Wouldn't it be great if there was a way to avoid spending time and money developing products or services customers may not want? There is: it's called customer development and Under30ceo.com recently posted an enlightening article about it. Developed by serial entrepreneur Steve Blank, customer development is a process for discovering and validating market demand for an idea and determining the right product features needed to meet customer needs. This helps to take some of the risk out of starting a new business, it gives you a way to figure out more information about whether your business is meeting a need in the market. Here are ten key principles and tips for practicing customer development effectively:
1.) Don't Pitch Your Idea at First
Pitching an idea instead of doing a thorough customer development process will result in lesser learning and getting biased answers that can lead you down the wrong path. The goal of customer development is not just to validate or invalidate an idea, it's to learn what is valuable to customers and optimize the offering.
2.) Try to prove yourself wrong
People don't like to fail or get rejected. In the case of a startup, an entrepreneur may have a "vision" for what they want to build and accomplish, and are probably eager to bring it to life. However it is important to remember that you don't want to waste your time and money on something that people don't want. Proving yourself wrong can save you a lot of time and money. Most people want to be successful or to create a successful business, if that is your end goal then don't look at doing customer research as an impediment to your dream, it is an asset because it helps you more easily reach your ultimate goal of being successful.
3.) Talk less, listen more
The goal of customer development is to learn from your customers about how you can build the best product possible. Learning happens when you are listening, not when you are talking. You listen when you learn and it is important to listen actively and focus on what is being said rather than thinking while you are listening.
4.) Ask open-ended questions
Open-ended questions get people talking way more than yes-or-no questions do. The goal of conducting customer development interviews is to learn what you need to build products people love. Open-ended questions will help you gain the right insight. Don't be afraid to ask follow up questions if you are unclear or if you feel that you need more information.
5.) Get real proof
Want to gain confidence that you're truly building a product that people want? Proof can come in the form of pre-sales, referrals to people you know who could be customers, following up to get multiple rounds of interviews, or even just an email address. Saying something is great is a lot different than actually paying for it.
6.) One-on-one and in-person is best
Many people rely on online surveys, secondary research, focus groups, or even anecdotal interviews with people that aren't actually customers. However one-on-one, in-person interviews are best. Focus groups can lead to biased responses, especially if it's about a personal matter.
7.) Abstract everything by a level
Abstract everything by a level to gain deeper insights and to avoid biased responses. When you start talking about specific problems or solutions, customers are more prone to agree with you. Abstracting everything by a level will allow your customers to talk in more detail, which means you can gather deeper insights. People may agree with you without actually meaning it for several reasons such as confirmation bias, wanting to keep someone happy or because they think it is what you want to hear. While they may not mean any harm by doing this, it can actually create harm because it keeps you from getting the real data that you need.
For a more detailed explanation of these customer development tips, click here.