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Master the Customer Development Process

 

Get out of the building.

Steve Blank, a serial entrepreneur, teacher, and father of the Customer Development methodology is best known for that phrase. Customer Development is not a reason or even an excuse to slow your roll and switch your plans every day; it’s a method to reduce the risk of total failure by checking your theories and assumptions against reality. You will be able to get a sense for who the customer of your product might be, how you’ll reach them, and what they will ultimately need. The goal of this is to talk with you customers and build a product with a minimal amount of features (and cost!) for you. It will be able to point you into a direction for you to build your product.

There are roughly three types of markets, which would explain why every startup faces their individual challenges and frustrations:

  1. Create a new market
    2. Bringing an existing product to an existing market
    3. Re-segmenting an existing market

Navigating this field can be treacherous as startups are trying to find a way up instead of running in circles. Back in the day companies would do a traditional product launch at the beginning—either with failing or succeeding– mostly failing. This sort of public and expensive failure allows for only a handful of iterations until the founders give up and scrap the entire business.

I want to explain this with a project we worked on at Startup Weekend back in 2011. It will help you fundamentally understand the process we went through to validate the idea.
Check out Steve Blank’s lesson on customer development here:
Customer Development Methodology from Venture Hacks

Our team had a fantastic idea, called Airmaid (view below). It was a full back-end service for Airbnb tenants, the people who rent out their apartments, and included cleaning, key exchange (from renter to tenant), 24- maintenance, etc. We assumed that all these tenants wanted to provide these services to their renters.

Knowing we had to interview some Airbnb tenants, our team split in two with some of us (including me) going outside to interview these other renters while others stayed at the space and set up the landing pages and basic brand elements. The customer development team interviewed 5 renters: 2 in Brooklyn and 3 in Manhattan. Some had overlapping problems, while others had unique ones. As someone who has done this a few times before (and seemingly increasingly more and more now), there are some little nuances and tips that I have picked up that make the customer development process more fruitful.

Being in Person Matters

Unless traveling is an issue, I highly recommend having conversations face-to-face. Body language, facial expressions and change in tone can be noticed far better than over the phone. It’s something about being in the moment that makes it tangible. If one of your questions causes a slight change in their posture or facial expression, you can then explore that subject further and really try to find the seed of the issue that’s bothering them (and which you’re trying to solve).

Observation

If you ask 100 random people coming out of the subway if they use the stairs more often than an escalator, they will probably overstate the amount of times they use the stairs. It would be more worthwhile to observe 100 people coming up from the subway and noting whether they choose to take the escalator or the stairs (which of course is directly dependent on the amount and length). Unfortunately we didn’t have the luxury of time to observe renters throughout their tenants’ stay, so we had to rely on questions. When you step into their environment you can discover a whole mess of insights that can influence some more ideas to make your product and service better. I was talking to a fellow entrepreneur and he was developing client management software for Tattoo parlors. He went to about 20 different parlors and noticed only at the end of his interview rampage that the ones who were interested in the software had more than 3 tattoo chairs. He then knew the size of the tattoo parlors he had to target for his new product.

Questions

It might be enticing to start the conversation off with what you are looking for, but from my experience that’s not the best way to go around it. People will usually give you the answers you are looking for, which doesn’t help you build your case for your idea. Observation must then play a larger role in validating your idea. As discussed earlier, since people naturally do one thing yet their actions differ, you must strike a balance and strategically position your questions to really pinpoint their problems instead of asking upfront, “What your biggest problem?”. For example:

  1. When did you start using Airbnb?
  2. Why did you start renting out your apartment?
  3. How long have you been a renter?
  4. What is the process of getting a new tenant like?
  5. Say a tenant is going to be staying in your apartment next weekend, what is the process like from beginning to end?
  6. Who is you ideal tenant? Have you ever had an ideal tenant?
  7. What are some common issues with the tenants you’ve had?
  8. Have you ever have to rearrange your schedule to deal with tenant issues?
  9. What are some of the most common tenant issues that you’ve had to resolve?
  10. What was your nightmare experience? (skip if not applicable)

From this sample of some of the questions we asked really provides really good, accurate insight by stepping into the renter’s shoes and really trying to figure out his pain points.

Customer development plays a crucial part in not only validating your idea but effectively targeting it as well. The target market you originally thought was correct could turn out either being further refined or completely different. I urge you that before you start spending your money and energy, do some solid field work, observation, and customer development to really validate and focus your idea.

 


 

 

Reprinted with Permission

Image Credit CC: Shutterstock

About the author: The Phat Startup

The Phat Startup is an integrated media company that produces premium content for all levels of entrepreneurs.  We are inspired by and fuse together Lean Startup methodology and Hip Hop culture.

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