Startup Sales Coach

How to Judge a Startup’s Customer Experience

Question 1:
“When you described (your big benefit) to customers, what did you learn?”

Naive startups believe that everyone in their target market will beat a path to their door as soon as they launch on Product Hunt. Experienced founders have learned how to sort customers by their requirements, profitability and growth potential.

Great answer: Startups that spend time with customers will immediately describe specific segmentation:

“Customers like Acme and Bravo told us they want us to solve (problem 1). We’re going to focus on that segment with our first product, which we can launch quickly. Customers like Charlie have (problem 2). We’ll go after that segment with a future product. Customers like Delta aren’t interesting because…”

Poor answer: Startups that haven’t spent enough time with customers don’t have a clear idea who will buy their product or why. They are likely to waste a lot of money pursuing the wrong customers. They will repeat their features and benefits:

“We’re faster than X and cheaper than Y.”

“AI/5G/Crypto is growing really fast and we have the solution to Z.”

If you want to give them a second chance, ask, “Who told you that?” then jump to question 2.

Question 2:
“How does your target market calculate the cost of the problem you solve?”

Startups with B2B experience understand that most enterprise buyers need to present a “business case” within their organization to justify any purchase.

Great answer:

“First level managers tell us they track hours spent on X, so they can justify our first product on reduced labor cost or headcount. We chose a monthly price for the first 5 users that they can expense without a long approval process or evaluation. Then our dashboard creates the specific graphs and charts that management wants to see to justify more seats.”

Poor answer:

“Our advisor/professor/investor says every company has this problem.”

Selling to the Fortune 500 C-Suite describes the justification process for a typically complex enterprise sale.

Question 3:
“How will customers evaluate you against alternative solutions?”

This question is much more powerful than the standard “Who is your competition?” because it probes the startup’s understanding of customer alternatives. For example, B2B SaaS products may be evaluated against Excel, SaaS point tools or broad SaaS solution suites (SalesForce, Oracle/NetSuite). Until a startup understands all the alternatives, evaluations will drag on and on and on… Does that sound familiar?

Great answer: Startups that understand their customers’ options will describe a range of options:

“Mom and pop shops are still using paper or Excel. We’re targeting the next level of SMBs that have adopted an XYZ SaaS solution but want to expand it throughout their organization. We’ll win the first deal on (benefit 1) then expand within the organization with (benefits 2 and 3).”

Poor answers:

“We don’t have any competition.”

“We’ve never lost an evaluation.”

“We’re faster than X at a lower price.”