What process involves interviewing potential customers to understand their needs and behaviors?

The correct choice is indeed the process known as Customer Discovery. This process involves engaging with potential customers through interviews and surveys to gather insights about their needs, preferences, and behaviors. The primary goal of Customer Discovery is to validate assumptions about the market and ensure that the product or service being developed will meet actual customer demands. By understanding the pain points and desires of customers, entrepreneurs can refine their business ideas, maximize the chances of market fit, and reduce the risks associated with launching a new product.

Market Segmentation, while related, focuses on dividing a market into distinct groups of buyers with different needs or behaviors rather than directly engaging with customers to gather insights. Customer Validation involves testing the business model and product with actual customers to confirm that the solution is effective, but it occurs after Customer Discovery has laid the groundwork by gathering initial insights. Competitive Advantage refers to the unique benefits or features that make a business stand out against its competitors but does not encompass the process of directly interacting with customers to understand their needs.