Customer Development

Why do Customer Development?

Product/Market Fit (a.k.a. Customer Development) is imperative for any startup where there’s nothing more valuable than the ability to understand what your customers need versus what they want. This understanding is key to building a repeatable and scalable business model.

“Get closer than ever to your customers. So close that you tell them what they need well before they realize it themselves.” – Steve Jobs

 What is Customer Development?

 Customer Development is a tried and true process (when done correctly) to finding out if you have a market for your offering.  It is an iterative process that requires true empathy, perseverance, and genuine curiosity to navigate from hypothesis to a true customer-worthy offering.  It is not a guarantee that you will find a market and sell millions of dollars worth of product but it will help you to quickly test your hypothesis(es), iterate and pivot quickly saving valuable time, money and frustration down the road.

“No business plan survives first contact with customers” – Steve Blank

How does Customer Development work?

  1.  Identify your assumptions

There are things you believe to be true about how your customer thinks and acts, what he is capable of, and how he makes decisions. There are things you believe to be true about how you will produce your product, the resources, and partners, etc. These need to be identified and cataloged as preparation for effective customer development.

  1.  Write your problem hypothesis

Once you have identified your assumptions, you will craft a succinct statement that will help you to identify the target customer profile – looking at your customer from all angles from the professional to the personal.

  1.  Map your target customer profile

What does your customer look like: what about her abilities, needs, and environment make her more likely to buy your product etc.?

These three steps should take you 2-4 hours to complete

Once this process is complete, the first round of interviews follow:

  1.  Find customers to interview

For example:

  1.  Seek out people likely to be interested in your product and give them pitches, demos, or samples.
  2.  Look for places where your likely customers already are and try to get your product in front of them.
  3.  Partner with complementary products or services to cross-promote.
  4.  Leverage personal networks for initial interviews.
  1.  Put together a script for email and phone to ask for an interview

This will be short and sweet clearly explaining your objective and setting proper expectations.

  1.  Create your list of questions to ask.

The key thing to remember is to focus on what you are trying to learn vs. coming up with the perfect question(s) to ask.

  1.  Conduct 15-20 interviews to test the initial hypothesis.  

You are looking for trends to prove or disprove your original hypothesis.  You are also looking to explore alternatives based on the answers you hear. Ultimately, you are hoping to hear, “I would buy this if…….”.  Make sure you ask questions the right way.

  1.  Review data and make changes if necessary.

Please note that after the first 15-20 calls you should be comfortable to do this on your own (i.e., you no longer need to pay a 3rd party to be your discovery partner although I am happy to do it if you would like).  Either way, I strongly recommend that, if not recording, you have a second person taking copious notes so you can focus completely on the interview.

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