One of 21 skills I try to look for in entrepreneurs is listening – more specifically active listening. The reason for testing this skill is obvious. More than wanting to be listened to, I look for whether the entrepreneur is listening to respond or listening to understand.

Most entrepreneurs find it hard to listen, in fact most type A people are in roles that requires them to be constantly “pitching” and “selling” their vision, company and product. So, they are always in “objection handling” mode.

While I understand that most of the questions that are going to be asked by the investor or customer are likely ones that the entrepreneur has heard before, nonetheless, I am seeking to understand if the entrepreneur can still parse, ask relevant questions to clarify and be thoughtful about their responses.

There are 3 dead-giveaways when I know someone is not listening.

First, the entrepreneur says “Yes, Yeah or Uh Huh” a lot even before sentences are complete – usually this means they are pretty distracted and looking for an opening to get their word in.

Second, they never probe to ask questions themselves, instead are always providing answers. A key part of listening is to understand, pause, reflect and let silence take over at times – which may be awkward at times, but it works.

Third, they are distracted easily and end up answering the wrong question, keep using filler phrases such as “I understand” or “Sure, but…” often.

What we look for is listening first. That does not mean we are looking for someone to change their mind based on our questions. We are seeking to understand if they have the cognitive ability to keep their “mind” open not just their “ears”.

You can hear well, but not listen at all.

The next question is how can someone listen well?

The first is to listen with more than your ears – listening with your mouth – asking more clarifying open-ended and closed questions. This is the best way to force yourself to actually ask more questions.

The second is to use silence strategically – pause and reflect on the question. Use the ability to tell the other person “Let me think about that” before you start to answer their statement, question or comment.

Finally use non-verbal communication to listen if it is a one-one, face-to-face meeting, including using your eyes – focus on the person or taking notes, and use time to summarize or paraphrase their comments.

Throughout most of the 80’s, 90’s and 2000’s successful big company ideas, concepts and models – such as Rank and Yank (GE, Microsoft), Be number one or two in a market or get out (GE as well), Just in Time Manufacturing (Japan), etc. were pretty popular.

Now, of course, most bigger companies are adopting the theories, practices and models that startups have pioneered – Lean startup methodology, DevOps, Customer development, Business model canvas, Move fast and break things, Open office space, etc.

This “reverse brain osmosis” is critical since startups have captured the imagination of most people.

It is easy to just put these cultural and thematic phenomena as “adopting what’s successful”, but there’s more to it than just larger companies adopting successful startup ideas.

Over the last 3 years as I talk to more larger companies and startup entrepreneurs, I have not been asked by a single entrepreneur “What are large companies doing that we should adopt”?

I have though been asked by almost every large company executive “What are startups doing that we can learn from”?

The biggest reason is changing market demographics and technology. Both of these are critical. Without mobile, these would not have been possible to a large extent. Mobile changes everything.

The first, demographics and attitudes of the younger folks is driving companies and businesses to adapt as well. Millennial’s especially (most dont like that term, BTW) have much different expectation from their work, life and the balance of it.

The most important change is that they want everything now and the flexibility to work when they want to.

Which is why I think “the gig economy” or “the on-demand economy” is a much bigger concept than any other for this generation and likely be the most dramatic change for the next 20 years.

“Work” is really a man-made concept. As a friend put it yesterday, it is exchange / creation of value for goods and services desired. If we can abstract why we need to work from why we want to work, then it becomes a question of bringing value to another human’s life.

That’s the reason why startups, especially in the Silicon Valley measure the “change the world” factor that their company brings about.

Since many accelerators have been asking startup entrepreneurs to “get on the phone” with customers and talk to real users, I have been getting a lot of emails from folks asking me how long their customer interviews should be.

While there is no right answer, there are a few guidelines that you can use, which come from th best User experience designers.

First, it is best to schedule your customer interviews and in step function of availability. Ideally you want 10 time as many surveys, to the number of calls and 3 times as many calls to the number of face to face meetings.

If you want to get feedback from 10 customers / user in a face-to-face setting, then 30 people on a call is ideal and 100 people filling out an online or email survey is the best.

Where did I get these numbers from? Most sample size calculators will give you numbers based on your population (total customers who you expect for your first version of product (segmented), confidence an margin of error.

Second, if it is possible, get users to commit to giving you 30 min of their time, for which you will have to give them something meaningful in return, else they will be unwilling to give you the benefit of doubt.

The best way that I have seen great customer interviews being conducted is to have user empathy sessions.

1. The first step before your interviews is to prepare and brainstorm questions.
2. The second step is to identify the focus of what you’d like to learn from your users.
3. The final step of your preparation is to ensure you have the right questions.

During your interview, I’d recommend you “break up” the allocated time into 7 sections. These are scientifically proven, so you don’t have to take my word for it.

1. Introduce your self – typically this should take less than 10% of the time of the interview. So, if you have 30 min, less than 3 min to introduce the participants.

2. Introduce your problem statement (or project). This should also take less than 10% of the overall time of the interview.

3. Build common ground or rapport – Usually empathy is shown by framing the user problem in their daily scenarios. Typical items to cover include – “Some of our other users have told us …”. Or “the problems our users have encountered so far include…”. Most of this part should take you another 15% of the time.

4. Get them to talk about their problems in the context of the discussion. The best interviews are those when your users are doing most of the talking. The bulk of your interview time should be spent here. Close to 30%.

5. Explore the current solutions and how those solutions are deficient or how they dont empower your user. This part usually takes about another 15%.

6. Ask more questions that help you clarify the statements and positions users take. Most people end up spending 10-15 % of the time here.

7. Thank the user for their time. Typically 5 to 10% of the time is spent on this.

These numbers are purely indicative and will change based on your relationship with the user and their constraints on the ability to express their usage and user behavior.

“Mind share relates generally to the development of consumer awareness or popularity, and is one of the main objectives of advertising.”

“Market share is the percentage of a market (defined in terms of either units or revenue) accounted for by a specific entity.”

“Wallet share is a survey method used in performance management that helps managers understand the amount of business a company gets from specific customers.”

The answer to when do you need to take which approach is via the funnel framework of customer acquisition.

Most entrepreneurs start to acquire customers via the network they know – either B2B or B2C. Friends and family are the logical first early adopters if it is a consumer product and if they are not the target audience, then sharing via social networks is a logical choice.

Getting “mindshare” is important at the initial stages of customer acquisition. Potential customers need to be aware of your product and know that you exist.

There are 2 parts to this acquisition – the trusted customer acquisition and the unknown.

The trusted is the customers / targets / prospects who know you – they have prior experience or knowledge about you and are willing to make a bet based on their experiences with you.

The unknown is the new fresh leads or prospects who you have to build a relationship with. That’s usually harder for most entrepreneurs. Which is why you want a product that customers really like, which means they will tell other customers about it, reducing the barrier to “building trust”.

When you get “enough” of a pipeline, you tend to focus on marketshare – getting these customers to convert.

Marketshare is a focus if you have enough leads. If you are getting enough leads or “trials” or “free tier” users to convert them. Obviously you cant convert 100% of your free users to paid, but if you get enough data from them to make it worth the while, then the free tier is worth it. In many cases the free tier is also a marketing technique, when you cant afford marketing.

Finally wallet share is when you already have customers and want to get more revenue from existing customers.

So, the easiest way to determine where you need to spend your time and energy is to look at your funnel and determine where the gaps are.

The other way is to look at relative metrics. If the ratio of what’s in your marketshare vs. value of what’s in your mindshare is less than 10%, you need to spend more time on converting existing customers.

If the ratio of wallet share pipeline $ to marketshare pipeline $ is less than 30%, then you need to spend more time converting existing customers to buy more from you.