Getting Started with Customer Development for Your Startup
Treehouse’s own CEO, Ryan Carson, wrote a post on the Treehouse blog recently about an experience he had of “getting out of the building.” It was one of those classic examples that all the best Customer Development books have, of finding your customers “in the wild” and understanding how they really use your product.
If you haven’t read Ryan’s post, I’d recommend it. Once you have, I’m hoping this post will give you some concrete, actionable steps to achieve a similar effect for your own business.
First things first: What is Customer Development?
If this is all new to you, don’t feel overwhelmed. Customer development is actually a fairly simple concept. In fact, it’s so simple that I’m going to stop using those foreboding capital letters every time I say customer development. I didn’t say it was easy though. Like looking after a pet or completing a trust fall, it’s the execution that’s difficult.
Brant Cooper and Patrick Vlaskovits provide this definition in The Entrepreneur’s Guide to Customer Development:
“Customer Development is a four-step framework to discover and validate that you have identified the market for your product, built the right product features that solve customers’ needs, tested the correct methods for acquiring and converting customers, and deployed the right resources to scale the business.”
Their four-step process includes customer discovery, customer validation, creating your company and building the company.
They also offer this short explanation:
“At an abstract level, Customer Development is simply about questioning your core business assumptions.”
If we broke it down even further, we could say that Customer development is the process of identifying, finding and talking to your customers to validate the assumptions you’ve made about your business.
Ryan’s story provides a great example of how important (and surprising) Customer development can be for your business. As hard as it might be to admit, your customers really do have the answers – after all, they are the ones who are going to purchase your product.
So keeping your customers in mind as your product develops and you work out a business plan is clearly imperative. But the question remains – how to go about this?
No doubt there are a bunch of ways your could approach Customer development and your own methods will depend on what works for your business. I want to look at some basic ideas in this post that you can adapt to work for you.
Let’s begin with one of the trickiest questions: where are those customers, anyway?
Where to find your customers
I call this one of the trickiest questions because it seems to be the one that everyone avoids. In every book, blog post or interview I’ve read about Customer development, the question of where the customers are and how to find them is the one that’s avoided or skimmed over. This is probably because each business is so different, and the answer to this question could never apply to everyone.
So instead of “answers” I’m going to give you some actionable steps to help you get started with this process yourself – after all, experience is the best teacher. Plus, as soon as you find some of those elusive customers, they’ll provide clues as to where you can find more. Which means the sooner you get started looking, the better.
1) Start with friends and family
People you know are easier to talk to than strangers. You can be vague, or confused, or fumble your interview questions and your friends or family won’t mind. Even if they aren’t your exact market, friends and family are a good place to start, to help you gain confidence and truly define what it is you’re trying to find out or what assumptions you want to test.
If you don’t have any friends or family who are interested in what you’re building, they can still be useful to you at this stage. For instance, you might try interviewing a friend about a problem that does affect them, which will help you practice effective listening and how to understand the problem without pushing your own solution onto the customer.
2) Create a solid profile
Understanding your customers will help you work out where to find them. Though this might be difficult until you start meeting them, build up as specific a profile as you can to get a better understanding of who they are.
Pay particular attention to what their jobs might be, what habits or leisure activities they might enjoy, where they might spend their time and who else might influence their purchasing decisions. For instance, if your product is for people who are very active, you might imagine that they are members of gyms or health clubs, play team sports or spend time with friends who are also active. These clues can help you to work out where and how to get in touch with your potential customers.
3) Never stop looking
As Ryan’s story proves, your customers can be found anywhere. Keeping your eyes peeled and paying attention to the people you interact with could lead you to find new customers to interview in the most unlikely places.
How to reach your customers
So you’ve worked out where they spend their time, and now you want to approach your potential customers and get their input on your product. Again, there are all sorts of methods you could use, but I’ll give you three ideas to be going on with.
1) Cold calls/emails
Whether a phone call or an email is more appropriate will depend on your customers, your product and how they might use it (for instance, is it something they’ll need for work, or a family-oriented weekend-use product?). Either way, you’ll probably want to adopt a blanket approach – i.e. calling or emailing as many people as you can, since the response rate is often quite low for these methods.
In Nail It Then Scale It, Nathan Furr and Paul Ahlstrom point to the use of cold calls as an indicator of the customer reception to your proposed solution:
“A monetizable customer pain represents a customer pain so significant that the customers will return the cold calls of an unknown startup to solve it.”
Remember that cold calls and emails are called such because they come out of the blue, generally to parties who don’t know you. This means you’ll want to be succinct and friendly, introduce yourself and explain clearly what your product is and what you want from the recipient. It’s probably a good idea to indicate that you’re not selling anything at this point (assuming you’re in the pre-building research phase still), to get them on-side right away.
2) Get introduced
An introduction is a great way to open the door to someone you want to talk to, since a mutual acquaintance or friend can encourage your customer to be more receptive to what you have to say. Again, pointing out that you’re after feedback only and are not selling anything is likely to make your friends more likely to introduce you, as well as making your customers more comfortable to chat with you.
3) Use surveys
Although both of the customer development books I’ve already mentioned stress that online surveys or questionnaires cannot be substituted for one-on-one conversations with your customers, they can be helpful supplementary material.
If you have a blog or an email newsletter already, you can send an email survey to get feedback on your idea, your customers’ problems and suggestions to help tailor your approach. You could also set up Google Adwords related to your product and use a landing page survey to collect information.
What to ask your customers
Thankfully this question isn’t nearly as slippery as where to find customers, but it doesn’t have an easy answer, either.
1) Dig into the problem
Regardless of the problem you’re attempting to solve, the better you understand it, the closer you’ll come to solving it. Dig down deeper into the problem by asking why, listening intently and asking follow-up questions. Try asking about how your customers notice this problem, whether they’ve tried to fix it themselves and what the perfect solution might look like.
2) Explore the competition
If there are other companies offering a similar product already, ask about your customers’ experience with those products, what they liked and disliked and how they found out about them.
If your customers have hacked together a workaround, this is a really good indicator, as well. It proves that you’ve hit upon a strong enough pain that the customer has created a solution themselves, and it serves as a clear blueprint for that customer’s needs. One workaround won’t suit everyone, but it’s an excellent place to start getting ideas.
3) Find out what job they are trying to get done
Thought they might seem irrelevant, ask as many questions as you can about the situation and surroundings of your customer when they have this problem. Understanding the job they are trying to do will help you work out what outcome they’re looking for, and how you can develop the features needed to offer them this.
For instance, you might find out that the problem arises mostly during peak time in their office, so they’re battling high levels of noise and distraction – this kind of information is invaluable when designing your product.
Just get started
Customer Development can seem a bit daunting, especially with all the jargon that comes along with it. The best advice though, as Ryan proved, is to actually get out of the building and go do it. As soon as you have an idea, this is a great time to start testing your assumptions, so that you know you’re building a product that people want from the start.
Belle Beth Cooper
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