Presentation given at Rocky Mountain ProductCamp by Travis Power. The presentation is an overview of Steve Blank's Customer Discovery - phase 1 of Customer Development.
Customer Discovery is a process through which assumptions about high tech products and the business model being created are turned into facts.
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RMPCamp 2010 Customer Discovery
1. 1
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2. Part 1 of Customer Development
Travis Power
November 13, 2010
Rocky Mountain ProductCamp
Customer Discovery
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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?
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?
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• 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?
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Focus is on 1st ship date!
Where are the customers?
Not enough LEARNING!
8. Cust. Dev. Process
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Turning assumptions
into facts
Finding scalable &
repeatable sales
process
Driving demand for
your product
Transition from
learning org into
execution org
15. Early Evangelists
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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
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• 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)
$$$$
$
$$
19. The 1st Meeting
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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
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You’ve met with development team
Take product concept to early evangelists
Does it solve their problem?
21. Iterate as needed
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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
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• 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
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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/
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.
