I have written recently about the two new startup ideas we are working on this summer. In this post I outline the costs of customer discovery.
Both of these ideas started as ArrayFire employees were excited about something and just started to build the product. I intervened in both cases and said, “Let’s not waste time building something before we know if there is an appetite for it in the market.” It is waaaaay cheaper to do customer discovery than it is to build blindly and try to sell.
We brought on board customer discovery help at $20/hr (or about $3500 per month). Smart, capable, and independent minded people able to take the idea and run with it out in customer discovery interviews.
There is normal overhead associated with $20/hr help. Let’s call it 30% overhead.
There were some costs to design the website, setup email address, purchase Salesloft, purchase desks etc. Let’s call it all about $2,000 per idea.
So the math on the costs of customer discovery for a summer per idea is: $3,500 * 1.3 (overhead) * 3 (months) + $2,000 (startup expense) = $15,500. So for each idea we are pursuing, that is the cost of the attempt for 3 months. In some cases, like Dyced, we were able to shut it down after 2 months and saved some expense. We did not ever buy plane tickets for these ideas.
What are your thoughts on the costs of customer discovery?
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