CUSTOMER DEVELOPMENT

KALEV KAARNA

IDEA LAB IN UNIVERSITY OF TARTU

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TARIKH KORULA (SEEN.CO)

Source: http://www.javelin.com/experiment-board.html

3

?

?CUSTOMER

PROBLEM

SOLUTION

Exp. 1

RISKIEST ASSUMPTION

<30 YR OLD CONCERT GOER

TEST & MEASURE

TOO BUSY & BROKE TO KEEP UP

SEARCH ENGINE FOR FINDING

CONCERT VIDEOS

INTERVIEW:7/10

HOW BIG IS THE PAIN?

CARE ABOUT CONCERTS

THEY MISSED?

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RISKIEST ASSUMPTION

TEST & MEASURE

INTERVIEW:7/10

CARE ABOUT CONCERTS

THEY MISSED?

RESULTS

LEARNING

VALIDATE, DIVE DEEPER

THEY CARE, BUT STILL DO NOT

KNOW HOW BIG PAIN IS

Exp. 1

5

WHO HAS BIGGER PAIN?CUSTOMER

PROBLEM

SOLUTION

Exp. 2

RISKIEST ASSUMPTION

18-24 YR+ ON SOCIAL MEDIA

+ MUSIC IS PART OF ID

TEST & MEASURE

CATCHIN UP ON SHOWS THEY MISSED

WILL THEY SPEND TIME ON CATCHING UP ON SHOWS

MISSED?

INTERVIEW:5/10

SEARCH ENGINE FOR FINDING

CONCERT VIDEOS

6

RISKIEST ASSUMPTION

TEST & MEASURE

RESULTS

LEARNING

Only 1 INVALIDATED!

NOT PAINFUL ENOUGH

WILL THEY SPEND TIME ON CATCHING UP ON SHOWS

MISSED?

INTERVIEW:5/10

Exp. 2

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WHO HAS BIGGER PAIN?CUSTOMER

PROBLEM

SOLUTION

Exp. 3

RISKIEST ASSUMPTION

EVENT ORGANIZERS WHO SEEK SPONSORS

TEST & MEASURE

MANUALLY CREATING PDF’S FOR SPONSORS

EVENT ORGANIZERS WILL PAY FOR DATA

TEST SALE

AUTOMATE THEIR SPONSORSHIP

FOLLOWUP

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RISKIEST ASSUMPTION

TEST & MEASURE

RESULTS

LEARNING

VALIDATED!

NEXT STEP: PROVE IT ON WIDER SCALE

Exp. 3

EVENT ORGANIZERS WILL PAY FOR DATA

TEST SALE: 1 ORG WILL PAY 20USD PER PAGE

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RESULTS

• Angel investors gave money

• 80 000 unique visitors monthly

• 30-40 events summarized daily in June

10

CUSTOMER

PROBLEM

SOLUTION

Exp. 1

RISKIEST ASSUMPTION

TEST & MEASURE

Exp. ..

RESULTS

LEARNING

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LESSONS LEARNED

Pick easier targets

• big pain (pain, gain, job done)• willingness to pay (pays for

alternatives)• minimal behavior change or does not

loose anything

YOUR SOLUTION CAN BE…

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LESSONS LEARNED

Getting feedback is not easy

• customer is not going to the analysis job for you

• prefer “how” & “what” questions• let tell the story: how customer currently

solves the problem?• what problems they have? how often?

how big problem it is?• have customers searched for better

solutions? If not, why not? If yes, what have they found?

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LESSONS LEARNED

Customer development is a messy process

• are we validating a problem

• are we validating a customer

• are we validating a solution

• are we validating everything at the same time?

Possible solution: have an anchor

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LESSONS LEARNEDCustomer development is a messy process

Dumbledore tool & field

Psychology Bus tool

Funderful solution

Presenters feedback tool & field

Health Connect tool & general problem

Whatson general problem

Switch general problem

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HOW TO VALIDATE MY BUSINESS IDEA?

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1. ANALOGS AND ANTILOGS

• Google direct competitors and indirect alternatives

• Find good examples to copy (analogs) and bad examples to avoid (antilogs)

ACTION:

• Google individually (1-2 people)

• ask people to name analogs and antilogs

TIME TO SPEND: up to 1 HOUR

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2. SEARCH TEST

• Are people searching online for the solution?

• Google Adword Tool• Quora• Facebook groups• Forums, etc

ACTION: ask for help from others

TIME TO SPEND: up to 1 HOUR

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3. LIVE FEEDBACK

• Face-to-face interviews

• Phone or Skype or Hangout interviews

• Is there a problem? How often happens? • etc.

ACTION: conduct 5-15 interviews

TIME TO SPEND: at least 2 HOURS

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3. LIVE FEEDBACKUse our sponsor (350 employees)

Dumbledore HR

Psychology Bus HR

Funderful any alumnus

Presenters feedback sales

Health Connect ? any person/ ?client

Whatson ? any person

Switch ? client

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4. TEST SALE

• Facebook page or landing page (quickmvp.com/)

• sign-ups and e-mails• pre-payment or actual sale

• Sales portals: www.holvi.com (free online shop), www.cherry.ee (discount outlet), www.indiegogo.com (crowd funding)

• Test sale in person

• contract• pre-payment or actual sale

ACTION: Just do it!!!

TIME TO SPEND: at least 2 HOURS

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MATERIALS• steveblank.com/category/lean-launchpad/ (more cases)

• customerdevlabs.com/ (more tips!)

• www.leanstartupmachine.com (more videos)

• blog.javelin.com/ (more lessons learned)

• lmalmanza.wordpress.com/2013/02/26/the-first-steps-validation-board/ (more tips!)

Google keywords:

• Customer validation

• Validation board

• Lean startup