The Entrepreneur's Guide to Customer Development


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Brant Cooper & Patrick Vlashkovit
Brant Cooper and Patrick Vlaskovits' The Entrepreneur's Guide to Customer Development: A gentle introduction to customer development

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The Entrepreneur's Guide to Customer Development

  1. 1. TheEntrepreneur’s Guide toCustomer DevelopmentA “cheat sheet” to The Four Steps to the Epiphany Customer Development Customer Customer Customer Company Discovery Validation Creation Building Problem- Product- Solution Fit Market Fit Scale Organization Proposed Business Scale Execution MVP Model Scale Operations Proposed Sales & Marketing Funnel(s) Roadmap by Brant Cooper & Patrick Vlaskovits Foreword by Steven Gary Blank pivot
  2. 2. Introduction Customer Case Study: Concept Case Study: Development Naive Thinking Definitions Multiple PivotsWhy this book? What Customer Early Adopters/Early Development Is EvangelistsWho should read this What Customer Segmentation Development Is Not Market Type Three Levels of Learning “Non-Traditional” Getting Started Business Model Positioning Product-Market Fit Minimum Viable Product (MVP) Lean Startup Pivot Getting out out the building
  3. 3. Know Thy Case Study: 8 Steps to Case Study: ConclusionBusiness On Customer- Customer Testing Towards Centric Cultures Discovery a Scalable Business ModelTo the Whiteboard Overview SummaryAn Example Step 1. Document C-P-S Resources HypothesesKnow Thyself About the Authors Step 2. Brainstorm Business Model Hypotheses Step 3. Find prospects to talk to Step 4. Reach out to prospects Step 5. Enaging prospects Step 6. Phase Gate I Compile | Measure | Test Step 7. Problem Solving Fit/MVP Step 8. Phase Gate II Compile | Measure | Test
  4. 4. Concept DefinitionsPositioning Notes: Your positioning varies by audience. In theIn a Nutshell: Positioning is the act of Your differentiator is not your example from the Market Type discussion,placing your product within a market compelling reason to buy, but the “Facebook for Seniors” is bad positioning forlandscape, in your audience’s mind. benefit the differentiator provides, you customer, but perhaps very appropriate likely is. So, for example, if you are the first for investors, partners, and some media and to offer a sales force automation tool in a analysts. This leads us to issue a note of cau-In Geoffrey Moore’s Crossing the Chasm, SaaS business model, your customers don’t tion when briefing media (PR) and analystsproduct positioning includes the following buy because you are SaaS, though this is (AR) too early: wrong positioninginsights: knowing who your customers are your primary differentiator. They buy because (and untimely PR) can kill yourand their needs; the name of your product of the benefits that SaaS provides outweigh company. If you are branded byand its product type or category; what the the benefits that an in-source solution pro- media and analysts in a way that confuseskey benefit of the product is to your customer vides: IT costs are lower; deployment costs customers or lumps you with existing prod-(the compelling reason to buy); the “state of are lower; remote access is easier; integration ucts incorrectly, you may never be able tobeing” without your product; and how your with the web is easier; web interface lowers undo the damage.product differs or “changes the game.” training costs, etc.Your positioning will form the basis of yourcommunications with all of your constituents,including customers, investors, partners, em-ployees, etc. For your customer, the goal ofpositioning is to have them understand whatbenefit they will receive from you and whyyou are better than everyone else. 23
  5. 5. STEP 2Brainstorm Business Model Hypotheses Business Assumptions MVP AssumptionsObjective: Document all the Return to the diagram you created in the last Return to your Value Path diagram andassumptions required to build, market, chapter and flesh out all of the assumptions document your objective for the first MVP,and sell your product to the indentified that your diagram suggests. For example: its “currencies,” and assumptions regardingcustomer segment. the minimum features required. If you have • My product reaches my customers through no intermediate MVPs, refer to your final these distribution methods (e-commerce, proposed MVP. The final MVP must describeYou have three more major sets of hypotheses SaaS, VARs, Resellers, inside sales, direct the minimum product features required thatto document: sales, etc.) will result in each entity participating in your • I need to partner with the following compa- entire assumed ecosystem.1. Your business – document your assump- nies in order to deliver a complete solution tions concerning business model, partners, to my customer’s problems • Free users require these features to sign up relationships, and dependencies captured • We believe this % of free users will upgrade and be active users in your ecosystem diagram. to premium accounts annually • What do account level 1 users require for2. Your product – document the feature • We will monetize free users via advertis- these features to sign up and pay $x? requirements you believe are necessary to ers, advertising networks, data miners, lead • Advertisers will pay $z for y # of active complete your final MVP. purchasers, etc. users/mo3. Your funnel – document your assumptions • Some users will pay for premium features • Businesses will sign a Letter of Intent about how you will acquire and convert based on a live demo of these features your customers. • Strategic investors will provide development funds by proving this works in a live demo • Users will click on the “more info” button, upon reading content of the landing page 52