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Intro to   Customer  DevelopmentClass 4, UCN, Antofagasta, 2011                                  1
OutlineSteve BlankHow it has been doneProduct / Customer DevelopmentCrossing the chasmCustomer DiscoveryCustomer Validatio...
Steve Blank
Bases
How it was done•   High burn rate•   Swing for the fences•   Full management teams•   Assume customer is known•   Assume f...
Crossing the Chasm: Moore
Concept      Product                          Alpha/Beta   Launch / /Seed      Developm                             Test  ...
Problem: Expensive FailureBuilt and they will come syndromeExpenditure is loaded upfront (1st Shipping):    Product develo...
Fix?Focus on Develop Customers not only the ProductDesign for customersCustomers from day Onefinaly, match Product to Cust...
Pair Product to Customer            DevelopmentConcept     Product                      Alpha/Beta   Launch / /Seed     De...
Concept  /Seed ProductDevelopm   ent                            Solution KnowAlpha/Beta   Test             Problem Know La...
SCRUM PracticesProduct Backlog    Current prioritized list of work to be doneEffort Estimation    iterative on Backlog ite...
   Split-test (A/B) experimentation   Extremely rapid deployment       Continuous deployment, if possible       Deploy...
Customer Development KeysParallel process to Product DevelopmentMeasurable CheckpointsNot tied to FCS, but to customer mil...
Search for a BizStop selling, start listening    There are no facts inside your building, so get outsideTest your hypothes...
Customer Discovery Cicle
Phase 0: Get buy-inConvince your-selfConvince othersGather a teamMission statement & values
Phase 1: State HypotesesProductCustomer/ProblemDistribution/PricingDemand CreationMarket TypeCompetition
Customer Discovery Cicle
Product HypotesesFeaturesBenefitsProduct Delivery ScheduleIntellectual PropertyTotal Cost of OwnershipDependency Analysis
Customer Discovery Cicle
Customer/Problem HypotheseTypes of Customers/ArchetypesMagnitude of the problemVisionaries & Early EvangelistsA Day in the...
Early Evangelist
Distribution / Pricing                HypothesesDistribution ModelDistribution DiagramSales Cycle/RampChannel strategyPric...
Demand Creation HypothesesHow do competitors create demand?How will you?   Dave McClure’s AARGH modelWho are influencers/r...
Exit for Customer Discovery   What are your customers top problems?        How much will they pay to solve them   Does ...
CUSTOMER SEGMENTSwhich customers and users are you serving?which jobs do they really want to get done?
VALUE PROPOSITIONSwhat are you offering them? what is that getting done for them? do they care?
CHANNELShow does each customer segment want to be reached? through which interaction points?
CUSTOMER RELATIONSHIPS   what relationships are you establishing with eachsegment? personal? automated? acquisitive? reten...
REVENUE STREAMSwhat are customers really willing to pay for? how?  are you generating transactional or recurring          ...
KEY RESOURCESwhich resources underpin your business model?          which assets are essential?
KEY ACTIVITIESwhich activities do you need to perform well in    your business model? what is crucial?                    ...
KEY PARTNERSwhich partners and suppliers leverage your                 model?       who do you need to rely on?
COST STRUCTUREwhat is the resulting cost structure?which key elements drive your costs?
key    value            customer            activities   proposition      relationships     key                           ...
4ÁREAS        Cómo   Qué   Quién               $
9 Guesses                       GuesGues    Gues                       s         Guess       s                            ...
Turning Hypotheses to Facts         Test         Hypotheses:         •           Product         •           Market       ...
TestHypotheses:•  Problem•  Customer•  User•  Payer
TestHypotheses:•  Channel
Test                                               Hypotheses:     Test                             Test                  ...
Test                                               Hypotheses:     Test               Agile                             De...
Test                                               Hypotheses:     Test               Agile                             De...
The Pivot• The heart of CustomerDevelopment•    Iteration without crisis•    Fast, agile and opportunistic
Extra
Startup Metrics for Pirates•   Acquisition: users come to site from various channels•   Activation: users enjoy 1st visit:...
AARRR!: 5-Step Startup Metrics Model                                SEO                 Campaigns,                     SEM...
Course 4 - Intro Customer Development
Course 4 - Intro Customer Development
Course 4 - Intro Customer Development
Course 4 - Intro Customer Development
Course 4 - Intro Customer Development
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Transcript of "Course 4 - Intro Customer Development"

  1. 1. Intro to Customer DevelopmentClass 4, UCN, Antofagasta, 2011 1
  2. 2. OutlineSteve BlankHow it has been doneProduct / Customer DevelopmentCrossing the chasmCustomer DiscoveryCustomer ValidationBusiness Canvas
  3. 3. Steve Blank
  4. 4. Bases
  5. 5. How it was done• High burn rate• Swing for the fences• Full management teams• Assume customer is known• Assume features are known• Assumes growth is by execution
  6. 6. Crossing the Chasm: Moore
  7. 7. Concept Product Alpha/Beta Launch / /Seed Developm Test 1st Ship. Round ent Branding Positioning Expensive LaunchMarketing Create PR Event Materials Early Buzz Create Demand Build Hire Sales Organizati Sales Boss on Hire Staff Work Leads Close 1st Hire Biz Biz Dev Ship. Dev Boss Deals
  8. 8. Problem: Expensive FailureBuilt and they will come syndromeExpenditure is loaded upfront (1st Shipping): Product development (p.e. design, software dev) Infrastructure (p.e. warehusing, server clusters) Sales & marketing departmentsHiring and executing according to “plan” “now we need an API to integrate with...”Hard to steer a cruise ship
  9. 9. Fix?Focus on Develop Customers not only the ProductDesign for customersCustomers from day Onefinaly, match Product to Customer Development
  10. 10. Pair Product to Customer DevelopmentConcept Product Alpha/Beta Launch / /Seed Developm Test 1st Ship Round ent
  11. 11. Concept /Seed ProductDevelopm ent Solution KnowAlpha/Beta Test Problem Know Launch / 1st Ship
  12. 12. SCRUM PracticesProduct Backlog Current prioritized list of work to be doneEffort Estimation iterative on Backlog itemsSprint 30 day / 15 days iterationSprint Planning Meeting decide goals for next sprint and how team will implementSprint Backlog Product Backlog items for sprintDaily Scrum meeting what doing, what will do, and any problemsSprint Review Meeting present results of sprin
  13. 13.  Split-test (A/B) experimentation Extremely rapid deployment  Continuous deployment, if possible  Deploy when core ready Just-in-time architecture and infrastructure  Incremental investment for incremental benefit Five whys – ask five times to solve problems  Use defects to drive infrastructure investments  E.g. Vendder had to CDN before coming to Chile.
  14. 14. Customer Development KeysParallel process to Product DevelopmentMeasurable CheckpointsNot tied to FCS, but to customer milestonesNotion of Market Types to represent realityEmphasis is on learning & discovery before execution
  15. 15. Search for a BizStop selling, start listening There are no facts inside your building, so get outsideTest your hypotheses Two are fundamental: problem and product conceptContinuos DiscoveryDone by Founders
  16. 16. Customer Discovery Cicle
  17. 17. Phase 0: Get buy-inConvince your-selfConvince othersGather a teamMission statement & values
  18. 18. Phase 1: State HypotesesProductCustomer/ProblemDistribution/PricingDemand CreationMarket TypeCompetition
  19. 19. Customer Discovery Cicle
  20. 20. Product HypotesesFeaturesBenefitsProduct Delivery ScheduleIntellectual PropertyTotal Cost of OwnershipDependency Analysis
  21. 21. Customer Discovery Cicle
  22. 22. Customer/Problem HypotheseTypes of Customers/ArchetypesMagnitude of the problemVisionaries & Early EvangelistsA Day in the Life of a customerOrganizational impactROI JustificationProblem RecognitionMinimum Feature Set
  23. 23. Early Evangelist
  24. 24. Distribution / Pricing HypothesesDistribution ModelDistribution DiagramSales Cycle/RampChannel strategyPricing (ASP, LTV)Customer Organization MapDemand Creation
  25. 25. Demand Creation HypothesesHow do competitors create demand?How will you? Dave McClure’s AARGH modelWho are influencers/recommendors?Key trade shows?Key trends?Start assembling advisory boar
  26. 26. Exit for Customer Discovery What are your customers top problems?  How much will they pay to solve them Does your product concept solve them?  Do customers agree?  How much will they pay? Draw a day-in-the-life of a customer  before & after your product Draw the org chart of users & buyers
  27. 27. CUSTOMER SEGMENTSwhich customers and users are you serving?which jobs do they really want to get done?
  28. 28. VALUE PROPOSITIONSwhat are you offering them? what is that getting done for them? do they care?
  29. 29. CHANNELShow does each customer segment want to be reached? through which interaction points?
  30. 30. CUSTOMER RELATIONSHIPS what relationships are you establishing with eachsegment? personal? automated? acquisitive? retentive?
  31. 31. REVENUE STREAMSwhat are customers really willing to pay for? how? are you generating transactional or recurring revenues?
  32. 32. KEY RESOURCESwhich resources underpin your business model? which assets are essential?
  33. 33. KEY ACTIVITIESwhich activities do you need to perform well in your business model? what is crucial? 36
  34. 34. KEY PARTNERSwhich partners and suppliers leverage your model? who do you need to rely on?
  35. 35. COST STRUCTUREwhat is the resulting cost structure?which key elements drive your costs?
  36. 36. key value customer activities proposition relationships key customerpartners segments cost revenuestructure key streams resources channels 39 images by JAM
  37. 37. 4ÁREAS Cómo Qué Quién $
  38. 38. 9 Guesses GuesGues Gues s Guess s s Gues s Gues Gues s s Gues Gues s s
  39. 39. Turning Hypotheses to Facts Test Hypotheses: • Product • Market Type • Competition
  40. 40. TestHypotheses:• Problem• Customer• User• Payer
  41. 41. TestHypotheses:• Channel
  42. 42. Test Hypotheses: Test Test • Demand HypothesesTest Hypotheses: Creation :Hypotheses: • Product • Problem• Channel • Market Type • Customer• (Customer) • Competitive • User• (Problem) • Payer Test Hypotheses: • Channel Test Hypotheses: Test Hypotheses: • Size of Opportunity/Market • Pricing Model / Pricing • Validate Business Model
  43. 43. Test Hypotheses: Test Agile Demand Test • Hypotheses Developme CreationTest Hypotheses: : ntHypotheses: • Product • Problem• Channel • Market Type • Customer• (Customer) • Competitive • User• (Problem) • Payer Customer Developme Test Hypotheses: nt Team • Channel Test Hypotheses: Test Hypotheses: • Size of Opportunity/Market • Pricing Model / Pricing • Validate Business Model
  44. 44. Test Hypotheses: Test Agile Demand Test • Hypotheses Developme CreationTest Hypotheses: : ntHypotheses: • Product • Problem• Channel • Market Type • Customer• (Customer) • Competitive • User• (Problem) • Payer Customer Developme Test Hypotheses: nt Team • Channel Test Hypotheses: Test Hypotheses: • Size of Opportunity/Market • Pricing Model / Pricing • Validate Business Model
  45. 45. The Pivot• The heart of CustomerDevelopment• Iteration without crisis• Fast, agile and opportunistic
  46. 46. Extra
  47. 47. Startup Metrics for Pirates• Acquisition: users come to site from various channels• Activation: users enjoy 1st visit: "happy” experience• Retention: users come back, visit site multiple times• Referral: users like product enough to refer others• Revenue: users conduct some monetization behavior AARRR ! (note: If you’re in a hurry, Google “Startup Metrics” & watch 5m video)
  48. 48. AARRR!: 5-Step Startup Metrics Model SEO Campaigns, SEM PR Contests Biz Social Network Dev s Blogs Affiliate O Q N U A C S T I I I Apps & s Direct, Widgets Email Tel, TV Viral Domain Loops s Emails & Ac Homepage / Emails & Alerts tiv Landing Page widgets RE LRF ati AE R Product onBlogs, RSS, Affiliates,News Feeds Features Contests Ret enti Biz Dev on Ads, Lead Gen, Re System Events & Subscriptions, ve Time-based ECommerce nu Features e Website.com $$ $
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