Basel: In the book, we'd like to hear from you on what customer development is, and what customer development is not. I know you have this section in your book and it's exciting how you play out your thoughts about what it is and what it's not.
Brant: So, customer development is a way to engage with your customers to learn whether your idea is valid at all. You're trying to discover whether there is, in fact, a problem that you're trying to solve, and whether the customers feel any passion or pain deep enough around that problem that they would actually seek to use your solution. The idea really is that you can engage your customers in a way to, one, learn: are you building a product anybody cares about? And, number two: can you reach those people? What are the effective ways of marketing and selling to those people?
Those are not just principles of execution. You can't just go to your toolkit and pull out your marketing and your sales activities and assume that that's what's going to lead your customers to your doorstep. Those things are actually learnable. You want to learn them before you execute them. That's literally what customer development is about.
Discovery is figuring out: is your product at all interesting? Then, the validation part of it is you start putting these practices into work, and you're measuring to see whether people are engaged with your product or whether you've got the marketing funnel correct.
The later two stages are not ones that I'm very active on, because it means you've already nailed it. It's time to scale your company and you're starting to input processes, so that you can blow up your company. That's in a nutshell what customer development is. What it's not is, and this is sort of the tricky point for a lot of entrepreneurs, it's not building what your customers ask you to build. Customer development is not about feature mongering.
It's not about getting a stenographer and asking your customers, "What would you like them build?" Because anybody who has worked with customers knows, customers actually often don't know what they want. So, they're going to ask for features X, Y and Z, but what your job is to understand is: why are they asking for those features? The idea is to empathize, to understand deeply what the problems and the pains are of your customers. Then it's up to your vision to build the solution.
So, vision is an important part of entrepreneurship. Everybody knows that customer development is not counter to that. It's using your vision in order to figure out what to build, based on some of the things that your customer is going through and experiencing.
Basel: This is really interesting. Can you give us an example of a business case that went on that way?
Brant: That actually used customer development? Or, didn't use customer development?
Basel: Well, you said you built something that the customer did not really know that they need. I have some examples off the top of my head, but I'd like to hear from you on what sort of examples we're talking about here.
Brant: In the book we use a couple of different examples. There's the use-ended application which was developed in order to send large files, because sending large files via email is often problematic. The founders had this idea, this vision to build that; they go and they talk to their customers. Their customers are going, "You know, well, I just kind of learned to FTP or something like that." So, part of the exercise is actually finding who it is that has that problem deep enough, right?
What they did is they stumbled across graphics professionals who actually weren't that technical. So, setting up secure FTP or some of these other methods to transfer the files was actually very difficult for them. They, working with graphics professionals, were able to find this early adopter community. Part of that again, customer development is using those people to figure out where to find them, right?
Patrick, my co-author, talks about fishing. It's like going fishing. You have to choose the right bait. You have to choose the right water in order to find the specific type of fish that you're going after. The YouSendIt guys go, "Well, there were forums that existed that were filled with graphics professionals." That was an obvious place to go to cast their line to start promoting their product. That's a little example that we used in the book, but, like you said, there's numerous examples. Do you actually have one in your mind?
Basel: I was thinking about Steve Jobs' creation of the whole change of the music industry. By itself it was something nobody thought that they needed, but it's out there and everybody's using it like crazy now.
Brant: Right. What's interesting is that I've got this little chart, that maybe, I'll include in the next book. The more disruptive your technology is, and Steve Blank in his book would call this a new market. The more disruptive technology is, the less you can believe your customers say they will do or what they want. A classic question that entrepreneurs try to ask is, "Will you pay for this solution?"
It's very difficult to believe what your customers will say. Sometimes they'll say, "Oh yeah, I'd pay for it." Then, when you put the product in front of them, they don't pay for it. Then sometimes the opposite happens, right? The more disruptive, you're building something that's brand new, the less able you are to take literally what the customer says.
On the other hand of the spectrum is what Clayton Christensen calls "sustaining innovation". That's when you're actually improving performance. You're using technology to improve performance or lower prices, but the market is really well known and you're selling to the same customers. In that instance, you actually can believe much of what your customer says, and that's where classic product management works pretty well. As long as you're still diving in and understanding why customers are asking for specific customers, you can actually believe more of what they say.
The real dilemma ends up being, and the tough part for entrepreneurs is if you're doing something new, how do you engage customers in a way that you can actually get learning out of them if, what I say is true, you can't believe what they say? That is actually a tough nut to crack, and you have to be creative. You have to try to get them to talk about their problems and talk about what they're passionate about. What you're looking for there is an emotional connection to something that they're talking about, which is a signal to dive deeper.
What you're not doing in those conversations is going, Hey, you know, Basel, I've got this great idea, you know? Don't you think this is a really cool idea?" Because if you're friends with the person you're going to go, "Yeah, that's a great idea." Or you're going to be somebody that doesn't know him and you're busy and you're going to go, "Yeah yeah. That's a great idea. Get out of my hair." The key is that if you're having these conversations, don't pitch your solution first. Try to dive in and understand the life of your customer with the problems that they're currently having.
About the Guest:
Brant Cooper helps startups get started
As the author of the popular Lean Startup book "The Entrepreneur`s Guide to Customer Development.", he is a sought-after writer, speaker and consultant. The "CustDev book" is required course text at several universities, including the University of Chicago MBA program, Stanford University, De Paul, Boston University, UC Santa Barbara and
University of Oslo. Brant has been published in Venture Beat and Business Insider and frequently travels the world speaking to entrepreneurs at conferences, hackathons and workshops.
He has spoken at Qualcomm, the Kuala Lumpur Venture Capital Symposium, and Lean Startup conferences in Vancouver and Michigan. Other speaking events include the Forward Technology Conference in Wisconsin, the Lean Startup Challenge in Boston, and Lean Startup
Machines in London, New York, Boston, Chicago and San Francisco.
Brant consults for and advises startups on Lean Startups and Customer Development, serving clients in Silicon Valley, New York, San Diego, France, Australia and Singapore. Clients include Qualcomm, MOGL, HubKick, MotherKnows, i.TV, and Lean Startup Machine.
Brant Cooper is passionate about growing the San Diego tech community. He runs the San Diego Tech Founders monthly meetup that consistently draws 200 attendees. Brant is also the curator for the San Diego edition of the Startup Digest. Brant mentored at CONNECT for four years and holds open office hours at a weekly informal coffee meetup.
Brant has over 20 years experience in IT and a long track record of bringing innovative products to market. As a leader in Professional Services, Product Management and Marketing, he has directed strategy, design, marketing and implementation of numerous products for a variety of startups including Tumbleweed, Timestamp, WildPackets, Incode and InfoBright.
Brant Cooper blogs at Market By Numbers and tweets @brantcooper.
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Customer Development
Customer Development is a critical issue in the Startup world! Brant Cooper will tell us what Customer Development is and what customer development is not.
