to movie studios and music labels and creative agencies and all this. And every meeting I wanted to get, I had to get a warm intro. And that was difficult. Just figuring out who do I wanna talk to?

How do I get the intro? Then you go through the whole calendar dance. Then you sit down with them and you start asking stupid questions. Because you don’t even know the basics. Right? So, they’re like, “Whose this idiot asking me dumb stuff?”

You’ve done all this work to talk to a VP at Sony or something. And now you’ve kind of wasted it ’cause you don’t even know the basics. Then my next company, I was like, “Okay, well I’m not gonna do that again.” That was a huge disadvantage to have to start all that from scratch.

I’d spent a lot of time in academia before I got into startups. I wanted to be a professor. So, I was going through a Ph.D. program. I didn’t finish it because I dropped out to start my business. But I kind of understood that world.

I liked hanging out with professors. I knew how they thought. I liked being around universities. I’d done some casual teaching work with a few universities. Just as a guest lecturer. I had people I could call. I was like, okay, I wanna build something for universities.

All I had to do was literally walk onto universities. You know, you can go to a physical location like at UCL, I would hang out at the professors’ bar. They have a private bar just for Ph.D. students and professors.

I would just post up at the bar. And when someone came up to order a beer I’d be like, “Hey, weird question. But, how do you guys handle blah, blah, blah?” I would just ask them. Really quickly, you’re able to talk to people instantly ’cause you kind of have access. And you know their language.

Louis: Yep, that makes sense. But you’re talking about something that is quite scary I think, for a lot of people. The fact to go right out of the building and actually talk to people, right?

How would you convince people who like to program stuff in front of the computer and just post things in forums and ask questions in forum and social media? But don’t really tend to go out into the real world and talk to people.

Rob: I’ve got so many thoughts on this. I’m a programmer, right? I would much rather be programming. But it sucks a lot to program things that nobody uses. You spend like six months, or 12 months pouring your heart and soul into a piece of software.

And then it has zero users. You don’t even wanna use it yourself. It’s just terrible, it’s heartbreaking. Once you realize that by talking to people you can build the correct software. And by talking to people, you can launch the correct marketing campaigns.

You can phrase it in the correct way. And you can target it correctly. Suddenly you’re like, “Oh wow. I had two conversations which weren’t all that bad. I just saved $100,000 worth of development time or marketing budget.” Or whatever.

Suddenly, it gets really exciting. ‘Cause it’s not like some tedious, busy work. It’s like, “Oh wow, this is really enabling me. This is a superpower.” And being able to do both, talking to customers and then also being able to program.

Or talking to customers and also being able to directly turn that into a marketing campaign. There’s so few people who have both sets of skills. If you do, you’re automatically a superhero in both entrepreneurship and in traditional careers.

So, that’s part of it. It’s like the pay off is worth it. Another part of it is that people have the wrong thing in their head when they think of talking to customers. They tend to think of when you’re walking down the street and some charity mugger stops you.

And is like, “Hey, can I ask you a few questions? It’ll only take a minute.” People hate that. They hate being stopped and interrupted. But that’s the only kind of interview they’re familiar with. So, they think it’s gonna be like that.

But that is not it. If you’re doing your customer interviews like that, you are doing them wrong. And you’re wasting the opportunity. Think about it like the way you try to talk to and understand your close friends. Like, you wouldn’t sit down with a close friend who just had a breakup.

And go, “Okay, so on a scale of one to five, how upset are you that you just got dumped? On a scale of one to five, how likely are you to have a regrettable rebound?” People don’t talk to people like that. If you talk to your customers like that, you’re an asshole.

You’re not gonna learn very much. ‘Cause you’re treating them like a test subject, not like a human. The way we talk to our friends is we go, “Wow, you just got dumped. That sucks. Tell me everything.” And you kind of want to talk to your customers the same way.

Because ultimately they have a problem, right? The reason they’re using your product is you create joy or you remove pain. You are trying to make their life better. You’re doing that because you care about their lives, you care about them.

And if you can engage with them on that level, it’s like, “Wow, you’re a professor. You don’t have big enough budgets. You’re asked to do a million things. You’re trying to help your students and you can’t ’cause all this bureaucracy. That must suck. Tell me everything.”

They’re just gonna open up to you. People love having that conversation. It’s not like you’re exploiting them or tricking them, or making them talk about something they don’t wanna talk about. It’s like a human conversation. It’s good stuff. People love doing it and if you see it that way, it’s nowhere near so scary.

Louis: People love talking about themselves, don’t they?

Rob: They do.

Louis: Step one, to summarize, is really about understanding the type of people you gravitate towards. Even if you think it’s normal. I think this is one of the key things I’ve learned. Is people take for granted the network they currently have.

And they always try to look beyond it because it’s not sexy enough. The fact that they know all of those people. They wanna go beyond as you said, talking to a VP of Sony, VP of marketing at Sony or whatnot. But your own network has so much value, you don’t realize it.

Your uncle works in this company. Or your aunt that works in this one. Your cousin that you’re close to. Your friends. If you create a spreadsheet of all those people that you know, you’ll be probably blown away by the amount of people you know.

And the amount of introduction you can get. Then as you said, the second thing is, you’re probably interested in a lot of topics. What is one topic that is really close to your heart and you feel passionate about? And you might know a lot of people there.

You might be part of a community there. A group, social events, or whatnot. Those are the people you wanna maybe focus on to create your first business or second business, right?

Rob: Yeah, it helps a lot. It like immediately saves you one to two years worth of work by just beginning with customers you already understand. It makes everything else so much easier. They have to also have money, right? And they also have to have problems.

And there’s other criteria. Like making a new kind of hacky sack for people who like to play hacky sack is not gonna be a breakthrough business probably. No matter how well you understand them.

Louis: Should it be step two then? Once you know the type of people that you gravitate towards, maybe the step two should be to understand whether they have money. Whether they suffer from the problem.

Rob: No, I think it’s pretty obvious. It’s self-evident as soon as you think about it. You don’t even need to call it a step. It’s just like when you look at your list of potential customers, you can very quickly rank them. And you can do some ranking based on —

It’s not just about the profitability. It’s like, do they have problems that cost them money? Would be probably one of my criteria. Another one would be how much do I like spending time with them? ‘Cause you’re gonna end up spending a lot of time thinking about and being with people like your customers.

If you don’t actually like them, that’s gonna suck. And then another one might how actually easy are they to access? If you’ve already got a mailing list with 1,000 of them on them, then I would consider that a pretty big headstart.

Those 1,000 people are really easy for you to access. Or if one of your buddies runs an industry event. Or if a company that you’re friends with sponsors an industry event. All of those things give you a big headstart in ease of access.

For me, it’s how much do I like them? How profitable could they be? Or generally their problems. That sort of thing. And how easy is my access?

Louis: Right. I think this is gonna be important for listeners to remember. So, how easy of access you have. How painful is the problem they suffer from? And do they have access to money? And do you like to hang out with them?

Rob: Yeah, it’s fun if you have customers you like. It’s just like, “Hey, let’s meet at the bar and talk about your problems.” It’s like, “Alright, that’s not such a painful way to spend an hour.”

Louis: It doesn’t feel like customer interviews or customer development. There’s a lot of lingo around this concept of talking to people.

Rob: I always try to call them conversations. There’s so much baggage tied up in the word interview. It’s not like that at all. It’s like … “Hey, you guys are losing money. Tell me about it. That must suck. Maybe I can help.” You just talk to them.

Louis: That’s step two, right? That’s what you mentioned. You go where they hang out and talk to them, right?

Rob: Well, I’m gonna resist putting it into steps. ‘Cause I don’t think you can put this stuff into steps. But you get a headstart if you already understand and have access to your customers. And then, what I mentioned as my second criteria was that you need customers you can access.

Then you need to create some way to serve them, right? You need to build the business, build the product. So, the other half of it, which gives you a big headstart is if you can find business partners who already have some of the stuff that you would otherwise need to build yourself.

And if there’s some way to partner or collaborate with them as opposed to starting it all from scratch. Everyone does their own content marketing. It’s so hard and it takes so long. But, I once had a great business. It was doing a million dollars a year within a few months. And we ended up having problems.

But it was really good for two years. The way it worked is I just partnered with someone who already had a mailing list with 300,000 people. I was like, “Hey, I’ve got a service that I think your mailing list would like.

You’ve got a mailing list but no way to monetize. Boom. Let’s make a million dollars a year out of thin air.” And it was super simple. We were up and running in a matter of weeks. If you can do that, customers you understand, partners who already have the resources you need.

I think based on your original question which was how do you do it quickly? That would be my answer.

Louis: Right. And is it the way you’ve done it for the second business you mentioned? The one after the ad business?

Rob: No. There’s a big bias towards doing everything yourself. In that one, we were surfing universities and basically helping them handle the IP transfer when they spun out student businesses. It’s like they have all this research inside the university.

It’s a lot of legal overhead and bureaucratic overhead for them to spin it out into external businesses. So, we gave them a software suite and a smoother process and all that. And it was cool. We got a couple thousand student businesses spun out into standalone things.

But we ran into some other issues like the universities didn’t have the budgets to make it scalable. And for our particular use case. But in that case, we did most of it ourselves. I was writing the software and kind of leading the sales.

And then the guy I chose as a co-founder was getting his Ph.D. Kind of in this domain with a top tier university. With him onboard, he provided the easy access to customers.

Louis: Right and that makes sense. As you said, if you wanna do it quickly to repeat, it’s about making sure that you get close to the customers you can have access to. That you have good knowledge of. That you like to hang out with and have problems worth solving that have money to solve those problems.

They are losing money from those problems. And then the second thing is, look at partners. Don’t try to do stuff on your own. Don’t try to reinvent the wheel for everything possible, right? Starting content marketing some scratch. Or starting Facebook advertising from scratch if you can have people can help you. Right?

Rob: It’s worth adding that, in the end, partnerships tend to be unstable. And in the end, your partners will inevitably screw you over. You have to be prepared to screw them over faster. Basically, what happens in a partnership is you both start making a lot of money.

It’s great for both of you. And then you both realize that the other one is probably gonna realize that they could make twice as much money if they cut you out. And so, you’re both sort of defensively forced into aggressively cutting each other out.

So, if you partner with someone who has their own list and you’re providing a service, you have to assume that they’re immediately tying to replicate your service. You have to start trying to replicate their list. Just because it’s really difficult for the partnership to last long term. But it can be a great way to run the first year or two years to get a quick headstart.

Louis: You get one million in revenue after a year. Then you can think of not necessarily partnering and investing in your own channels to grow.

I’m curious to hear of an example from your own life right now. Based on those two steps, even though you don’t really call them steps. But let’s say you have zero, nothing in your bank account right now. But you still have the knowledge and the network you have.

I’m just curious, who would you go after? What type of customers based on what you just talked about would you go after straightaway?

Rob: Okay, if you look at the resources that you have as a person, you’ve basically got your skills. You’ve got the groups of customers that you have insight about. And you’ve got, let’s say, potential partners. Both businesses and individuals.

You’ve got people you know, stuff you can do. And potential business partners. So, one of the skills that I have that’s valuable is teaching. I’m pretty good with a crowd. Both designing educational material or running events. Or acting as an MC or a host. That’s a skill I bring to the table.

The other skills I’ve got is programming and writing. So, I would basically be listing down my skills. And then I’d go, “Okay, so these are the things I can bring to the table.” And if I have other assets, I would list them. Like I have a blog with a few thousand email subscribers.

Cool, that’s an asset. I’ve got various code bases that I’ve built. Okay, those are assets. I’m like, “Okay, so these are all my assets and my skills.” That stuff. Then I would look at the people I can partner with.

And go, “Okay, what could I bring to them to make use of their assets?” I would probably start with events. Just because events are much more … much quicker cashflow than programming. Also, there’s a lot of programmers who are better than me.

Whereas there’s fewer teachers who are better than me. If that makes sense. Relative to my competition, I’m a better teacher than I am a programmer. So, that makes sense as the most monetizable skill.

I’d be looking at everyone I know and go, “Okay, did they have a community? Do they have a list? Or do they have an asset? Or do they have an expertise which, if I wrap an event around it, I can make us both money in a hurry?” I would basically just plow through my entire network going, “Okay, who needs an event and/or, who needs teaching?”

And work it like that. Then I would look for stuff that repeats. Maybe there’s a bunch of different people who need kind of the same thing. That’s an opportunity to productize it. Either by turning it into an actual literal product.

Or by just hiring and training a delivery team. Who can then do what I was previously doing myself. And in either case, you’ve got a productized business. Whether it’s people or tech-driven.

Louis: What do you mean by delivery team, exactly?

Rob: Oh, in the case of teaching it would be like training up a lead teacher and training up an events person. And training up an events project manager. It’s just all the people who do the tasks. This is the same way agencies work.

Imagine if you were a freelancer and then you start getting more clients than you can handle. You would start hiring people to do pieces of your job and you would train them up to do one specific piece of what you used to do yourself.

And over time, you would build up a team underneath you, doing more and more. From the simplest tasks upward. As you move onto whatever strategy. Finding new work. Whatever you feel relaxing. Whatever’s worthy of your time.

Louis: So, you would start with a simple task. The simplest task and then move upwards, is what you said, right?

Rob: Yeah. When people delegate … I’m still terrible at this. And I keep getting screwed by it. ‘Cause I try to delegate too aggressively. And then nothing works. But there’s an excellent book called The E-Myth Revisited, which was written in the ’80s.

It’s about how to deal with this problem. Basically, in a human and process-driven business as opposed to a technology-driven business. How do you turn the stuff that you’re doing yourself into a repeatable, simple, foolproof process?

And then train someone else to do it. And gradually build the team beneath you so that, even though it’s human-driven, it runs very regularly and predictably.

Louis: This book is fantastic ’cause it’s really about processes. You basically write down all of the processes you have in your head, right? How do I invite people to do Everyone Hates Marketers for example. At the minute, I don’t teach anyone.

But, if I had to, I would probably take a one-pager, write, “Okay, I know five people who have good following. And I have five people that a lot of listeners said I should interview. I find a way to get the email address. I send them this email.”

I follow up with them and reply in two weeks, et cetera. So, system after system is a good way to outsource the right way, right?

Rob: Exactly. And people always wanna delegate the thing that they’re worst at. Which I totally understand. But the argument this book makes, which I totally believe, having been screwed by making this mistake. Is that you can’t delegate it until you’re already able to do it very well yourself.

You kind of work your way through the business, getting good at everything. And once you figure something out, then you can process and delegate it. But people always try to delegate too early. And they delegate stuff they don’t understand.

And then they inevitably get screwed ’cause they can’t manage it. And they can’t quality control it.

Louis: Word. And one small tip, this is not where I wanted to go in this interview but that’s super interesting is to record your workflow. Let’s say if you wanna outsource stuff to a virtual assistant. To start with an admin and stuff that you know how to do.

You can recall the very quick deal from your screen using tools like Sub Box. And instead of having to write things, like a long paragraph, just record your workflow in a video. Send that to this person.

Most of the time, this person will know exactly what to do. I want to go back to what you said because I ask you the question again about giving me an example from how would you do it again right now? And just talk about something you hadn’t talked before.

Which is the skills, right? And find what you’re very good at. I think that’s something people overlook. So, do you have any tips for people? How do you know what you’re good at if you’re struggling to find out what your top strengths are?

Rob: I have no idea. Certain skills are obviously monetizable. Like, interface design. And programming, assuming you’re also a decent communicator and understand a little bit about business. All of these skills though, I think it was the Dilbert guy, Scott Adams who made this observation that any skill on its own is kind of a commodity.

But if you can have a combination of two skills then you start to become a bit rare. So, if you can program and write, then you can have a good programming blog. And that sort of separates you.

Or if you can program and you understand business, then you can be a technical consultant instead of just a commodity programmer. I’ve met marketers who were really good at crunching their numbers and they’re just terrible communicators.

So, they send reports to their clients which their clients can’t understand. I had a guy who used to pay me 1,000 pounds an hour just to help him understand what his marketing agency was telling him. Like, he was already paying a marketing agency and he could not understand their reports.

He hired me and once a month I would have a beer with him, he would give me a grand, and I would just help him understand the report that his stupid agency has sent. Because they were shit at communications, right? And if they had invested a bit more…

This isn’t really answering your question but, maybe it provides a strategy. For these marketers that were sending him the report, if they had invested more communication, that would have acted as a multiplier skill.

And pushed them up from mid-tier pricing into being able to do top tier pricing. You know? But they had the core skill, the marketing. But they didn’t have the enabling skill. The communication and visual design of those reports.

So maybe you can be a bit strategic about that. Be like, “Okay, I’ve got my core skill.” I think probably you’re aware of what your core skill is. What is the best multiplier skill that I could intentionally develop alongside it?

Is it design? Is it writing? Is it public speaking? The communication ones are pretty huge, to be honest. People are just terrible at communication and it’s really tragic.

Louis: It is tragic. It’s tragic but it’s good for us, right? So, once you know your skills, the multipliers that go with it, and then you naturally went straightaway into, “Okay, I will look at my least.” Seems to be a good thing.

Look at my least and maybe I find people who might need teaching, or might need an event, or whatnot. So, how do you go about translating I know my strengths to I know which type of people I should contact?

Rob: Well gosh. I mean, when I’m starting a business … my last couple businesses have been mostly B2B like sales driven. When I’m starting out, you have a list of potential customers who could go. And whether you’re trying to just learn from them.

Or whether you’re trying to sell to them or whatever. What I typically do and I think I would do the same thing here is, I rank people by friendliness as opposed to ranking them by their profitability or potential. Because I would rather make my mistakes early with the friendly people.

They’re a lot more forgiving. You’re allowed to ask much dumber questions when you’re talking to someone friendly. Let’s say that I wanted to run events for people who have large email newsletters. And if I have a friend with 5,000 subscribers and someone I kind of know with 100,000.

I would start with the friendly 5,000 because I’m gonna be able to learn a lot in a safe environment from that person. Without burning my bridge with the big lead. I can hopefully learn stuff there that’s transferrable to the person with the 100,000 person list.

People are always in a hurry to close the deal. Close the partnership, close the sale, close the funding. But you tend to go much faster if at the beginning, you’re not trying to close it and you’re just trying to learn.

You’re like, “Okay, I’m not trying to raise investment from you. But I am trying to understand how the investment process works for businesses like mine. Can you explain to me where we need to get to? And what milestones we’d need to hit?”

And you can kind of treat these early pitch conversations more like learning conversations by starting with the friendly ones first. So, that’s probably what I would do. People always try to go, “Okay, well is it the best choice?”

Well, frankly, that’s a stupid question. ‘Cause you don’t need the best business. You just need a business that is good enough. Like, if you have a business making a million dollars a year and you could have been making five million a year.

Then quite frankly, who cares? Because you still created the financial breathing room that you need to survive whatever crisis you’re originally in. And then you can use that as the stepping stone to the much bigger thing that comes next.

You don’t need the optimal choice at first. You just need anything that works sufficiently well. If that makes sense.

Louis: It makes total sense. I think people tend to be paralyzed with the fact that they don’t have all the data to make a decision, right? It’s always this case of, “Oh, we need a bit more data to make this decision. We need a bit more data to make this decision or know.”

And they are paralyzed, they don’t do what they’re supposed to do. Instead of settling for good enough, knowing that they will never have all the answer. It’s just better to just do something. Even if it’s shit the first time. Because the second time you do it better and better.

Rob: Yeah,  and this depends a bit on how much work is involved in trying. So, for example, even though I’m a programmer, you noticed that if it comes to making quick money, none of my choices involve programming. Even though I’ve got that skill and that skill is valuable.

Just because to even try something, when you’re programming it’s gonna take you at least a few weeks and probably more like a few months. And that makes your mistakes quite expensive, relatively speaking. Whereas, if you’re looking at a joint venture thing.

Or if you’re looking at something that’s sales driven or conversation driven. Or events, you can basically, the cost of failure is an email or a meeting in the worst case. When that’s the case, it’s so cheap to try stuff.

Because it just takes a conversation. Then you can be a lot more aggressive about your willingness to make mistakes ’cause they’re so cheap. Programming makes your mistakes more expensive. Same deal with retail. If you’re opening a café, that’s so scary.

Because if you’re wrong once, you’re gonna go bankrupt. You need everything to be perfect. Whereas, if you can find some kind of business where you can do it conversations first then, your mistakes are very, very cheap.

Louis: It’s like in a way, there will be ways for you to break down this initial idea into something way less risky. So, to take your example of a café that you wanna open up. Maybe you should invest in those small stands that you can just wheel around the city. Whatever, and get permit from the city council.

Or maybe you can just monitor the traffic a specific street gets and just start very, very small to validate some of the assumptions you have, right? And move up. So, that removes the risk.

But I very much like the way you classified that. So, I’ll try to summarize back and think back what you said. So, identify your core skills, identify your multipliers. Rank the people you know by their friendliness. Identify them.

Identify the ones who are related to the business you like to create. The ones that you enjoy spending time with. The ones that mostly have pains point. And then try to run a business. Try to start something with a mistake that won’t cost you a lot of money of time. Which is kind of the same thing, right?

Rob: One way to think about it at the beginning is you can think about it as like, “I need to create a gig.” Or, “I need to create a project.” Which generates money, obviously. If you need money. But sometimes in business, we create a lot of mental overhead once we start thinking of something as a business instead of just a project or a gig, or an opportunity, or a deal, or whatever.

Louis: As you said, it doesn’t have to be a business. It can just be something small that just gets into something much bigger. That’s what happened with this podcast.

It was never supposed to be a podcast. Just started with one interview on Skype. And then I ended up doing it a bit more. And then I started to record them. Here we are after 100 interviews. It’s pretty good. Okay so, I think I’ve squeezed enough knowledge of you into this first step of the question.

I think with this knowledge, people listening will understand how they can really generate revenue quite quickly by using their own skills, the network they currently have. And being smart about the people they choose to work with and also type of ideas they should pursue.

So, thanks for going through this exercise with me, Rob. That was quite insightful. I think I’d like to just go to the second topic today. Which is very related and we talked about it already. Which is this concept of asking for feedback.

And the concept of your book, right? Let’s say you’re on the example you took before. Let’s say you wanna create a business product for professors and Ph.D. students and whatnot. And you start to talk about this scenario where you would go to where they hang out.

And just talk to them. So maybe, can you talk about the wrong way, and you already touched on that a bit. But, can you talk about the wrong way to talk to those people in the first place?

Yes. So, there’s a couple mistakes. I guess the two I’ll mention, one is beginning with a pitch, is a huge mistake. And the other one’s being too formal. So, if I come to you and I go, “Hey, thank you so much for taking the time to meet me. I’m working on this incredible idea. It’s like new software. It does this and this. And it’s real-time and it’s big data. What do you think?”

What you’re gonna say is, “Wow, it sounds really cool. It’s so innovative. Let me know when it launches.”

I’ve kind of backed you into this rhetorical corner where you’re forced to just say something nice. That’s kind of all you can say. Very few people, after you pitch, they’re gonna go, “Well honestly, I just don’t care at all about that problem.”

People just don’t respond that way. When you open with a pitch, you kind of shut down useful feedback. Instead what you’re meant to do is ask people how they’re already solving it and why they’re doing it that way.

So, you wouldn’t say like, “Hey I’m reinventing spinning out student businesses. It’s gonna be incredible. It’s got all these great features.” Instead, you would say, “Hey, listen. You guys that spin out student businesses sometimes right?”

And they’d go, “Yeah.”

You go, “Can you talk me through that process? How does it work? What goes wrong? What’s the worst thing that’s ever happened? Why do you do it that way? Have you looked into other ways of doing it? Have you ever tried doing it with software?”

You never need to mention your own idea. You just need to try to better understand what they’re already doing and why. Does that make sense as a distinction?

Makes total sense. And that’s something that happens quite a lot, especially during startup events. I used to go to those a few years ago in the good old days. And it’s insane that yes, this is the only thing you hear. It’s a pitch.

People try to either sell it to you directly or try to understand whether you have feedback on the idea. As you said, you’re just cornered into it. Instead, the way I like to talk about it is very is to act like a journalist.

To be just very curious about everything. If it’s like we’re doing in this podcast right? I’m not satisfied when you just give me an answer, I wanna dig into it. So if you tell me, if I would interview you or understand, or try to be the business for you.

Let’s say you run events all the time. I would ask you, how do you run events? And how and why, and why? I just make talk, right? For an hour. Then I have everything I need without ever talking about a product that I have.

Rob: And sometimes it only takes five minutes. People can be very clear sometimes. You know? You put them onto a topic they really care about and they’re like, “Ah, that is the worst part of my day.” It’s like, “Oh, tell me more. Why do you do it like that?”

And they’re just boom, boom. It comes out really quickly. So, you often don’t even need the hour calendar block. You just need a couple minutes to chat with people. Although, this does require planning what you’re trying to learn in advance.

What I like to do is once a week, I always plan what the three big things I’m trying to learn from any customers I happen to chat to this particular week. It could be things like, I would love to know what they Googled for last time they tried to have this problem.

Which I can then feed into my ad campaigns. Or it might be — oh, I’d love to know why they aren’t already using my competitors. What has caused them to not purchase that product? I kind of decide on my learning objectives ahead of time.

And then when you meet people you go, “Hey, weird question. But, why aren’t you using this product?” They’ll just tell you right then. Because it’s about their life. They won’t lie to you. Where people lie to you is when you ask them for opinions about your product. So, don’t do that.

Louis: From the example you just gave, I never thought of this one before the first question about asking what they prefer. What did they search for in Google and then you can reuse that for ad campaigns. It’s a very unscalable way to scale stuff.

Which is interesting. From your experience then, what are the types of learning you’d recommend listeners to focus on?

Rob: At the very beginning, you want to try to get to where you have a good mental model of what they are already doing and why. For example, let’s say they’re still using an Excel spreadsheet, telephone calls, and Post It notes.

That’s their system. Well, okay. And you think this is a common entrepreneur trap. They go, “Oh wow, they’re still using Excel and Post It notes. They need software.” So, you build a bunch of software and then they don’t want it.

And like why? Because they like their Excel and their Post It notes. They’re comfortable with that. It works for them. So, you have to understand not just what they’re doing but, why they’re doing it that way. Why haven’t they already upgraded to fancy software?

Maybe there’s some interesting constraint that you need to know about. That’s my number one learning goal is, what are they already doing and why? What’s their decision-making process? And you should kind of be able to talk through it.

Like, you’ve got a good mental model of your customer’s world. Then after that, it probably moves into like the more money focused stuff. Like, what’s they’re buying criteria. Their decision making. Their budgets. It’s different with consumers because consumers will do a lot more impulse buys.

The biggest one though is what are they already doing and why? If you’ve got that, you’ve got 95% of what matters.

Louis: And it sounds like it’s even better if you can actually ask them to show you how they actually do stuff. Instead of just describing it, right?

Rob: Yeah, it’s not always possible. It depends on what you’re trying to help them with. If you’re trying to improve the way people deal with email then yeah, by all means, watch them do email. You’re gonna learn a ton. But there’s lots of problems where that’s just not practical.

It’s worth pointing out, let’s say you’re building Uber. Or you’re making the Segway. Or you make a video game. These types of products do not solve explicit problems. Everyone could still get a taxi before Uber came out.

So, there was no explicit problem. Video games are a classic example. You can’t go to someone and go, “Hey, do you like having fun?” There’s just nothing to learn from that conversation. In those cases, where there’s no clear problem, you have to build an actual prototype much sooner.

And just put it into peoples’ hands. Then you kind of use conversations afterward to understand what they did and didn’t like. Whereas if the problem’s explicit and well defined, then you can learn everything just from talking to people even before the product exists.

Louis: Is the fact that when you can’t really identify a problem, is it more from a B2C perspective rather than a B2B, you think?

Rob: It’s both. Let’s say you can save someone 6% on operational expenses. That’s not an explicit problem. They’re not like, “We desperately need to save 6% on operational expenses.” But, if you go to them, it’s like a nice to have.

But, if it’s easy enough for them to install and use and it doesn’t massively change their workflow then they’re like, “Hell yeah.” So, that’s a B2B, nice to have. Whereas for consumers, you have a ton of stuff that is nice to have.

And much more like impulse buy. Or they don’t need it but they like it. That’s harder to learn from conversations. But that’s where stuff like all the marketing experiments like running fake Adword campaigns. And all of that stuff really comes into the forefront when it’s these nice to have for consumers.

Louis: let’s talk about that a bit more then. Let’s say you understand that the problem is not obvious but you have a hunch. You have a good feeling that your idea, your prototype could be useful. You said one thing, first of all.

Build a prototype quite quickly and put that in the hands of potential people and just see how they react, right?

Rob: Yeah. Events are another example. You kind of can’t really test an event. You just have to start selling tickets and see if people buy them. And so that’s your prototype. Like, “Alright, I have an event.” If you sell enough tickets then you build it afterward.

The same is true for video games, for most consumer phone apps. There’s a huge swath of things where you kind of need something to sell or to pitch. Before you can get anywhere.

Louis: Talk to me about the commitment side of things. I know it’s difficult first of all to get to talk to someone once and then — how do you talk to this person again?

Let’s say now that your prototype has been built and now that your product or service is a bit more defined. Building this relationship and asking for a commitment. Making sure that people reply to your emails and all of that. How do you deal with this?

Rob: Okay, so the idea of commitments is that if you pitch a product to someone, it’s very hard to figure out whether they’re a customer, or whether they’re just saying nice things about it. Because they wanna be polite.

Your challenge is, “Okay, how do I distinguish between these two groups of people? ‘Cause I wanna ignore the feedback that’s just compliments. I want to obsess over the feedback that’s from real, potential customers.” And so, traditionally, the way this works…

The way I think about it is, you ask them for something that they will only give you if they’re serious. Which is usually their time, their reputation, or their money. If I say like, “Hey Louis, I’m making this incredible software for podcasters. It’s gonna make your life easy. It cleans up your audio. It does automated marketing, it’s great.”

And you’re like, “Wow, that sounds so innovative. That’s really cool.” Okay, so this is, I know the problem point, right? I’m like okay, “Well he said it’s really cool. But, does that mean it’s a compliment. What is it?”

All I have to do is ask you for something that you’ll only give me if you’re serious. So, I say, “Listen, it’s not ready yet. But, we’re gonna be starting our beta in a few months.

If you wanna put down a 10 euro deposit now, I’ll make sure that you get a first access spot into the beta. It’s gonna be a limited group. What do you think? Do you want in?”

And if you actually really care you’re gonna be like, “Hell yeah. This is an important tool for me. I absolutely wanna try it.” I’m not trying to trick you. It’s not like some neuro linguistic whatever.

I’m not tricking you or trying to get your money if you don’t wanna give it to me. Rather, I’m just giving you a clear opportunity to do this small commitment to show me whether or not you’re serious.

In a B2B context, the main one is introduction. So, if someone will introduce you to their boss, it’s a sign that they’re really serious. You can treat them like a customer. Whereas if you’re talking to them, they’re like, “Oh I love this. This is incredible. I really want it.”

You go, “Oh, well listen. Who else would need to sign off on this for you guys to be able to buy it?” If they go, “Oh, you need to talk to my boss, the legal team, the tech team.” It’s like, “Oh, will you make that introduction? I’d love to talk to your boss.”

They go, “Oh no, I really can’t.” Alright, well, they’re not that serious. Or you’re not good enough yet. But you can figure that out with a couple of followup questions. But just by asking for that introduction.

You’re able to … ’cause they might say, “Yeah, absolutely. Do you have 10 minutes now? We can go talk to him right now.” You’re like, “Okay, great. This guy’s really serious.” There’s no money changing hands. But the fact that they’ve put their reputation on the line by making that intro. You can treat them like a customer.

Louis: So, time, reputation, and money.

Rob: Those are the three big ones. There’s some others like basically anything someone wouldn’t give you unless they’re serious. If someone tells you about their budgets, that’s also a kind of secret information that they’ll only give you if they’re serious. So, there’s a few edge cases like that.

Louis: Yeah, especially in the B2B budget the marketing team has. I realize that as soon as you mentioned that. This isn’t something we would disclose until yes, we are very interested in talking to people. Understanding how much we have. It’s a good question to ask as well.

You’re going so fast through every single topic I wanted to talk to you about. That I’m struggling to find questions. No, I’m not struggling, I have plenty of stuff. But I’m curious, we talked about a lot of things. We talked about how to start a business the right way.

How to do it again. How to ask for feedback early. How to decide whether someone is worth talking to or interested in stuff. I’m just curious, is there one thing, a pet peeve of yours, something that you really hate. Or you really love talking about that we haven’t covered so far?

Rob: I mean, if you’re thinking about entrepreneurship somewhere in your career, right? Maybe you’re just doing a marketing job now but you’d like to run your own business someday. Or maybe you’re already doing your own startup.

You’re working on it on the side, whatever. What I would encourage you is like a mindset shift. I noticed, I did this myself and everyone does it. When you’re in your first company or when you haven’t started a company yet, you think you’re only gonna get one chance.

It’s this one shot mentality. “Oh, it’s my only company so I have to make it work. And it has to be perfect. And it has to change the world.” We put all these extra demands on ourselves ’cause we think it’s gonna be our only one.

But if you can change your mindset — and this is hard to do — but it’s very powerful if you can pull it off. If you can change your mindset to think of entrepreneurship as a career, where you’re gonna be able to start multiple companies.

Maybe you go back to a job. Maybe you try freelancing. Maybe you start another business, whatever. Everything changes. ‘Cause your first business doesn’t need to change the world. Your first business can just sort out your finances.

Or your first business can build some important skills. Or your first business can create your network by giving you a chance to work with a lot of great people. Then you can think of your entrepreneurial career as a series of stepping stones.

Where it’s not necessarily like my one big business, it’s everything. It’s like, “Oh, well I did this project. And I gained …” Remember we talked about our resources, our skills. Or communities, our insight. All these resources that you bring to the table.

With each stepping stone, with each stepping stone business, your pool of resources is getting bigger. Which makes the next stepping stone can be even grander, even loftier. And businesses that would be really hard for you to start right now.

After you’ve taken a couple of these stepping stone businesses, suddenly they’re super easy. ‘Cause you’ve already got all the resources. You know the people. You have the skills. Say if you can think about it a little bit longer term like that.

Don’t worry about, “How do I make a billion dollar unicorn for my first business?” Rather be like, “How do I make anything this profitable just within my reach?” And then once you’ve done that you go, “Okay. Well, what next?”

You keep going. And you’ll get much further than you imagined you could have.

Louis: Yeah, amen to that. I don’t know consider myself to be an entrepreneur. Maybe I am. But, definitely, I started a full-time job, my first full time job as a marketer a few years ago. I left to create my first business — an agency that failed.

‘Cause I bailed out. But I learned so much. And as you said, also created a big network. Now I have a full time job that I very much love and this side project on the side. I know that the second or third business I would create if I ever create one, would be much, much better than the first one. Because of all of those elements.

Rob: Yeah, and you can think this way about your skills as well. It’s easy to look at me and you go, “Oh, well he’s got a blog. And he can program. And he can talk.” Okay but, a few years ago, I couldn’t. And so, whatever your skillset is now.

If you think about what are the multiplier skills that I would love to have, that it seems unfair that other people have and I don’t. Well, it’s like great, start building that. You know? Then when you are ready to start your business in a few years, you’ll already have that unfair advantage.

It’s like you can’t just turn these things on right now. Oh and similarly, this will be my last of unsolicited life advice. But co-founders are really, really important. And no one pays enough attention to who they work with.

People spend a lot of time dating because they wanna make sure they marry the right person. And so, they go on dates and they break up. They go through this whole process, right? Because they want their husband or wife to be the correct person.

And then when they’re starting a company they’re just like, “Anyone else wanna start a company? Okay, you seem good.” They go for it, but that’s crazy. And the dating equivalent of finding a co-founder is working on side projects together.

Let’s say that you’re a marketer, and you’ve got a buddy who’s a programmer. Or a buddy who’s a sales person. Or a designer.  You think that someday they might make a good potential co founder. Well, carve out a weekend and be like …

“Okay, I bring marketing to the table. You bring your skill. What can we do in a weekend that would be fun?” You might learn by the end of the weekend, that’s a date. That’s the equivalent of a date. But for co founders instead of relationships.

You’re like, “Wow, you’re terrible. We hate each other. We should never do that again.” And that’s a great result. And you wanna make those discoveries before you start the company rather than after you start the company.

It also gives you this chance to hone your skills and it also builds a portfolio. Which is useful whether you go the entrepreneurial route or the career route. There’s so many wonderful side effects to working on side projects with interesting people.

Louis: Yeah, thanks for sharing this as well. It’s quite interesting. I decided to go on my own for the first business because I couldn’t find the right person. I think it was a good choice in insight. ‘Cause I could have raised with the wrong people.

And I know a lot of people are still doing this mistake. So, it’s a great analogy. I ask three questions to every guest on the podcast, Rob. The first one is, what do you think marketers should learn today that will help them in the next 10 years, 20 years, or 50 years?

Rob: I’m not sure. There’s a lot of talk about the kind of data and programming stuff. Which is certainly useful. I would have to say though, being able to write coherently in a way which is understandable for people without your skills.

Like, if you can write in a way that the average uninformed small business owner can understand quickly. Without the jargon. Without all your acronyms and stuff. That’s gonna 10x your billing power as a marketer.

Tat would be my number one. It’s like playing language communication of difficult topics. And you can practice it. It’s something learnable.

Louis: Yep. That’s a good one. What are the top three resources you’d recommend our listeners today to check out? Could be a book, podcast, events, anything.

Rob: My book is The Mom Test, which is good for having these one on one customer conversations and learning from them. Apart from that, for me the biggest one was meeting up with a group of other people who were working on the same types of problems that I was.

And meeting with them like once a week or once every two weeks. Just swapping notes about what we were trying. What was working, what wasn’t working. I think you can apply this to any interesting skill as well as to entrepreneurship, in general.

If you’re really struggling to figure out whatever. Say, some new Instagram advertising system or whatever. If you can meet up with people who are also working on either just new ad systems in general. Or on that one in particular.

Just swap notes and case studies of what you tried. Look at each other’s analytics dashboards. I think that learning from our peers in this kind of structured intentional way is really, really undervalued. People always get a beer with their peers.

But they’re not really swapping what they’ve learned. I would set that up. I did that for years in London. Where once a week I would meet up with six people and we would just swap our notes. And it was so, so valuable.

Louis: Yeah. So that’s one definitely an incredible resource. And the first one was the book. So what would be your last one?

Rob: I don’t know. I mean, so much stuff’s just a waste of time. I don’t know. Read a good fiction book or something. I’m trying to pull myself away from all the learning, right? I spent so many years so deep in it.

And it’s like all of my waking hours were about, “I must learn. I must engage with the community.” And all of that. Recent years it’s been like, I learned how to sail. And I bought a sailboat. And I spent a lot of time writing.

And I learned to play ukulele. I think that that stuff’s a good counterbalance as well. It’s easy to get a bit too obsessed with our skill or our career. And it’s like, you forget about the rest of life and doing the other living stuff.

It’ll make you better at your job as well. It just makes you a better human and then you get naturally better at your career as a side effect.

Louis: Just do other shit, right?

Rob: Yeah, do fun stuff. And some of the fun stuff that takes a bit of effort. Not just Netflix.

Louis: Laughs. Rob, you’ve been an absolute pleasure. Thanks so much. I love talking to guests like you, you’re able to just get the questions very fast and able to deliver so many insights in every minute. I think listeners have enjoyed this one quite a lot.

Where can listeners connect with you and learn more from you?

Rob: Robfitz.com is sort of … it has links and email addresses and whatever, everything else. So, robfitz.com. And links to my blog. And momtestbook.com if you wanna pick up a copy of the book.

It’s like $10 for the eBook so it’s not gonna break your bank. And it’ll certainly make your customer conversations more valuable and more effective.

Louis: Once again Rob, thanks so much.

Rob: Thank you. It’s been a pleasure.

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