Starting a company is not easy.
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
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)
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
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.
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.
#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
- 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 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:
- FoundersWiki by Lukas Fittl
- What’s your CDVC by Kevin Dewalt
- What you should be learning by Cindy Alvarez
- Never Ask What They Want by Charles Liu
- More Matter. Less Blabber. by Salim Virani
- 5 Whys by Eric Ries
- Get out of my Building! by Steve Blank
- Product/Market Fit is a Trap by Thomas Schranz
I’m sure there are many more interesting reads. Please feel free to share writings that you found helpful.