Lean customer development
Crafting must-have products
Description
Most companies develop products first, then figure out how to market them later. This can lead to solutions without problems. A better approach is "lean customer development" - learning what customers need and delivering what they'll pay for.
Lean customer development has five steps: - Form a hypothesis about what customers want - Find potential customers to interview - Ask the right questions to validate your hypothesis - Make sense of their answers to see if your hypothesis is correct - Build a minimum viable product to keep learning what customers want
"Every hypothesis you invalidate through customer conversations prevents you from wasting time building a product no one will buy. If your hypothesis is wrong, you modify it based on what you learned. Those course corrections lead to products customers want and will pay for."
Table of contents
01Formulate hypotheses
Everything you do in customer development centers on testing hypotheses about what customers are thinking and doing. You start by identifying your assumptions and articulating an initial hypothesis about the type of customer you want to serve. This process of writing down your assumptions shouldn't take long, but few teams remember to do it.
The first step in lean customer development is forming an initial hypothesis about what customers want. This doesn't need to be complex or time-consuming. You really only need to do three exercises:
Identify your assumptions
You're likely already making assumptions about how your future customer thinks and acts. Spend time articulating what those assumptions are and putting them on paper. Questions to surface those assumptions include:
- customers want to _____ but can't. - once customers use this product, they will _____. - customers are already using _____. - this will be useful because _____.
02Find prospective customers
Identifying early adopters to validate your hypothesis
You have a hypothesis for a new product or service. Now it's time to validate that hypothesis by talking to potential early adopter customers. The more conversations you have, the better, so cast a wide net. Look for people who stand to benefit greatly from your offering — the earlyvangelists.
Approaching strangers about a non-existent product sounds intimidating. But you only need to have meaningful conversations with likely earlyvangelists. Where can you find them?
Leverage your network
Tell friends and colleagues about your idea. Ask if they know anyone frustrated by the problem you aim to solve. Assure them you won't waste their contacts' time. If they make promising introductions, show gratitude.
Search linkedin
Find first- or second-degree connections in your target segment. If a couple engage, ask who else they'd recommend. Send brief screening surveys to gauge interest before longer discussions.
Engage quora users
Quora's vocal, passionate users can be earlyvangelists. But they protect their community. Establish your credibility there before outreach. Upload a photo, complete your profile, and contribute value to discussions.
Attend industry events
Your customers congregate at conferences and trade shows. Rent a booth or chat where they network, like the starbucks near a convention center. Go where they go.
03Ask the right questions
Effective customer interviews start with five basic questions:
1. What is the hardest part of your day? 2. What do you wish existed to make your life easier? 3. What frustrates you most about [the process]? 4. Walk me through how you currently [do the process]? 5. What prevents you from [achieving your goals]?
As the customer responds, ask follow-up questions to uncover more details:
- Can you explain more about that process? - Who else is involved in making that decision? - How long did it take last time you did this? - The goal is to understand the customer's current behaviors and pain points. Key things to uncover:
04Interpret the answers
Your customer interviews provide the raw data needed to validate (or invalidate) your hypothesis. Look and listen closely for signs that the customer confirms there is a problem, has tried solving it already but existing solutions fall short. After 10 or so interviews, useful patterns should start emerging. Stop interviewing when you stop hearing surprising new things.
As a general rule of thumb:
After 2-3 customer interviews, pause and ask yourself: "Am I learning what I need to?" If not, adjust your questions. Within about 5 interviews, you should better identify who will have genuine interest in your solution. By 10 interviews, patterns should be emerging. You'll have a more realistic sense of whether your original assumptions hold true and if your hypothesis is on track.
In analyzing your interview data, you want to establish:
- This is definitely a problem customers care about. - Customers believe the problem is worth solving. - Customers have tried solving this before without success. - No external factors prevent customers from using a solution.
05Build an mvp to keep learning
Once you validate your hypothesis about what customers want, the next step is to build a minimum viable product (MVP). The goal of the MVP is to continue learning from potential customers by getting feedback on a basic prototype. Based on how customers actually use and respond to the MVP, you gain critical insights into which features to prioritize for the final product. The key is continuous communication with customers, incorporating their ideas into iterations of the product.
The purpose of an MVP is maximizing learning while minimizing risk and upfront investment. It takes your hypothesis and makes it tangible so customers can interact with it. This allows you to validate assumptions and answer key questions: Will the target customers see value in this offering? How much are they willing to pay? How do they measure value from this type of product? What pricing model aligns with the value provided?
The "minimum" aspect focuses on efficient learning. The "viable" aspect ensures it provides enough core functionality for customers to adequately evaluate the product concept. As CEO Kevin DeWalt explains, "Stop worrying about the perfect set of features and build an MVP to get real customer feedback. That's the only way to drive ongoing discovery."
There are six common MVP approaches:
1. Pre-order MVP: Describe the intended solution and assess demand by taking pre-orders before building it. This indicates customer commitment to purchase. 2. Audience building MVP: Create an online gathering place for potential customers to express interest and provide feature ideas. Observe what prospective users ask for. 3. Concierge MVP: Manually deliver the solution as a customized service. Not scalable, but allows customers to experience it. 4. Wizard of Oz MVP: User believes the product works automatically, but it is secretly operated by humans. Enables observation of customer behavior. 5. Single use case MVP: Solve one piece of the problem to validate interest and get feedback. May iterate toward complete solution. 6. Existing product MVP: Repurpose components of current tools to create a modified MVP. Leverages existing solutions to validate ideas.
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