What's the difference between customer discovery and early stage sales?

What’s the difference between customer discovery and early stage sales?

In past issues, I’ve talked about customer discovery and early stage sales almost interchangeably. In my mind that is a bit dangerous because there’s a big difference in goals, strategy and tactics for customer discovery vs. early stage sales.

Here are some of the key differences between customer discovery and early stage sales.

Feedback vs. active selling

Customer Discovery

When you’re doing customer discovery, the goal is to identify whether the problem you’re working on is a massive source of pain for the buyer and whether or not they are able to solve the problem adequately with existing solutions. It's much more about generating feedback to validate answers to those questions versus selling a product to solve a specific problem.

Once you’ve gained confidence in the problem and the lack of adequate solutions, ideally you want to gauge interest in a hypothetical solution that hasn't been built yet. You also want to discover the buyer’s willingness to pay for this proposed solution.

The best method to run customer discovery is often a structured interview process where you front load questions about the problem and current solutions before disclosing the proposed hypothetical solution to gauge interest and willingness to pay. This is somewhat similar to an early stage sales process, but there are important key differences

Early stage sales

For a sales process at the early stage, your goal is as much to disqualify customers as it is to sell. You want to get from 5-10 early believers to 30-50 customers. Ideally these customers start to look the same and form the basis for your ICP. You should be structuring the discovery portion of calls to reject prospects that are too far outside your ICP.

This is important tactically because you have limited resources and bandwidth to work with new customers as a small, early stage team. Unless you have a very strong self-serve product and motion, you are most likely expending resources to onboard new customers and make them successful. You want to insure that those customers will be fanatically happy with your product and customer support to be strong references to other great prospective customers in their peer group.

What should I build vs. an evangelical sale

Customer Discovery

In customer discovery, you’re often tasked with not only gaining confidence in the problem you’re trying to solve but also what the proposed solution to that problem should be. This means your intermediate customer discovery efforts should hinge around doing product discovery.

This entails understanding how they’re currently solving the problem. Are they using another tool? If so, what are the core features of that incumbent product? If they’re using a spreadsheet, how are they using that spreadsheet? What integrations would be “must have” vs. “nice to have” to accommodate their workflow?

Early stage sales

Once you’ve established answers to questions you ask around product requirements and you’ve built a superior product to the current workflow, early stage sales processes often benefit from taking an “evangelical” approach.

By this I mean you want to run a discovery process that identifies that your prospective buyer has the problem you’re solving and an immediate need and then you are counter positioning your product against their current state. The current state is unbearable, they are losing money by remaining in the current state. Your product will be 10x better than the current state and therefore it will be transformative for the buyer and ideally for their career.

Why do these differences matter?

The main takeaway here is that you should be very intentional about your goals when you’re talking to prospective customers and align with your current needs. If you’re just starting out trying to validate an idea you don’t want to sell aggressively since you’re still trying to form conviction around the problem and your potential solution.

If you’ve done that validation work, you don’t want to “ask for feedback,” instead you want to start identifying a repeatable sales pattern and consistent buyer. Ideally you’re qualifying out customers that aren’t a great early fit.

If you’re in either of these modes right now, I’d be interested to hear what you agree with or disagree with. Let me know what’s working for you!

Three interesting articles

1. First Round Capital’s finding PMF series

First Round Capital launched the PMF Method this week. Here’s how they describe the program:

2. How to go from $2k MRR to $98k MRR

Nathan Berry, the CEO/Co-Founder of Convertkit, shares some of the tactics he used in early stage sales to get past $1m ARR.

3. Tactical SaaS sales advice

Kyle works for MongoDB, a $26b public company, but the advice in this thread is relevant for founders doing early sales as well as salespeople at larger SaaS companies.

First GTM Hire Jobs

• Founding GTM at Pointable

• OneSchema is hiring for a Founding BDR

• Pump.co is hiring for a Founding AE

Closing thoughts

I plan to publish a separate post from my weekly newsletter doing a deeper dive into modern enrichment tools. If there are other categories of tools you’re interested in seeing a deep dive on, reply here to let me know!