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MERLIN H2020 - Workshop #3 "Customer discovery"


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Materials of the first MERLIN ( workshop, delivered on October'18. MERLIN will support market-oriented researchers, SMEs and startups across Europe, to consider the full potential of their research and to shape ideas and outputs into innovations to be ready for market validation and commercialisation, by using modern needs-first, market-led methodologies and offering free training workshops and meetup in 7 European countries.
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MERLIN H2020 - Workshop #3 "Customer discovery"

  1. 1. H2020 GA #780460 CUSTOMER DISCOVERY FACILITATOR NAME Location Date Helping today’s researchers create tomorrow’s enterprises This project has received funding from the European Union’s Horizon 2020 research and innovation programme under grant agreement No 780460
  2. 2. H2020 GA #780460 Rules for the workshop š No question is a silly question 2 š What is said in the room stays in the room š Support and challenge each other
  3. 3. H2020 GA #780460 General information š Workshop length – 4 hours 3 š Coffee break – 20 minutes š Slide availability
  4. 4. H2020 GA #780460 About MERLIN project 4 MERLIN project aims to stimulate the interest in the creation of startups, spin-offs and licensing agreements among ICT researchers, providing them with the business skills that would help them to commercialize their research findings and successfully introduce them to the market, and introducing them to their local and European entrepreneurialecosystems Organization of more than 40 practical thematic workshops in several European cities, including Cambridge, Madrid, Poznan, Vilnius, Berlin, Warsaw, Bucharest, Tallinn Participation in 5 international conferences, organizing workshops and forums Organization of 8 meetups with potential customers, commercial partners, and investors Preparation of 4 webinars on SME growth and PPP business models
  5. 5. H2020 GA #780460 Who am I? 5 Rosalind Franklin
  6. 6. H2020 GA #780460 Agenda 6 Customer Development - introduction Customer Discovery – key activities What is the problem Who are my customers? Discovery interviews Moving on Customer Validation Personal Action Plans and Feedback Discovering different markets
  7. 7. H2020 GA #780460 Customer Development 7 ‘’ A startup is an organization formed to search for a repeatable and scalable business model.’’
  8. 8. H2020 GA #780460 8
  9. 9. H2020 GA #780460 9
  10. 10. H2020 GA #780460 10
  12. 12. H2020 GA #780460 The process 12 CUSTOMER DISCOVERY CUSTOMER VALIDATION Product- Market Fit Problem- Solution FitPIVOT
  13. 13. H2020 GA #780460 13 “Pivoting for pivoting’s sake is worthless. It should be a calculated affair, where changes to the business model are made, hypotheses are tested, and results are measured. Otherwise, you can’t learn anything.” Founder Flowtab ‘Failed Startup’
  14. 14. H2020 GA #780460 14
  15. 15. H2020 GA #780460 I have an idea… 15 Should I build it? Who are my customers? What is my market? Does the problem exist?
  16. 16. H2020 GA #780460 16 Challenge your assumptions
  17. 17. H2020 GA #780460 Why do we do Customer Discovery? 17 What you know What you know you don’t know What you don’t know you don’t know
  18. 18. H2020 GA #780460 18 Customer Discovery AIMS ACTIVITES OUTPUTS • Identify if there is a problem • Identify who is the customer • Identify the market • Hypotheses construction • Customer Interviews • Experiment design • Product design • Initial business model • Customer needs • MVP • Problem-Solution Fit
  19. 19. H2020 GA #780460 Customer Discovery Cycle 19 Phase 2: Test problem hypothesis Phase 3: Test product concept Phase 4: Verify Phase 1: State hypothesis EXPLORE PROPOSE CHECK THINK
  20. 20. H2020 GA #780460 Customer Discovery Cycle 20 Phase 2: Test problem hypothesis Phase 3: Test product concept Phase 4: Verify Phase 1: State hypothesis Minimum features Develop Concept Initial MVP
  21. 21. H2020 GA #780460 Customer Discovery 21 Business Model Canvas Interview Script Report Cards
  22. 22. H2020 GA #780460 22 “The goal of Customer Discovery is not to collect features from customers. It’s to understand what not to ship.”
  23. 23. H2020 GA #780460 Build it and they will come! Really? 23
  24. 24. H2020 GA #780460 Does the problem exist? 24
  25. 25. H2020 GA #780460 25 Your product is the potential solution to a problem
  26. 26. H2020 GA #780460 Problem Statement ………(who) has the problem of ………..(what) when they are trying to………. (when/where) This is a problem because…….(why) 26
  27. 27. H2020 GA #780460 What is my market? 27
  28. 28. H2020 GA #780460 Market Type 28 Existing Market Resegmented Market Customers Existing Existing Customer Needs Performance 1. Cost 2. Perceived need/problem Product Performance Better/Faster 1. Good enough for low end 2. Good enough for new niche Competition Existing Incumbents Existing Incumbents Risks Existing Incumbents 1. Existing Incumbents 2. Niche strategy fails Example Transferwise, Google Chrome Ryanair, iZettle, Fairphone Adapted from The Startup Owner’s Manual €€€ €
  29. 29. H2020 GA #780460 Market Type 29 New Market Clone Market Customers New/New Usage New Customer Needs Simplicity & Convenience New idea already in other geographies Product Performance Low in “tradition attributes”, improved by new customer metrics Good enough for local market Competition Non-consumption/ Other Start-ups None, foreign originators Risks Market Adoption Cultural Adoption Example Dropbox/iPod Cabify Adapted from The Startup Owner’s Manual €€€ €€
  30. 30. H2020 GA #780460 B2B – B2C – B2B2C? 30 X X
  31. 31. H2020 GA #780460 B2B – B2C – B2B2C 31 Customer Development UX Customer Development Customer Development
  32. 32. H2020 GA #780460 32
  33. 33. H2020 GA #780460 Phase 1: Inside the building 33
  34. 34. H2020 GA #780460 Who are my customers? 34
  35. 35. H2020 GA #780460 Finding the customers 35 2. Identify potential online and in- person networks 1. Describe potential Customer Groups NOT YOUR FAMILY OR FRIENDS They like you too much! 4. Go where they will be. Call them. Email as a back-up 3. Prepare a long-list of key persons
  36. 36. H2020 GA #780460 Finding the customers 36 2. Identify potential online and in- person networks CEO
  37. 37. H2020 GA #780460 Cold-calling vs Warm-leads 37
  38. 38. H2020 GA #780460 Developing The Hitlist 38 • Working in teams of 4, select 1 of the ideas from the group • Ensure everyone clearly understands their problem statement • Take out your phones • You have 5 minutes to identify (name, role and company) as many potential Discovery Interview candidates as possible.
  39. 39. H2020 GA #780460 Performing the Discovery Interviews 39
  40. 40. H2020 GA #780460 Phase 2: Outside the Building Problem Interviews 40 Have a relaxed atmosphere Do it in pairs Have an introduction and structure Follow the flow Have a close Stick to the script Avoid probing Interrupt Forget to take notes Leave without asking for follow-up
  41. 41. H2020 GA #780460 41 Questions? Open Closed Leading • Long answers • Provides reflection and feelings • Begin with Describe, How, What, Why • Hand control over • Yes/No/ One-word answers • Provides facts • Retains control • Confirmation of understanding • Provide desired answer • Impose the interviewer bias • Avoid! – not sales meetings The questions you ask, determine the answers you get
  42. 42. H2020 GA #780460 Open or closed? š Would you use a dashboard to monitor your sales team’s targets? š Describe the main problems you encounter when trying to manage your team? š Would you buy a toy that helps your children to learn new languages? š Do you think that business intelligence dashboards are difficult to understand? š What type of car would you pick for your commute to work? š How do you buy services? š Would you choose a subscription or once-off payment? š Why do you think that happens? š Who makes a good product? š Do you like making higher returns? 42
  43. 43. H2020 GA #780460 The present is terrible 43 Ask about how someone would behave, they will give you their Ideal/Imagined Self Past behaviour predicts future. Ask about a previous event to understand the Real Self
  44. 44. H2020 GA #780460 The anatomy of the interview 44 Intro The Person The Problem Processes Outro Tell me about your role? How does that process work now? What are the top 3 issues you encounter? How does your company purchase software? What do you look for in a solution? Can I call you to follow-up on some of the topics? Could I show you a prototype? I’m looking to develop a solution for Sales Teams e.g.
  45. 45. H2020 GA #780460 Probing š Why? š Tell me more. š When was the last time that you encountered this problem? š What caused the problem? š What did you do to try and fix it? š How much time do you have to spend on work arounds? 45
  46. 46. H2020 GA #780460 Role-play 46 PhD students have difficulty keeping up-to-date lab- books and supervisors are often not in the lab to see progress - why not have a digital lab-book?
  47. 47. H2020 GA #780460 Should I build it? 47
  48. 48. H2020 GA #780460 48 They’re lying, they are only telling you what you want to hear
  49. 49. H2020 GA #780460 Advanced? š Are they are willing to introduce you to someone else? š Willing to meet again? š Did you convert an assumption into an validation? š Have you learned something new?
  50. 50. H2020 GA #780460 Are they interested? š Did they spend more than the 30 minutes allocated? š Have they asked to be kept informed? š Was their body turned completely towards you? š Did they ask interesting questions in return? š Were their pupils focused and/or eyebrows raised? š Did they leave their phone or computer out of sight?
  51. 51. H2020 GA #780460 Moving on… š If your problem isn’t in the top 3 of the people you are speaking to š à Find other customers š If you keep hearing a need that is currently not being satisfied š à Explore it š If you keep hearing the same thing š à You’re done, for now š If you get bored š You’re probably ready to draft a concept/MVP š If the response is lukewarm š à Return to problem interview 51
  52. 52. H2020 GA #780460 The MVP 52 Phase 2: Test problem hypothesis Phase 3: Test product concept Phase 4: Verify Phase 1: State hypothesis Minimum features Develop Concept Initial MVP
  53. 53. H2020 GA #780460 The MVP again 53
  54. 54. H2020 GA #780460 Good or Bad Signs? š “That’s so cool. I love it!” š “Looks great. Let me know when it launches.” š “There are a couple people I can intro you to when you’re ready.” š “What are the next steps?” š “I would definitely buy that.” š “When can we start the trial?” š “Can I buy the prototype?” š “When can you come back to talk to the rest of the team?”
  55. 55. H2020 GA #780460 Customer Validation - Product-Market Fit COSTSREVENUE Phase 2: Sell to early adopters Phase 3: Develop positioning Phase 4: Verify Phase 1: Get ready to sell
  56. 56. H2020 GA #780460 56 “You can always feel when product/market fit isn't happening. The customers aren't quite getting value out of the product, word of mouth isn't spreading, usage isn't growing that fast, press reviews are kind of ‘blah’, the sales cycle takes too long, and lots of deals never close” Marc Andreessen VC, Andreessen Horowitz
  57. 57. H2020 GA #780460 57 “In general, hiring before you get product/market fit slows you down, and hiring after you get product market fit speeds you up. Until you get product/market fit, you want to a) live as long as possible and b) iterate as quickly as possible.” Sam Altman President of Y Combinator
  58. 58. H2020 GA #780460 Let’s get personal 58 Core Assumptions Priority Test Method Success Criteria Date CustomerProblemMarket CUSTOMER DISCOVERY - PERSONAL ACTION PLANS Name: Sales team manager have the problem of understanding individual and team performance when they are trying to reach sales targets and are not in the office. This is a problem because potential sales opportunities are lost and the sales team’s efficiency is lower-
  59. 59. H2020 GA #780460 Let’s get personal 59 Core Assumptions Priority Test Method Success Criteria Date Customer Sales team managers in SMEs Director of sales is purchaser Interviews 80% of sales team managers report the same problem November 2018 Problem Sales managers struggle to maintain an understandingof their team member activities. Sales teams do not have an way of seeing their objective progress in real-time. Market SMEs are looking for new solutions to increase their sales efficiency SMEs will be willing to pay as a % of sales gained. CUSTOMER DISCOVERY - PERSONAL ACTION PLANS Name: 2 5 4 3 1 6
  60. 60. H2020 GA #780460 Homework for everyone 60 • • Video: The Rules for Customer Pitching • 253 Startup Failure Post-Mortems Internet resources • Business Model Canvas Try with your own idea • The Four Steps to the Epiphany by Steve Blank • The Entrepreneur's Guide to Customer Development: A cheat sheet to The Four Steps to the Epiphany by Brant Cooper • The Startup Owner’s Manual by Steve Blank and Bob Books
  61. 61. H2020 GA #780460 Reflection š Today I learned… š I was suprised by... š I will use... 61 Go to XXX #YY
  62. 62. H2020 GA #780460 Info about next workshops in CITY 62 2018 April Lean startup 2018 June Using Business model canvas to assess and focus business development 2018 September Customer Discovery 2018 November The Entrepreneurial Mindset 2019 February ’I Bring the Idea’ matchmaking session 2019 May How to design a product using User Experience 2019 June Interpreting the Custoemr 2019 July Spinout vs Startup – differences, how to operate and succeed
  63. 63. H2020 GA #780460 GET OUT AND ASK THE RIGHT QUESTIONS! 63 @Merlin_ICT