10,000 foot view of customer development essentials

1. powered by Monash
What is
Customer
Development?
Generator
THE
powered by

2. Classic
Chicken
or theEgg
problem?
Productready
forsales
vs
Customersto
work with

3. Hint… the right answer is CUSTOMERs
Customer Development = framework for
1. discovering & validating the right market for your
idea
2. building the right product features that solve
customers’ needs
3. testing the correct model and tactics for acquiring
and converting customers
4. deploying the right organisation and resources to
scale the business

4. Startups don’t fail
because they lack a
product. They fail
because they lack
customers and a
profitable business
model.
Steve Blank

5. market
Problem
Customers
Willingto Pay
For
Your
solution
Borrowed from Adreas Klinger

6. Is your problem worth solving?
• You can ID your customers
• Customers have confirmed they want it and
are willing to pay for it
• You can define the MVP
• Customer is willing to pay
• You can deliver the product/service through a
profitable (or sustainable) business model

7. lean methodology
• Find a problem worth solving
• Find a potential solution
• Validate that the solution works
• Validate that the market wants the solution
• Validate the business model

8. hypotheses
• Customer/Problem
• Product
• Distribution & Pricing
• Demand Creation
• Market Type
• Competitive

9. • Customer/Problem
o Types of customers/archetypes
o Magnitude of the problem
o Visionaries
o A day in the life of a customer
o Organisational impact
o ROI justification
o Problem recognition
o Minimum feature set

10. • Product
o Features
o Benefits
o Product delivery schedule
o Intellectual property
o Total cost of ownership
o Dependency analysis

11. • Product
o Positioning & Differentiation
• Competition
o Who is out there?
o Why are they important?
o How do customers use them today?
o What don’t customers like about them?

12. • Face to face conversations
• Don’t pitch your idea, learn from your
potential customers
• MEASURE your results
Customer interviews

13. Before you rock up to an interview…
• Know what you want to learn
• Define your questions
o Formulate testable hypotheses
o Cluster by topic

14. Step 1: the problem interview

15. template
• Welcome, set the scene
• What’s the biggest challenge you face as a [relevant role]?
• When’s the last time you tried to solve that problem?
• Can you tell me about the last time that problem happened?
• Why is it a problem for you?
• How did you find your current solution?
• What isn’t ideal about your current solution?
• I’m actually exploring a solution thi [problem]. Can I follow up with you if we find a
viable solution?
• I’m trying to understand this problem from a wide range of perspectives. Do you
know 1 or 2 other people who are struggling with [problem] that I might talk with?
http://customerdevlabs.com/script/
Check out this cool, free resource:

16. Good - bad
• Do you have a problem about X?
• Tell me about x.
• Do you think it is a good idea?
• Would you buy a product which solved this
problem?
• How do you currently deal with this problem?
• Talk me through the last time you had this
problem.

17. Good - bad
• How much would you pay for this?
• How much money does this problem cost
you?
• Is there a budget for it?
• Who else can I talk to?
• Is there anything you think I should have
asked?

18. Analysing the results
• Sounds great. I love it!
• Brilliant – let me know when it launches!
• I would definitely buy that!
• There are a couple people I could introduce
you to when you’re ready
• We are spending $500/month on this

19. How do I know when I’m done?
• When feedback repetitive and not gleaning
new learnings

20. Step 2: the solution interview

21. Before you rock up to an interview…
• Build a demo/MVP
• Define your questions

22. o the product with the highest return on investment versus risk
o the smallest thing you can build that lets you quickly make it
around the build/measure/learn loop
o the smallest thing you can build that delivers customer value
o the minimum product that you can take to market successfully
(allowing a start-up to generate positive cashflow & fund further
development work)
GOAL = to test fundamental business hypotheses
MinimumViableProduct(MVP)

23. Validating your solutions
• Revisit interviewees
• Discuss current solutions, flaws
• Show mockups, interactive demos
• Get improvement feedback
• Get them to commit (without a hard sell)… or
iterate

24. WANT TO KNOWMORE?
GET IN TOUCH!
www.monash.edu/entrepreneurship
@monashGENERATOR
Facebook.com/monashGENERATOR
7 Innovation Walk AG01-04 (Clayton Campus)
entrepreneurship@monash.edu