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Customer Discovery

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Customer Discovery …

Customer Discovery
(aka Talking with and Learning from Prospects)

Published in Technology , Business
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  • 1. CustomerDiscovery(aka Talking with and Learning from Prospects)BarCamp - May 11, 2013Jason Innes
  • 2. About Uncommon Innovation• Started in 2007• Services:o Product Management and Customer Discoveryo Business and Market Strategyo Marketingo Opportunity Assessmentso Financing preparationo Capital raising• Focus:o New productso Technology
  • 3. Agenda• What is Customer Discovery?• Why do it?• Resources• The Interviewo Pushbacko Goalso Keys to Interviewo Getting Contactso The Problem Interviewo The Solution Interview
  • 4. What is Customer Discovery?• Learning from initial target customerso Talk to them, engage themo Do they have a big/painful problem?o Would they pay to solve it? Etc.• ...not selling or promoting• Systematic• Iterative. Can my product be successful?
  • 5. Customer Discovery? (cont)• Focuses on problem initially, the solutioncomes afterwards• For startups AND established companies• Happens after market research to determine:o Market Sizeo Market Trendso Competitiono Segmentation
  • 6. Why do it?• Most startups fail• More likely due to market risk, nottechnology risk• Nothing important happens in the office(Pragmatic Marketing)• Learn before you build and seek investment
  • 7. Resources• Running Lean (by Ash Maurya)• The Lean Startup (by Eric Ries)• Four Steps to the Epiphany (by Steve Blank)• The Startup Owners Manual (by Blank/Dorf)• Pragmatic Marketing (course)
  • 8. Interview PushbackCommon things we hear:• Interviews take too much time• Interviews are scary• I dont know anyone in the target market• I dont want to tell people about my idea• Steve Jobs didnt ask people what theywanted, he had vision
  • 9. Interview GoalsGoals:• Understand the problem(s), customer,needs, competition/alternatives, buyingbehaviour• Testing the solution (MVP) will come later
  • 10. Keys to Interview• Participate in process• 12 interviews target (5 may cover 85%)• 1-on-1 interviews, phone or in-person• Open ended questions• Qualitative (not quantitative) validation• Develop falsifiable hypothesiso Statements that can be clearly proven wrong• Aim for repeatability• Try to determine what you dont know• 30 to 40 minutes, more if possible• Don’t stop learning!
  • 11. Getting Contacts for InterviewsFrom Running Lean:• Start with personal network• Ask for introductions• Play the local card• Create email list from a web teaser page• Get contacts from Google searches• Use LinkedIn• Guess email addresses
  • 12. The Problem Interview ScriptFrom Running Lean:• Welcome 2 min• Collect Demographics 2 min• Tell A Story 2 min• Problem Ranking 4 min• Explore Customers Worldview 15 min• Wrapping Up 2 min• Document Results
  • 13. Interview - Welcome (Set the stage)"Thank you for agreeing to talk with me today. I wantto ensure you I am not trying to sell you anything. Iam only trying to learn more about your needs inregards to XX, so we can build a better product thatmeets your needs. I am interested in talking withexperts like yourself.We are working on a service that aims to solve theproblem of XX. I got the idea from XX.This is what is going to happen...."
  • 14. Interview - Collect Demographics• Dependant on product and segment• For B2B product/service:o Ageo Cityo Titleo Responsibilitieso Number of people in companyo Key priorities in next few years
  • 15. Interview - Tell A Story"Great, thanks. Let me tell you about theproblems we are tackling with this product."Tell the story of how you came up with yourproduct idea (but dont describe the solution).Talk about the problems you identified."Does any of this resonate with you?"
  • 16. Interview - Problem Ranking• State the top one to three problems and askthe prospect to rank and provide a measureof value (scale of 1 to 5)• Ask for other problems you havent identified• Need to understand how big of a problemthese are
  • 17. Interview - Explore Worldview• Open ended exploration• Keep asking "Why?" until you understand• Dont be afraid to ask questions• Are they trying to solve the problem?• Are problems "nice to have" or "must have"?
  • 18. Interview - Wrap Up• Thank them for their time and valued input tohelping a startup• Ask for permission to follow-up ("Your inputhas been extremely valuable and we will belooking for experts like you to provide inputinto our product design")• Look for references
  • 19. Interview - Document Results• Document results in a template• Review and learn• Tweak questions if needed, ideally not toomuch (want to compare results)
  • 20. The Solution Interview ScriptFrom Running Lean:• Welcome 2 min• Collect Demographics 2 min• Tell A Story 2 min• Demo 15 min• Test Pricing 3 min• *Buying Process 4 min• Wrapping Up 2 min• Document Results
  • 21. Interview - Wrap Up• Thank them for their time and valued input tohelping a startup• Ask for permission to follow-up ("Your inputhas been extremely valuable and we will belooking for experts like you to provide inputinto our product design")• Look for references
  • 22. Interview - Collect Demographics• Same as for Problem Interview
  • 23. Interview - Tell A Story• Same as for Problem Interview
  • 24. Interview - Demo (Test Solution)• Illustrate through your "demo" how youintend to solve the identified problems• Seek feedback:o What are the key features?o What could they do without?o What should be added?
  • 25. Interview - Test Pricing• Dont ask "What would you pay?"• Ask "We plan to charge $XX for the product.Does that seem reasonable to you?"• Aim higher than you were planning oncharging to determine range• Look/listen for clues (hesitation, surprise)
  • 26. Interview - Buying Process• Who is the MAN (more for B2B)?o M - Moneyo A - Authorityo N - Need• Budget timing, likely cycle length• Promotional Channels:o Where would they expect to hear about this kind of product?Rank priorityo Tradeshows, web, magazines, word of mouth, TV, radio, socialmedia, industry associations, etc.
  • 27. Interview - Wrap Up• Same as for Problem Interview except...• Ask if he/she would be interested in being abeta tester (may provide incentives, like "freefor 1 year", "50% off for 1 year“, “be part ofspecial customer advisory group”)
  • 28. Interview - Document Results• Same as for Problem Interview
  • 29. Some Past Clients
  • 30. Contact InfoJason Innesjason.innes@unco.ca(o) 403-455-3966(m) 403-701-0680
  • 31. Appendix
  • 32. The Lean Canvas• By Ash Maurya, based on AlexOsterwalders Business Model Canvas• Business model on 1 page (concise)• Identify riskiest parts of business• Draft early, test and iterate
  • 33. The Lean Canvas