course 4 - intro customer development
DESCRIPTION
TRANSCRIPT
![Page 1: Course 4 - Intro Customer Development](https://reader036.vdocuments.net/reader036/viewer/2022081323/540b0cc78d7f72f36a8b45c1/html5/thumbnails/1.jpg)
Class 4, UCN, Antofagasta, 2011
1
Intro to Customer
Development
![Page 2: Course 4 - Intro Customer Development](https://reader036.vdocuments.net/reader036/viewer/2022081323/540b0cc78d7f72f36a8b45c1/html5/thumbnails/2.jpg)
OutlineSteve BlankHow it has been doneProduct / Customer DevelopmentCrossing the chasmCustomer DiscoveryCustomer ValidationBusiness Canvas
![Page 3: Course 4 - Intro Customer Development](https://reader036.vdocuments.net/reader036/viewer/2022081323/540b0cc78d7f72f36a8b45c1/html5/thumbnails/3.jpg)
Steve Blank
![Page 4: Course 4 - Intro Customer Development](https://reader036.vdocuments.net/reader036/viewer/2022081323/540b0cc78d7f72f36a8b45c1/html5/thumbnails/4.jpg)
Bases
![Page 5: Course 4 - Intro Customer Development](https://reader036.vdocuments.net/reader036/viewer/2022081323/540b0cc78d7f72f36a8b45c1/html5/thumbnails/5.jpg)
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
![Page 6: Course 4 - Intro Customer Development](https://reader036.vdocuments.net/reader036/viewer/2022081323/540b0cc78d7f72f36a8b45c1/html5/thumbnails/6.jpg)
Crossing the Chasm: Moore
![Page 7: Course 4 - Intro Customer Development](https://reader036.vdocuments.net/reader036/viewer/2022081323/540b0cc78d7f72f36a8b45c1/html5/thumbnails/7.jpg)
Concept /Seed Round
Product Developm
ent
Alpha/Beta Test
Launch / 1st Ship.
PositioningCreate
Materials
Expensive PR
Early Buzz
BrandingLaunch EventCreate
Demand
Marketing
SalesHire Sales
BossHire Staff
Build Organizati
onWork Leads
Biz DevHire Biz
Dev Boss
Close 1st Ship. Deals
![Page 8: Course 4 - Intro Customer Development](https://reader036.vdocuments.net/reader036/viewer/2022081323/540b0cc78d7f72f36a8b45c1/html5/thumbnails/8.jpg)
Problem: Expensive Failure
Built and they will come syndromeExpenditure 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
![Page 9: Course 4 - Intro Customer Development](https://reader036.vdocuments.net/reader036/viewer/2022081323/540b0cc78d7f72f36a8b45c1/html5/thumbnails/9.jpg)
Fix?Focus on Develop Customers not only the ProductDesign for customersCustomers from day Onefinaly, match Product to Customer Development
![Page 10: Course 4 - Intro Customer Development](https://reader036.vdocuments.net/reader036/viewer/2022081323/540b0cc78d7f72f36a8b45c1/html5/thumbnails/10.jpg)
Pair Product to Customer Development
Concept /Seed Round
Product Developm
ent
Alpha/Beta Test
Launch / 1st Ship
![Page 11: Course 4 - Intro Customer Development](https://reader036.vdocuments.net/reader036/viewer/2022081323/540b0cc78d7f72f36a8b45c1/html5/thumbnails/11.jpg)
Problem Know
Solution Know
Concept /Seed
Product Developm
ent
Alpha/Beta Test
Launch / 1st Ship
![Page 12: Course 4 - Intro Customer Development](https://reader036.vdocuments.net/reader036/viewer/2022081323/540b0cc78d7f72f36a8b45c1/html5/thumbnails/12.jpg)
![Page 13: Course 4 - Intro Customer Development](https://reader036.vdocuments.net/reader036/viewer/2022081323/540b0cc78d7f72f36a8b45c1/html5/thumbnails/13.jpg)
SCRUM PracticesProduct Backlog
Current prioritized list of work to be done
Effort Estimationiterative on Backlog items
Sprint30 day / 15 days iteration
Sprint Planning Meetingdecide goals for next sprint and how team will implement
Sprint BacklogProduct Backlog items for sprint
Daily Scrum meetingwhat doing, what will do, and any problems
Sprint Review Meetingpresent results of sprin
![Page 14: Course 4 - Intro Customer Development](https://reader036.vdocuments.net/reader036/viewer/2022081323/540b0cc78d7f72f36a8b45c1/html5/thumbnails/14.jpg)
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.
![Page 15: Course 4 - Intro Customer Development](https://reader036.vdocuments.net/reader036/viewer/2022081323/540b0cc78d7f72f36a8b45c1/html5/thumbnails/15.jpg)
Customer Development Keys
Parallel process to Product DevelopmentMeasurable CheckpointsNot tied to FCS, but to customer milestonesNotion of Market Types to represent realityEmphasis is on learning & discovery before execution
![Page 16: Course 4 - Intro Customer Development](https://reader036.vdocuments.net/reader036/viewer/2022081323/540b0cc78d7f72f36a8b45c1/html5/thumbnails/16.jpg)
Search for a Biz
Stop selling, start listening There are no facts inside your building, so get outside
Test your hypothesesTwo are fundamental: problem and product concept
Continuos DiscoveryDone by Founders
![Page 17: Course 4 - Intro Customer Development](https://reader036.vdocuments.net/reader036/viewer/2022081323/540b0cc78d7f72f36a8b45c1/html5/thumbnails/17.jpg)
Customer Discovery Cicle
![Page 18: Course 4 - Intro Customer Development](https://reader036.vdocuments.net/reader036/viewer/2022081323/540b0cc78d7f72f36a8b45c1/html5/thumbnails/18.jpg)
Phase 0: Get buy-inConvince your-selfConvince othersGather a teamMission statement & values
![Page 19: Course 4 - Intro Customer Development](https://reader036.vdocuments.net/reader036/viewer/2022081323/540b0cc78d7f72f36a8b45c1/html5/thumbnails/19.jpg)
ProductCustomer/ProblemDistribution/PricingDemand CreationMarket TypeCompetition
Phase 1: State Hypoteses
![Page 20: Course 4 - Intro Customer Development](https://reader036.vdocuments.net/reader036/viewer/2022081323/540b0cc78d7f72f36a8b45c1/html5/thumbnails/20.jpg)
Customer Discovery Cicle
![Page 21: Course 4 - Intro Customer Development](https://reader036.vdocuments.net/reader036/viewer/2022081323/540b0cc78d7f72f36a8b45c1/html5/thumbnails/21.jpg)
Product HypotesesFeaturesBenefitsProduct Delivery ScheduleIntellectual PropertyTotal Cost of OwnershipDependency Analysis
![Page 22: Course 4 - Intro Customer Development](https://reader036.vdocuments.net/reader036/viewer/2022081323/540b0cc78d7f72f36a8b45c1/html5/thumbnails/22.jpg)
Customer Discovery Cicle
![Page 23: Course 4 - Intro Customer Development](https://reader036.vdocuments.net/reader036/viewer/2022081323/540b0cc78d7f72f36a8b45c1/html5/thumbnails/23.jpg)
Customer/Problem Hypothese
Types of Customers/ArchetypesMagnitude of the problemVisionaries & Early EvangelistsA Day in the Life of a customerOrganizational impactROI JustificationProblem RecognitionMinimum Feature Set
![Page 24: Course 4 - Intro Customer Development](https://reader036.vdocuments.net/reader036/viewer/2022081323/540b0cc78d7f72f36a8b45c1/html5/thumbnails/24.jpg)
Early Evangelist
![Page 25: Course 4 - Intro Customer Development](https://reader036.vdocuments.net/reader036/viewer/2022081323/540b0cc78d7f72f36a8b45c1/html5/thumbnails/25.jpg)
Distribution / Pricing Hypotheses
Distribution ModelDistribution DiagramSales Cycle/RampChannel strategyPricing (ASP, LTV)Customer Organization MapDemand Creation
![Page 26: Course 4 - Intro Customer Development](https://reader036.vdocuments.net/reader036/viewer/2022081323/540b0cc78d7f72f36a8b45c1/html5/thumbnails/26.jpg)
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
![Page 27: Course 4 - Intro Customer Development](https://reader036.vdocuments.net/reader036/viewer/2022081323/540b0cc78d7f72f36a8b45c1/html5/thumbnails/27.jpg)
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
![Page 28: Course 4 - Intro Customer Development](https://reader036.vdocuments.net/reader036/viewer/2022081323/540b0cc78d7f72f36a8b45c1/html5/thumbnails/28.jpg)
![Page 29: Course 4 - Intro Customer Development](https://reader036.vdocuments.net/reader036/viewer/2022081323/540b0cc78d7f72f36a8b45c1/html5/thumbnails/29.jpg)
![Page 30: Course 4 - Intro Customer Development](https://reader036.vdocuments.net/reader036/viewer/2022081323/540b0cc78d7f72f36a8b45c1/html5/thumbnails/30.jpg)
CUSTOMER SEGMENTS
which customers and users are you serving? which jobs do they really want to get done?
![Page 31: Course 4 - Intro Customer Development](https://reader036.vdocuments.net/reader036/viewer/2022081323/540b0cc78d7f72f36a8b45c1/html5/thumbnails/31.jpg)
VALUE PROPOSITIONS
what are you offering them? what is that getting done for them? do they care?
![Page 32: Course 4 - Intro Customer Development](https://reader036.vdocuments.net/reader036/viewer/2022081323/540b0cc78d7f72f36a8b45c1/html5/thumbnails/32.jpg)
CHANNELS
how does each customer segment want to be reached? through which interaction points?
![Page 33: Course 4 - Intro Customer Development](https://reader036.vdocuments.net/reader036/viewer/2022081323/540b0cc78d7f72f36a8b45c1/html5/thumbnails/33.jpg)
CUSTOMER RELATIONSHIPS
what relationships are you establishing with each segment? personal? automated? acquisitive? retentive?
![Page 34: Course 4 - Intro Customer Development](https://reader036.vdocuments.net/reader036/viewer/2022081323/540b0cc78d7f72f36a8b45c1/html5/thumbnails/34.jpg)
REVENUE STREAMS
what are customers really willing to pay for? how? are you generating transactional or recurring
revenues?
![Page 35: Course 4 - Intro Customer Development](https://reader036.vdocuments.net/reader036/viewer/2022081323/540b0cc78d7f72f36a8b45c1/html5/thumbnails/35.jpg)
KEY RESOURCES
which resources underpin your business model? which assets are essential?
![Page 36: Course 4 - Intro Customer Development](https://reader036.vdocuments.net/reader036/viewer/2022081323/540b0cc78d7f72f36a8b45c1/html5/thumbnails/36.jpg)
36
KEY ACTIVITIES
which activities do you need to perform well in your business model? what is crucial?
![Page 37: Course 4 - Intro Customer Development](https://reader036.vdocuments.net/reader036/viewer/2022081323/540b0cc78d7f72f36a8b45c1/html5/thumbnails/37.jpg)
KEY PARTNERS
which partners and suppliers leverage your model?
who do you need to rely on?
![Page 38: Course 4 - Intro Customer Development](https://reader036.vdocuments.net/reader036/viewer/2022081323/540b0cc78d7f72f36a8b45c1/html5/thumbnails/38.jpg)
COST STRUCTURE
what is the resulting cost structure? which key elements drive your costs?
![Page 39: Course 4 - Intro Customer Development](https://reader036.vdocuments.net/reader036/viewer/2022081323/540b0cc78d7f72f36a8b45c1/html5/thumbnails/39.jpg)
39images by JAM
customer segments
key partners
cost structure
revenue streams
channels
customer relationships
key activities
key resources
value proposition
![Page 40: Course 4 - Intro Customer Development](https://reader036.vdocuments.net/reader036/viewer/2022081323/540b0cc78d7f72f36a8b45c1/html5/thumbnails/40.jpg)
Cómo Qué Quién
$
4
ÁR
EA
S
![Page 41: Course 4 - Intro Customer Development](https://reader036.vdocuments.net/reader036/viewer/2022081323/540b0cc78d7f72f36a8b45c1/html5/thumbnails/41.jpg)
9 Guesses
Guess
Guess
GuessGues
s
Guess Gues
s
Guess
Guess
Guess
![Page 42: Course 4 - Intro Customer Development](https://reader036.vdocuments.net/reader036/viewer/2022081323/540b0cc78d7f72f36a8b45c1/html5/thumbnails/42.jpg)
Test Hypotheses:• Product• Market Type• Competition
Turning Hypotheses to Facts
![Page 43: Course 4 - Intro Customer Development](https://reader036.vdocuments.net/reader036/viewer/2022081323/540b0cc78d7f72f36a8b45c1/html5/thumbnails/43.jpg)
Test Hypotheses:• Problem• Customer• User• Payer
![Page 44: Course 4 - Intro Customer Development](https://reader036.vdocuments.net/reader036/viewer/2022081323/540b0cc78d7f72f36a8b45c1/html5/thumbnails/44.jpg)
Test Hypotheses:• Channel
![Page 45: Course 4 - Intro Customer Development](https://reader036.vdocuments.net/reader036/viewer/2022081323/540b0cc78d7f72f36a8b45c1/html5/thumbnails/45.jpg)
Test Hypotheses:• Problem• Customer• User• Payer
Test Hypotheses:• Demand Creation
Test Hypotheses:• Channel
Test Hypotheses:• Product• Market Type• Competitive
Test Hypotheses:• Pricing Model / Pricing
Test Hypotheses:• Size of Opportunity/Market• Validate Business Model
Test Hypotheses:• Channel• (Customer)• (Problem)
![Page 46: Course 4 - Intro Customer Development](https://reader036.vdocuments.net/reader036/viewer/2022081323/540b0cc78d7f72f36a8b45c1/html5/thumbnails/46.jpg)
Test Hypotheses:• Problem• Customer• User• Payer
Test Hypotheses:• Demand Creation
Test Hypotheses:• Channel
Test Hypotheses:• Product• Market Type• Competitive
Test Hypotheses:• Pricing Model / Pricing
Test Hypotheses:• Size of Opportunity/Market• Validate Business Model
Test Hypotheses:• Channel• (Customer)• (Problem) Customer
Development Team
Agile Development
![Page 47: Course 4 - Intro Customer Development](https://reader036.vdocuments.net/reader036/viewer/2022081323/540b0cc78d7f72f36a8b45c1/html5/thumbnails/47.jpg)
Test Hypotheses:• Problem• Customer• User• Payer
Test Hypotheses:• Demand Creation
Test Hypotheses:• Channel
Test Hypotheses:• Product• Market Type• Competitive
Test Hypotheses:• Pricing Model / Pricing
Test Hypotheses:• Size of Opportunity/Market• Validate Business Model
Test Hypotheses:• Channel• (Customer)• (Problem) Customer
Development Team
Agile Development
![Page 48: Course 4 - Intro Customer Development](https://reader036.vdocuments.net/reader036/viewer/2022081323/540b0cc78d7f72f36a8b45c1/html5/thumbnails/48.jpg)
The Pivot
• The heart of Customer Development• Iteration without crisis• Fast, agile and opportunistic
![Page 49: Course 4 - Intro Customer Development](https://reader036.vdocuments.net/reader036/viewer/2022081323/540b0cc78d7f72f36a8b45c1/html5/thumbnails/49.jpg)
![Page 50: Course 4 - Intro Customer Development](https://reader036.vdocuments.net/reader036/viewer/2022081323/540b0cc78d7f72f36a8b45c1/html5/thumbnails/50.jpg)
Extra
![Page 51: Course 4 - Intro Customer Development](https://reader036.vdocuments.net/reader036/viewer/2022081323/540b0cc78d7f72f36a8b45c1/html5/thumbnails/51.jpg)
![Page 52: Course 4 - Intro Customer Development](https://reader036.vdocuments.net/reader036/viewer/2022081323/540b0cc78d7f72f36a8b45c1/html5/thumbnails/52.jpg)
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)
![Page 53: Course 4 - Intro Customer Development](https://reader036.vdocuments.net/reader036/viewer/2022081323/540b0cc78d7f72f36a8b45c1/html5/thumbnails/53.jpg)
AARRR!: 5-Step Startup Metrics Model
Website.com
Reven
ue $$$
Biz DevAds, Lead Gen, Subscriptions, ECommerce
Activatio
n
Homepage / Landing Page
Product Features
ACQUISITION
SEOSEM
Apps & Widgets
Affiliates
PR Biz Dev
Campaigns, Contests
Direct, Tel, TV
Social Network
s Blogs
Domains
Retention
Emails & Alerts
System Events & Time-based
Features
Blogs, RSS, News Feeds
REFERRAL
Emails & widgets
Affiliates, Contests
Viral Loops