I read the deal memo and ran the numbers. Everything looked great. But was this company really legit?
There was only one way to find out.
The Mystery Shopper Method
This afternoon, I dug into a promising telehealth startup. I liked it from the investor perspective — now I wanted to see what it was like to be a customer.
So I pulled up their website and started a support chat. Not wanting to fake an illness, I simply asked what type of services they provided and whether it was available in my home state of New Jersey.
As an agent was coming up, I noticed support was available from 6am to 9pm, 7 days a week. Impressive.
In less than a minute, a nice lady popped up on my screen.
“Are you targeted to people with chronic conditions, or do you also do preventative health?” I asked.
“We handle all of your preventative needs, from physicals to lab work. But we also can manage chronic diseases with specialists referrals and care plans,” she responded.
“Awesome. When do you think you’ll be available in New Jersey?”
“We should be there by the end of the year!”
I thanked her and wished her a good day. And I learned something critical about this company.
Even for a person who had never spent a dime with them, customer service is amazing. And they provided that great service without having any idea I was considering an investment in the company.
“The true test of a man’s character is what he does when no one is watching.”
John Wooden, former Head Coach, UCLA Bruins Basketball, 10 Time NCAA Division I national champion
Why Being a Mystery Shopper Is a Key Part of Due Diligence
People can tell you a lot of stories. But experiencing a company’s product and service for yourself, without them knowing who you are, tells you more than anything.
That’s why I like to kick the tires when I evaluate a startup.
If I can use the product myself, I do. If I can interact with their customer service, I will — although I’m careful not to take up too much of their time.
Wrap-Up
An investment in an early stage startup is a 10 year partnership. Both sides should go into it with their eyes open.
That’s why I want to know everything I can about a company. And founders should diligence their investors too!
So if your company ever gets an unexpected message, it just might be me — looking for my next deal.
How do you like to diligence companies? Leave a comment and let us know!
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