For Starters #5: Navigating Minnesota Nice or All the Whys Customers say 'No'
A year or so ago, I attended a workshop for startup founders on how to successfully pitch investors.
My two biggest takeaways from that session:
- Investors are a customer
- Few people are incentivized to say ‘No’.
Both of these have significant implications for how Founders prioritize conversations with both investors specifically and potential customers in general.
The former means all the same customer development principles apply to conversations with investors;
What’s the persistent frustrating problem you can help them solve? (diversifying risk in existing portfolio, deal flow)
What’s success look like for them? (increasing their chance of a outsized return, fulfilling obligations to LPs)
What’s the price they’re willing to pay for this help? (expressed in valuation)
Few of these have any short term time constraints, which means the investor can be patient, in much the same way all well-established organizations can be patient. So much effort is required to overcome internal opportunity costs, that even solutions that appear promising may not be able to survive the process. Thus, the only rational answer here is, "Let's keep in touch."
Understanding this lack of incentive to clearly say 'No' is a one of the most important lessons for any startup founder - hell, anyone in new business development - to learn. The vast majority of potential customers (investors or otherwise) have no incentive to say ’No’ to you. Especially right away. Why would they?
You seem like a nice enough person, the two of you just met, you both committed time to this conversation, you've found some common ground, and this conversation will conclude soon enough. There’s no reason to unceremonious end the relationship….yet. So, we all get Minnesota Nice because we want to be civil and polite when deep down we're not convinced we'll ever see this person again [1].
For starters, some ways potential customers say ’No’:
- evading your direct question
- speaking in generalities rather than specifics relevant to their organization
- hesitating to introduce you to others in their organization
- resisting scheduling a followup
- rescheduling within 48 hours of a scheduled conversations
- not joining the call within 5 minutes of the determined start time.
- simply ghosting you
- declaring some variation of, “I would buy it if…”
- asking how you’d address some hypothetical scaling problem
If you prefer a consultative sales approach like I do, you know none of these ‘No’s suggest removing the person from your ongoing marketing outreach, but every one of these ‘No’s 100% means this person is not going to buy - right now. But, early on, buying right now is all that matters. So, headline is 'No', time to move on.
This means, you don’t actually need to ponder the tea leaves in their cup, study their body language, or run the transcript of your call through the Midwest Voice Translator - https://www.youtube.com/watch?v=7OR7yPK4wEw, or decode any other subltey. You just need to listen for a ‘Hell, Yes’ - https://sive.rs/n
Actual customers won’t wait - https://garrickvanburen.com/attn-entrepreneurs-customers-wont-wait/ - and actual customers buying today is what breaths life in your startup.
What ‘Hell, yes’ can sound like (actual customer quotes):
“Hell, yes.”
“When can you start?”
“What’s your day rate?”
“I need you.”
"Can you come by on Monday."
“Let me see if my boss is available right now."
“One minute, while I move some things so we can talk specifics.”
Anything where the customer proposes specific next steps
I have a standard six question script to structure 30-minute customer discovery conversation. The script can get to ‘Hell yes’, though it's not the intention. The script is designed for an initial conversation to understand the customers’ perspective and how urgently they want help with the problem at hand ("Not at all" is a fine answer). The six questions themselves are just landmarks for the conversation. All of the important details are in your follow up questions. No, the follow up questions aren’t in the script - you have to listen for them. Your prospect will suggest follow up questions in their responses to your landmark questions.
In these conversations, I like to imagine potential customers describing a machine, a system of inputs and processes and outputs. The outputs going to clamoring customers continually insisting on more, more, more. My default follow up questions simply flush out the specifics of this imagined machine [2]. You probably have your own technique for really purposeful listening. Whatever your technique,
Just listen.
Then sell.
Then build.
In that order. Listen, Sell, Build.
Yes, it can be frustrating and unsatisfying - because all you really want to do is build. It can be doubly frustrating when the customer suggests they would buy if you had a fully-baked solution already built.
Don’t fall for it. They won’t. [3]
The world is full of workarounds. If they won’t entertain a short term workarounds for potential relief - they’re not a customer. Let’s go back to the core of JobsToBeDone’s outcome-driven innovation model, ‘The how doesn’t matter to the customer. Only the outcome matters’.
Related:
A Smart Bear: Never say “no,” but rarely say “yes.” (2011) - https://longform.asmartbear.com/say-yes/, includes this great line;
"Funding is always a distraction from actually running your business, so the amount of money you get must be transformative to the business."
It's not just Minnesota, in my experience it's the vast majority of western professional cultures. I've found the Dutch delightfully direct - with a much higher chance of clearly saying 'No' from the start and continuing to value the relationship.
One of the startups I’m helping engaged me for follow up questions in customer interviews. If you or someone you know would like help levelling up their customer interviews - grab some time off my calendly.
As I've said multiple times before, "if you build what just one customer wants - you're a custom dev shop. If you build what a number of customers want - you're a product company."