So, you have a business idea. Sweet!!

Now what’s your next step?

You want to get venture capital. You want to form an LLC (Limited Liability Company). You want to create a Facebook page and a website. You want to sell your product to the millions of desperate customers who can’t wait to get their hands on your awesome product.


Hold up, not so fast! It’s easy to get caught up in the excitement of launching a business, and let’s face it…it’s pretty darn cool. Okay, REALLY cool. And maybe you do have the next BIG idea.

But you need to understand one of the startup fundamentals: you don’t have a business until you sell something. In other words, you don’t have a business until you find someone who thinks your product is so valuable that they will hand you their hard-earned cash in exchange for your product.

So before you seek venture capital, before you form an LLC, and even before you create a logo, website, or Facebook page, you need to be searching. Your single most important job as a budding entrepreneur is to search for a profitable, scalable business model. And at the center of your business model is your target customer.

This is the fundamental difference between a startup and an established business.  While a startup searches for customers, an established company executes a proven business model.

Okay, so we now know your #1 priority as a new entrepreneur: find your target customer and create a business that fills their needs.

Before discussing how to do that, we need to cover a few key terms:

Value Proposition: the (unique) selling point that makes your product attractive to customers. Your value proposition answers the question, “why do my customers care about my product?”

Minimum Viable Product or MVP: a basic version of your product that allows you to test your assumptions about your customers and market with little cost and effort.

Product/market fit: finding the right match between your value proposition and your customers. For example, when Steve Jobs returned to Apple in 1997, he rebranded the company as a computer manufacturer for the visionaries who think differently. And it caught fire. You’ve probably heard Steve Job’s famous quote from their 1997 television advertisement, “Here’s to the crazy ones. The misfits. The rebels. The troublemakers. The round pegs in the square holes. The ones who see things differently. They’re not fond of rules. And they have no respect for the status quo. You can quote them, disagree with them, glorify or vilify them. About the only thing you can’t do is ignore them. Because they change things. They push the human race forward. And while some may see them as the crazy ones, we see genius, because the ones who are crazy enough to think they can change the world, are the ones who do.” Apple has established an incredibly strong product/market fit.

Business model: the strategy a company creates to generate revenue and make a profit from selling products to a target market. A business model is your startup’s game plan. It’s quite similar to a business plan, but in a condensed form (sometimes fitting onto a single page) without the “rigidity” and “structure” that a traditional business plan requires. Business models help you brainstorm your operations and direction with your team.


There is never a perfect time to begin talking with prospective customers. When I launched my first serious startup, I came up with dozens of excuses why I should wait to talk with customers. Not only was I scared to make conversation with total strangers, I was secretly petrified to expose my business idea to the world’s scrutiny.

Yes, getting out and speaking with potential customers is daunting and you should expect a lot of pain and rejection, but getting out there and talking to customers is the only way your idea will grow into a scalable, profitable business.

Let’s get one thing clear…

You MUST forget the false notion of “build it and they will come.” In other words, don’t expect to simply build your product and then have customers line up outside your door. That only works for revolutionary, earth-shattering products like airplanes and penicillin. For the other 99.999% of products, entrepreneurs must find the right target market and craft a unique value proposition that speaks to a particular target market’s needs. Then, entrepreneurs must back their value proposition with an incredible product and customer support that knocks the socks off your customers.


Don’t be everything to everyone. The worst target markets are undefined. The phrase “anybody can use my product” is a recipe for failure.

I know you don’t want to “limit” your potential market. I know that you don’t want to only focus on a small market and “exclude” everyone else. And I know you probably think, “Everyone can use my product.”

I know because I’ve thought the exact same thing, just like every other aspiring entrepreneur (at least who I know of) thinks in the beginning.

Why do we think this?

When you are head-over-heels in love with something, it’s easy to expect everyone else will love it to. But here’s the thing: entrepreneurs blinded by love need to realize that only a very small group of people will love your idea enough (at least in the beginning) to actually write a check.

If you want to have success in business, you need to become very clear about who your target market is and exactly what value you are providing them. The goal is NOT to cater to a lot of people. Even if you are “successful” in launching your product to an undefined, mass market, you will inevitably become a mediocre solution for a lot of people.

Instead, the goal is to become a fantastic solution for a small group of people. This small group of people holds the keys to incredible growth and profitability. It’s far better for a small group of people to absolutely love you than for a large group of people to be simply satisfied with your offering.

The bottom line: you have two options when creating a product/market fit…

  1. Build a crappy product that somewhat meets the needs of a lot of people

  2. Build an incredible product for a small, passionate group of early adopters

Surprisingly enough, most entrepreneurs still tend to gravitate toward option 1. They are focused on finding as many customers as possible. They see the smaller market of option 2 and fail to understand the benefits of that route. In general, option 2 is more profitable, offers a greater chance of survival, and will provide you with a greater sense of appreciation from your customers.

Finding a single customer and closing your first sale is difficult enough. Don’t make it more difficult by trying to be everything to everyone. If you do, you’ll just end up being average.

I really want to drive my point home, so think about this for a moment:

If you had to sell one product to one customer TODAY and would be out of business tomorrow if you didn’t, who would you pitch? You don’t have time to create a grandiose marketing plan and pump thousands of dollars into a website and targeted Facebook Ads. You need to sell one product by TONIGHT or your entrepreneurial dreams will be crushed.

You certainly wouldn’t waste time on things that don’t matter. You wouldn’t spend the morning tweaking your product’s packaging, printing business cards, or buying a nice outfit to impress your potential customers. No, you’d shine whatever shoes you’ve got and run out the door with your MVP in hand at 5AM sharp. And where are you going to go? You wouldn’t waste time with the thousands of people who might like your product. You are going to go right for the kill shot and pitch the few customers who you think will absolutely freaking love your product. Those are the customers we want!

Although you might be struggling to come up with an exact description of your “perfect customer,” you already have a good idea who these customers are, whether you realize it or not. Your business idea was likely sparked by a need you see in the world. You need to get specific about exactly who this target customer is for your business.

So, let’s look at an example of a successful entrepreneur who got really specific about his target customer: Tim Ferriss in promoting The 4 Hour Workweek. For those of you who live under a rock and don’t know who Tim is, you should check out his site (

I use Tim Ferriss as an example because I recently heard him talk about his earliest marketing plan for his first book, The 4 Hour Workweek, on his well-known podcast The Tim Ferriss Show. He explained that when he first began marketing his book, he didn’t have any traction in the marketplace or influential contacts to call for help. He had very limited resources and 25 rejections from publishers. With these limitations, he decided to get really specific and promote the book to the group of people he thought would most love the story he had to share. On the podcast, he explains that he focused all of his effort on reaching “18-to-35-year-old tech savvy males living in New York City and San Francisco.” Now that’s pretty darn specific, but there’s no doubt it is a group of highly passionate people that would love to read Tim’s guidebook for lifestyle entrepreneurs.

So how do you find these customers for your business?


Let’s separate this section into two: inside the building and outside the building. “Inside the building” refers to all of the things you are going to do before you get out there and start speaking with prospective customers. “Outside the building” refers to the face-to-face interaction that you will have once you get out there and start speaking with potential customers.

A thoughtful and proactive synergy of both approaches will help you achieve product/market fit and form the base of a successful startup.

customer discovery process for startups


Step 1: State your hypothesis

Before you begin the process of customer discovery, I urge you to begin by formulating a hypothesis for your product. This hypothesis should take the following form:

My product solves [insert PROBLEM] for [insert SPECIFIC CUSTOMER DESCRIPTION] by [insert main BENEFIT].

Another way to state your hypothesis using the terms we’ve been using is this:


Step 2: Conduct preliminary research

If you’re heading into the B2C (Business to Consumer) space, you can collect information from prospective customers using a site like Survey Monkey.

We are interested in building a customer development process, not a product development process.

In effect, you need to know what your future customers’ problems are, what they like, how they think, how they react to price/quality expectations, etc. Also important to find out is why the competition has failed to provide customer satisfaction all the while, or for a new idea, how customers coped all the while without this product, etc.

Start by completing a very rough draft of your business model. Don’t worry about filling out everything, just do what you can. A best guess is all we are looking for here. I highly recommend getting started with the Business Model Canvas.


Who do you talk with?

You probably think your product can solve everyone’s problems. But the hard truth is that you are really just head over heels in love with your product and consequently have a warped sense of reality.

When conducting target market research, you must get face-to-face with your potential customers. Email, surveys, and telephone calls aren’t enough. Seriously. I wasted a lot of time with these not-too-useful approaches. I rationalized these approaches with excuses like, “I’ll have more reach by going digital,” and “These people are busy, they don’t have time to talk with me in person” to appease my timidity.

Think about your potential customer. Where do they hang out? What groups do they belong to? What do they spend their time doing? Where do they shop?

Here are a few suggestions to get your search started:

  1. Attend trade shows or conferences for your target audience. I attended several local food shows including a Food & Wine Festival, where I sold out of product and established contact with 3 future retailers of my product.

  2. Go where your target audience congregates. If you have an idea for a food startup, go to a cafeteria, a restaurant, or even a pub. If you have an idea for athletic apparel, go to where athletes congregate, attend sporting events, etc.

  3. Join and attend relevant Meetups in your area. Similarly, you can find clubs or other groups that your target audience participates in. This is how I started with my idea for an organic Ironman energy bar. I emailed the organizers for a few triathlon groups in Pennsylvania and New Jersey. I ended up spending an awesome Friday night at a bar in Hoboken, NJ surrounded by a group of 45 Ironman athletes who all belonged to a triathlon group. I learned a heck of a lot and met some people who were really passionate about my product. And it was super fun!!

Word of caution: Friends and family members can be a great sounding board, but not during the customer discovery stage. Most friends and family members will lie to be supportive, even when you aren’t directly pitching your product idea. You must seek strangers – complete strangers.

So when you get in front of people, what should you say?

#1 Rule: DON’T PITCH YOUR PRODUCT, not even a feature of your product. Period. Don’t even indirectly pitch your product by saying something like, “if you found a product with X, Y, & Z features, would you be interested in buying it?”

As soon as you start pitching, your mind switches from learning to selling. And that’s an instant turn-off to anyone you’re speaking with.

Instead, ask questions, listen thoughtfully to your prospective customers’ answers, and learn from the information.

So, you’re probably wondering, “If I can’t pitch them, what should I say?”

You ASK questions and LISTEN to their answers.

You should always ask open-end questions. Open-ended questions require the prospect to tell you what they think, what they want, or how they feel.

Only ask questions about their past or present realities. We don’t want to ask any hypothetical “Would you…?” or “Will you…?” questions regarding on their future reality. Future questions force your potential customer to predict and forecast and people are generally terrible at predicting the future, even their own future. Consequently, answers to such questions will likely be damaging, even counterproductive, to your research efforts. Future questions will lead you down the wrong path.

Additionally, future questions taking the form of “Would you…?” or “Will you…?” will inevitably lead you to pitch your product in some form or another.

So now that you know to avoid future questions, let’s get back to talking about the past and present questions you should ask.

When you get in front of a prospective customer, here’s what you should ask…

Question 1: “Tell me about your most recent experience with [insert PROBLEM].”

The “PROBLEM” is the pain point that you intend to solve with your product or service.

For example, “Tell me about the last time your phone battery died.”

Answer: “Oh man, the last time my phone battery died I was hiking on a trail in the middle of nowhere by myself! It was getting dark and I was getting really worried that I wouldn’t find my way back to my car. After two hours, I finally found the trailhead and made it back to my car, but I would have been screwed if my car hadn’t started! Nobody else was around!”

This open-ended question will help you connect with your potential consumers. Listening to their experiences with the problem you are working to solve will allow you to craft a narrative for your solution using language that emotionally resonates with your target customers. In general, people love talking about themselves so this is an easy way to get the conversation flowing.

Expanding upon this, you are going to really dig in and get more personal. The goal here is to learn everything you can about your potential customers (without being annoying of course!).

What do your target customers most care about? What do they value? What are their problems? What do they fear? What do they want to see realized in the world?

To answer some of these questions, you must continue with your line of questioning. Here are the follow-up questions you should pose to your potential customers after you hear about their most recent experience with the problem you intend to solve.

Question 2: What is the most difficult aspect of the [PROBLEM]?

Question 3: Have you tried solving the [PROBLEM]? If they say yes, ask them about the methods they used to try solving the [PROBLEM].

Question 4: Have any solutions worked? Follow this up by asking them what they liked and didn’t like about these solutions.

Again, you want to emotionally connect with your prospective customer by empathizing with and deeply understanding their experience.

It really comes down to being sincere and a great listener. Don’t be a jerk. Don’t rush the conversation, and NEVER pitch your product during this first conversation.


The customer discovery process is continuous and iterative. Although it requires a lot of hand-on work, rushing or outright neglecting this phase of your startup journey will dig a grave for your budding business.

Key customer discover guidelines:

  • There are no facts ‘inside the building,’ so get outside!

  • Develop your product for the few, not the many. Don’t generalize your target market – FOCUS!

  • Capturing early adopters will make your startup successful. Don’t waste valuable time in the beginning of your new endeavor trying to justify your product or service to someone or some company. Find the person who lights up with interest and writes a check after your 20-second elevator pitch.

  • Picking a great market leads to better products. With a passionate group of early adopters, you can execute product design in a simpler, more attractive way.

  • Early adopters are also smarter than you. In other words, they have all the answers to guide your product and business development processes, you just have to ask the right questions and listen. More startups fail from a lack of customers than from a failure of product development. You must allow customers to guide your business model formation.

The Key To Success: Focus on learning everything you can about your customers from day one…and never stop!

I wish you all the best in finding your first customer!! If you have any questions and would like my input, send me an email:

Your startup mentor,