Course 4 - Intro Customer Development
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This document provides an outline for a class on customer development and product development. It discusses key concepts like crossing the chasm, customer discovery, customer validation, and the business model canvas. The document emphasizes the importance of focusing on developing customers, not just products. It recommends designing for customers from day one and matching product development to the iterative process of customer development.
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Course 4 - Intro Customer Development
- 1. Intro to Customer Development Class 4, UCN, Antofagasta, 2011 1
- 2. Outline Steve Blank How it has been done Product / Customer Development Crossing the chasm Customer Discovery Customer Validation Business Canvas
- 3. Steve Blank
- 4. Bases
- 5. How it was done • High burn rate • Swing for the fences • Full management teams • Assume customer is known • Assume features are known • Assumes growth is by execution
- 6. Crossing the Chasm: Moore
- 7. Concept Product Alpha/Beta Launch / /Seed Developm Test 1st Ship. Round ent Branding Positioning Expensive Launch Marketing Create PR Event Materials Early Buzz Create Demand Build Hire Sales Organizati Sales Boss on Hire Staff Work Leads Close 1st Hire Biz Biz Dev Ship. Dev Boss Deals
- 8. Problem: Expensive Failure Built and they will come syndrome Expenditure is loaded upfront (1st Shipping): Product development (p.e. design, software dev) Infrastructure (p.e. warehusing, server clusters) Sales & marketing departments Hiring and executing according to “plan” “now we need an API to integrate with...” Hard to steer a cruise ship
- 9. Fix? Focus on Develop Customers not only the Product Design for customers Customers from day One finaly, match Product to Customer Development
- 10. Pair Product to Customer Development Concept Product Alpha/Beta Launch / /Seed Developm Test 1st Ship Round ent
- 11. Concept /Seed Product Developm ent Solution Know Alpha/Beta Test Problem Know Launch / 1st Ship
- 13. SCRUM Practices Product Backlog Current prioritized list of work to be done Effort Estimation iterative on Backlog items Sprint 30 day / 15 days iteration Sprint Planning Meeting decide goals for next sprint and how team will implement Sprint Backlog Product Backlog items for sprint Daily Scrum meeting what doing, what will do, and any problems Sprint Review Meeting present results of sprin
- 14. Split-test (A/B) experimentation Extremely rapid deployment Continuous deployment, if possible Deploy when core ready Just-in-time architecture and infrastructure Incremental investment for incremental benefit Five why's – ask five times to solve problems Use defects to drive infrastructure investments E.g. Vendder had to CDN before coming to Chile.
- 15. Customer Development Keys Parallel process to Product Development Measurable Checkpoints Not tied to FCS, but to customer milestones Notion of Market Types to represent reality Emphasis is on learning & discovery before execution
- 16. Search for a Biz Stop selling, start listening There are no facts inside your building, so get outside Test your hypotheses Two are fundamental: problem and product concept Continuos Discovery Done by Founders
- 18. Phase 0: Get buy-in Convince your-self Convince others Gather a team Mission statement & values
- 19. Phase 1: State Hypoteses Product Customer/Problem Distribution/Pricing Demand Creation Market Type Competition
- 21. Product Hypoteses Features Benefits Product Delivery Schedule Intellectual Property Total Cost of Ownership Dependency Analysis
- 23. Customer/Problem Hypothese Types of Customers/Archetypes Magnitude of the problem Visionaries & Early Evangelists A Day in the Life of a customer Organizational impact ROI Justification Problem Recognition Minimum Feature Set
- 24. Early Evangelist
- 25. Distribution / Pricing Hypotheses Distribution Model Distribution Diagram Sales Cycle/Ramp Channel strategy Pricing (ASP, LTV) Customer Organization Map Demand Creation
- 26. Demand Creation Hypotheses How do competitors create demand? How will you? Dave McClure’s AARGH model Who are influencers/recommendors? Key trade shows? Key trends? Start assembling advisory boar
- 27. Exit for Customer Discovery What are your customers top problems? How much will they pay to solve them Does your product concept solve them? Do customers agree? How much will they pay? Draw a day-in-the-life of a customer before & after your product Draw the org chart of users & buyers
- 30. CUSTOMER SEGMENTS which customers and users are you serving? which jobs do they really want to get done?
- 31. VALUE PROPOSITIONS what are you offering them? what is that getting done for them? do they care?
- 32. CHANNELS how does each customer segment want to be reached? through which interaction points?
- 33. CUSTOMER RELATIONSHIPS what relationships are you establishing with each segment? personal? automated? acquisitive? retentive?
- 34. REVENUE STREAMS what are customers really willing to pay for? how? are you generating transactional or recurring revenues?
- 35. KEY RESOURCES which resources underpin your business model? which assets are essential?
- 36. KEY ACTIVITIES which activities do you need to perform well in your business model? what is crucial? 36
- 37. KEY PARTNERS which partners and suppliers leverage your model? who do you need to rely on?
- 38. COST STRUCTURE what is the resulting cost structure? which key elements drive your costs?
- 39. key value customer activities proposition relationships key customer partners segments cost revenue structure key streams resources channels 39 images by JAM
- 40. 4 ÁREAS Cómo Qué Quién $
- 41. 9 Guesses Gues Gues Gues s Gues s s s Gues s Gues Gues s s Gues Gues s s
- 42. Turning Hypotheses to Facts Test Hypotheses: • Product • Market Type • Competition
- 43. Test Hypotheses : • Problem • Customer • User • Payer
- 45. Test Hypotheses: Test Test • Demand Hypotheses Test Hypotheses: Creation : Hypotheses: • Product • Problem • Channel • Market Type • Customer • (Customer) • Competitive • User • (Problem) • Payer Test Hypotheses: • Channel Test Hypotheses: Test Hypotheses: • Size of Opportunity/Market • Pricing Model / Pricing • Validate Business Model
- 46. Test Hypotheses: Test Agile Demand Test • Hypotheses Developme Creation Test Hypotheses: : nt Hypotheses: • Product • Problem • Channel • Market Type • Customer • (Customer) • Competitive • User • (Problem) • Payer Customer Developme Test Hypotheses: nt Team • Channel Test Hypotheses: Test Hypotheses: • Size of Opportunity/Market • Pricing Model / Pricing • Validate Business Model
- 47. Test Hypotheses: Test Agile Demand Test • Hypotheses Developme Creation Test Hypotheses: : nt Hypotheses: • Product • Problem • Channel • Market Type • Customer • (Customer) • Competitive • User • (Problem) • Payer Customer Developme Test Hypotheses: nt Team • Channel Test Hypotheses: Test Hypotheses: • Size of Opportunity/Market • Pricing Model / Pricing • Validate Business Model
- 48. The Pivot • The heart of Customer Development • Iteration without crisis • Fast, agile and opportunistic
- 50. Extra
- 52. Startup Metrics for Pirates • Acquisition: users come to site from various channels • Activation: users enjoy 1st visit: "happy” experience • Retention: users come back, visit site multiple times • Referral: users like product enough to refer others • Revenue: users conduct some monetization behavior AARRR ! (note: If you’re in a hurry, Google “Startup Metrics” & watch 5m video)
- 53. AARRR!: 5-Step Startup Metrics Model SEO Campaigns, SEM PR Contests Biz Social Network Dev s Blogs Affiliate O Q N U A C S T I I I Apps & s Direct, Widgets Email Tel, TV Viral Domain Loops s Emails & Ac Homepage / Emails & Alerts tiv Landing Page widgets RE LRF ati AE R Product on Blogs, RSS, Affiliates, News Feeds Features Contests Ret enti Biz Dev on Ads, Lead Gen, Re System Events & Subscriptions, ve Time-based ECommerce nu Features e Website.com $$ $