Max Mullen, Instacart co-founder, explains how to build a customer-focused startup. Talk to customers every day before you launch. Handle support yourself, measure Net Promoter Score, and use open-ended questions to find what they actually need and whether they'll pay for it.
Chapters
I was hoping to tell you a little bit about Instacart today. One of the key reasons we are successful as a company, and then tell you a little bit about how you can use that same idea to make your companies more successful. So, first off, if you don't know what Instacart is, we're a 1-hour grocery delivery service. And we work in a really special way. When you place your order from any of the local grocery stores we work with, like Whole Foods, Costco, even Petco, we assign your order to a personal shopper in your area who goes to the store on your behalf and picks up the groceries and brings them to your door in an hour. So, it's a really interesting service and it's really different than everything else that's out there. And I'll get into a little bit about why that's important. When we started the company almost 3 years ago, one thing was very, very important to us as a company and that was focusing on our customers. So I want to spend a little bit of time talking about customer focus and why that's really so important when you're starting a company. And so what does customer focus mean? It means obsessively focusing on your customers above everything else. That means customers are more important than your investors sometimes. That means customers may be more important than building something new or adding a feature. And I'll talk to you about how you can talk to your customers and why that's just so important. So for one, why should you talk to customers? If you're not talking to customers all the time, you won't be sure that you're making something that people actually want. And I know that in one of your other sessions you went over this, but you can't stress this enough. You need to talk to customers because customers are the source of information on what people will want you to build. And if you don't build something that people want, you won't build something that's valuable. Secondly, customers, especially in your stage of company, very early before some of you have even launched your, your products. Customers are the way that you can learn very fast. And you can build something or you can even make a prototype of something or a picture of something and show it to customers. And you can learn something about what they think about what you might build in the future. So it's very important to have customers from the very beginning. And when you build an understanding of your customers, a bunch of other magical things happen. So the first thing you want to do is understand who they are. And if you haven't launched yet, who will they be? Are they moms? Are they parents? Are they young? Are they old? Do they have cars? Do they not? And it's very important to understand their lifestyle and to understand how your product will fit into it. Why are they going to use your product? So why are they going to use your product specifically? Why are they going to use it instead of what they're currently using? And what is the problem that it really solves for them? Those are all important questions to ask your customers. And then what do they want next? So once you have a product in market, you're definitely not done. It's just the beginning. So what do your customers want next from your product? And by asking those questions, you can actually very quickly find out if what you've built isn't what your customers necessarily want. So some quick methods on how to get the most customer focus at the very beginning stages of your company. Talk to customers every day. I know some of you haven't launched yet, but how many of you have a good idea of Who your customers are? OK, almost everyone. That's awesome. How many of you have talked to one of your potential customers or customers today? About half. OK, about half. OK. You all need to be talking to your customers every day. Not just weekdays. On the weekend, you should roll out of bed, and you should worry about your idea and your company, and then you should call your customers, and you should find out what they want you to do. Because that connection is absolutely, positively the most important thing that you can be doing. Another way to find out what customers think is after you've launched to have yourself be the customer support person. So when your customers email you, handle that. Answer their questions. Find out what else is wrong or what else you can do for them. And turn people who may have a problem with your product into advocates for you. And then they'll tell their friends. And then there's a really cool thing that you should research called Net Promoter Score, which is an idea of how many of the people that use your product care enough about your product to recommend it to friends, and how many of them are just sort of okay about it, and how many of them are actually what they call detractors, or people who actually would not tell their friends about your product because they're not happy. So roughly speaking, there's kind of 3 stages of startup companies. And there's pre-product, there's when you have product-market fit, and then there's when you're growing. And as I understand, most of you are in between pre-product and product market fit. So I'll focus most of what I'm going to say about that stage company. This means you maybe haven't launched yet, or you're thinking about launching. You have a prototype of what you're going to launch. Maybe you're even just in the idea stage, and you don't know exactly how your idea, when it meets customers, will really work out. And so the most important piece of advice that I can give you is to have customers. You have to have customers from day one. Even if your product isn't launched, you have to have someone to talk to in order to be able to learn. And so go find people who say they will use your product when you build it and ask them lots of questions. And there's no magic answer on how to get customers. If you have zero, the way to start is to get the first one. And after you get the first one, get the second one. And if you can't get the third one, sit down next to somebody and say, will you become a customer of my company, or will you use my product? And show it to them and put it in front of them and get them to sign up right in front of you. And many companies have been successful at building a really engaged core group of customers by just going after them one by one by one. So that's very important. And what should you ask them when you run into your customers? Well, I would start not by asking them, will you use what I'm building, but ask them, what do you think about this, or open-ended questions. And then ask them, would they tell their friends about this if they had this? And if it's something that you think that they'll pay for, if you're starting a business that has a transactional component, ask them how much will they pay. Ask them if they'll pay at all. And then something that's really cool to do is maybe you only have the, the very beginning of your product, but ask them to write you a check right there on the spot. And that will determine whether they really mean it when they say they'll pay.
