Lectures‎ > ‎Week 6: July 5-July 10‎ > ‎

01-CustDev - Customer Development

Homework required in preparation for this lecture

  1. NONE! In honor of July 4th there will be no homework due for Tuesday July 5.

Customer Development - We've Been Doing it Wrong!

Learning Goals

  • Peek at tomorrow's homework
  • Introducing CustDev
    • What is Cust Dev?
    • Crossing the Chasm. 
    • The Key insight.
  • Thinking about a business model
    • How to think about a business model
    • What are the elements to look for
    • How to be creative and flexible in defining and refining it
  • Customer-Problem-Solution
    • Applying a "scientific method" to having an impact
    • The Customer-Problem-Solution loop
    • Identifying and prioritizing your hypotheses
    • Testing their validity, Pivoting
  • Tools
    • Unbounce
    • Google Analytics
    • Touch on many others

Cutomer Development or CustDev

  • Why are we here? Learning + Doing
    • Near and dear to Tim and Pito's heart
    • Start thinking about how to have impact with your work
    • How to build something that actually addresses a need, has a real impact on the world
    • Role of Learning + Doing Question Your Assumptions
  • Origin of the term: "CustDev"
  • Underlying lesson to take to heart
    • Always, Question and Test the core assumptions you are making about your product
    • Articulate and write down the hypotheses that you have about your product/business/project
    • Figure out the cheapest possible way ("minimum viable product") to test it
    • Apply a "scientific" method to what is (inherently) an unscientific problem
      • Observe/Describe/Imagine a phenomenon
      • Formulate a hypothesis about it
      • Test the hypotheses
      • Rinse and repeat
  • Crossing the Chasm

  • Lessons:
    • Acquiring Early Adopters is critical because they set you up to be able to get to the early majority. They influence the rest
    • CustDev focuses on preparing and then getting the Early Adopters

Business Models

  • What is a business plan? Let's look at a lemonade stand
  • Elements
    • Entities involved
    • Value/Currency given and received - direct and indirect
    • Flow of product/components
  • Draw an Ecosystem diagram
  • Designing your business model
    • Consider whether there are other entities that might participate
    • Realize that you will need to think about and provide an MVP for each entity
  • Quick background on "Freemium" model
    • Buzzword
    • Multi-tiered pricing, with one tier being free
    • Objective is to entice people into the higher tiers which are not free
    • Different from 'free' where the objective is something other than getting revenue for the product
      • Such as?


  • Applying a "scientific method"
    • Be explicit about your assumptions - think of them as hypotheses
    • Go about testing them, in the right order
  • The Customer-Problem-Solution Hypothesis. Here's a quick example using Giraffe Adventure:

    Youth, young adult, who have an Android phone
    They have bits of time, here and there, and would like something to entertain them
    They are bored with the other games they have
    They want something new and cool to do with their Android
    An entertaining new game with great graphics that can be played in 5 minutes
    A game requiring fast manual dexterity
    A game with a fun animal theme

    • Can we sharpen this hypothesis?
    • What alternatives does this user have?
    • Where does he look for them?
    • How can I test each element of this hypothesis?
    • Which is the most important?
    • Goal: At all times, you should have, in writing, your C-P-S for each entity in your business model
  • Testing their validity
    • MVP: Minimum Viable Product
    • The smallest unit of work that would allow you to disprove/prove one of your hypotheses
    • Is it an interview? Is it a landing page? Is it a prototype? Is it a paper prototype? 
  • Pivoting
    • Stick with your CPS hypothesis as long as you can
    • When you conclude that it has a basic flaw, then you pivot. Change something. And re-test
  • Get out of the building!
    • Question your assumptions
    • Be open to specific feedback that challenges or disproves your hypothesis, and then, change!


  • www.unbounce.com
    • Build a landing page (what is that?)
    • Collect early commitments or orders
    • Test out different ways of talking about your product
    • Measure advertising results
    • How to get traffic to your landing page?
    • A&B Testing - but why is it useful?
  • Google Analytics
    • Search engine optimization
    • Become more data driven. Know what you are measuring and why
    • Put instrumentation into your web sitee

Pito Salas,
Jul 4, 2011, 7:48 PM