Startups don't win because of a great vision, but because of a superior strategy. If you want to have the superior strategy, you must simply have a better customer insight. Customer discovery principles can help you to get real insights about your customers.
The first rule is to fall in love with a problem, not your solution or business idea. You must have a clear picture what your product is hired to do. With customer interviews and different types of tests your job is to prove value hypothesis (that people are prepared to pay for your solution).
You can write down all your hypotheses on business model canvas, running lean canvas or even in a spreadsheet. Then you have to constantly sketch out alternative business models by asking yourself difficult questions and testing different assumptions.
Steps to customer discovery include developing a vision, setting the hypotheses, getting out of the building and performing a reality checks. The best way to start the customer discovery process is with the riskiest assumptions.
Important tools that can help you with customer discovery are also segmentation, personas, empathy map and value proposition canvas. After exploiting all the tools you should have a clear picture what are your customer's pains and gains and what are they willing to pay for.
When you are doing the customer discovery interviews to get the market insights you have to avoid doing any behavior predictions or being satisfied with compliments, opinions or stalling. What are you looking for is a real commitment from early-evangelists.
Remember, wrong assumptions are mother of all fu*ck-ups, and with customer discovery you can make sure you are not building your business based on the wrong assumptions.
2. BLAZ KOS
• 10+ years working with start-ups
• Management of university incubator, technology park and business angel network
• Management of two start-up accelerators and co-working space
• PODIM Conference – one of the biggest conferences in Alps-Adriatic region
• 600+ lectures in CEE
• Mentored over 300 start-ups
• Two handbooks about startups, 1500+ pages on two blogs
I am on a life mission to make the world a more innovative, organized and transparent place to be by
helping individuals, organizations and communities achieve their peak potential and an entirely new level of
performance.
4. Start-ups don‘t win because of great vision,
but because of superior strategy.
If you want to have superior strategy, you must
have better customer insight.
7. Follow your passion‘ is easily the worst advice you
could ever give or get.
The vision in not as important as the drive to achieve
it.
It‘s not the vision that makes the visionary; it‘s the
driving force to make change happen.
Don‘t follow your passions; follow your effort
(determined attempt). It will lead you to your passions
and to success.
9. Don’t start business ”doing what you love” or ”doing
what you know”. You will operate in industry where the
service is commoditized.
Therefore you will fight over every customer while you
will earn fewer and fewer dollars.
•Don‘t do what you love
•Solve people‘s problems
•Sell dreams
10. Fall in love with a
PROBLEM, not
SOLUTION
(IDEA)
13. • Just because you have the problem doesn‘t mean
there truly is an addressable market.
• You may be biased toward a solution that the market
majority doesn‘t want.
• Your product is only as good as the problem it‘s
solving and its suitability to the segment.
Yet another cold reality
Source: Lean Entrepreneur
14. YOUR VALUES
• Describe what you hope your business to be
• Size
• Financial Potential
• Number of Employees
• Company Financing
• Company Culture (should reinforce the values)
• etc.
• Set fundamental values of your business
• Also determine your business vision
25. STEPS TO CUSTOMER DISCOVERY
• DEVELOP A VISION / CUSTOMER HYPOTHESIS
• Document hypothesis: Guess (customer-problem-solution)
• Business model hypothesis
• GET OUT OF THE BUILDING
• Find prospects to talk to (50+)
• Reach out to prospects
• Engage prospects
• REALITY CHECK
• Compile-measure-test
• Problem-solution fit / MVP
• Compile-Measure-Test II
Source: Steve Blank, The Startup Manual
26. Core and Riskiest Assumptions
CUSTOMER/PROBLEM
• Customer Segmentation
• Customer Problem
• A day in life of Customer
• Customer Influence Map
• ROI for Customer
• Minimum Feature Set
PRODUCT/SOLUTION
• Product Features
• Product Benefits
• Intellectual Property
• Dependency Analysis
• Product Delivery Schedule
• Total Cost of Ownership
VALUE HYPOTHESIS
Source: Steve Blank, The Startup Manual
28. STEPS TO CUSTOMER INSIGHT
1. Hypothesis
2. Segmentation
3. Empathy Map
4. Value Proposition Canvas
5. Personas
6. Get Out of The Building
7. Experiments
30. Segment Clues
• Different level of pain or passion
• Seek to solve problem differently
• Require different marketing
• Require different distribution
• Require different sales
• Not necessarily demographic-based
• Not „verticals“
Source: Lean Entrepreneur
31.
32.
33. Customer Clues
• Who are they? -> Personas
• Day in a Life of your Customer
• Customer or buyer
• Decision process chain
• User
• Influencer
• Recommender
• Decision maker
• Economic Buyer
• Sabotager
40. CUSTOMER PAINS
• What do customers find too costly?
• Money, Time, Effort
• What are the customer difficulties?
• What are the customer challenges?
• What is keeping them wake at night?
• Big issues, concerns, worries
• How are current solutions underperforming?
• What barriers are keeping customers from adopting?
• Upfront investment costs
• Learning curve
• Resistance to change
• What makes your customers feel bad?
• Frustrations, annoyances, …
• What risks do customers fear?
• Financial, social, technical, …
41. CUSTOMER GAINS
• Savings
• Expectations
• Current solution delights
• How to make customers life easier?
• Positive social consequences
• What are they looking for?
• What do they dream about?
• How to increase likelihood of adoption?
47. Pre-purchase
Trial subscription
Introduction to decision-maker
Referrals
Clear next meeting
COMMITMENT
LOOK FOR
48. GET OUT OF THE BUILDING IDEAS
• Interview potential
customers
• Set up a booth
• Do a public demo
• Put your office where your
customers are
• Throw a party
• Talk to experts in the field
• Find the decision maker
• Listen to what customers
are demanding
• Ask for introduction
• Pre-order
• Landing pages
• Ask for the introduction
BE WHERE YOUR CUSTOMERS ARE
49. GOAL OF CUSTOMER INTERVIEWS
IS TO FIND AN ANSWER TO THE FOLLOWING
QUESTIONS
• Who your customers are
• The specific problem your potential customers have
• Why this is a problem for them
• How painful this problem is for them
• What happens when the problem is not solved
• How they are currently solving this problem, and what else
they’ve tried
• How much this problem, when solved, is worth to them
• How they find out about solutions to this problem
• The words your customers to describe this problem
50. Stakeholders
Potential people to talk to
• Customers
• Partners
• Industry experts
• Friends
• Investors
• Founders
• Lawyers
• Recruiters
• Trade magazines
• Business reference books
• Accountants
• …
Sent e-mail
Phone call
Meeting and presentation
Follow up call
Second meeting
TYPE OF COMMITMENT?
51. INTERVIEW – DO
Take notes
Be kind and smile
Ask questions
Understand their story
Listen
INTERVIEW – DON‘T
Sell (OBSERVE REACTIONS)
Talk too much about your product
Ask leading questions
Suggest answers
Interview your mother
Talk much
52. • “Have you ever….”
“And then what happened…”
“Why (or how) did you do that…”
“Can you say more about that…”
• Tell me about the last time you…
• Tell me about an experience you‘ve had with…
• How did you feel when … happened?
• What were you feeling at that moment?
• Really, can you tell me why that matters?
DON‘T ASK FOR OPINIONS!!!
Look for examples from real life.
53. Interview Structure 1/3
WHO YOU ARE
• What is your name and role at your company?
• How do you fit into your company’s department structure?
Overall in the company?
• What is your budget like? Who has to approve your purchases?
• How do you discover new products for work? Do you need any
approval to try them?
• Have you tried anything new recently?
• What is a typical day like on your job?
• How much time do you spend doing [task X]?
Source: Jason Vanish Blog
54. Interview Structure 2/3
WHAT ARE YOUR GRAITEST PAINS
• What are your top 3 challenges you face in your job?
• What are your top 3 challenges you face in your job related
to [industry X]? (Industry X being the one your startup is in)
• If you could wave a magic wand and instantly have a
solution to any of those problems…what would the solution
be?
• Dig deeper into their typical day on anything that sounds
painful or expensive. How have you dealt with or solved
[Problem X]?
Source: Jason Vanish Blog
55. Interview Structure 3/3
SOLUTION – RESPONSE/BEHAVIOUR NOT OPINIONS!
• Walk them through the problems you believe your solution
solves. Do they agree?
• Does [your solution] solve any of their problems?
• Would you be willing to pay for our solution? How much? (Don’t
be afraid to probe for the pricing you know you want…”Would [X]
be reasonable?”)
• If they’re willing to pay your price and like the idea then…”Would
you be willing to start right away?”
Source: Jason Vanish Blog
56. If you didn’t take any notes, you
weren’t doing customer
development.
“Yes,” means no. “Where can I buy
that?” means maybe. “Here’s $20
dollars,” means yes.
57. EARLY-EVANGELSITS
•You know they have a problem
•They know they have a problem
•Actively looking for a solution
•Put together a solution out of piece parts
•Budget
58.
59.
60.
61. (sources and references) Learn More
Steve Blank
@sgblank
http://steveblank.com/
Eric Ries
@EricRies
http://startuplessonslearned.com/
Ash Maurya
@ashmaurya
http://ashmaurya.com/
Dave McClure
@davemcclure
http://davemcclure.com/
Alex Osterwalder
@AlexOsterwalder
http://alexosterwalder.com
Brad Feld
@bfeld
http://feld.com/