Learning 80/20 of CustDev in 48 Hours

Starting a company is not easy.

Me on Day 0 when I realized that Customer Development will be critical to the success of our company // I felt like Business Dog // source: knowyourmeme.com

Me on Day 0 when I realized that Customer Development will be critical to the success of our company // I felt like Business Dog // source: knowyourmeme.com

It is not impossible, but certainly not trivial. Anyone who tells you otherwise is lying straight to your face.

Founders constantly find themselves in unprecedented situations. And a lot of times it will feel like walking in Business Dog’s fur. No. Clue. Whatsoever.

Whether it is serial time founders who have to battle realities of a new venture in a different time or whether it is first time founders who have to figure out how to set up a running organization whilst changing their own diapers.

Fortunately enough, founders can be considered ‘the cockroaches of the business world’ → read: “professionals capable of adapting to new situations quick enough to survive (and potentially thrive)”.

Yet the single most important thing is ‘solving the right problem the right way’ → commonly referred to as the ‘Problem/Solution Fit’.

To find the Problem/Solution Fit for your company’s product is via Customer Development.

Below are my first learnings from diving head first into this subject matter.

The Importance of Solving the Right Problem

Until you’ve launched the only 2 things you should be doing are writing code and talking to customers. — Paul Graham
This is what happens when an organization does not listen to the customer or does not communicate it clearly within the organization // source: coventry.ac.uk

This is what happens when an organization does not listen to the customer or does not communicate it clearly within the organization // source: coventry.ac.uk

What is Customer Development?

CustDev (abbr.) is a systematic process to gather relevant insights/learnings (to the right questions) at an accelerated pace.

Typically the Customer Development process is split into 2 distinct parts:
1) Discovery → Learn (about the customer’s needs & pain points)
2) Validation → Confirm (within the context of your own solution)

Why bother?

1) It provides relevant customer/market intelligence that feeds into (a) core business (b) product development (c) sales (d) marketing and other functions.
2) Most importantly, listening to voices in the marketplace makes sure that you don’t build the wrong product, for the wrong customers, at the wrong time, at the wrong price/profit margins and distribute it via the wrong distribution channels…

→ CustDev keeps a young company aligned with the market reality.

No need to reinvent the wheel

If I have seen further, it is by standing on the shoulders of giants. —Isaac Newton
Following the White Rabbit into Customer Development Wonderland // source: Disney

Following the White Rabbit into Customer Development Wonderland // source: Disney

After immersing myself into CustDev Wonderland I have realized the following: You have to get a lot of things right for successful Customer Development.

Identifying the relevant problems. Testing against the right hypotheses. Asking the questions right. Drawing the right conclusions. Following up in the right directions.

Repeat.

Sorry! Unfortunately there is no real shortcut to successful insight generation. Yet I feel the following 3 ideas will have a significant practice on my organization’s CustDev practice:

#1 Shut up and listen!

Don’t pitch your product! You want to learn from your conversation partner not the other way around. Remember, you know nothing about their lives.

Instead, listen to what they have to say and how they say it. Your goal is to find out real-life needs & pain points (not verify product features).

#2 Why? Why? Why? Why? Why?

The Laddering technique goes a long way when probing for real motivations. When smell that the conversation is taking an interesting direction ask ‘why’ continuously until you have exhausted user story and arrived at the core driver of their behavior.

Congrats, ‘Mr./Ms. Freud’, you are now qualified to searching & finding underlying causes.

#3 Get the intro

One of the rather simple yet powerful concepts that I came across was the ‘Customer Development Viral Coefficient’ (CDVC) → calculated as [CustDev Introductions]/[CustDev Conversations]

The math is simple:

  • CDVC > 1 Awesome! Your CustDev conversations intrinsically create a new pipeline of interview partners. Also, this is a first feedback-loop if you are on track. If your solution is irrelevant/not ready, your interview partner will be hesitant to put his credibility at stake to refer you.
  • CDVC < 1 → Try harder. This means you have to get creative to find further CustDev interview partners. Also, this can be an indicator that something might be off with your solution.

These principles are by no means exhaustive, but they should improve your CustDev efforts by a significant margin.

What I learned

Once you understand the principles the application is easy. — Pavel Tsatsouline
Me after 2 days in solitary confinement and lots of CustDev on the agenda // source: knowyourmeme.com

Me after 2 days in solitary confinement and lots of CustDev on the agenda // source: knowyourmeme.com

  • Always be goal oriented: CustDev is aimed at producing insights & learning. Not data. → Walk away from every conversation with at least 1 actionable item (e.g. validation/falsification of a hypothesis; introduction to new customers; new industry insight; etc.)
  • Find root causes: Don’t look for feature requests but try to understand a customer’s reality. → A good way to wrap your head around this is the ‘Jobs-to-be-Done’ framework.
  • Poor questions → poor answers: Carefully think about what you are trying to get as a result and thoroughly plan what you want to talk about. → A lot of people (smarter than I) have covered this subject in detail. Make sure to pick their brains. But common sense applies here: “Rubbish in = rubbish out.”

The Moral of this Story

48 hours of immersion into Customer Development won’t make you a master of the trade, but it is a good start.

Now it’s time to put theory into practice and learn my own lessons :)

 

Thanks a lot to Lukas for being the White Rabbit and taking me into CustDev wonderland.

Thanks Luis for swinging the editorial wand.

I am still learning so am thankful about any comments, input, critique, feedback, experiences, etc.

If you like this post please share the love and feel free to get in touch with me.

Resources that were amazing eye-openers along the way:

I’m sure there are many more interesting reads. Please feel free to share writings that you found helpful.