Discovery = Hypothesis Testing
 What are Hypothesis?
 Where do Hypothesis come from?
 Why Test them?
 How do you test them?
MBA295-F Customer Development in the High-Tech Enterprise Spring 2009

Customer Discovery: Step 1
Customer Customer Customer Company
Discovery Validation Creation Building
Existing Market: 1 Month – 1 Year
Resegmenting a Market: 6 Months – 3 Years
New Market: 1 Year – 3 Years
MBA295-F Customer Development in the High-Tech Enterprise Spring 2009

Customer Discovery: Step 1
Customer Customer Customer Company
Discovery Validation Creation Building
Existing : 1-6 Months
Resegmenting: 3-12 Months
New: 1-2 Years
MBA295-F Customer Development in the High-Tech Enterprise Spring 2009

Customer Discovery: Step 1
Customer Customer Customer Company
Discovery Validation Creation Building
 Stop selling, start listening
 Test your hypotheses
 Two are fundamental: problem and product concept
MBA295-F Customer Development in the High-Tech Enterprise Spring 2009

Customer Discovery
Customer Phase 3 Phase 4
Discovery Test Verify, Iterate &
Product Expand
Hypothesis
To Validation
Phase 1
Phase 2 Author
Test Hypothesis
Problem
Hypothesis
MBA295-F Customer Development in the High-Tech Enterprise Spring 2009

Customer Discovery
Hypotheses
Product Customer Distribution Demand Market Type Competitive
Hypothesis & Problem & Pricing Creation Hypothesis Hypothesis
Hypothesis Hypothesis Hypothesis
Test “Problem” Hypothesis
Friendly “Problem” Customer Market
First Contacts Presentation Understanding Knowledge
Test “Product” Hypothesis
First Reality “Product” Yet More Second
Check Presentation Customer Reality Check
Visits
Verify
Verify the Verify the Verify the Iterate or
Product Problem Business Exit
MBA295-F Customer Development in the High-Tech Enterprise
Model Spring 2009

Customer Discovery
Hypotheses
Product
Hypothesis Inside the Building
Customer
& Problem
Hypothesis
Distribution
& Pricing
Hypothesis
Demand
Creation
Hypothesis
Market Type
Hypothesis
Competitive
Hypothesis
Test “Problem”
Friendly
First Contacts
Hypothesis
“Problem”
Presentation
Customer
Understanding
Market
Knowledge
Outside the Building
Test “Product” Hypothesis
First Reality “Product” Yet More Second
Check Presentation Customer Reality Check
Verify Visits
Verify the Verify the Verify the Iterate or
Product Problem Business Exit
MBA295-F Customer Development in the High-Tech Enterprise
Model Spring 2009

Phase 1: Author Hypothesis
Phase 3
Product
Phase 4
Iterate &
 One-time writing exercise
Concept Expand
Testing  All other time spent in
front of customers
Phase 1  Assumes you’re smart but
Phase 2
Test Author guessing
Problem
Hypothesis Hypothesis
MBA295-F Customer Development in the High-Tech Enterprise Spring 2009

Hypothesis
 Product
 Customer/Problem
 Distribution/Pricing
 Demand Creation
 Market Type
 Competition
Product Customer Distribution Demand Market Type Competitive
Hypothesis & Problem & Pricing Creation Hypothesis Hypothesis
Hypothesis Hypothesis Hypothesis
MBA295-F Customer Development in the High-Tech Enterprise Spring 2009

Product Hypotheses
 Features
 Benefits
 Product Delivery Schedule
 Intellectual Property
 Total Cost of Ownership
 Dependency Analysis
MBA295-F Customer Development in the High-Tech Enterprise Spring 2009

Customer/Problem Hypotheses
 Types of Customers/Archetypes
 Magnitude of the problem
 Visionaries
 A Day in the Life of a customer
 Organizational impact
 ROI Justification
 Problem Recognition
 Minimum Feature Set
MBA295-F Customer Development in the High-Tech Enterprise Spring 2009

Distribution/ Pricing Hypotheses
 Distribution Model
 Distribution Diagram
 Sales Cycle/Ramp
 Channel strategy
 Pricing (ASP, LTV)
 Customer Organization Map
 Demand Creation
MBA295-F Customer Development in the High-Tech Enterprise Spring 2009

Demand Creation Hypotheses
 How do competitors create demand?
 How will you?
 Dave McClure’s AARGH model
 Who are influencers/recommendors?
 Key trade shows?
 Key trends?
 Start assembling advisory board
MBA295-F Customer Development in the High-Tech Enterprise Spring 2009

Type of Market Hypotheses
 Positioning and Differentiation
 Existing Market
 The product is the basis of competition
 New Market
 Creating the market is the basis of competition
 Redefine Existing Market
 Resegment the existing market is the basis of
competition
MBA295-F Customer Development in the High-Tech Enterprise Spring 2009

Competition Hypotheses
 Who is out there?
 Why are they important?
 How do customers use them today?
 What don’t customers like about them?
MBA295-F Customer Development in the High-Tech Enterprise Spring 2009