At SXSW this year, I met a startup founder, a former fitness trainer, who was about to launch an online business offering personalized gym workouts.
I liked that he had first-hand experience as a personal trainer and wasn’t just a gym rat. But I was surprised when he struggled with my first question.
I asked him, “Who is it for? Who are you targeting?”
He replied, “People who already go to the gym.”
I said, “Good. That’s much easier than trying to convince people who don’t go to the gym to go to the gym. But that seems broad. Men? Women? Runners? Weigh-lifters?”
He stared at me blankly, paused, and then said, “All of them.”
I asked, “Who were your customers when you were a personal trainer?”
He answered, “Men, women, mostly people in their 20s, people who wanted to learn how to use gym equipment.”
Okay, that’s a start.
Me, “And why did they want to learn how to use gym equipment?”
Him, “To get fit.”
Me, “Sure, but why.”
Him, “I don’t know. Health.”
Before you think I’m crazy and that I grill every person that I meet at a party about their startup, this was a business school startup pitch fair. The guy was standing behind a laptop demoing his product. So he was fair game.
Me: “Were they athletes trying to get better at a sport? Health nuts who did juice cleanses and only ate raw food? Or did they just want to look good? What motivated them to want to get fit?”
He didn’t know and at this point was a little bit annoyed with me.
I tried again, “I can find free gym workouts on the web. How do you know that anyone will pay for this service?”
He said, “I asked them.” And he immediately pulled up his survey results that showed some percentage of people said they would pay for gym workouts and another percentage of people said they would pay at least $19 / month for it.
Oh dear, this guy was about to like me even less.
Don’t Ask People What They Would Do, They Don’t Know
I started by explaining that you don’t want to ask people about what they would do. They simply don’t know. We are notoriously bad at predicting our future behavior.
He looked at me skeptically. He didn’t want to believe me. He had this great survey data that said people wanted to buy his product.
So I asked him, “How many times are you going to the gym next week?”
He said, “5”.
Me, “And how many times did you go to the gym last week?”
He said, “2”.
I laughed and he immediately started to explain: He had midterms. His sister was in town. He went three days without sleep.
Of course. We all have reasons for why we don’t do what we intend. Life intervenes. But we don’t take this into account when we predict our future behavior.
We believe we will have more time in the future. We don’t ask what could go wrong or what could keep us from doing what we intend.
And the same thing happens when you ask your users if they would pay for something in the future.
If you ask someone if they would pay for your service in the future, a few factors are at play:
- They overestimates how much money they will have in the future.
- They overestimate how much time they will have to use your product in the future.
- And they genuinely want to be nice and tell you yes.
The problem is this is not helpful. It’s the exact opposite. It leads us to falsely believe that there is a market for our products.
Ask About Past Behavior
Our past behavior is much more predictive of our future behavior than any prediction we might make ourselves about our future behavior.
In other words, if I went to the gym twice last week, odds are i’m going to the gym twice next week, even if I intend to go five times.
When you are trying to uncover if someone would pay for a service, don’t ask, “Would you pay for this?” – Tweet This
Instead, ask, “Have you ever paid for a service like this?”
Ask follow up question.
- For how long?
- What were you using before that?
- What triggered the switch from a free service to a paid service?
- Do you still use that service?
- Why did you stop using that service?
And if you want to get a sense for how much they might pay for it, ask them what they pay for now and why.
“What did you pay for that service?” is a much more useful question than asking, “What would you pay for some hypothetical future service?”
If I pay $7.99 for Hulu Plus and $8.99 for Netflix and rent an occasional movie from Amazon for $4.99, but I’m unwilling to pay $100+ for cable, this gives you much more information about what I might pay for an entertainment service than if you asked me what I would pay to stream NHL games live over the internet.
When you need to learn about how a potential user or customer might interact with your hypothetical service, dig deep and learn the ins and outs of their past behavior. You’ll learn far more than if you ask them to project into the future.
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