Webuye, Kenya, July 2015
Customer Discovery
A part of the motivation to start this endeavour was the shared view from previous experience that too many preconceived ideas are out there: so little is known directly from real end-users. ‘Distribution’ usually meant selling to someone who would sell to someone who…
Therefore, as soon as we started work in October 2014 we went “out of the building” and started with a blank sheet, listening to our potential clientele, before even thinking of engaging in any of the usual activities most start-ups spent their early days. We did not start setting up a company in Kenya, we did not start hiring lawyers or advisers, we did not chose accounting software, instead we read Steve Blank’s chapters on Customer Discovery, prepared a questionnaire or two and chose a target region in rural Kenya.
We chose Bungoma County and Webuye, a small town, as our base. Why Bungoma? Because it is mostly rural and with large number of small holder farmers who are our core market target, rural population density is high and it’s well connected by road. Setting up shop in the wealthier central region would introduce biases in our learning and we want to know what we can learn from an ‘average’ place in Kenya.
Testing the problem hypothesis
Do we really understand our customers’ problem? Do they care? We interviewed rural families to learn about their problems with their living conditions and how they currently solve them. We asked about their homes and farms, how they light their homes, get clean water or charge their mobile phones, and what bothers them about it: because that’s where we can make a difference.
With the help of Erica and Denis, two local multilingual enumerators we managed to speak to 59 families in three clusters away 5 to 20 km from Webuye town, which we randomly selected.
Rather than to assume, for example that surely they would need light given that hardly anyone is connected to grid electricity out here, we wanted to learn how they rank many problems at home and with the land. Language and cultural barriers didn’t make that an easy exercise, of course, but we managed to narrow it down to three or four main problem categories. Being invited to their homes and seeing with your own eyes gives you so much more than stats from some market research.
Aside from struggling to pay school fees, people wanted to have clean lights and charge their phones at home. We’re still learning that for women light is on top of the list whilst for men, charging their phone has a higher priority.
They also missed clean water at home and being able to cook quickly and cleanly. Here, however, many are so used to the ‘old’ ways of cooking outdoors over a smoky fire that they didn’t see a problem with it. What people aspire to more often is to own a radio or TV for news and entertainment. Mobile phone ownership is already near 100% per household. What’s next, a second phone or the smart phone for the husband or grown-up kid?
We also learned about their lack of trust on formal financial institutions and a general fear of borrowing. Would that doom our idea of selling on credit?
Solutions presentation
Not surprisingly, at the end of the problem discovery phase we had a relatively long list of problems we could potential tackle: lighting, phone charging, entertainment, irrigation, clean water and cooking. We can’t do everything, however, and we abandoned the often voiced pain of rural transportation (narrowly avoiding a pivot towards a road construction or drone company).
No, our vision was and is to create a rural distribution business, as most of the technical solutions are out there. So we did what our customers can’t do – we went shopping in Nairobi, the capital. We bought a bit of everything:
- different solar lights and systems from different brands (which one would clients prefer?)
- a large solar home system with TV (what would they make of the heavy price tag?)
- wood, charcoal and ethanol stoves (which ones would be easy to use?)
- water filters and pumps (was clean water as important when it had a price as discovered in the interviews?).
We had to learn more about potential demand for each of the available technological solutions for each of these problems. Would our potential products, i.e. the technical fixes, and our services, like delivery and credit, create real enthusiasm?
We then visited half of the families we had met before. We not only talked to the innovators but also talked to people with no problem awareness. Depending on their previous answers we let them use some of the goods we brought with us.
This part was a bit of a logistics nightmare but we managed to let them try goods for up to a week, long enough to form a proper opinion.
We then asked for feedback. The pricing was finally brought in and we discussed what an ideal payment plan would look like. We discussed the concept of groups for purchases on credit. We talked about what warranties mean for them, how they make purchasing decisions at home, and learned to what extent trying the good helps and many other things.
With all this information we narrowed down the features of our MVP (yes, our minimal viable product, finally!). We decided to start offering just three goods: a solar lamp, a solar system and a cook stove. We decided to offer credit to groups of clients not to individuals. We decided to include home deliveries, education of the users and installations in all of our sales.
We also managed to identify some “earlyvangelists” who became our targets for Customer Validation. But for that you will need to read the next blog.
Lessons learned
- One has to continuously refocus the conversations about the problems faced to the problems we think we can solve otherwise it is very easy to end up going off-piste
- It was surprising the get so much time, energy and enthusiasm from users during the solutions presentation phase. Although it was sometimes difficult to get critical opinions, people are way too polite!
- Even if you have some of your guesses confirmed, you always get surprises
Favourite Steve Blank’s Manifesto line: “No business plan survives first contact with customer”