Author: Savvy

Are you inadvertantly sabotaging your customer development? Here are some anti-patterns to watch out for and defeat.

Steve Blank always liked to say, “In a startup, no facts exist inside the building, only opinions.” The lean startup movement encourages that you get out of the building with a mixture of experiments and qualitative research. Doing qualitative work gives you several benefits. It helps you learn how others experience and think about your problem space. It helps you uncover evidence about your assumptions, or lack thereof.

My post “12 tips for customer development” tries to help entrepreneurs and product designers understand how to do qualitative work more effectively. But people struggle with this area. Here are some anti-patterns to watch out for and defeat.

1. You treat speculation as confirmation

Here are some question types that I don’t like — and if you ask them, you should heavily discount the answer: “would you use this?” “would you pay for this?” “would you like this?”

I can’t say that I *never* ask these questions, but I always prefer behavioral questions over speculation.

As contrast, here is a behavior-focused interaction: “Tell me about a time when you bought airline tickets online.” “What did you enjoy about the process? What frustrated you about the process?” “What different systems or methods have you tried in past to book tickets?”

2. You lead the witness

Leading the witness is putting the answer in the interviewee’s mouth in the way you ask the question. For example: “We don’t think most people really want to book tickets online, but what do you think?” Examine both how you phrase your questions and your tone of voice. Are you steering the answer? Ask open-ended, neutral questions before you drill down: “what was that experience of buying online tickets like?”

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At Buffer, we have always taken a lot of pride in thinking that we were following the Lean Startup methodologies very closely. However we were not connecting with our customers enought throughout development. Twitter helps us quickly get customer feedback so we can continue to build products people love.

At Buffer, we’ve recently made a big change to how we build products and use the Lean Startup methodologies much more closely.

It followed what I’d call a phenomenon that Hiten Shah, one of our closest advisors mentioned to us in a mentoring session:

“There’s a strange thing I see. Startups do customer development once then don’t make it part of the product process.” – Hiten Shah

At Buffer, we have always taken a lot of pride in thinking that we were following the Lean Startup methodologies very closely. That’s why this line from Hiten hit me like a brick. We weren’t really being lean and avoiding waste if we weren’t doing extensive customer development.

From that day a few months ago, we started to double down and put almost every single assumption or hypothesis of our business through customer development interviews first. And I believe it’s been one of the best changes we’ve made recently.

I’ve personally never felt closer to our customers and their problems.

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So you’ve done a bunch of interviews. How do you know when to stop, and then start building? Use this article to learn a couple of different methods.

Robert Graham of WhiteTail Software, and this awesome guest post on cold calling asks:

@whitetailsoft https://twitter.com/#!/whitetailsoft When do you stop #custdev efforts and build the product? I’ve been wrestling with the details of #leanstartup.

I talked to 30 people before I realized that a certain idea of mine was a crappy idea, and about 40 people before starting WP Engine. Here are the details of both of those customer development experiences. 

But there’s no one “number.” Food on the Table — a now-famous lean juggernaut in Austin run by IMVU alum Manuel Rosso — talked to 120. Capital Factory 2011 alum GroupCharger talked to 50 before building and another 50 after that. At AppSumo, another Austin startup with startling growth, Noah Kagan talked to 0 people initially, but maintains ruthless pressure on a tight and measurable product.

There’s two ways to decide when you should stop talking and start building.

Way #1: Go until boredom.

Recently at WP Engine I did some brand new customer development for a new project that we think will revolutionize WordPress blog management. I spent 30 hours talking to WordPress consultants, but I didn’t have “30” preset in my head. I knew to stop when the process got boring.

The first dozen calls were a blizzard of activity — my note-taking fingers furiously trying to keep up with new information being revealed, theories getting alternately validated and blown away, unexpected customer segments arising, and new ideas recombining from the primordial soup generated by introspective, honest, provocative conversation with thoughtful people who were “living the pain” we’re trying to solve.

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Want to know the wrong way to approach customer interviews? This article explains the top three ways to fail at customer development.

Fail #1 – You Don’t Listen

The customer confirmed all of our hypotheses! We’re awesome! I mean really, who wouldn’t want a square disco ball? Let’s go build it!

Bullshit.

In the unlikely event that your revolutionary new product, the square disco ball, is actually a customer need, the customer will still challenge your expectations of what the product should be with either:

1) Pricing discrepancies – “I would’ve paid more than $2000 for that.”
2) Unexpected use cases – “This will make a great piñata!”
3) Marketing material miscommunication – “What is this disco thing of which you speak?”
4) Ridiculous feature requests that no one else will want – “Why doesn’t this disco ball come in a nice plaid?”

If you take the time to talk to customers and learn absolutely nothing new about your product, even if only a few random brainstorm ideas, then you probably were talking to not with the customer.

So congratulations, you made a sales call. You were probably leading the witness the entire time. You did not do a customer development.

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Poor customer development is the single biggest reason products fail. Jakob Marov argues that customer development is crucial, especially in the Saas B2B space.

Customer development process. Everybody talks about it. Everybody.

Yet surprisingly, not that many people actually walk the walk.

I understand it – the process is freakishly gruelling. I hated it, for example: why would anyone half sane try her best to dismiss her shiny new idea. To find that nobody, not even her mom, cares about it.

It’s against human nature to seek negative feedback. That’s why so few people do it. We rather just rush into building our dream product. It’s sexier.

And it’s probably also the single biggest reason why most new products fail. Now, after having done it a couple of times, I would argue that customer development is crucial, especially in the SaaS B2B space. And not just to learn whether your idea makes sense.

No, the potential learnings go way beyond that. Here are my four biggest benefits of a well thought-through customer development process:

  •  Get initial customers: Fast track your way to the first 10 customers.
  • Meet potential advisors: Get to know influencers and opinion leaders that know your industry and could eventually help you as advisors.
  • Connect with future employees: Meet potential hires that work or have worked in a similar industry.
  • Build a network of super fans: People that can help you spread your content marketing and help with customer and hiring referrals.

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We live by our To Do list. A simple tool that is often not used successfully. Here’s Five simple to-do list steps that will increase your productivity while decreasing your negative mind chatter. It’s a win/win.

As an entrepreneur, how can you be productive and ensure that you are focusing on the right areas?

Every entrepreneur is a self-starter; it tends to come with the territory. Being an entrepreneur also means that you don’t necessarily have a daily playbook to follow. Many entrepreneurs are breaking new ground and learning through trial and error. It can be daunting, and even a bit scary, to determine where to focus your energy on any given day.

Should you have your team spend the day creating marketing copy for that new product, or reaching out to customers to get feedback on an existing product? It can feel as though there is never enough time to meet all the demands of the business.

One tool many entrepreneurs use to get organized and improve focus is to create a To Do list. This can be a very helpful tool. Unfortunately, in my opinion, about 85% of the population is using the To Do list in a completely ineffective manner. Here’s why: most people are using their To Do list as a measure for self-worth…and this is a huge mistake.

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What correlates the most to success — team, product, or market? Or, more bluntly, what causes success? And, for those of us who are students of startup failure — what’s most dangerous: a bad team, a weak product, or a poor market? Marc Andreessen reveals the ONLY thing that matters in the best article we’ve ever read on product/market fit.

This post is all about the only thing that matters for a new startup.

But first, some theory:

If you look at a broad cross-section of startups — say, 30 or 40 or more; enough to screen out the pure flukes and look for patterns — two obvious facts will jump out at you.

First obvious fact: there is an incredibly wide divergence of success — some of those startups are insanely successful, some highly successful, many somewhat successful, and quite a few of course outright fail.

Second obvious fact: there is an incredibly wide divergence of caliber and quality for the three core elements of each startup — team, product, and market.

At any given startup, the team will range from outstanding to remarkably flawed; the product will range from a masterpiece of engineering to barely functional; and the market will range from booming to comatose.

And so you start to wonder — what correlates the most to success — team, product, or market? Or, more bluntly, what causes success? And, for those of us who are students of startup failure — what’s most dangerous: a bad team, a weak product, or a poor market?

Let’s start by defining terms.

The caliber of a startup team can be defined as the suitability of the CEO, senior staff, engineers, and other key staff relative to the opportunity in front of them.

You look at a startup and ask, will this team be able to optimally execute against their opportunity? I focus on effectiveness as opposed to experience, since the history of the tech industry is full of highly successful startups that were staffed primarily by people who had never “done it before”.

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The most important part of the market validation is the questions that you ask and how you ask them. Tips on understanding the emotions of your target market.

Overview and Objective

Market validation is a series of interviews of people in your target market. These interviews are used to test a product concept against a potential target market.

A market validation should always be done before introducing a product. Ideally, market validation should start much earlier in the process. A better understanding of the target market will help build a better, more focused product. A market validation will take a minimum of four weeks, more likely take six to eight, depending on the number of interviews and the number of people performing the interviews.

Pick one objective for your market validation. Either verify the target market, or verify the positioning and value statements. Trying to do both of these in a single market validation will create too many variables and weaken the value of the market validation. Write down your objective and make sure everyone involved agrees on the objective before proceeding.

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Social media marketing has a lot to offer for B2B companies. In fact, according to Think With Google, 81% of millennials have a say in purchasing decisions. Here’s how your B2B brand can get on board.

Social media is not just for B2C anymore. B2B companies tend to focus exclusively on targeting the highest-level executives because of the misconception that those are the main influencers in the purchasing decision.

Because of this reason, most B2B tech companies will not attempt to dip their toes in the social media waters, and those who sort of believe in social media will limit their power to LinkedIn exclusively. However, the reality is that social media marketing has a lot to offer for B2B companies. In fact, according to Think With Google, 81% of millennials have a say in purchasing decisions. So B2B brands better get on board.

Today, we don’t want to focus only on social media strategies for B2B; there are a lot of helpful resources addressing this already.

Social channels are a great tool to generate awareness through preference, and this is something that large B2B industries have started to realize. According to the 2016 B2B Technology Content Marketing report, from Content Marketing Institute, 96% of technology marketers use social media content as their main content marketing tactic.

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Although Customer Development can give us tremendous insight into market problems, it takes a lot of time – time that’s wasted if we do it incorrectly. Worse yet, poorly worded questions can cause us to reach wrong conclusions about what people want.

The best questions don’t require customers to speculate about their behavior. Kevin Dewalt shares real examples of his bad questions and mistakes and offers some better alternatives.

If you’re starting Customer Development you’re getting ready to talk to a lot of potential customers. You started with an an idea, wrote down your key assumptions, and started flipping through contacts to see who you can interview.

Awesome! You’re off to a great start. Talking face-to-face with customers brings us insight we can’t get from surveys and clicks.

Unfortunately, conducting face-to-face customer development interviews is a skill that takes practice. I’ve been doing it for 5 years and I’m still learning. So many times I’ve asked the wrong questions and later realized I was wasting time or – worse yet – coming to incorrect conclusions and building the wrong products.

“Learn Nothing” Questions

I call “Learn Nothing” questions those that don’t result in any learning, just wasted time.

“What do you think of my idea?”

I LOVE talking about startup ideas. To quote my friend Patrick Smith , “talking about startups is entertainment like sports”. Fun, yes. Validated learning? No. What do you think of my startup idea? is useless because if my idea is great people will like it. If it sucks, surely some people will still like it.

“If you could wave a magic wand…”

I know Steve Blank calls this the “IPO question”. I call it the “sit back and watch people ramble about things I have no chance of building” question. I’ve asked this question at the end of meetings and – after some funny looks – watched somebody ramble. It just hasn’t worked for me.

Too Broad Questions“Can you tell me about your problems with medical bills?”

I asked this question a few times before realizing that asking people to talk about problems just results in venting and no learning. This is particularly true with complex, personal, emotionally charged problems like those in health care. “Well there was this one time….and then…but what really got me mad…”

“False Positive” Questions

Wrong conclusions are worse than no learning at all, and I call “False Positive” questions those designed to get customers to tell us what we want to hear.

All of us want our product ideas to be right – I want it, you want it, Steve Jobs wanted it. While our enthusiasm is our biggest asset, it is dangerous in customer development because most people don’t want to disappoint us.

Leading Questions

I’m building a product to help people manage medical bills. Can you tell me…”

Any question that starts with the solution already biases people’s expectations. Someone hearing this question might focus on a minor problem they had with medical billing in the past and convince us that it is a major source of pain.

Better: Skip the “I’m building a…” intro.

Questions that Put People on the Defensive

“How do you reconcile your HSA account with your bills, receipts, and statements to make sure you’re optimizing future tax savings?”

The “How do you do something complex to achieve results” questions can put people on the defensive. You can imagine someone thinking, “You mean I’m supposed to be doing something with that paperwork to save money on taxes? Oh no, I’m such an idiot, what am I doing wrong?”

Of course customers will be biased to tell us they need help with something after we cause them to doubt their own competence.

Better: “What do you do with that HSA paperwork?”

Questions Leading to Answers you Want to Hear

“Would you take a picture of a medical bill with your iPhone?”

This question sets up the prospective customer to tell us what we obviously want to hear.

Better questions would give us insight into how they currently work and whether the extra steps and inconvenience of using our products gives a promise of a big return.

Better: “Do you scan or file medical bills you get in the mail?”

This question is better because it gives someone the opportunity to disappoint us without realizing it, what Rob Fitzpatrick http://vimeo.com/40192415 calls the “mom test”.

In this case, suppose your key assumption is that managing bills via in iPhone app saves time over filing or scanning. Should they respond, “Scan them? I’m too busy for that, I don’t even open them,” you’ve just invalidated your whole company vision with one question.

The Key to Effective Customer Development

In retrospect, the root of my bad questions was that I only had an idea – I didn’t have specific hypothesis I was trying to validate. I tried to replace the hard work of documenting and testing assumptions with meetings and simply wasted time.

Always remember that Customer Development is a big commitment that takes a huge amount of time, time best spent on something else if you’re not doing it right.

Before you line up a bunch of meetings and spend weeks talking to people, take some time to carefully consider what you’re going to ask and why. The key is to make sure your questions are designed to test your assumptions. I write them down and you should too.


“Bad Customer Development Questions and How to Avoid My Mistakes” was originally published by KevinDewalt.com on January 21, 2013.
By: Kevin Dewalt, 20 years as a startup hacker, founder, & investor.


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