Customer Development - Notes from the Field


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Customer Development - Notes from the Field

  1. 1. Customer DevelopmentNotes From The FieldChristian
  2. 2. "Users dont know what they want”TRUE & FALSEFeatures Outcomes
  3. 3. I am not himBut I did go hereCD Inventor
  4. 4. Background“a product guy”•  Lots of startups•  Non-developer•  Self taughtThe scars to prove it…
  5. 5. Curriculum“No Code Prototype” “n=1 MVP” “Strategy Matters”Prototyping MvP StrategyCustomer Development
  6. 6. $$$  Customer Development
  7. 7. My CD experience•  Chem Lab – Adjacent Growth. Exit Value.•  IBM – New Approach. Old Problem.•  Startups – New Products. New Businesses.•  Technicolor – Big Bets. The Future.
  8. 8. Scientific Method“hypothesis testing rules”•  Establish a testable hypothesis•  Get feedback as fast as possible•  Iterate, iterate, iterateA laboratory approach…
  9. 9. Early Stage Objectives•  Exploratory discovery•  Concept Validation•  Get a check•  Benefits– Test based and pivot-able – less waste– P/M fit focused - prevent premature scaling– Evangelist driven – time to market
  10. 10. 5 KeysGreat ListenerDemonstrate EmpathyPractice PatienceBe EngagingSuperb Storyteller
  11. 11. In Context•  Enterprise–  Learn to say no. Learn to scope & budget. Learnto steer toward scalable product.•  Consumer–  Listen for insight, not features. Look for positioningopportunities.•  SMB–  Look for pain worth paying for – very tricky.
  12. 12. In Practice•  The Interview – listen & suspend bias/opinions[Problem/Solution Fit]•  The Proto/Demo – tell a story & sell a little[Define MVP]•  The MVP – test against & listen to your metrics[P/M fit or Pivot]
  13. 13. Opening•  Nail the intro– Plain/straight talk – it’s a Conversation•  e.g. don’t mention algorithms– Analogous - ‘This for that’•  CRM for personal relationships– Memorable - a fun one liner•  Helping you not get Yelp’d
  14. 14. $2B Pitch
  15. 15. $2B Pitch
  16. 16. $2B Pitch
  17. 17. Pro TipsPlausible – not RidiculousAuthentic – not ScriptedPassionate – not ArrogantVisionary – not CopycatMomentum – not Needy
  18. 18. Interviews
  19. 19. Interview[REDACTED] – Interview OutlineQuick Intro• Who are we? Working on a startup backed by [redacted].• What are we doing? We see is a big problem in the [x] space. We want tosolve it…• Show gratitude. “we really appreciate your taking the time to talk to us aboutthis concept. We are really excited about involving you as much as you’d like– we value your input greatly”.Collect Data• Who are you?o Roleo Years in gameo Biggest projectso Frequency of [problem/solution]
  20. 20. [REDACTED] – Interview OutlineSet Stage• Lay out the problem. “We’ve talked to a lot of folks in the [x] industry – bothon the [a] side and the [b] side – and we keep hearing the same thing. It’s noteasy to [fill in the blank]”. So we are digging into this problem, with the aim ofbuilding the solution – starting simple and small at first (90 days) but evolvingto what we think can be a bit of a game changer.• We want to [fill in blank with solution statement]…• Is this important to you?o Is this a problem you want to see solved?Explore Problem• How big is this problem?o Is it a top 3-5 challenge in your professional life?• What are you doing today?o What do you like?o What do you hate?o How does this process make you feel (angry, frustrated, at risk, etc)?o What could be improved?o What is new and exciting?o What has changed in past few years that make things better/worse?• What would you like to be doing? If you could wave a magic wand ; ) Getcreative on us ; ) Play back to make sure you heard them right.Interview
  21. 21. [REDACTED] – Interview Outline• Lets talk about some features we’ve been thinking about.• Big Idea = [fill in w/ BAG]• Feature Set 1o Ao Bo C• Feature Set 2o Ao Bo C• Feature Set 3o Ao Bo C• What would get you excited to use the product, use it regularly and encourageothers to join them there.• Why wouldn’t they use it?• Search for break throughs.o What are you seeing in the broader technology space that excites you?o What turns your heads?o What impresses you?o What could we be learning from?o What makes this a must have tool?Interview
  22. 22. !!!!!!!!!!!!!!!!!!!!!!!!!!• What would get you excited to use the product, use it regularly and encourageothers to join them there.• Why wouldn’t they use it?• Search for break throughs.o What are you seeing in the broader technology space that excites you?o What turns your heads?o What impresses you?o What could we be learning from?o What makes this a must have tool?• How do they gauge the benefits of a solution like we are talking about?o Do you see this as a big idea?o Would this change the way you do your work?o Would this help you advance your creative journey?o Would this help you make more money?o How much time would you spend to realize these benefits (e.g. 1 hrbuilding profile)?o What is critical for you to use it and use it frequently (e.g. 1x/m)?Interview
  23. 23. [REDACTED] – Interview OutlineEnlist Advocates• Can they think of others we should talk to?o Can you think of anyone else we should interview?o Would you tell other people about this kind of platform?o Can you think of 5 people you’d invite to the platform?• Can we come back periodically? Define the touchpoints:o Short survey to help quantify & prioritize all the cool things we can do.o Clickable prototype session to give us feedback on initial direction.o Signup and test actual MVP to provide feedback to shape product plan.o Input into creative ways to spread the word – assuming they love it.• Followup w/ thank you and next steps. Thank them for the time andenthusiasm. Tell them what we are going to do for them (featured early onthe platform, founding members of user group/community and resume bullets).Interview
  24. 24. Evangelists•  Follow up and manage a program– Grandfather them in (stamp on their account)– Special invitations to share w/ friends– Featured contributor at launch.
  25. 25. How Many?•  Diminishing Return +10– You are looking for patterns– 25-100 is a healthy range– It’s better with a prototype
  26. 26. Prototyping“many ways to skin a cat”•  Scrappy – Sketches/Screenshots•  Lean - Clickable•  Designery – Photoshopjust work with the tools you know…
  27. 27. Weapons“Tools are everywhere”•  Photoshop, Illustrator, Keynotopia, etc•  Balsamiq, SimpleDiagrams, Powerpoint, etc•  Justinmind, Mockflow, InvisionApp, etc•  Interesting new tools -, DivShot,JetStrap, Pop (mobile)You get better feedback…
  28. 28. WTF MVP“cliffs suck”•  Test your hypothesis•  Makes it consumable•  Can be killed offStop driving blind…
  29. 29. MVP ScopeTest Value Prop traffic/signups 60%Deliver Utility or Fun engagement/wom 50%Demonstrate Traction viral/cpa/etc 25%Test your BS…
  30. 30. InvitesPublic WaitlistUser InvitesOrganicInboundCreate AccountLinked AccountsAdd ContentAdd FavsCreate ContentUpdate AccountCommentLikeUp VoteAccept InvitesAttributionShare Link(s)Pro FeaturesTransactionsTest Growth ModelAcquisition Signup Usage RevenueInvite FriendsInvite FamilyInviteSet GoalsCreate ProgramsModel & Measure
  31. 31. Choose Features“a fine balancing act”•  Utility – drives usage•  Viral – drive Word of Mouth•  Monetization – makes money•  Risk – viability•  Wow - differentiation.Be deliberate…
  32. 32. Feature SetActivity Function Category Sub Categoryave transper usertransperyearavetransvalue ARPUChecks Daily Agenda email summary usage email 3 x/wk 156Reminds husband to pick up kids email, SMS and Social usage reminder 3x /wk 156Creates GTD list Task list (internal) usage lists 1 x/wk 52IM chats w/ friend re: dinner plans usage communications 1x /wk 52Creates grocery list Task list usage shopping 2x /m 24Checks friends availability Check calendars usage schedule 2x /m 24Updates Facebook Facebook WOM social 2 x/wk 104Shares plans with her friends Facebook, twitter, etc WOM social 1 x/wk 52Sends daily deal to friend HUBnote (internal) WOM communications 1x /wk 52Schedules lunch OpenTable rev dining 6x /yr 6 20 6Plans holiday travel Kayak, etc rev travel 2x /yr 2 50 5Gets movie tickets Fandango, rev entertainment 5x /yr 5 20 5buys tickets to the concert rev entertainment 2x /yr 2 50 5Buys brother a gift rev general 2x /yr 2 30 3Orders flowers for mom, 1800flowers rev gifts 3x /yr 3 20 3Sends brother b-day card americangreetings, Hallmark rev gifts 5x /yr 5 1 0.25Checks Weather, etc tbd conditions 3 x/wk 156Checks Traffic Google Maps? tbd maps 3 x/wk 156Checks news feeds tbd tbd news 3 x/wk 156Total 27.25* 5%
  33. 33. Force FeasibilityMfP MvPFit & FinishLaunch MilestoneUsage MonitoringUser ExperienceFunctional BuildInternal MilestoneTalk TestCore Capabilities
  34. 34. CD ToolsAnalytics•  MixPanel•  KISSmetrics•  RJ MetricsFeedback•  UserVoice••  Intercom.ioHacks•  Features•  Content•  Beta/Exclusive AccessReferences•  4 Steps to Epiphany•  Entrepreneurs Guide toCustomer Development•  Google…
  35. 35. PivotIncrementsIncremental EvolutionWell defined build (but not over spec’d)Customer feedback for tweaks (UI/UX, etc)Customer input for future features (capabilities, etc)Very team and customer driven“Bet the Farm” PivotsIntense sprint driven builds (constrained‘existing’ feature set)Customer feedback for monetizationBusiness model projections and testingVery customer and market drivenPivot?
  36. 36. ObjectiveFind a business model (not just eyeballs or signups)Drive customer advocacy (not just uptake)Reduce cycle time (both versions and pivots)CompanyPivotProductPivotPricingPivotPivots
  37. 37. BonusTeam Product MarketExperience Differentiation Tractionmade investors money before a clear focal feature registered active/usersworked on notable products/projects a clear unmet need REVENUE & ARPU (ave rev per user)education from well known institutions a simple story Viral Factors (WOM, referals, etc)Partnerships pennedPassion Experience Addressabledrive to win simple and intuitive UI how big is marketa love of the topic/domain easy to get started what are distribution channelscontagious enthusiasm trust building steps access to channel partnersLeadership Behavior Business Modelability to inspire a team serve emerging consumer behavior how will you make moneyability to manage a small team serve current better (faster, easier,) is it highly scalableability to grow partnerships not trying to teach new behaviors how long are sales cycles, etcability to secure advisors/investors
  38. 38. Be Careful Out There“Dogma is Dangerous”“There are better ways to make a living”“Create pain killers”
  39. 39. Christian GammillFounder, Advisor & Helperjgammill@gmail.com310-526-3751