What is Customer Discovery?

  • June 8, 2020

Customer discovery is a form of market validation and research that will allow a company to test the viability of their project or idea by gaining insight into their potential customer base. Some key questions to consider during the customer discovery journey are “Who are the customers?”, “What problems do they have?” “How does this product or idea solve their problem?” and “Will people buy this?” Customer discovery is part of the initial research performed before launching a go-to-market plan. Honing in on who will be buying this product and why is an important first step in developing the more complex marketing and commercialization strategies that will be to follow.

The Four Phases

There are four phases of customer discovery. By following the phases in sequential order companies can test a hypothesis about their customer base and market viability. This helps reduce risks when the company decides to do a full market launch of the product.

  1. Develop a Hypothesis. The formation of a hypothesis, or educated guess, about who might be interested in this product and why is the first step in customer discovery. The first step is to create a hypothesis that can be tested for validation in steps 2-4.
  2. Test the Hypothesis. Now that you have stated your hypothesis, it is time to test it for accuracy. The primary way to test this is via informal interviews with potential customers. Identify the hypothesized target market and begin conducting interviews to see if they would be interested in this product. Remember, this is not a sales pitch. The goal is to gauge interest based on the merits of the product to solve the customer’s problems alone. Some other helpful insights that can be gained via interviews are those of analysts and peers.
  3. Test Product Concept. The interviews with potential customers should have offered a better understanding of their pain points and what types of solutions they need for their problems. This step is where companies test the relevance and attractiveness of the product. To test this, let customers see the product or interact with a proof of concept version if possible. If it seems improvements can be made, be sure to share this information with the development team so they can implement changes to make the product more attractive to customers.
  4. Evaluate Customer Feedback. Based on the hypothesis and relative customer interest discovered in steps 1-3 do you feel this product is as good as it possibly can be? If you feel the product can be improved upon or made more attractive to customers you may implement the necessary changes and start back at step 1. Customer discovery is often an iterative process.

I-Corps for Customer Discovery

Customer discovery is the driving force behind the I-Corps program. This is a commercialization and business intelligence program originally created by NSF but now offered by NIH, DHS, USDA, DOD, and DOE as well. There are 99 locations to attend and the program offers a small award to fund customer discovery activities as well as a rigorous program to teach attendees about customer discovery and marketing prior to their proposed SBIR activities.

If you would like some guidance on customer discovery attending an I-Corps program is highly recommended.

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