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RMPCamp 2010 Customer Discovery
- 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. Part 1 of Customer Development Travis Power November 13, 2010 Rocky Mountain ProductCamp Customer Discovery 2
- 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. Session Summary 4 Purpose: Turn your initial hypotheses about markets and customers into facts.
- 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. 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. Whats wrong with Prod Dev. Model for Startups? 7 Focus is on 1st ship date! Where are the customers? Not enough LEARNING!
- 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. 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. Upstream Marketing 10 Product DownstreamUpstream • Lead Gen • Collateral • 4 P’s • Drive Prod. • Creation • Strategy B- SchoolOur Focus
- 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
- 13. Who do we go talk to? 13 Early Evangelists Contact 50, interview 5-10
- 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 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. 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. What’s enough? 18 64% 20% 16%
- 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. 2nd Visit 20 You’ve met with development team Take product concept to early evangelists Does it solve their problem?
- 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. 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. 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. Thank You! 24
Editor's Notes
- 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.