4. Customer Discovery
Customer Customer Customer Company
Discovery Validation Creation Building
! Stop selling, start listening
! Test your hypotheses
" Two are fundamental: problem and product concept
5. 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
6. 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
Model
7. Customer Discovery
Hypotheses!
T
h
e
i
m
Product
Hypothesis Inside the Building!
Customer
& Problem
Hypothesis
Distribution
& Pricing
Hypothesis
Demand
Creation
Hypothesis
Market Type
Hypothesis
Competitive
Hypothesis
Test “Problem” Hypothesis!
Friendly “Problem” Customer Market
First Contacts Presentation Understanding 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
Model
9. 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
10. Customer/Problem Hypotheses
! Types of Customers
! Magnitude of the problem
! Visionaries
! A Day in the Life of a customer
! Organizational impact
! ROI Justification
! Problem Recognition
! Minimum Feature Set
11. Distribution/ Pricing Hypotheses
! Distribution Model
! Distribution Diagram
! Sales Cycle/Ramp
! Channel strategy
! Pricing (ASP, LTV)
! Customer Organization Map
! Demand Creation
12. Demand Creation Hypotheses
! How do competitors create demand?
! How will you?
" Viral
" Advertising
" PR
" Trade shows
! Who are influencers/recommendors?
! Key trade shows?
! Key trends?
! Start assembling advisory board
13. 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
14. Competition Hypotheses
! Who is out there?
! Why are they important?
! How do customers use them today?
! What don’t customers like about them?
16. Traditional organizations
and titles Fail
Typical Startup
CEO
VP Engineering VP Marketing VP Sales VP Business Dev
! People equate their titles with their functions
" But standard titles describe execution functions
" We need new titles = learning & discovery functions
17. Customer Development Team
Tasks Not Titles
Customer Development
Driven Startup
CEO
VP Product Dev Technical Visionary Business Visionary Business Execution
In Front of Customers
19. 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
20. Distribution/ Pricing Hypotheses
! Distribution Model
! Distribution Diagram
! Sales Cycle/Ramp
! Channel strategy
! Pricing (ASP, LTV)
! Customer Organization Map
! Demand Creation
21. 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
22. 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
23. Competition Hypotheses
! Who is out there?
! Why are they important?
! How do customers use them today?
! What don’t customers like about them?
45. Phase 2:
Test & Qualify Problem
Hypothesis
Phase 3 Phase 4
Test
Product
Iterate &
Expand
! Get out of the building
Hypothesis
! Test the problem
! Become the customer
Phase 1
Phase 2 Author ! Solve a real problem
Test Hypothesis
Problem
Hypothesis
46. Test & Qualify Problem:
First Contacts
! Build a Rolodex
! Develop “Innovators” list
! Create reference story/sales script
! Schedule Customer Visits
47. Test & Qualify Problem:
Create Problem Presentation
! Not a Sales Pitch
" Test of your understanding of the customers
problem
! Problem/Solution – Slide
" Problems column 1
" Today’s solution column 2
" Your solution column 3
! Capture other missing data
48. Test & Qualify Problem:
Customer Understanding
! Become a Domain Expert
! Understand their “Day-in-the Life”
! Understand their problems/pain
! Get a feel of how this impacts their life/work
! Who has similar products that solve this problem
! How do they learn about new solutions
! Can they be helpful later
49. The Big Idea
! What is the problem?
! Who has the problem?
! How important is the problem’s solution to the
customer?
! How valuable is the problem’s solution to the
customer?
50. Test & Qualify Problem:
Market Knowledge
! Get a feel for the “lay of the land”
! Adjacent Market players
! Industry Influencers
! Key Analysts
! Attend Conferences/Tradeshows
51. Phase 3:
Test Product Hypothesis
Phase 3 Phase 4 ! First reality check w/
Test Iterate &
Expand product development
Product
Hypothesis ! The product hits the street
! Lots of customer visits
Phase 1
Phase 2
Test
Hypothesis ! More doses of reality
& Qualify
Hypothesis
52. Test Product Hypothesis:
First Reality Check
! Build a Workflow Map of customer
" Before and after your product
! Problem scale
! Key insights
! How did the product spec match needs?
! Re-review product feature List
! Why are you different
53. Test Product Hypothesis:
Product Presentation
! Questionnaire
! Start w/Problem Presentation
! Then describe the Product
! Demo if you have one
54. Test Product Hypothesis:
Yet More Customer Visits
! Set up More Calls
! Validate Solution
! Validate Product
! Validate Positioning
! Understand Customer and Org. Pain
! Validate Pricing and Budget
! Understand “Whole Product” needs
! Understand Approval Process
! Update potential Advisory Board candidates
55. Test Product Hypothesis:
Second Reality Check
! Does the product solve a problem?
" Serious problem?
" For a large scalable market?
! How did the product spec match needs?
! Re-review product Feature List
