The 4 steps to the epiphany - Customer Discovery template - guilhem bertholet

Start easily with Customer Development A playbook for entrepreneurs *** GuilhemBertholetInspired by The Four Steps to the Epiphany – Steven G Blank GuilhemBertholet.com

1-01 - Customer DiscoveryProduct Hypothesis Objectives: write down initial guesses about the product and its development. Step 1:Product Features List the top 10 (or fewer) features with a one-sentence description of it. ● Feature #1:blablabla ● Feature #2:blablabla ● … ● Invalidatedfeature: blablablaDiscussion points, links, ... Step 2: Product Benefits Describe the benefits the product will deliver to customers (new, cheaper, better, faster, …). ● Product benefit #1:blablabla ● Product benefit #2:blablabla ● Product benefit #3:blablabla ● … ● … ● Invalidatedbenefit: blablablaDiscussion points, links, ... Step 3: Intellectual Property Assumptions about IP, technology bottlenecks, patents to be used or filed, ... ● IP & technology point #1:blablabla ● … ● Invalidatedbenefit: blablablaDiscussion points, links, ... Step 4:DependencyAnalysis Things out of our control that we will depend on to succeed (technology, market adoption, usages…) ● Dependance #1:blablabla ● Dependance #2:blablabla ● … ● Invalidateddependance: blablablaInspired by The Four Steps to the Epiphany – Steven G Blank GuilhemBertholet.com

Discussion points, links, ... Step 5: Product Delivery Schedule Prioritization of the shipping order of the different product features. If possible, givesome dates. ● Feature set for shipping #1:blablabla + blablabla ● Feature set for shipping #2:blablabla ● …Discussion points, links, ... Step 6: Total Cost of Ownership / Adoption What’s the total cost the customer will pay to implement the solution, including training, hardware, hiring people, etc. ? ● Cost #1: blablabla ● Cost #2: blablabla ● Cost #3: blablabla ● ...Discussion points, links, ...Inspired by The Four Steps to the Epiphany – Steven G Blank GuilhemBertholet.com

1-02 - Customer DiscoveryCustomer & Problem Hypotheses Objectives: write down assumptions on who you think the customers are, and what problems they have Step 1: Types of customers Who are the decision takers? The buyers? The influencers? The end-users? Are thereanypotential saboteurs? ● Customer type #1: blablabla ● Customer type #2: blablabla ● … ● Invalidatedcustomer type: blablablaDiscussion points, links, ... Step 2: Customer Problems what pain do customers experminent? If customers had a magic wand, what would they change? Are they latent or active needs? How deep is the need? Do customersalready in search of a solution? ● Problem #1: blablabla ● Problem #2: blablabla ● … ● Invalidatedproblem: blablablaDiscussion points, links, ... Step 3: A day in the life or your customers How do your customers “work”, or behave? How do the different types of customers spend their days? Go out and talk to them! ● Cust. Type #1 typical day:blablabla ● Cust. Type #2 typical day: blablabla ● …Discussion points, links, ... Step 4:Organizationnal map and customer influence map Try to understand how your customers interact with other people and businesses. Findwho influences who. Who has to beconvinced?Drawhere !Inspired by The Four Steps to the Epiphany – Steven G Blank GuilhemBertholet.com

Discussion points, links, ... Step 5: ROI (Return on investment) justification What’s the return of your future customers, in terms of money saved, new customers generated, time saved, influence, data, …? What will they win against their present solutions? Try to put precise figures in your answers! ● Key figures: blablabla ● Potential gains: blablabla ● … ● Invalidated figures and facts:blablablaDiscussion points, links, ... Step 6: Minimum feature set Try to understand what is the smallest feature set customers will still be glad to pay for. Really kill your own will to add “just another small thing”. ● Feature 1: blablabla ● Feature 2: blablabla ● … ● Won’t-be-included features:blablablaDiscussion points, links, ...Inspired by The Four Steps to the Epiphany – Steven G Blank GuilhemBertholet.com

1-03 - Customer DiscoveryDistribution and Pricing Hypotheses Objectives: Describe what distribution channel you intend to use to rich customers (direct, online, telemarketing, reps, retail, …) 3 criteria to have in mind: does the channel add value to the sales process? What are the prices and complexity of the product? Are there established customer buying habits? Step 1: what does the distribution channel look like? Who’s here? What are the margins? ● Channel 1: blablabla ● Chennel 2 2: blablabla ● … ● Invalidatedchannel: blablablaDiscussion points, links, ... Step 2: what are your pricing assumptions? Do customers already pay for something similar? How much? How will they buy from you ? At which price do customers find your offer really too expensive? ● Pricingrationale 1: blablabla ● Pracingrationale 2: blablabla ● … ● Invalidatedpricingfact: blablablaDiscussion points, links, ... Step 3: what is the customer LifeTime Value? Do you sell once? Or do you keep your customers for a long time? Do a sold customer brings you new ones? Do you enhance recurrence? ● Fact 1: blablabla ● Fact 2: blablabla ● … ● Invalidatedfact: blablablaDiscussion points, links, ...Inspired by The Four Steps to the Epiphany – Steven G Blank GuilhemBertholet.com

1-04 - Customer DiscoveryDemandCreationHypotheses Objectives: find out how customers learn of new companies and new products: set hypotheses on how your customers will hear about you. Step 1: Creating customer demand You need to find a way to create demand and drive people into the sales channel. Advertising? PR? Word of mouth? Fairs? Telemarketing? Partners? Spam? Which magazines do customers read? Note: the further away from a direct sale, the highest costs of demand creation... ● Customer demand creation idea 1:blablabla ● Idea 2: blablabla ● … ● Invalidatedidea: blablablaDiscussion points, links, ... Step 2:Understandinginfluencers Who are the industry trend-setters? Thought leaders? Who’s affecting customers’ opinions: analysts, blogers, members of the press... ?Whocouldjoin an advisoryboard? ● Influencer 1: blablabla ● Influencer 2: blablabla ● … ● Invalidatedinfluencer: blablablaDiscussion points, links, ...Inspired by The Four Steps to the Epiphany – Steven G Blank GuilhemBertholet.com

1-05 - Customer DiscoveryMarket Type Hypotheses Objectives: start-ups generally enter one of three market types, and you’ll have to chose one. Even if you can defer that decision, you need to start working on one hypothesis. You’ll have to answer to that question: is your company entering an existing market, resegmenting an existing market, or creating a new market? Step 1: Are you in an existing market? Is there an established and well-defined market, with a large number of customers? Does your product have better “something” than competitors? Who are the competitors? What are the market share of each? What are their marketing and sales expenses? What are the entry costs? Which performance attributes are important for customers? How do competitors define the market? What are the market standards? ● Competitors’ type 1: blablabla ● Type 2: blablabla ● … ● Invalidatedcompetitors: blablablaDiscussion points, links, ... Step 2: Are you in a resegmented market? Is there an established and well-defined market with large numbers of customers and your product is lower cost than the existing solutions? Or can it be uniquely differentiated from the incumbents (going to niche)? What existing markets do customers come from? What customers needs remain unmet by competitors? what compelling features of your product will drive customers abandon their current suppliers? To what size can you grow? How will you educate the market? What are the sales forecasts? ● Existingmarket 1: blablabla ● Existingmarket 2: blablabla ● … ● Invalidatedmarket: blablablaDiscussion points, links, ...Inspired by The Four Steps to the Epiphany – Steven G Blank GuilhemBertholet.com

Step 3: Are you entering a new market? What are the adjacent markets next to the one you are creating? What compelling need will make customers use/buy your product? What compelling feature? How long will market education take? What market size will be sufficient? How will you educate the market and create demand? How much money will it take before the market be educated? What will stop competitors from taking the market from you? Is it possible to define the product as either resegmenting a market or entering a new one? ● Fact 1: blablabla ● Fact 2: blablabla ● … ● Invalidatedfact: blablablaDiscussion points, links, ... Quick overview... Small graph of all three market types attributes... Existingmarket Resegmentedmarket New market Customers existing existing new/new usage Customer needs performance 1. cost simplicity&convenience 2. perceivedneed Performance better / faster 1. good enough at the low Low in “traditional end attributes”, improved 2. good enough for new by new customer niche metrics Competition existingincumbents existingincumbents non consumption / other startups Risks existingincumbents 1. existing incumbents market adoption 2. niche strategy failsInspired by The Four Steps to the Epiphany – Steven G Blank GuilhemBertholet.com

1-06 - Customer DiscoveryCompetitiveHypotheses Objectives: have a look on the competition to understand who’s in here and on what features/needs you’ll going to compete. If you’re creating a new market, no need to do this part. Step 1: Why customers would buy something from you? What’s the competition basis? Do competitors fight on product attributes? on features? on service? What are their claims? Why do you believe you’re different? ● Claim 1: blablabla ● Claim 2: blablabla ● … ● Invalidatedclaim: blablablaDiscussion points, links, ... Step 2: What do you allow customers to do? Do you bring something they couldnt do before? Do it faster? Better? Cheaper? Through a betterchannel? ● Advantage 1: blablabla ● Advantage 2: blablabla ● … ● Invalidatedadvantage: blablablaDiscussion points, links, ... Step 3: Who are your best competitors? What do you like most about each competitor? What do customers prefer? how do competitive products do get used? ● Fact 1: blablabla ● Fact 2: blablabla ● … ● Invalidatedfact: blablablaDiscussion points, links, ...Inspired by The Four Steps to the Epiphany – Steven G Blank GuilhemBertholet.com

Step 4: What do people do without your product? Do they do something? Do it badly? ● Fact 1: blablabla ● Fact 2: blablabla ● … ● Invalidatedfact: blablablaDiscussion points, links, ...Inspired by The Four Steps to the Epiphany – Steven G Blank GuilhemBertholet.com

1-07 - Customer DiscoveryFirst Customer Contacts Objectives: Start going out of the building and meet people to get deep understanding of how customers actually work and what they need and how they buy. You just want to validate or modify you hypotheses. Step 1: Friendly First Contacts In your personal network, find the first people you’re going to talk to. List 50 contacts from friends, investors, founders, lawyers, recruiters, magazines, books, … even if they do not have a direct interest in the product. Call them and remind to ask them who you could call by their recommendation. ● Contact 1: blablabla ● Contact 2: blablabla ● … ● Invalidatedcontacts: blablablaDiscussion points, links, ... Step 2: Use the contacts Send a brief mail explaining what you do and why: gathering customer thoughts, that your contacts will forward as an introduction to potential customers or interesting people to meet. Use the reference to contact this level-2 batch of people, asking for some free time to talk. Prepare to do *TEN* phone calls a day. ● Intro mail: blablabla ● Phone speech: blablablaDiscussion points, links, ... Step 3: List the “innovators” Find the people, amongst the previous list or not, that are seen as early adopters, trend setters or innovation spotters. ● Innovator1: blablabla ● Innovator2: blablabla ● … ● Invalidatedinnovators: blablablaDiscussion points, links, ...Inspired by The Four Steps to the Epiphany – Steven G Blank GuilhemBertholet.com

1-08 - Customer DiscoveryThe Customer Problem Presentation Objectives: based on your hypotheses, develop a presentation about the problem you want to solve. Problem presentation (in contrast with a product presentation) isn’t designed to convince customer, but rather to elicit information from customers. Step 1: One slide presentation When accurate, you can use a one slide to state the problems as you see them, but a simple flip chart can make it too. Do not propose the solutions, instead explain how you see the problems, let your contact restate or reorder them, and go on only afterwards. List of problems Today’s solution Your solution ● Bullet point 1: blablabla ● Point 2: blablabla ● … ● Do-not-mentionpoints:blablablaDiscussion points, links, ... Step 2:Attract feedbacks During the meeting, do not propose the solutions, instead explain how you see the problems, let your contact restate or reorder them, and go on only afterwards with column 2. You’re not the one convincing the other, you need to let them convince you they have a problem. Once a problem is recognized, ask how much having it costs to the customer. ● Feedback 1: blablabla ● Feedback 2: blablabla ● … ● Invalidatedfact: blablablaDiscussion points, links, ... Step 3:Summarize Ask “what’s the biggest pain in your work?” and “if you could have a magic wand and change anything, what would it be?”. After each meeting, make a follow-up e-mail and summarize the learnings. ● Fact 1: blablabla ● Fact 2: blablabla ● … ● Invalidatedfact: blablablaDiscussion points, links, ...Inspired by The Four Steps to the Epiphany – Steven G Blank GuilhemBertholet.com

1-09 - Customer DiscoveryIn-Depth Customer Understanding Objectives: you want to understand how your customers spend their day and their money, and how they get their job done. Step 1: How customers live How do your customers do their job ? Who are they interacting with? Whatotherproducts do they use? ● Normal dayfact 1: blablabla ● Fact 2: blablabla ● … ● Invalidatedfact: blablablaDiscussion points, links, ... Step 2: Would people pay for it? What would make customers change the way they live by now? Which price? What features? What would be the barriers to adopting the product? ● Paying argument 1: blablabla ● Paying argument 2: blablabla ● … ● Invalidatedarguments: blablablaDiscussion points, links, ... Step 3: How would they know you? Who are the visionnaries? What do they read? Which event do they go to? ● Fact 1: blablabla ● Fact 2: blablabla ● … ● Invalidatedfact: blablablaDiscussion points, links, ...Inspired by The Four Steps to the Epiphany – Steven G Blank GuilhemBertholet.com

1-10 - Customer DiscoveryMarketKnowledge Objectives: go a little further than just knowing your customers: know adjacent markets and industries and be aware of every trend or new buzzword of it. Step 1: Meet people in adjacent markets Through your own contacts or through introductions, take peers to lunch and offer them a trade of information and contacts. ● Contact 1: blablabla ● Contact 2: blablabla ● … ● Invalidatedcontacts/markets: blablablaDiscussion points, links, ... Step 2: Jump into the ecosystem List all conferences ad tradeshows you need to attend to and use them to spot trends and talents. Gather quantitative date and find all the essential reports on the industry. Understand what are the trends, the players, the key metrics, the business models... in the minds of the analysts and experts. ● Ecosystemtouch point 1: blablabla ● Point 2: blablabla ● … ● Invalidatedpoints: blablablaDiscussion points, links, ...Inspired by The Four Steps to the Epiphany – Steven G Blank GuilhemBertholet.com

The 4 steps to the epiphany - Customer Discovery template - guilhem bertholet

by Guilhem Bertholet on Dec 19, 2011

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