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Click to edit Master text styles
Second level
Third level
Fourth level
Fifth level
1/30...
Part 1 of Customer Development
Travis Power
November 13, 2010
Rocky Mountain ProductCamp
Customer Discovery
2
Session Summary
3
Basis for Customer Development
Startups fail for lack of customers not for lack of product.
What process...
Session Summary
4
Purpose:
Turn your initial hypotheses about markets and customers into
facts.
Goals
5
Develop basic understanding of Customer Discovery and its role in
the Customer Development Process
Understand the ...
Who is this guy?
6
• Mechanical Engineer
• Rockwell Automation
Your participation is incredibly valuable here!
• Master of...
Whats wrong with Prod
Dev. Model for Startups?
7
Focus is on 1st ship date!
Where are the customers?
Not enough LEARNING!
Cust. Dev. Process
8
Turning assumptions
into facts
Finding scalable &
repeatable sales
process
Driving demand for
your pr...
Overview of Customer
Discovery
9
Assumption
Hypotheses
Test
Hypotheses
Test
Product
Concept
Verify
Iterative Process
This ...
Upstream Marketing
10
Product
DownstreamUpstream
• Lead Gen
• Collateral
• 4 P’s
• Drive Prod.
• Creation
• Strategy
B- Sc...
Innovation Continuum
11
Incremental Radical
Extension of existing product or
process
Product characteristics well-
defined...
Cust Discovery Process
12
http://steveblank.files.wordpress.com/2010/02/customer-discovery-for-the-enterprise.jpg
Who do we go talk to?
13
Early Evangelists
Contact 50, interview 5-10
Radical Innovation
14
Innovators
Technology
Enthusiasts
Early
Adopters
Visionaries
Late
Majority
Conservatives
Early
Major...
Early Evangelists
15
Types of Early Evangelists:
Not helpful
Jackpot!
Steven Blank, Four Steps to the Epiphany, 2006
1. Ha...
16
How do you meet these
people?
• Start with people you know and go from there
• Always ask if they know others that may ...
Listen for Main
Parameters of Value
17
• Determine “main parameters of value” (MPV)
Customer Value Proposition(mpv)
Some K...
What’s enough?
18
64% 20% 16%
The 1st Meeting
19
NOT A SALES CALL!
Listen first attitude
20 min. long
Slide Deck 1-2 slides about the problem you think
...
2nd Visit
20
You’ve met with development team
Take product concept to early evangelists
Does it solve their problem?
Iterate as needed
21
Verify all your assumptions using the cycle:
• Buying Habits
• Product Features
• Price
• Distributio...
Recap
22
• Customer Development – Link products with paying
customers
• Focus is on learning not execution of a business p...
Additional Resources
23
Book: The Four Steps to the Epiphany. Steven Gary Blank
Blog: Steve Blank’s personal blog. www.ste...
Thank You!
24
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RMPCamp 2010 Customer Discovery

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Presentation given at Rocky Mountain ProductCamp by Travis Power. The presentation is an overview of Steve Blank's Customer Discovery - phase 1 of Customer Development.

Customer Discovery is a process through which assumptions about high tech products and the business model being created are turned into facts.

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  • Customer Discovery – Turn initial hypothesis about market and customers into facts
    Customer Validation – Do we have a repeatable sales model?
    Customer Creation – Create strategy to reach customers
    Company Building – Create environment for growth of company. “Pivot” into mainstream market.
  • Iterative process around customer discovery to get a true understanding of who the customer actually is before making the product. Lean startup concept, upstream marketing focus is cheap activity compared to developing products. Make sure this product is the right product first!.
  • Customer Discovery learned through High Technology Marketing class at CU Boulder. Focused on marketing as an “Upstream” activity rather than traditional downstream. Area of specialization of my degree in product management and development, tech ventures, and R&D portfolio management.

    Primarily speaking from an academic perspective and need participation from audience to create a more successful session. 20 min of material, leaves 20 min for audience participation which I hope will occur throughout.
  • 75% of products succeed when “superb up front homework is done”

    31% succeed when up front homework is poor.

    VC’s say something like 1/10 startups will fail.
  • Communicate value to customers that have no experience with your product.
  • Difficult for radical innovation to serve the majority market segments. Rate of adoption depends on market type, however, upstream marketing is focused on creating products for new or emerging markets. Traditional marketing is great for existing, majority markets where incremental product improvements are strategic focus.
  • RMPCamp 2010 Customer Discovery

    1. 1. 1 Click to edit Master title style Click to edit Master text styles Second level Third level Fourth level Fifth level 1/30/2015 1
    2. 2. Part 1 of Customer Development Travis Power November 13, 2010 Rocky Mountain ProductCamp Customer Discovery 2
    3. 3. Session Summary 3 Basis for Customer Development Startups fail for lack of customers not for lack of product. What processes do we have in place to help us link products with paying customers?
    4. 4. Session Summary 4 Purpose: Turn your initial hypotheses about markets and customers into facts.
    5. 5. Goals 5 Develop basic understanding of Customer Discovery and its role in the Customer Development Process Understand the strengths of the process and when you would use it Know of resources where you can find more information
    6. 6. Who is this guy? 6 • Mechanical Engineer • Rockwell Automation Your participation is incredibly valuable here! • Master of Engineering Degree, Engineering Management • Product Management, R&D Management, Tech Ventures • High Technology Marketing
    7. 7. Whats wrong with Prod Dev. Model for Startups? 7 Focus is on 1st ship date! Where are the customers? Not enough LEARNING!
    8. 8. Cust. Dev. Process 8 Turning assumptions into facts Finding scalable & repeatable sales process Driving demand for your product Transition from learning org into execution org
    9. 9. Overview of Customer Discovery 9 Assumption Hypotheses Test Hypotheses Test Product Concept Verify Iterative Process This is all about learning Answers are out there!
    10. 10. Upstream Marketing 10 Product DownstreamUpstream • Lead Gen • Collateral • 4 P’s • Drive Prod. • Creation • Strategy B- SchoolOur Focus
    11. 11. Innovation Continuum 11 Incremental Radical Extension of existing product or process Product characteristics well- defined Competitive advantage on low cost production Often developed in response to specific market need "Demand-side" market/customer pull New technology creates new market R&D invention in the lab Superior functional performance over "old" technology Specific market opportunity or need of only secondary concern "Supply-side" market/technology push © Mohr, Sengupta, Slater 2005
    12. 12. Cust Discovery Process 12 http://steveblank.files.wordpress.com/2010/02/customer-discovery-for-the-enterprise.jpg
    13. 13. Who do we go talk to? 13 Early Evangelists Contact 50, interview 5-10
    14. 14. Radical Innovation 14 Innovators Technology Enthusiasts Early Adopters Visionaries Late Majority Conservatives Early Majority Pragmatists Laggards Skeptics { { { { {
    15. 15. Early Evangelists 15 Types of Early Evangelists: Not helpful Jackpot! Steven Blank, Four Steps to the Epiphany, 2006 1. Has a problem 2. Understand he or she has a problem 3. Actively searching for a solution 4. Cobbled together an interim solution 5. Committed and can quickly fund a solution
    16. 16. 16 How do you meet these people? • Start with people you know and go from there • Always ask if they know others that may be interested • Check forums for subject experts • Tradeshows, Events, Conferences Suggestion: Use mind mapping software to manage contacts
    17. 17. Listen for Main Parameters of Value 17 • Determine “main parameters of value” (MPV) Customer Value Proposition(mpv) Some Key MPVs met, technology shortfalls still exist. Early adopters, Enthusiasts adopt Essential key MPVs met to satisfy mass market. Early majority adopt. Most Key MPVs satisfied, customers delighted. Best In Class product Innovation Customer Value Proposition is derived from Main Parameters of Value (MPVs) $$$$ $ $$
    18. 18. What’s enough? 18 64% 20% 16%
    19. 19. The 1st Meeting 19 NOT A SALES CALL! Listen first attitude 20 min. long Slide Deck 1-2 slides about the problem you think they have Show solution Get hypotheses answered
    20. 20. 2nd Visit 20 You’ve met with development team Take product concept to early evangelists Does it solve their problem?
    21. 21. Iterate as needed 21 Verify all your assumptions using the cycle: • Buying Habits • Product Features • Price • Distribution Channels • Decision Makers • Product Competitive • Demand Creation • Market Type Move to next phase once you’ve answered all these questions
    22. 22. Recap 22 • Customer Development – Link products with paying customers • Focus is on learning not execution of a business plan • Customer Discovery – turn assumptions about customer into facts • Cheap, lean • Develop product for these few, not mass market • Exit when product and customer hypotheses are verified
    23. 23. Additional Resources 23 Book: The Four Steps to the Epiphany. Steven Gary Blank Blog: Steve Blank’s personal blog. www.steveblank.com Twitter: @sgblank, #CustDev, #LeanStartup Book: The Entreprenuer’s Guide to Customer Development. Cooper & Vlaskovits. eBook @: www.custdev.com Google Group: http://leanstartupcircle.com/
    24. 24. Thank You! 24

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