The document outlines the importance of customer development in achieving product-market fit for startups through engagement with real customers, testing features, and refining target definitions. It emphasizes the need to initiate customer acquisition tactics concurrently with product development and the role of both inbound and outbound strategies in generating leads. Key principles include understanding target audiences, creating compelling value propositions, and adapting agile methodologies for effective customer acquisition processes.

1. STARTUPS
CUSTOMER DEVELOPMENT FOR

2. 1
Motarme delivered real,
measurable results in a
short timeframe
“
”

3. Customer Development

4. 3
The process of achieving product-market fit by
• testing with real customers and then
• adding or removing features or
• adjusting your target customer definition.
Definition
Once you've achieved product-market fit you then seek
growth through a repeatable customer acquisition processes.

5. 4
http://www.slideshare.net/venturehacks/customer-development-methodology-presentation
Definition

6. 5
Definition

7. 6
David Skok, Matrix Partners
http://www.slideshare.net/DavidSkok/the-saas-business-model-and-metrics
http://www.forentrepreneurs.com
Definition

8. 7
• Most of us focus too much on product development at the
start
• We also wait too long before engaging seriously with
customers
• Serious engagement = sale
• When you start, you realise customer development and then
customer acquisition is as hard or harder than product
development
Key Points
Therefore
1. You should start your Customer Development process at
same time as product development.
2. Use lessons from other B2B and B2C startups to avoid
reinventing the wheel

9. Customer Development II

10. 9
Principles
Smoke Testing
Test Demand at Low Cost1
2 Proceed or Modify

11. 10
Inputs
Smoke Testing
Target Customer Definition1
2 Value Proposition
3 Market – Existing, Resegmented, New

12. 11
Who Are We Trying To Target?
 Where are they (countries, languages)
 What do they like and dislike?
 What industry sectors?
 What types of organisation?
 What size – revenue, number of employees ...?
 Any specific named target companies?
 What are the typical roles or titles?
 How does your system relate to their job?
 What are their key concerns/drivers/goals?
 What are their demographics?
 Where do they hang out online?
 What sources of information do they use?
?

13. 12
Who Are We Trying To Target?
• Draft “Personas” for your top 3 target customers
• Brief descriptions representing 80% of your target visitors
• Use them as way to describe and understand those customers
• Also helps to identify ways to get in touch with these customers
Oscar
Role: Sales manager
Organization: SME
Age: 45
Goals: have easy access to prospect
information 24/7; get better quality
leads; better pipeline
Nora
Role: Marketing manager
Organization: multi-national
Age: 32
Goals: manage multiple channels;
drive awareness of the company;
produce more and better quality
leads.
Liam
Role: IT manager
Organization: SME
Age: 31
Goals: reliability and availability;
simplified architecture; security;
cloud-based infrastructure

14. 13
• Select some value proposition claims for your target audiences – VP1, VP2 etc.
• Position them on the grid
• “Appeal” means – how strongly do the target customers want this VP?
• “Exclusivity” means – can people get this VP anywhere else?
• The closer you can get to the upper right hand quadrant the better your VP is
The Value Proposition

15. 14
14
1. Talking about your company and its capabilities rather than focusing on
the customer
2. Talking about features instead of the value provided by those features
3. Using marketing waffle like ‘leading global provider of X’
4. Highlighting benefits that your customers don’t care about
5. Lack of a single definition within a company – if you ask two different
sales people you get two different answers as to what they do and why
they’re the best.
Typical problems
The Value Proposition

16. 15
Testing the Value Proposition
Three main options
 Inbound
 Outbound
 Via partners – potential delay

17. 16
Why You Need Outbound As Well As Inbound
If your service is new, or you operate in a highly vertical/niche market then
potential buyers may not be aware of or searching for your type of service.
This means there may not be a big enough volume of search traffic to
generate sufficient leads
In that case, you will have to reach out to them in a targeted, efficient and cost
effective process – Outbound Lead Generation
Web based leads can sometimes be lower quality, since the visitor may also be
searching on competitor websites. With Outbound, there is a good chance you
are the first supplier to talk to them.
For certain industries prospects may not use the web as a key part of their
selection process. In this case, outbound is a better way to establish contact
with them.
1
2
3

18. 17
17
Why Outbound As Well As Inbound
Inbound
• Website
• Email
• Search Marketing
Outbound
• Email marketing
• Inside sales
• Telemarketing
• Executive events
• Direct Mail
Effectiveness
Adoption

19. 18
Inbound Testing
 Website design
 Content
 Landing pages
 Social Media
 Pay per click
 Keyword Research
 Split Test
http://www.quicksprout.com/2013/09/26/7-things-every-great-landing-page-needs/

20. 19
Inbound: Drive Traffic to Your Website
19
Content1
Pay-per-click2
Search Engine
Optimization
3
Social Media
4
Email Marketing
5

21. 20
Outbound as well as Inbound
Source: Predictable Revenue by Aaron Ross

22. 21
Outbound Testing
 Find lists of people who match your target profile
 Send them a short business email
 Be “politely persistent” – send 3 or 4 follow-up emails in
a consistent process
 This will be useful for any B2B companies in their long
term customer acquisition process

23. 22
Principles
Smoke Testing
Test Demand at Low Cost1
2 Proceed or Modify?
Not always a simple
yes or no

24. 23
• An unsuccessful attempt to sell doesn’t mean there is no
demand - could be because you didn’t execute correctly
• When you are unsuccessful after repeated attempts across
different channels then time to rethink
• But don’t pivot too early – i.e. Don’t give up too easily
Observations
• When have you achieved Product-Market fit?
• Good definition from David Cummings
(www.davidcummings.org) – when you have sold 10 units to
non-friends who share some commonality i.e. There is the
beginning of a pattern
• http://davidcummings.org/2013/07/04/5-ways-to-identify-
product-market-fit/

25. 24
• 1st factor in success is targeting a big market – small markets
are too tough
• Resilience and persistence are key factors – don’t give up.
See Paul Graham (Ycombinator)
Observations
• Start selling as quickly as possible – i.e. Get someone to pay
for your product
• As you try to sell, you’ll start learning about your longer-
term Customer Acquisition Process

26. 25
• No textbook or blueprint will guarantee success – we are all
reading the same books, but not everyone makes it
• But it’s great to have a guide or model that explains what is
happening
• Also great to (a) learn from other people’s mistakes and (b)
avoid re-inventing the wheel
Observations
• When reality is not matching your model then react – don’t
keep executing a formula that isn’t working

27. 26
• Agile development is really important, and is the basis of
Lean Startup
• But a lot of startups don’t seem familiar with how Agile
works
• Important to learn how to execute correctly
• However, JFDI is always best advice
Observations
• Prioritization by Business Value vs. Cost & Risk
• Iterative, Time boxed
• User Stories
• Backlogs and Sprints
• Planning Poker
• Standups ,Scrums, Playbacks

28. 27
- 27 -
Agile Manifesto 2001
We value:
Individuals and interactions over processes and tools
Working software over comprehensive documentation
Customer collaboration over contract negotiation
Responding to change over following a plan
That is, while there is value in the items on the right, we value the
items on the left more.
Observations

29. 28
The Twelve Principles of Agile Development
Working software is the primary measure of progress.
Agile processes promote sustainable development.
The sponsors, developers, and users should be able to
maintain a constant pace indefinitely.
Continuous attention to technical excellence
and good design enhances agility.
Simplicity--the art of maximizing the amount
of work not done--is essential.
The best architectures, requirements, and designs
emerge from self-organizing teams.
At regular intervals, the team reflects on how
to become more effective, then tunes and adjusts
its behaviour accordingly.
www.agilemanifesto.org
Our highest priority is to satisfy the customer
through early and continuous delivery
of valuable software.
Welcome changing requirements, even late in
development. Agile processes harness change for
the customer's competitive advantage.
Deliver working software frequently, from a
couple of weeks to a couple of months, with a
preference to the shorter timescale.
Business people and developers must work
together daily throughout the project.
Build projects around motivated individuals.
Give them the environment and support they need,
and trust them to get the job done.
The most efficient and effective method of
conveying information to and within a development
team is face-to-face conversation.
Observations

30. 29
“
”
“People are more important than any process.
However good people with a good process will
outperform good people with no process every
time”
Grady Booch

31. Customer Acquisition

32. 31
A Repeatable Customer
Acquisition Process
Our Goal
Predictable1
2 Scalable
3 Automatable

33. 32
Generate more leads at the top of the
sales funnel using
• Outbound Lead Generation email,
phone, social media, events
• Inbound Lead Generation website,
SEO, Google pay-per-click, social
media
Use Lead Nurturing to profile and
manage these leads more effectively
so more become ‘sales qualified’
Our Goal – Increase Lead Generation and Conversion
€ $ £
Use your CRM system to manage the
sales process / sales team and
convert opportunities to customers.
1
2
3
4

34. 33
33
Why Inbound Is Important
Savo Group Research Study 2012
via PepperGlobal.com
• 41% of Business Buyers said they engaged with sales only after their initial research
was conducted
• 25% said they initiated contact after they had already established a preferred list of
vendors
Source: DemandGen White Paper “The New BtoB Path to Purchase”, 2012
of the buying process is completed
before talking to a vendor.
58% –
70%

35. 3434
ABC, 1234
“What are you selling?”
Your Value Proposition
“Who are you selling
to?”
Your target buyers
A B
“How will you sell?”
Your customer
acquisition process
C
Bring
people to
your
website
1
Traffic
Persuade them
to pay for your
service
3
Subscription
Convince them to
renew each year –
retain your
customers
4
Retention
2
Conversion
Persuade
them to sign-
up, register or
download

36. 35
35
A: Your Value Proposition
“Who are you selling
to?”
Your target buyers
“How will you sell?”
Your acquisition process
B C
 What value do you deliver?
 How quickly can I see the value?
 Why is your product better than competitors?
 Why is it better than what I do at the moment?
Value Proposition:
Why should I buy something from you?
“What are you selling?”
Your Value Proposition
A

37. 3636
B: Your Target Buyers
“What are you selling?”
Your Value Proposition
“Who are you selling
to?”
Your target buyers
“How will you sell?”
Your acquisition process
A B C
 What do they want?
 What do they like and dislike?
 Where are they (countries, languages)
 What industry sectors?
 What types of organisation? Size, location ...
 What are their typical roles or titles?
 Where do they hang out online?
Who are your buyers?

38. 3737
C: Your Acquisition Process - Online
“What are you selling?”
Your Value Proposition
“Who are you selling
to?”
Your target buyers
A B
“How will you sell?”
Your customer
acquisition process
C
Bring
people to
your
website
1
Traffic
Persuade them
to pay for your
service
3
Subscription
Convince them to
renew each year –
retain your
customers
4
Retention
2
Conversion
Persuade
them to sign-
up, register or
download

39. 38
Outbound Lead Generation
Outbound Lead
Generation
Automate
Automate Prospecting Emails
Automate Finding Prospects
Automate Follow-up Actions
Sales
Team
Lead
Nurturin
g
Automate handover to Sales Team (CRM) or Lead Nurturing

40. Useful Links

41. 40
Resources
• David Cummings
• Great presentation “Building a Sales and Marketing” Machine from David Skok, Matrix Partners-
http://www.forentrepreneurs.com/slides-sales-marketing-machine/
• Reid Hoffman’s notes on investment hypothesis
• Brad Feld
• OpenView Partners blog / newsletter – sign-up at http://openviewpartners.com/
• Hiten Shah
• Lincoln Murphy’s blog Sixteen Ventures - http://sixteenventures.com/ - advice on pricing for SaaS
• MarketingSherpa – fantastic source of advice and information on B2B technology marketing –
www.marketingsherpa.com
• Neil Patel’s blog QuickSprout (www.quicksprout.com) has excellent information on getting found
on the web
• Scott Brinker, Chief Marketing Technologist blog – www.chiefmartec.com
• Moz.com – great blog on SEO – also check out Bruce Clay www.bruceclay.com
• Growthhackers central resource - http://growthhackers.com/
• Sean Ellis’ advice on Product Market Fit for startups - http://www.startup-marketing.com/the-
startup-pyramid/
Links

42. 41
Books
Resources
Also
• “The Hard Thing about Hard Things”
• “With Winning in Mind”
• “Crossing the Chasm”, Geoffrey A. Moore – classic guide to product marketing, good
intro to marketing for technologists

43. 42
Presentation Zen
Bonus Advice

44. 43
Thank You
Motarme Marketing Automation
T: +353 1 969 5029
M: +353 86 383 8981
W: www.motarme.com
Twitter: @motarme