For Starters #11: First, Presume There’s No Customer Demand

"The Time Traveler Convention was a single-event convention held at MIT on May 7, 2005, in the hopes of making contact with time travelers from the future....It was presumed time travelers would have the capability to visit any particular time if they could travel to that general time period at all. The Convention was announced in advance (that is, before the event) and over 300 contemporary people attended." -https://en.wikipedia.org/wiki/Traditions_and_student_activities_at_MIT

This past weekend, I ran an experiment to identify nascent demand on a silly idea. Like the Time Traveler Convention above, it cost me $0 - just opportunity cost. My silly idea was: "Could we fill an entire parking lot with orange Subaru Crosstreks?"

So, a couple months back, I declared a date, time, location, made a Facebook event, and made some flyers (for windshields of orange Crosstreks I’d see on the streets and parking lots).

Today, at the appointed time, I arrived at the designatd location and I waited.

Building demand starts extaordinarily slow. One person at a time. I think of building demand as climbing the Fibbonoci sequence (https://en.wikipedia.org/wiki/Fibonacci_sequence):

0, 1, 1, 2, 3, 5, 8, 13, 21, 34, 55, 89, 144

Pick a timeframe - a week, a month, a quarter, a year - it doesnt matter, each number in the sequence is that many sales in that timeframe. Presuming, this is what your growth is going to look like, how many steps until you’re unable to handle demand is with your current methods? 8? 9?

You don't need to worry about scaling until you start seeing that level of concurrent demand - yes, concurrent demand - not cumulative. Cumulative customers doesn't mean anything, you're looking for concurrent customers within the smallest unit possible. The smallest unit possible is often monthly as in Monthly Average Users (MAU) and Monthly Recurring Revene (MMR).

The great thing about working in a successful company is that this customer demand exists, deep into Fibonacci. In the short term, the demand will very likely persist at a high-enough level no matter what you do (or don't do). Which means, the goal of a "job" at an existing company is simply to process and fulfill that demand, in a way that grows but does not threaten the demand.

“My team presumes there will always be demand, that’s not the case.” - a CEO that's seen things go south before.

The above CEO is who I'm referring to when when I say, "few people know what a successful businesses looks like on day one."

Few people know the feeling of zero demand on day one.

Zero phone calls, zero emails, zero sales. Zero time travelers. Zero orange Crosstreks.

It’s both liberating and panic-inducing.

What did we do?

What can we do?

There’s only thing to do: Try different outbound sales and marketing experiments and incrementally build demand. No, do not build product.

Product - Sales = Waste

One of the founders I talked to this week was a bit anxious about my recommendation to aggressively go after sales when their product and processes weren't able to support much more than their current handful of customers. Yes, that could be a problem if sales and delivery are simultaneous. In this particular market, sales and delivery are months apart (you may be surprised how often this is the case, especially in B2B & B2G sales).

You could even say that having sales and delivery months apart is the best possible scenario because it tightly focuses delivery on exactly what was sold (presuming the delivery team is confident in executing under these terms). Doubly so for multiple sales of the same thing to be delivered in months - with multiple sales, you've got a pattern to build a product against.

So many Founders I've worked with (and been myself) have over-invested in product ahead of sales because they didn't know how to get started on customer discovery, didn’t feel comfortable talking to strangers in a structured way for 20 minutes.

This is why I created The Customer Interview Review ( http://garrickvanburen.com/product/customer-interview-review/ ). Not that many years ago, the only way to improve your customer interviewing techniques is to have an expensive, experienced person sit in on the call with you. This can be even more awkward - both for the Founder (doesn’t know how to coordinate w/ the expert in real-time) and the prospect (can feel outnumbered).

Today is different. The ability to record Zoom calls gives early stage Founders 'game footage' after every interview to be reviewed by a 'coach' (in this case, me) asynchronously ahead of the next 'game' / interview. This means improvement can come faster, cheaper, and on-demand - dramatically accelerating the Founder's learning.

If you'd like to hear more - drop me a line.