how to conduct customer development

What Is Customer Development

Customer development is a formal methodology for building startups and new corporate ventures. The customer development method consists of four steps that are designed to help avoid common pitfalls and repeat successful business strategies:

1. Customer discovery first captures the founders’ vision and turns it into a series of business model hypotheses. Then it develops a plan to test customer reactions to those hypotheses and turn them into facts.
2. Customer validation tests whether the resulting business model is repeatable and scalable. If not, founders should return to customer discovery.
3. Customer creation is the start of execution. It builds end-user demand and drives it into the sales channel to scale the business.
4. Company building transitions the organization from a startup to a company focused on executing a validated model.

Customer development was developed by serial entrepreneur Steve Blank in the 1990s. While writing about his experiences as an entrepreneur in the Silicon Valley for his memoir, Blank began to notice patterns in the startups he was involved with. Recognizing that startups are not simply smaller versions of large companies, he observed that entrepreneurs need to have a systematic approach to guide their search for “repeatable and scalable business models.” The revelation led to his first book, The Four Steps to the Epiphany: Successful Strategies for Products that Win, which served as the course text for his first class and heralded the birth of Customer Development, which in turn spawned the Lean Startup movement. Blank’s second book, The Startup Owner’s Manual, is a step-by-step guide to building a successful startup using customer development principles.

See wikipedia.org/wiki/customer_development

Instructions for The Graded Assignment

For this module you will engage in the first stage of customer development: customer discovery. Customer discovery is a form of generative research on your targeted market. Typical questions you use in customer discovery focus on:

• Who is our customer?
• What are their pains?
• What job do they need done?
• Is our customer segment too broad?
• How do we find them?

Optional Read "Why customer development is crucial to every business' success (Kayako.com; 5-minute read). It's optional because this is really about customer retention and service rather than on development.

Open the google doc "Customer discovery interviews development activity," download the document and give a filename that includes your full name and "customer discovery," and follow the instructions. Starting on page 2 of the document:

1. write your learning goals for the interviews;
2. create some talking points and broad, open-ended questions designed to help you meet your learning goals;
3. conduct the interview using the questions you created above (conduct at least two interviews, ideally four or more); and
4. interpret your results.

Enter your learning goals, talking points and questions, and your interpretations of your interviews in this document, save it, and send it to me at NVDBAMA@gmail.com (or share it through google docs).

See also

Customer Development Guide For Product Managers, producttribe.com