Don’t Talk to Your Customers

I recently had two separate conversations with founders of young companies. Both were talking about strategies to grow their businesses, and my suggestion to each was to stop talking to their customers.

In each case, the business was small and growing, only capturing a small portion of the total addressable market.

As an example, let’s say your company is in the real estate technology space, and you’re selling a software solution to real estate agents. There are 1,000 possible buyers of your technology in your launch market. And perhaps you’ve signed 50 of them up as customers.

Unless you have customers paying you real money, they’re not customers. 

First off, the ultimate test of market acceptance is a paying customer. I don’t care about positive feedback, promises to sign up, or people on free trial accounts. Unless you have customers paying you real money, they’re not customers.

When you talk to your 50 paying customers, you’re talking to people who are already sold on your product. They’ve already evaluated it and have made the decision to use it in their business. Anything you learn about their pain points, the problems you’re solving, or why they like your product is nothing new to you.

If you want to grow, you need to talk to the other 950 people, the people who aren’t customers. You need to understand their specific needs and exactly what it would take to get them as paying customers.

If you only talk to your paying customers, you’re just going to reaffirm your existing assumptions in a very small, unrepresentative sample size. You won’t learn anything new. You’ll get nothing more than a distorted view of the entire 1,000-customer market.

This is a very dangerous position because it reinforces your existing prejudices. You won’t learn and you won’t grow. In fact, with that reinforced view, it may be more difficult for you to adapt your product or business model to appeal to the larger market. This tendency -- called confirmation bias -- is especially difficult for a young founding team to deal with.

I’ve seen a number of businesses fall into this trap. They achieve some small degree of success and sell their product to 50 customers. They only talk to the 50 and reassure themselves that their product is amazing. They spend their time wondering why no one else is buying it, and instead of talking to the 950 to understand their specific needs, they keep running into brick walls when no one wants to buy. They never grow, and end up in the category of zombie businesses; just successful enough not to fail.

So: don’t talk to your customers. If you want your business to grow, find the people that should be buying your product or service but are not, and spend your time talking to them instead!