YC Startup School 2019 How to talk to users framework

YCSS19 How to talk to users Framework
by Eric Migicovsky
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YCSS19 How to evaluate startup ideas

by Eric Migicovsky
● Based on lecture given at Y Combinator Startup School 2019.
The best founders maintain a direct connection to their users throughout the
lifespan of their entire company. The best companies are the ones where the
founders themselves maintain a direct connection to their users. If you are the
CEO, it is your job, it is in your job description, to talk to customers. So, take
the time to learn how to do it well. All founders need to participate in this
process as well. You want to make sure that the founders and the core
members of your company are the ones who develop the skills for talking to
users so you do not have to hire someone like that to be your go-between.
Two things to build a company: there are only two things that you must do in
order to start your company. You need to code or build your product and talk
to users. Recommended book : “The Mom Test”
1. Taking about our idea
The first mistake that we pretty much all make is we
talk about our idea. The goal of a great user interview
is to extract information from the person that you're
talking to, to extract data that will help you improve
the product or improve your marketing or improve
your positioning. It is not to sell them on using your
product. So at the core of a great user interview,
you need to learn about their life. You need to talk
about specifics around the problem area that you're
trying to solve that the user may be going through.
2. Talking about hypotheticals
Second mistake that we pretty much all make is we talk
about hypotheticals. We talk about what our product
could be. We talk about features that we want to build.
We ask questions like, if we built this feature, would
you be interested in using it or would you be
interested in paying for it? That is wrong. Instead,
talk about specifics that have already occurred in the
user's life. This will give you stronger and better
information in which to make product and company
changing decisions. You also want to talk in general
about the user's life. You don't want to just talk about
the specific solution that you’re
presenting.
common mistakes3

by Eric Migicovsky
Try to extract information about the users, the path that
led them to encounter that problem. Ask them questions
about their life in more broader ways to extract context
around how they arrived at this problem. Learn about
their motivations.
3. Talking too much
In a user interview, try to restrain your interest in talking
and really listen. Take notes and listen. In that span of time,
the 10, 20, 30 minutes that you spend with the user, you're
trying to extract as much information as possible so that
when you returned to the office and when you returned to
your cofounders, you're bringing hard data, real facts
about users' lives to the table.
common mistakes (cont.)3
1. What is the hardest part about [doing the thing
(that you're trying to solve)]?
The perfect context for asking, you begin an open ended
conversation, trying to extract information about how
that person currently works on group projects
together with friends. Hopefully, you'll learn about
specific pain points that they have, like they log onto a
shared computer, they have to get their files from
somewhere. In general, the best startups are looking
for problems that people face on a regular basis or
that they're painful enough to warrant solving.
questions to ask users5

by Eric Migicovsky
2. Tell me about the last time you encountered that
problem...
The goal of this question is actually to extract context
around the circumstances in which the user encountered
that problem. Try to extract as much information as
you can about the context in which they began solving
this problem so that as you develop your product, you'll
be able to actually reference real-life examples of past
problems that potential users have had, and you can
overlay your solution on top of that to see if it would
have helped in that particular circumstance.
3. Why was this hard?
What were the specific things that they encountered
that were difficult? The reason why you want to ask this
question is because you'll hear many different things
from different people. The benefit from asking this
question is not just to identify the exact problem that
you may begin to solve with your solution to this
problem, but you'll also begin to understand how you
market your product, how you explain to new potential
users the value or the benefits of your solution. In
general, customers don't buy what. They don't buy the
what. They buy the why. Answers that you get from
customers to this question of why. Why was this past
problem that you encountered so hard may actually
inform your marketing or your sales copy as you build
out the rest of your product.
4. What, if anything, have you done to try to solve the
problem?

by Eric Migicovsky
4. What, if anything, have you done to try to solve the
problem?
If potential customers are not already exploring
potential solutions to their problem, it's possible that
the problem that you're trying to solve is not a
burning enough problem for customers, for them to be
even interested in your better solution to this product.
Is the person who encounters this problem already
trying to solve this? Try to figure out, what tools did
they experiment with? What tools did they try to
use to solve this in the past? You want to ask this
question for two reasons. One is to figure out whether
the problem that you're solving or you're working to
solve is even really something that people are already
looking for solutions to. The second one is, what are
the other competition out there? What will your
product be compared against as you end up rolling out
your solution and offering it to end customers?
5. What don’t you love about the solutions you’ve tried?
This is the beginning of your potential feature set. This
is how you ask the... This is how you begin
understanding what the features are that you'll build
out for your better solution to the problem. Users in
general are not great at identifying the next features
that they want in the product. This question specifically
targets, what are the problems with the existing
solutions that they've already tried? These are
specifics and you can begin to kind of figure out what
the differential between your new solution and the
existing solutions already in the market will be.

by Eric Migicovsky
An early stage company - I would define that as a company
that has not yet reached product market fit, in which
talking to users would be extremely beneficial.
1. Idea stage
At the idea stage, you may have the back of a napkin
idea, you may have a thought, you may be
commercializing some technology that you've been
dreaming of, but you don't yet have any first users. So,
you need to begin finding the first people that will be
interested in either providing information about the
problem that they've encountered or potentially signing
up to be your first users. Some of the best companies
are products or services that are built for the
founders themselves. So start with yourself. Test
your user interview strategy on yourself. Try to walk
through a situation where you've encountered that
problem. The next step after that is to talk to friends,
is to talk to coworkers, to get warm introductions. You
don't have to talk to thousands of people. Every good
user research strategy begins with just one or two
people. The critical feature here is executing a
unbiased and detailed customer/user interview
strategy rather than just trying to pitch your idea to
them.
a) Just show up and do 10 min interview on the spot
b) Industry events (first 5-10 user interviews
dramatically improve you idea)
c) Be cognizant of the other person's time.
stages of early startup3

by Eric Migicovsky
2. Prototype stage
The prototype stage, where you have the first kind of
rough beginnings of your product, but you haven't really
gotten in the hands of any paying customers or any users
yet.
Best First Customers for Prototype Stage Framework
Ask questions that extract numerical answers to three
facts about the customer that you’re working with:
1. PAIN/COST: How much does this problem cost them
today?
And I like to get a hard number, either in terms of how
much revenue do they stand to earn if they solve this
problem or how much expense do they currently spend
trying to solve this problem? How much money is wasted
today as they try to solve this problem.
2. FREQUENCY: How frequently do they encounter this
problem? Do they encounter it on an hourly basis, a daily
basis, quarterly basis, yearly basis? The best problems
that startups can target are ones that are encountered
more frequently. This is usually beneficial for two
reasons. One is, they encounter a problem on a more
regular basis. It means that the customer's feeling the
pain of that problem on a more regular basis, and they'll
be much more receptive to a potential solution. The
second reason why you want to tackle a problem that
people encounter on a more frequent basis is, you'll get
more chances to know whether your product is
actually solving a problem. The best first customers
are ones that have this problem very frequently.

by Eric Migicovsky
Best First Customers for Prototype Stage Framework
3. BUDGET/AUTHORITY: How large is their budget for
solving this problem? Make sure that you're asking
questions about whether they actually have the ability
to solve the problem, given the choice.
Visualize answers to these three sets of customer
questions as overlapping Venn diagrams, with best first
customer being at the center of the Venn diagram where
they have the highest numerical answers to the three
questions.
You create a spreadsheet that simply has three columns
with the answers to the questions that you've extracted
through your user interviews. This data can actually be
used in prioritizing which customer you begin to sell your
product to first.

by Eric Migicovsky
You learn through the initial customer interviews that
McDonald's is actually the best potential first customer for
your product. While even though the cost of a new smoothie
at McDonald's may not bring in a large dollar amount per
transaction, they have a ton of stores and each of those
stores services a ton of people. On top of that, you happen
to get a warm introduction to the chief food officer of
McDonald's, which I'm not even sure they have, but that
person actually controls a multibillion dollar budget. And if
they wanted to solve this problem, they would have the
authority and they would have the budget to do so. So you
put that information in your spreadsheet, and you actually
do a simple stack rank that just pulls the best answers to
those questions up to the top. You can use this framework
for pulling together all of the information that you get from
various user surveys to find the best customers.
3. Product-Market Fit (PMF)/Launched Stage
After you've launched and you're iterating towards
product market fit, how do you guide that journey?
Measure Product-Market Fit Achievement weekly with
just one critical question:
How would you feel if you could no longer use [your
product/service]?
• Very disappointed PMFA if > 40%
• Somewhat disappointed
• Not disappointed.
If 40% or more of your user base reports that they
would be very disappointed if your product went away
on a weekly basis.

by Eric Migicovsky
3. Product-Market Fit (PMF)/Launched Stage
After you've launched and you're iterating towards
product market fit, how do you guide that journey?
Measure Product-Market Fit Achievement weekly with
just one critical question:
How would you feel if you could no longer use [your
product/service]?
• Very disappointed PMFA if > 40%
• Somewhat disappointed
• Not disappointed.
If 40% or more of your user base reports that they
would be very disappointed if your product went away
on a weekly basis. That's the differentiation point
that it says, if you get past this point your product
will just grow exponentially. This can be an immensely
useful thing for quantitatively determining whether
the features that you worked on in the previous week
were actually benefiting or adding to your product
market fit or potentially detracting from it as well.

by Eric Migicovsky
Other tips at this stage:
1. Get users PHONE Number
Ask your users for the phone number during signup
because oftentimes you'll be looking at the data and
you'll be wondering, why is the data showing this
particular kind of learning about our customers?
Sometimes it helps to just get on the phone and talk to
one person who is encountering this problem. So I always
encourage founders to put contact information,
including phone number, which is a direct connection
to customers, pretty high up in the user signup flow.
2. Don't design by committee.
You can't simply ask your users what features they
want. You have to begin to understand whether those
features are truly going to help make your product more
sticky and more useful. Instead of asking, will users be
interested in using this new product or this new feature,
instead say, "Here's an upgrade flow. If you want this
new product, put your credit card, or if you want
this new feature, put your credit card information or
pay more." Even before you actually built out the
feature, this could help give you information about
whether the feature that you're working on is actually
something that the users are gonna use.
3. Discard bad data.
Some of the kind of worst bad data that you may
encounter is compliments. The second main type of bad
data that you may encounter is fluff. These are
hypotheticals/generics. Whenever you're in the middle
of a user interview and you start getting onto this
hypothetical, oh, here's what the product may look like
in the future, try to steer it
back to specifics.

YC Startup School 2019 How to talk to users framework

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