Customer Development

Customer Development

Too often people come up with a great business idea or build a solution without really understanding the problem or need it solves.  If it doesn’t solve a compelling problem or need for a specific group of people, nobody will buy it. So before jumping into building that solution, entrepreneurs must get out of the building as Steve Blank would say, and go talk to customers.  This module will show you why you need to talk to customers and how to do it.

Outcomes
After this module, entrepreneurs should be able to:

  1. Identify the problem or need their business solves
  2. Create an appropriate list of questions to ask potential customers about what they currently do, why they do it, what issues they have with it, any workarounds or solutions they have identified and how they would like to see the problem solved.
  3. Compile the information gathered from multiple customers and begin analyzing it to determine next steps.

STEP 1: READING ASSIGNMENT

How to Start a Startup, by Paul Graham

 

STEP 2: CUSTOMER DEVELOPMENT PROCESS

One of the hardest things to do, is to get an entrepreneur to set aside his or her idea long enough to go out and interview or shadow potential customers about their real problems.  We have seen too many entrepreneurs with the Field of Dreams mentality: If you build it, they will come.  That was only true for Kevin Costner.  Unfortunately, it doesn’t hold true for start-ups and as Paul Graham and many others have indicated, not solving a compelling problem is the reason most start-ups fail.  We don’t want you to find out the hard way, so take a look at these next couple of videos before moving on to Step 3.

1. Rethinking the Product Development Process
2. Assessing Customer and Market Risks
3. The Customer Development Process

 

STEP 3: GETTING IN FRONT OF CUSTOMERS

Now you should be fired up to get out of the building and test some of your assumptions with clients!  There are several ways you can go about this, depending on who your customers are and where they are.  In person interviews, online surveys, focus groups or job shadowing are all appropriate ways to go about understanding your customers needs.  The main thing to remember is that you don’t want to bias the potential client by starting out with a description of your how great your product is.  The best approach is to refrain from discussing your business opportunity until after you have interviewed/surveyed them.   Stick to open ended questions, focused around their experience and don’t be afraid to dig deep on their answers.

A few of my favorite questions are: Tell me about what you would change about this if you could?  Why?  What have you done to work around this?  Did that/Does that solve the problem for you?   Why or why not?

Click on the links below to learn more about how to interview customers.

Interviewing Potential Users

Finding Product/Market Fit: Using Consulting to Understand Customer Needs

Product Development Process: Observation

 

STEP 4: ANALYSIS

Now that you have interviewed, surveyed and/or observed many potential customers, its time to determine how to move forward.  First, review your data and start identifying patterns.  Click on the links below to learn how to assess your information.

Identifying Market Problems

Deciding Which Market Problems to Solve

Now that you have read the above articles, gather your data and search for patterns.  It is always a good idea to get a third party opinion on the conclusions you are drawing, because we all have a tendency to see what we want to see.  Find a mentor or advisor to take a look at the information with you and listen to their feedback.  You may need to go back to some of the interviewees and dig deeper or even interview more customers.

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