Jeff Hoffman, a Priceline executive, argues that founders should talk to customers early instead of waiting to launch an MVP. He shares how Priceline did user research and how he signed NSYNC by first understanding what mothers of teenage girls wanted.
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Next, customer intimacy. The reason why I want to say this, when Silicon Valley and the books and everything came out with the concept of an MVP, your minimally viable product. I'm gonna tell you, just sharing my opinion, what I was thinking. I was thinking if you ain't getting feedback until you have an MVP, you're already way too deep into the process. Alright, so I was doing this TV show with these CEOs and the announcer said, the host said, what's the first thing you do when you have a good idea? And all these people said, we all go to a whiteboard in the conference room. And I said, I get my car keys and I go outside. And they're like, what are you talking about? And I said, I immediately— well, I'm going to tell you guys really quick the story of how I learned this and what this idea means about getting, developing customer intimacy as soon as you want. So I'm spending a day, I'm spending a day with this elderly gentleman who's in retail, has been very successful, but his product, by the time he launched it, was non-intuitive and non-conventional.
Bless you.
He launched something that everybody said, the experts And said, it's a bad idea, it's suicide, it won't work. And I said to this guy, we were spending the day together, I said, why'd you launch it anyway when everyone said it was a bad idea? And I said, who told you it would work? And he said, Jeff, he said, a farmer wearing a John Deere hat told me it would work. And I said, what? He said, here's the problem. These are the people I work with every day, really smart, really educated people. And I said, and? He said, we're in our conference room designing a product For farmers, people that wear work boots, wear overalls, and farmer hats all day. And he said, so all the experts thought the product idea was bad. And he said, so here's what I did. I said, what'd you do? And this gentleman said, I bought a John Deere hat, and I bought a pair of work boots and jeans. And he said, every other Friday, I would go across town. I would drive to a little diner, and I would sit in the diner in my boots and tractor hat, And I would buy people apple pie all day. He said, the farmers told me what to build. And just to give you guys an idea, the guy that I spent the day with was named Sam Walton. And his idea was called Walmart, what became the world's largest physical retail store. And I said, Sam, everybody in the world said you cannot build big box retail in small town America. And he said, right, but the farmers are the ones I listened to. So you know what we did even in early Priceline days? I do this now. I would schedule every time I launched a company, I would schedule every other Friday where I'm out of my office. And you know where I am? I change clothes and I'm hanging out with my customers. By the way, you're not pitching them. In those days when we were building travel, I would go to a store like Walmart where discount shoppers were. And I would go, there was Kmarts then. I would go in the produce section with a cart and I would walk around and pretend like I was shopping. and just chat with people. Hey, beautiful weather. What are you doing this weekend? And some people would be like, oh, nothing. We're home. And I'd keep rolling. And somebody would say, planning to go to my sister's wedding, but we can't really afford to get there, so I don't know. And I'd say, really? What were the tickets? Right? They don't know you're building a travel company. You're hanging out where they hang out. Because my own friends would have never used the product we were building. The early Priceline product of not knowing where your hotel is, what you're paying, not knowing what airline you're flying. I'm chatting with this woman. Our airline product back then, you don't get frequent flyer mileage. You don't know what time you're leaving and what time you're flying. Everybody I know said that's stupid, no one will do that. This woman in this store, I say to her, well, I said, well, do you care what airline it is? And she said, and I kid you not, let me say that. I first said, you know, you could probably get there cheaply. She's like, how cheap? And I said, what can you afford? I'm doing research. She said, maybe $100 a person, not $400. And I said, no one's gonna give you a $400 ticket for $100. I said, you're gonna have to do something. She said, like what? I said, I don't know, get up early? And she said, how early? I said, how early would you get up? Would you get up at 6? She said, hell, I'd get up at 4 if you could get me there for $100. And I was like, wow, price elasticity live. I'm doing the research. I said, they probably won't give you frequent flyer miles. She said, frequent what? I said, frequent flyer miles. She said, sorry, I don't know what you're talking about. I said, you know what frequent flyer miles are? She said, never heard of it. All my friends are like, dude, I'm not gonna fly on an airline if I don't get the miles. Not one of my customers even knew what they were. I said, what's your favorite airline? She said, what airlines are there? I said, well, just name one. And she said, okay, America Airways. I said, okay, no. There's US Airways and American Airlines. She said, whatever. My customer doesn't even know the airlines. They don't know what frequent flyers are. And yet all my friends are saying no one's going to use this. Schedule time outside of your office, outside of your world to go hang out with one another. By the way, you know how we got that NSYNC product right? Because I was there at the beginning when every single major record label passed on Justin Timberlake and NSYNC. The way that we got that right was hanging— was going and talking to the mothers of teenage girls and saying, What, what entertainment product do you want? Right? Well, we want squeaky clean, cute boys twirling around and singing love songs, all positive music. This is— they said they should never get busted for drugs. They should never be drunk. Did you ever see Justin or any of those kids ever get in trouble anytime? The product was designed to what the customer wanted to buy by asking the customer, what is the product that you would actually want by hanging out with them?
