| author | title | date |
|---|---|---|
Mark Koester |
Customer Development |
Startup Boost, April 2021 |
Mark Koester | www.markwk.com
Startup Boost, April 2021
Slides and References: github.com/markwk/customer-dev-talk
github.com/markwk/customer-dev-talk
- About Me
- Key Concepts
- Examples and Samples
- Principles
- Tactics
- Resources
Mark Koester
- Product Designer / Dev / Head of Product / Human-Centered
- Former: Regional Development (Greater China) at Techstars and Up Global (acquired)
- Blog: www.markwk.com | Products: www.markwk.com/products | Biz: Int3c.com | Code: github.com/markwk
All successful businesses are built on solving their customer problems better than the competition.
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The process towards understanding your customers and building innovative products and services for them is messy and that's ok.
(or my own assumptions for what we are taking about)
a series of untested hypothesis and assumptions
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Put another way: Startups / founders / entrepreneurs exist to deal with uncertainty.
Steve Blank and other have shown that traditional business management processes and planning developed in MBA programs are not suited for startups, because startups operate in uncertainy.
A startup is a temporary organization in search of a scalable, repeatable, profitable business model. (Blank, 2012)
In sharp contrast, startups operate in “search” mode, seeking a repeatable and profitable business model. The search for a business model requires dramatically different rules, roadmaps, skill sets, and tools in order to minimize risk and optimize chances for success. (Blank, 2012)
SEE: Blank, S. G., & Dorf, B. (2012). The Startup Owner’s Manual. :::
a process to organize the search for a business model, find product-market fit, understand your customers, etc.
Originated with Steve Blank and popularized by Eric Reis and Lean Startup. Dovetails well with many aspects of UX.
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Steve Blank and others strive to make this an almost scientific process but it still very much an art rather than a purely empirical science.
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- Customer discovery = "acquiring a deep understanding of customer needs"
- Customer validation = process to invalidate/prove other aspects of your biz model like sales desire and traction channels
- Change in one of more business model components
Eric Ries / Lean Startup: a "structured course correction designed to test a new fundamental hypothesis about the product, strategy, and engine of growth."
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In practice, startups begin with a set of initial hypotheses (guesses), most of which will end up being wrong. Therefore, focusing on execution and delivering a product or service based on those initial, untested hypotheses is a going-out-of-business strategy.
Steve Blank
= Overemphasis on deliverables and product, underemphesis on users and customers.
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Overemphasis on deliverables and product
Startups and entrepeneurs tend to focus on what we build, do and deliver and forget to spend as much time, energy and thought on customer discovery.
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Turn assumptions and guesses into facts and knowledge ASAP.
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Best combined with agile product development
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The entire experience and interactions that an individual has around a product or service.
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UX is broadly speaking a design practice aimed at understanding customers or users and designing, testing and building products and services with and for those users.
At the heart of UX is being user or human-centric.
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Your three most important questions
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- Invention / Technology Risk (questionable if tech can be done or invented).
- Customer/Market Risk (unknown if customers will adopt and/or pay product/service)
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The key to customer discovery...
to customers
By understanding the problem, you can...
- What are your assumptions that, if invalidated, will break the business?
- Business Model Canvas = use to lay out your key assumptions to test
- Market Sizing = talk to customers from your target markets, use to explore definition of markets (overall, addressable and target)
- Person
- Problem
- Solution
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- Who are they? What is their role? Backgound? Etc.
- If business product, who is their boss? who works for them?
- What is a typical day like? How do they spend their time?
Goal: Get a broad background understanding of the person. Develop a relationship. Stay broad.
- Learn about the problems that person recognizes and verbalizes.
- What are the top three challenges they face?
- What is frustrating, expensive or time consuming?
- What would they change right now?
- How are they solving them? Competitors? DIY tools and workarounds?
Goal: Get them to verbalize the problem you want to solve (preferrably unprompted)
- Assuming you've gotten them to identify with your problem, then...
- Reveal your solution (either as a concept or prototype or product)
- Read their reactions as well as their words to capturee their level of interest.
- HINT: "That's interesting" = kiss of death
Goal: Discover if they want your solution and gather feedback.
- Turn assumptions into customer questions.
- Create a script of your key questions.
- Work as team (customer development is the job of entire founding team).
- Take detailed notes (and consider recording)
- Use a Google form to log key responses.
- Be empathetic with interviewee and go off script when needed.
- If they are excited about something, ask if they'll pay for.
- Be open-ended.
- Show them early prototypes (if you have them and if they indicated a desire for it).
- Always follow-up.
- End with an ask (intro to someone else to interview, join mailing list, etc.).
- Review and Summarize, esp Extract key quotes and look for patterns and clusters
- Be open to new problems and opportunities.
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- Tap your social and professional network
- LinkedIn, Email, contacts, etc.
- Expect a higher response (30-40%)
- Meetup Groups, Twitter, Facebook Groups, Reddit, Craigslist, Instagram, etc.
- Expect a lower response rate (10-20%)
- Consider offering payment/gift card for an interview
- As many as needed to in/validate assmptions.
- DISCOVERY TIP: Aim to do 8-10 interviews for each customer type
- UX TIP: Customer Discovery can be combined with and supplement user testing.
- Google Doc / Spreadsheet / Airtable of all assumptions and hypotheses to validate and test.
- Record the status.
- Rank their importance (i.e. if invalidated, does it invalidate entire business?)
- Link to interviews you do and experiments you run.
TIP: Validation Board from Lean Startup Machine.
- Start with a wireframe or prototype.
- UX Research involves a systematic approach to qualitative research towards validating user needs.
- UX Design is a model of iterative design towards human-centered solutions for your product or service.
- When in doubt, don't assume. Instead, test it!
- Examples:
- Value hypothesis test = sell to target customers
- Growth hypothesis test = experiment with traction methods
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It's about exploring the dimensions of your business model and ecosystem in an inexpensive, agile and opportunistic way.
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It's about testing the validity of your most important assumptions.
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It's about dealing with your uncertainties.
Thinking = Diverge and Converge
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(Double Diamond of Design Thinking)
Remember that creative thinking involves an oscillating process.
- All startups face uncertainties. Own your assumptions.
- Turn assumptions into hypthoeses and your hypthoses into facts and knowledge ASAP.
- Always Be Talking To Your Customers.
- Embrace the messy process.
All successful businesses are built on solving their customer problems better than the competition.
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Find me online at www.markwk.com!