Where to Go Now? The Customer Development Model and Customer Discovery ProcessPosted: March 24, 2012
“Focus on customers and markets from day one” – Steve Blank, Professor, serial entrepreneur (and man of many other titles), Stanford University
Ideas vs. Opportunities
A great Hacker News article lost in my Twitter stream once wrote that a great idea is something that hits you out of the blue when you are washing in the shower. A great opportunity, on the other hand, is a great idea at the right time, the right place, under the right conditions, thought of by the right person, and finally executed in the right way. Ideas are free. You have to do a little digging to uncover the opportunities behind them.
Evan and I had two product ideas:
1) A set of branded apps to help businesses better connect with their customers of which a prototype had already been built.
2) An idea for scheduling software to be used by small service businesses
We focused on four customer segments that we hypothesized could be environments for potential opportunities:
- Every day iPhone consumers
- Salons, alternative therapists, and spas
The Customer Development Model
The problem that Steve Blank’s Customer Development Model’s tackles is well summarized by serial entrepreneur, Eric Ries – “very few startups fail for lack of technology. They almost always fail for lack of customers.” The Customer Development Model essentially says that you should put your focus on finding customers and markets in parallel to product development. Instead of just building your idea you need to test the market alongside it to see if it is worth building as an opportunity. The beginning of this process is Customer Discovery, which we focused on this term.
These are the steps that Evan and I decided to take:
- Hypothesis – Creating a product vision, and potential business model. “No plan survives first contact with customers,” says Professor Blank, but you need some idea to throw out there and get you started.
- Test – Getting outside the building. Steve Blank famously says, “there are not facts inside your building, so get outside!” What are customers’ problems? Does your product idea solve their problems? Will they pay to have their problems solved?
- Insight – Analyze your customers’ feedback. After each set of interviews, we needed to look at our notes, reflect, infer, and draw out what we thought were the biggest takeaways from each meeting. Sometimes this meant taking everything our potential customers told us. Other times, this meant throwing some information away.
- Iterate and Repeat – Plans are dynamic. Each set of interviews left us with more information and a new perspective. We continued to iterate on our prototype, presentation, and interview questions until we started to hear the same answers repeated. That meant it was time to start building.
- Not Done Yet! – Ten weeks flies by quickly! We have learned so much this quarter, and it has sent us on a road to more development and more consumer development!
After hearing some initially positive feedback on the branded apps, Evan and I jumped the gun a little early and built a functional prototype. Since the businesses we were approaching also all happened to be service businesses, we decided to test our scheduling idea alongside this, and the scheduling became the main focal point.
The rest of the posts in this series will outline our experiences – hypotheses, tests, insights, and iterations – through each of the steps of our Customer Discovery as part of the Customer Development Process.