Tag: Customer Discovery

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A product built through biased research will die a painful death from poor adoption.

Cognitive biases are among the imperfections that make us human, but they are bad news for product marketers. A bias, simply put, is an idea or prejudice that the respondent or the researcher brings to the research process and that can distort research findings.

Biases can affect all phases of customer development, from survey design to data collection and analysis. Unless the product marketer is aware of these biases and takes steps to reduce their impact, the results of customer discovery may become misleading.

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Two of the biggest political events of 2016, the British exit from the EU and the U.S. elections, have put a big question mark on the value of big data. Pollsters predicted a more than 71% chance that Hillary Clinton would win the elections, versus a 28.6% probability of a Trump victory. Across the Atlantic, the markets had predicted on the day of the referendum an 85% likelihood that Britain would remain in the EU. So what went wrong?

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According to the Economist the explanation of the spectacular failure probably lies in the cognitive biases people have. These biases affect the survey respondents as well as analysts, prompting the former to express opinions they don’t actually hold and the latter to interpret data based on faulty assumptions.

The LA times, which was almost the only publication that predicted Trump’s victory, said their polls were successful because they identified and removed the social desirability bias, which was causing Trump supporters to be less comfortable about revealing their vote to telephone pollsters. The analysts’ judgment was probably clouded by confirmation bias, which causes researches to form hypothesis and beliefs and give more importance to facts that confirm their preconceived ideas.

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But how do you do market validation? This week we spoke with Urko Wood an expert in growth strategy and innovation who helps companies determine where to focus and what to do to drive growth through innovation.

Urko, how do you validate a market?

It all depends on what you mean by “validate a market.” There are two different kinds of market validation. There’s validating the market demand and then there’s validating the solution. These are two very different things and, consequently, how we go about them should be different, too. I see a lot of large companies and startups fail to make this distinction all the time and, consequently, they fail with new products because they’re going about the market validation and innovation process all wrong.

Can you tell us more about these differences and how you would go about validating the market in each case?Continue Reading..

Fully understanding your customers and the challenges they face might just be the number one key to success as far as product development goes. In the end, customers are the ones who will decide whether to buy a product or not. Here’s how to focus on them first.

If I had asked people what they wanted, they would have said faster horses.” – Henry Ford

Henry Ford famously said that he invented the Ford T without asking for any feedback from his potential customers. According to him, people were not capable of thinking about radical innovation.

Since then, his words have sunk into the minds of many product teams that now deeply believe they should never listen to their customers. They’re afraid it might slow their innovative thinking.

However, we might be misunderstanding his words. There is a difference between deeply understanding your customers by asking them what they want and doing exactly what they say. It’s true that you shouldn’t always give your customers what they ask you for.

But, fully understanding your customers and the challenges they face might just be the number one key to success as far as product development goes. In the end, customers are the ones who will decide whether to buy a product or not, so it’s always a good idea to focus on them first.

But, how do you get to really understand your customers without quickly losing yourself in assumptions? This is where customer development comes in.

What Is Customer Development All About?

We are not trained to think about customers in a disciplined way. We have processes for product development, for sales, and for marketing. But, when it comes to our very own customers, we usually hide behind assumptions and guesses about what they need and want.

Customer development tries to fix that by pushing producers to understand customers as much as they understand the market they are in and the technologies they are using.

The idea being that you need to build your product or service for people who are or will be truly passionate about it. To do that, you need to get out of your office and check all the theories you have about your product against reality. It’s all about focusing on your customers.

The methodology is quite simple. Pick one customer that is or will be truly passionate about your product, build that product, and then iterate to improve it.

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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.

Shut up and learn to listen.Continue Reading..

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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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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