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Customer Discovery is the first of four steps in the Customer Development process originally documented in Steve Blank's The Four Steps to the Epiphany. The important thing to figure out as an entrepreneur at this step of development is: Does your product / service solve a problem for an identifiable group of users? Slides for my Lean Entrepreneurship course @ Carnegie Mellon University (94-840)
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Customer Discovery
Sean Ammirati
Partner, Birchmere VenturesAdjunct Professor, Carnegie Mellon University
#CMULean
The Customer Development Model
#CMULean
Focus
CustomerDiscovery
CustomerValidation
CustomerCreation
CompanyBuilding
A product solves a problem for anidentifiable group
of users
The market is saleable and large enough that a viable
business might be built
The business is scalable through a
repeatable sales and marketing roadmap
Company departments
and operational processes are
created to support scale
Why is this important?
#CMULean
Dec 2006
Conviction to build FeedHub
Aug 2007
Private Beta of FeedHub
Sept 2007
Launch FeedHub @ Demo 2007
10 months of “Stealth Mode”
#CMULean
http://www.flickr.com/photos/stuckincustoms/5881027457/#CMULean
#CMULean
http://www.flickr.com/photos/data70/4748860721/sizes/o/in/photostream/#CMULean
In a sense there's just one mistake that kills startups: not making something users want. If you
make something users want, you'll probably be fine, whatever else you do or don't do. And if you don't make something users want, then you're
dead, whatever else you do or don't do.
Paul Graham, Y Combinator
http://www.paulgraham.com/startupmistakes.html
Most Startups FAIL not because what they
imagine can’t build it, but because
NO ONE WANTS what they built.
#CMULean
“Launch early enough to be embarrassed by your product’s first version”
Reid Hoffman, Co-Founder & Chairman
Source: http://www.flickr.com/photos/joi/1431818434/sizes/l/in/photostream/#CMULean
The Customer Development Model
#CMULean
Today’s Focus
CustomerDiscovery
CustomerValidation
CustomerCreation
CompanyBuilding
A product solves a problem for anidentifiable group
of users
The market is saleable and large enough that a viable
business might be built
The business is scalable through a
repeatable sales and marketing roadmap
Company departments
and operational processes are
created to support scale
C-P-S Hypothesis
Customer: I believe my best customers are Marketers.
Problem: They have no idea if a specific campaign is generating a return on investment (ROI).
Solution: Analytics that easily demonstrate marketing ROI.
#CMULean
Example Source: The Entrepreneur's Guide to Customer Development
The objective is to define a hypothesis
that is testable...
C-P-S Hypothesis v2
#CMULean
Example Source: The Entrepreneur's Guide to Customer Development
Customer: I believe my best customers are small and medium-sized business (SMB) marketers.
Problem: Who cannot easily measure campaign ROI because existing solutions are too expensive, complicated to deploy,and display a dizzying array of nonactionable charts.
Solution: Low cost, easy to deploy analytics systems designed for non-technical marketers who need actionable metrics.
3 Other Key Hypothesis
1. Your business: assumptions concerning business model, partners, relationships, and dependencies captured in your ecosystem diagram.
2. Your product: the features requirements you believe are necessary to complete your final MAP.
3. Your funnel: assumptions about how you will acquire and convert your customers.Adapted from The Entrepreneur's Guide to Customer Development
#CMULean
“The FACTS Reside OUTSIDE
the Building”
#CMULean
Interviews
Problem CurrentSituation
ProposedSolution
#CMULean
Reach into extended network ...
#CMULean
#CMULean#CMULean
http://blog.startupcompass.co/pages/startup-genome-report-extra-on-premature-scal
#CMULean#CMULean
http://blog.startupcompass.co/pages/startup-genome-report-extra-on-premature-scal
Premature scaling is the most common reason for startups to perform worse. They tend to lose the battle early on by getting ahead of themselves. Startups can prematurely scale their team,
their customer acquisition strategies or over build the product.
#CMULean#CMULean
http://blog.startupcompass.co/pages/startup-genome-report-extra-on-premature-scal
Startups need 2-3 times longer to validate their market than most founders expect. This underestimation creates the pressure
to scale prematurely.
#CMULean#CMULean
http://blog.startupcompass.co/pages/startup-genome-report-extra-on-premature-scal
In our dataset we found that 70% of startups scaled prematurely along some dimension. While this number seemed high, this may
go a long way towards explaining the 90% failure rate of startups.
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