Secret to Startup Success: Customer Development
“Secret to Startup Success: Customer Development” By Justin Reyes We’ve talked about how startups scapegoat their product when they don’t see the customer adoption …
“Secret to Startup Success: Customer Development” By Justin Reyes
We’ve talked about how startups scapegoat their product when they don’t see the customer adoption they want. It’s because product development is stressed too much. What is often overlooked during the initial stages of building a new product is customer development.
Having a great product is essential to meeting customer expectations, but how do you know what those expectations are if you haven’t bothered to talk to potential customers?
The purpose of customer development is to ensure that there is a market for your
product. Without it the time spent on product development is a huge
waste of time!
A lot of startups Iʼve seen have executed brilliantly on their product. They have flawless
design, user experience, and responsive features. But they fail to receive initial traction because there isn’t enough demand for their product. Contrary to popular belief you cannot create artificially create demand by throwing money into advertising and marketing. Instead, as Steve Blank author of 4 Steps to the Epiphany famously said, “Step Outside Your Building”, meaning literally go out, meet, and talk to your customers! Doing this will help you figure out their needs and how much of a demand exists for a product like yours.
However, startups and even larger companies don’t get out much. It’s partly because they are lazy, but the other part is that they don’t know how. They make some small attempts like talking to their inner circle: friends, family, and colleagues. But they don’t go beyond the scope of these individuals. Often times they even overlook industry heads and potential partners.
The primary problem this causes is that startups fail to truly understand who their early adopter is. They are of course a unique breed. They care about being on the forefront of knowing a product, and can be amazing evangelists. Hence, early adopters are the key to product success! But finding them takes a bit of effort. You have to find those who are both enthusiasts and are experiencing the pains you’re product is trying to alleviate.
So how does one find out who is an early adopter is? Well you begin by identifying a broad base of potential customers for your product. Think about the benefits you are offering, and who that may appeal to. While you can start by reaching out to people in your network to interview, you’ll want to make sure that you’re expanding the group of whom you talk to over time.
For example, let’s say we have a vague idea that we want to make a new product for snowboarding. We’ll want to reach out to the following groups of people: snowboard enthusiasts, snowboard instructors, resort owners, and snowboard product makers. Snowboard product makers? Yes it’s important to talk to competitors as well, and it’s super easy to when you don’t have a product, because they don’t see you as competition! Reaching out can be as simple as saying: “I know you’re into snowboarding. If you’re open next week, I’d just like to do a quick chat, and learn more about your interest in snowboarding.”
The initial interview is not the time to sell them on anything! In fact, don’t even talk about your product idea. Focus purely on them. Chat about their experience, and get more information regarding their needs. Their insightful will be tremendously valuable and will help validate assumptions you have.
Aim to have at least 8 to 10 customer interview per customer group e.g. 10 snowboarders, 10 snowboard makers, 10 resort owners, etc. The reason to aim for 10 is that patterns will only emerge from a sizable group. If 10 people say vastly differently things, you’ll need to interview more. The patterns that emerge from interviews feed into the most acute pains or needs, and from that you can think about designing a prototype.
Notice I said think not build! People you identify as having the most acute pain, and have been dying for a product like yours would be willing to pay for it. You should have a deep enough understanding of their needs, and the benefits of your products to be able to close as sale without having built a prototype yet. Yes I know this might seem strange, but it can be done. Check out The Sandler Rules for how to close sales without demoing a product!
Early adopters aren’t created, they emerge from conversations and interviews you conduct. Only by truly understanding who they are will you be able to tout the benefits of your product, and get them to buy your product before it even exists!
Save yourself time, money, and cycles of frustration: don’t build an entire prototype or product, only to find out that people aren’t willing to actually pay for it or worse yet don’t even need it. Instead, stop building, step outside of your building, and start reaching out to customers today!
If you enjoyed this post, but want more step-by-step instructions for connecting with customers, then check out our Lean Product Development Course Learn more!
Justin Reyes is an web marketer noob, blogger, startup fanatic, coder (when need be) and obsessed with the Silicion Valley tech community.
