customer development and pivoting sp640
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Customer Development
and Pivoting
Dr Tendayi Viki
Follow Me: @tendayiviki
Ash Maurya (2012)Running Lean
http://www.runningleanhq.com/
Ash Maurya (2012)Running Lean
http://www.runningleanhq.com/
The Scientific Method
Customer Development is NOT the same as
market research or focus groups!
Introspection
Market research methods are based on one major premise: • If you want people to tell you what they
think, just ask them!
Introspection
This premise is based on one major problematic assumption:• People are able to introspect and
gain access into how they feel and communicate it to researchers.
Introspection
People often don’t know what drives their thoughts and actions. • But if you ask them, they often have
something to say. • Psychologists call this confabulation.
9
To Fully Understand Your Customers You Have to Go
Beyond the Focus Group
It is a “hypothesis driven” process.
12@robfitzhttp://momtestbook.com/
13@robfitzhttp://momtestbook.com/
Specify who you are going to be talking to from the beginning. Be specific about your target sample.
If you talk to anyone who will talk to you: It becomes hard to distinguish signal from noise.
Running Successful Experiments
Specify exactly what you would expect to find if your assumptions are correct. Hypotheses MUST be falsifiable. Set minimum success criteria.
Otherwise, there is no way to know if you have learned anything.
Running Successful Experiments
Running Successful Experiments
Ash Mauryahttp://www.ashmaurya.com/2010/09/lean-startup-is-a-rigorous-process/
Capture reliable data. Do not try to fudge the data.Avoid the confirmation bias.
Running Successful Experiments
18
Anybody will say you product is good if you bug them for long enough.
People also often don’t know the factors motivating their own behaviour.
@robfitzhttp://momtestbook.com/
The Mom Test
@paddayhttp://insideintercom.io//
Never ask for opinions… Ask about specific things in their life. Ask about specific things they have done in the past.
Only ask questions that even your mom would tell you the truth about…
@robfitzhttp://momtestbook.com/
The Mom Test
Do you think this is a good idea? Would you enjoying using this product? How many times would you buy such a
product? Would you buy this product? How much would you pay for this?
Examples of Bad Questions
@robfitzhttp://momtestbook.com/
How do you currently solve this problem? Tell me about the last time you solved
this problem? How much money does this problem cost
you? How much are you currently paying to
solve this problem?
Examples of Good Questions
@robfitzhttp://momtestbook.com/
The Process
Alexander Osterwalder (2012)http://www.businessmodelgeneration.com/
Talk about your business model. Identify the riskiest assumption. Describe one main problem. Transform that into a falsifiable problem
hypothesis. Develop two-three customer development
questions?
GET OUT OF THE BUILDING!!
Riskiest Assumption
Ash Maurya (2012)Running Lean
http://www.runningleanhq.com/
The Anatomy of A Pivot
Remember that at any point during the customer development process you might run into challenges. • People don’t have the problem you were hypothesising.
• People don’t like the solution you built.
• People don’t want to pay for the solution you developed.
• People use the product once and don’t come back.
If you run into any of these problems, you don’t give up on your idea.• However, you don’t just persevere “the plane into the
ground”. You can do a PIVOT. • Keep one foot in what you have learnt and then change one
other thing and test again!• This is why the companies that can run these tests quickly
and get to a plan that works, are more likely to succeed.
Different Types of Pivots
Zoom-in Pivot What was previously a single feature in a
product becomes the whole product. This is usually based on customer usage data.
Eric Ries (2011) The Lean Startup
http://lean.st
Zoom-Out Pivot
This is when a single feature is not sufficient. So what was once the product, becomes a single feature
of a much larger product.
Eric Ries (2011) The Lean Startup
http://lean.st
Customer Segment Pivot
This is when the company realises that their product serves a real customer need: But for a different customer segment to what they
originally thought.
Eric Ries (2011) The Lean Startup
http://lean.st
Customer Need Pivot This is when the company realises that
the customer need they were planning to serve is not real: But from talking to customers they realise that
there is another important need they can serve for that customer.
Eric Ries (2011) The Lean Startup
http://lean.st
Platform Pivot This represents a change in strategy
from an application to a platform and vice-versa. Usually starts as an application and then
becomes a platform (e.g. Twitter and Facebook).
Eric Ries (2011) The Lean Startup
http://lean.st
Business Architecture Pivot This represents a change in strategy
from a sales to a marketing business model, or vice versa. Low Margin, High Volume (Consumer) High Margin, Low Volume (B2B)
Eric Ries (2011) The Lean Startup
http://lean.st
Value Capture Pivot This represents a change in the way
the company captures value from its customers. Such changes in your revenue model can
have a significant impact on the rest of the business model.
Eric Ries (2011) The Lean Startup
http://lean.st
Engine of Growth Pivot This represents a change in the
companies growth strategy. Sticky Viral Paid
Eric Ries (2011) The Lean Startup
http://lean.st
Channel Pivot This represents a change in the way
you reach your customers to deliver the value proposition. For example, you could change from brick
and mortar to exclusively online.
Eric Ries (2011) The Lean Startup
http://lean.st
Technology Pivot This is when a company discovers a
new way to deliver the same value using a different technology. This is more likely in established businesses. For example, newspapers are moving from
print to online outlets (e.g. tablets). Eric Ries (2011)
The Lean Startuphttp://lean.st
A Pivot is:
It still needs to be tested...
NEW
ˆ
Good Luck!
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