What Is Customer Discovery…And What It Isn’t

(Also, how to do it.)

October 24, 2022
By Tom Carmona

“No plan survives first contact with customers” -Steve Blank

No matter how well thought out, your plan will nearly always either 1) solve the wrong problem, or 2) solve the right problem in the wrong way. Whether you’re starting a new company or pursuing a potential new revenue opportunity, it’s important to mitigate market risk ahead of time. The best way to reduce this risk is to “get out of the building” and have engaging conversations with customers. You conduct these customer interviews as part of a process called customer discovery.

Take what you think you know, and then carefully craft questions that, if presented to the right person, would tell you if you’re right or wrong.

Shed your bias toward being right; wanting to be right can ironically prevent you from ever getting it right.

What Is Customer Discovery?

Customer Discovery is a process by which you learn about your customers’ experiences, needs, wants, and pain points to validate or invalidate your hypotheses about a new business idea. In our view, the most powerful discovery tool is the customer interview, which is a structured conversation with a customer with the aim of inspiring stories that provide a deep understanding of the problem area from the person experiencing the problem.

We can also describe customer discovery in the following ways:

  A way to test your hypotheses about the problem that your product is trying to solve (and perhaps whether you’re solving it in the right way)

By conducting a proper customer interview, you can gain a deep understanding of someone’s problems, what motivates them, what their attitudes and habits are—with all of it geared toward determining the extent of the pain involved in the problem you’re trying to solve, and how burning of a need is a true solution to it. Your job is to validate or invalidate specific hypotheses. For example, you could think that people choose a food delivery service based on speed of delivery, or that people who prefer picking up their food do so because of price. You won’t know for sure unless you get those insights. Sometimes that level of insight might be available in a market research report that you buy off the shelf, but often you can’t get to the next level of insight without the nitty-gritty work of talking to people…many people. For example, if you want to know what attributes of a food delivery service might entice someone to switch, or if you want to know what would make dine-in and pickup customers change to a delivery service like yours, you won’t know unless you ask the right questions, and those answers are rarely available in a syndicated market research report.

  A way to de-risk your product development, marketing, and sales operations.

Whether you’re managing a small startup, a mid-market services firm, or the product portfolio of a Fortune 500 company, venturing into a new (or perhaps dubious) market with a new product or service is inherently risky. This presents a major barrier to innovation, because growing your existing business—or keeping your day job instead of going all in on a startup—is nearly always the safer option. (Of course, that perception may not always be correct if staying course will put your company at a disadvantage in the long run, but that’s a story for another day.)

That being said, every day people and companies take a leap and build something new. In order to recoup those development costs, not to mention production and selling costs associated with commercializing a new product, you should be as sure as you possibly can that you’re solving the right problem in the right way that aligns with, say, 100 customers that you’ve identified —and spoken to in a way that offers real insights that you’ve sought in earnest, without merely probing for what you want to hear or gaming your questions to validate what you’ve already built.

Why does discovery help de-risk new projects? It costs money, right? So it should add risk. No?

Well, imagine that you have an idea for a new device, and you were so sure that you were creating real value that you built a prototype, then produced 1,00 units, and hired a salesperson to test the market. How much would that cost? $50k? $100k? $500k? Would it take six months, a year, or more to make it happen? In any case, you’re taking a huge risk in terms of capital and opportunity cost. What if you could do a short discovery sprint over the course of a month or two to figure out that the device should come with a USB-C connector instead of a standard USB one, or that your ideal customer is only likely to buy your product through certain distributors and not directly from your website? These seemingly small details could mean life or death for your project, and perhaps for your company depending on the circumstances.

In hindsight, you’ll probably have wished that you spent a relatively small portion of your project budget to give yourself a much better chance of success.

  Asking open-ended questions to uncover a deeper narrative around a customer’s pain points, attitudes, and behaviors.

As the late Ross Perot once said, “can I finish?” Don’t cut your customers off before they start by asking closed-ended questions. You’re likely to miss the full narrative that reveals rich details that give you a leg up in creating real value for your ideal customers. If you do include closed questions in your script, it serves to verify a simple factual point that guides the rest of the discussion.

So, make sure to steer clear of closed-ended questions or seemingly open questions that limit the number of acceptable responses. Instead, ask open questions that get your customers talking more (while you talk much less).

  Understanding exactly how your solution addresses a customer’s pain point, AND exactly where it fits within the customer’s organization, BEFORE you have finalized your product or service offering, and DEFINITELY before you do sales outreach or marketing campaigns.

Ideally, you’ll hold off on building and commercializing your solution until you’ve done enough customer interviews to guide you in the right direction. It’ll save you from one or multiple false starts that burn capital and put you at a time-to-market disadvantage.

You should only build out your solution well enough conceptually to build the right customer interview script. This will mean different things for different situations. Maybe you have intellectual property that could be the basis of a new product. In that case you should at least understand a reasonable set of possibilities regarding different form factors and settings for your product. Then, you can build hypotheses for the ideal customer profiles you’ve identified, which can be validated or invalidated in your interviews. Then, hopefully your discovery synthesis will point you toward a certain form factor, certain features, etc. BEFORE you’ve built a single unit or—in the case of digital solutions—slung a single pixel, or written a line of code.

The reality will of course vary from one case to another, but generally you will want to put off as much development and commercialization as you can while still creating a meaningful discovery script.

  Interacting with several customers to extract insights around:

  • Product-market fit. For any company this is any ongoing effort, but in the discovery process you should be able to extract insights that address the suitability of certain features and functions, or at least gather enough insights for a go/no-go decision.
  • Ideal customer profiles and buyer personas. The identification of ideal customers and buyer personas is both both and input and an output of the customer discovery process. You should focus your customer discovery on a focused, well-defined customer profile, with certain buyer personas defined in advance. However, you may find yourself turning to an entirely different angle to the market as a result of the discovery process. The important thing is that you remain open to whatever you find in your customer interviews.
  • Channels and potential partnerships. Similarly, while you should have some marketing and distribution hypotheses already built into your discovery process, you will invariably come across inspiration for new channels and new partnerships in your interviews. Be flexible enough to see new opportunities, even if it’s not what you originally set out to validate.
  • Potential business models and delivery models. If you’re a service business, you may struggle to find the right way to structure your delivery teams and the way you charge your customers. Do customers prefer a subscription or a pay-as-you-go arrangement? Do they want you on retainer or would they prefer to pay you hourly? Do they need someone who lives in the same time zone? Ask the right questions and listen to your customers to dig into these details.
  • Gross margin considerations. Hearing from your ideal customers may help determine the nature of the solution they desire, and when and how they want it. Do they all seem to want the same thing? Maybe you can sell the same thing at a high volume and take advantage of economies of scale with more of fixed cost structure. Does the market want a few different versions, or even a bespoke product? Maybe you’ll have to be more nimble to adjust to market preferences and operate with more variable costs.  
  • Buyers vs. users vs. influencers vs. saboteurs. When interviewing people with select titles and roles within your ideal customer segment, you should be able to distinguish between the would-be buyers of your product and the end users of your product, to the extent that they’re different people. You may also encounter other personas like deal influencers or potential saboteurs to give you a much better view of the prospective selling process once you’re ready to go to market.   
  • And much more. There’s really no limit to the type of insights that can be gained by talking to customers. You can even do discovery with your own employees to help determine the best course of action for internal policies and operations, but that’s a story for another day.

  Analyzing the details from interactions, even those from seeming statistical outliers, for insights that go beyond what a view of market data can provide.

Good customer discovery includes a detailed synthesis process whereby all potentially valuable storylines are considered. One way to accomplish this is to categorize your qualitative insights through a process called affinity mapping. This is a fancy term for grouping similar ideas together for later analysis. Invariably, some dominant narratives will surface where people are expressing similar ideas. Meanwhile, other ideas may be less common. However, you should not assume that less common ideas are inherently less valuable. Sometimes the statistical outliers can point you in a different, or even better, direction. Maybe that new direction allows you to serve fewer but much bigger and less price-sensitive clients. In your market there may be 1,000 small businesses for every large corporation; in that scenario, maybe you’re better off serving the outlier if you’re well positioned to do so.

  Validating the merits of a new product or service for an existing market, or testing the viability of a market that doesn’t yet exist.

As we’ve said before, customer discovery isn’t traditional market research. In fact, it’s quite the opposite of traditional in the sense that you are discovering the market landscape for something entirely new—and perhaps for a market that may or may not exist.

  An opportunity to distinguish between customer needs and wants.

Last but not least, customer discovery will help you to determine whether your product is a “pain killer” or “vitamin” solution. Are you satisfying a burning need that your customer will pay dearly for, or are you merely providing a more pleasant experience or marginal improvement over the current substitute? There are many, many great pain killer companies, just as there are many successful vitamin companies. However, when we’re talking about using customer discovery as a means to mitigate risk, generally a no-brainer solution for a customer is a lower-risk business prospect for you as the inventor, entrepreneur, or business executive.

  A way to build useful assets like buyer personas, customer and user journey maps, service blueprints, and early business model canvases.

Once you’ve used discovery to research the problem area, you’ve likely uncovered enough insights to build out more detailed descriptions of one or multiple customer segments and the experiences that they’ve revealed through your interviews. Armed with these insights you can design visual assets that help to deepen your understanding of the customer experience—and, importantly, to articulate the story to another team member or potential investor. (These outputs of the process and what comes next will be the subject of several other posts to come.)

Avoid asking people too many closed-ended questions that prevent them from telling you richer narratives that may aid in persona development. Also, avoid asking questions that may reveal someone’s ideal or aspirational self rather than that person’s actual habits.

What Customer Discovery Isn’t

  Asking point blank if someone would buy a product or service that you offer.

For anyone pitching a product, swift rejection is never fun. What people should really fear is someone who says they’d buy your product but then don’t. You’ve gone through the effort of building a product, and you’ve gone to market thinking you’ve validated your product for the target market. You’d be much better off if you had asked better questions that address whether the person is likely to buy your product. When you find out the specific reasons why someone is likely or unlikely to buy your product, you get to the deeper truth about what that person is likely to do in the future. Then, you’ll know to either build the product, or to save your precious time, effort, and capital for a different product or for selling to the right customer.

Why is this such an important point? Because people lie! I don’t mean that they’re immoral and do it intentionally (of course some do). I mean that they want to come across as polite, and often they have a distorted view of their actual habits. So, someone may say yes to not hurt your feelings, not knowing that they may have doomed you for an expensive wild goose chase. Or, someone may say that they exercise twice a week, but when. you ask them the last time they exercised they may reveal that it was three weeks ago. The ideal self, unfortunately, is not always the real self.

  Simply market research.

Just as sales presumes there’s something to sell, market research presumes a market to research. Customer discovery is an attempt to gain market insights, but for a market that doesn’t necessarily exist yet, or for a product that doesn’t exist yet (and both in many cases).

  Pitching your product or service with a slide deck

Easy there! It’s not time for that yet. In a customer discovery interview the aim is to get a snapshot of that person’s habits, needs, wants, and attitudes as they relate to the problem that your product aims to solve (or plans to solve once it’s built). In order to validate or invalidate your market hypotheses, you cannot go in guns blazing with a fancy PowerPoint presentation, even if it looks really nice. Your product pitch will prejudice the interviewee’s answers, and those answers will be more about the product than they’ll be about the person you’re interviewing. It’s about the person and their problem, not your product—or at least not yet.

  A function of the sales process.

Sales presumes that there’s something to sell. In most customer discovery processes, there’s no product yet. There may be an idea for a new product, some intellectual property that could be made into a product, or a hypothetical version of a product or service that you currently offer. But, in each of these cases, there’s nothing ready for the customer to buy. Customer discovery can tell you what to sell, but it’s not the same thing as sales.

  Taking general product feedback at face value.

If you recall, people lie. Or, in many cases they’ll unintentionally mislead you. If someone says they like your product, and maybe even offer specific things they like about it, that’s not necessarily a signal that they’ll buy your product. Maybe they do like it but didn’t tell you what they didn’t like about it. Maybe they like it in the abstract, but when it comes time to solve their very concrete problem, your product may have some fatal flaw that prevents it from getting the job done the way the customer needs it to be done.

How Customer Discovery Works

Everyone’s process is going to look a little different, but if you’re conducting discovery with customer interviews, you’ll incorporate each of these four elements in some shape or form. Below we’ll walk through our version of the process, which we’ve developed through extensive work with Fortune 500 innovation teams.

Opportunity Activation

In this first step we explore the problem in its relevant industry context, and then formulate testable hypotheses regarding potential solutions, the value that solutions can create, and the marketing and distribution implications of commercialized solutions.

Ideal Customer Definition

In this step we build ideal customer profiles (ICPs) and relevant buyer personas to test our hypotheses. We also recruit people who match the identified customer criteria.


Customer Interviews

We develop a call guide to extract the most meaningful insights from customers, and then conduct and record interviews with a statistically significant sample group, which could be anywhere from 10 to hundreds of people depending on the size, segmentation, and otherwise makeup of the target market.


Synthesis & Analysis

Finally, we gather all the documented, structured qualitative data from customer interviews, as well as any notes or manually curated insights from the discovery team, and then and categorize ideas to see a broad landscape of the voice of the customer. We then analyze the qualitative data against the original hypotheses and look for unforeseen emerging trends that allow us to see the problem from a different angle. This process culminates in a set of insights either help to proceed more confidently in a potential new product or venture,  or to avoid spending precious time and capital on a project that you’ve discovered is likely to fail.


Tom Carmona is an experienced entrepreneur, investor, and operator with a wealth of successes and failures. Prior to joining ID8, Tom was Managing Director at Symphony Alpha Ventures, where he oversaw early-stage investments in enterprise SaaS, healthcare IT, and healthcare services with a strong track record of returns. Tom holds an MBA with a specialization in entrepreneurial management from the University of Wisconsin and lives in Nashville with his wife and three children.





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