Imagine that one morning you wake up thinking about the way we follow television series. We need to allow a relatively long time to be sitting in front of a screen. So, why not benefit from the availability of mobile phones so that we can follow, at small intervals throughout the day, tv shows conceived or adapted to be seen that way? Adapting the contents to the size of the device and dividing it into small sections may require some additional technology and effort, but could this idea result in a competitor to Netflix?
Knowing that the main reason for startups to fail is the lack of market for their product, you decide to use the customer development methodology created by Steve Blank to do the initial validation of your idea. You will then interview people representing the product’s different customer segments to assess interest in this new television content distribution service. Diligently, you scripted the interview with your potential clients. You begin by explaining, in general terms, your idea and you continue with a sequence of questions: Do you feel that you lack time to watch television series? Do you think it’s a good idea to be able to use small breaks of free time to watch series? Would you use your cell phone to watch a short episode of a series, while waiting for an answer or while commuting on public transportation? How much would you pay to have this service?
Empowered by this script, you look among the people you know who could represent potential customers and you schedule some time to interview them. The results you get are very promising, more than 90% of respondents said that they would like to have more time to watch tv shows and think your idea is good. More than 70% would like to see tv shows while waiting to be attended or while travelling. They were also willing to pay for it, more than half said that they would pay €4 or more per month. Although excited by these results, you may, however, suspect that they may be due to the small sample size. That’s why you prepare an online questionnaire with the same questions, which you publish on social networks and in conversation groups about tv shows. The more than one hundred responses confirm the data obtained from the interviews.
It is at this stage that you decide to interview a friend with some experience in validating business ideas and who, upon hearing her questions with some horror, suggests that you should read Rob Fitzpatrick’s book “The Mom Test”. Only later will you understand the reason for the title: the book teaches how to do interviews in a way that even our mother can give you honest information about the potential of our business idea. The desire to succeed and the desire to be pleasant lead your mother, and many other people, to praise and give positive opinions about hypothetical future situations, misleading the unwary interviewer. You quickly realize the mistakes you’ve made. You started by exposing the idea, leading your interviewee to the assumption that confirmation is a way of being pleasant to you. In the first question, the positive answers probably validate the lack of time more than the desire to watch tv shows. The remaining questions ask for opinions about hypothetical future situations and not concrete facts that could predict the future behaviour of the respondent.
Based on what you read, you decide to reformulate your script. You will no longer present your idea at the beginning of the interview and, instead, you will start with the following question: Are you a subscriber of streaming services for tv shows or movies? With this question, you will learn about the respondent’s interest in the topic. The following questions are focused on facts about the interviewee’s life. What did you do the last time you had to wait 10 to 15 minutes? How often do you have these waiting times? How often do you watch series or movies on your mobile phone? More than knowing the interviewee’s opinion about your business idea, these questions are necessary to provide you with more information about his or her life. If the interest is confirmed, you can then ask about the possibility of using a product like yours. Finally, you decide to end your interview with the question: Do you know other people I should talk to? The request for references is more than the possibility of having more people to interview, it is the confirmation that this interviewee has given enough value to the interview and the product, to the point of providing the contacts of his or her acquaintances.
This change of strategy produced the opposite results. Potential customers who subscribe to streaming services have other ways to occupy their short idle breaks. Those who have a larger number of small breaks occupy it watching free access content. These conclusions quickly led you to discard your project. And that was good for you, as the streaming platform Quibi, which pursued a similar idea, closed its operations in December 2020. It closed just 6 months after launch, in part due to the withdrawal of most customers at the end of the free trial period of 90 days. Of the $1.75 billion received from investors, it ended up with $100 million of programming rights that were purchased last January by Roku.
You have now more time to start validating your next business idea. You can start by interviewing your mother.
Adapted from my column in Jornal i of April 6th, 2021