According to the Lean Startup methodology, you find a customer before you start a business, and then you build your business around solving that customer’s needs. That process is called customer discovery, and it’s painful, insightful, educational, and absolutely necessary before starting a business. However, that doesn’t mean that once you have your business idea nailed down that you stop doing customer discovery. Markets change. People change. Companies change. Technology changes…sometimes really fast! You have to constantly talk to your customers and prospects. So what happens when you keep on and keep on and keep on doing customer discovery?
Well, in my case, as I pitched and talked and interviewed about deductmor, I found a new market. A much larger market. A B2B market. An “old school” market in desperate need of disruptive technology. A market that is making a solid come back from the economic stink at the end of last decade. I found this new direction at ATV, specifically, at their event Atlanta Startup Village.
Someone approached me, seeing what we were doing with deductmor (capturing an image of a receipt, pulling certain data from the receipt, creating a database and simple reports from that data, and store everything in the cloud), and asked, “Can you do that for us?”
“Well, maybe. Who are you, what do you do, and how many things do you need to process?”
“A LOT of them! Like thousands every day…well over a million a year.”
Turns out, with a few minor adjustments to the code we had already created for deductmor, we most certainly are able to “do this for them.”
PIVOT! Yes, I said “pivot.” I didn’t want to. I never set out to. And after pouring 8 months of my life into deductmor, it was a very tough decision to make. But numbers don’t lie. I can’t do both (yes, even serial startup freaks have a life!), so I choose the larger B2B opportunity. The last straw in the decision was David Cummings’ blog post from July 15, “Get Potential Customers to “No” as Quickly as Possible,” from which I quote, “Too often, entrepreneurs take too long to kill an idea.”
So, from B2C to B2B; from smartphone apps, APIs, and back end to completely web based solution; from $60/year/user to thousands of dollars per year in recurring service revenue per year per client; from total addressable market of $660M to total addressable market in the multi-billions.
Prospects are already paying for resources to do the manual version of our service and using outdated methods, willing to pay immediately for an efficient, cloud-based solution that provides data integrity, and saves them a lot of money.
Customer discovery. You’ll be glad you did it. Keep doing it, and don’t be afraid to change course.