Customer Development Proceeds in Parallel with Product Development

December 17th, 2009 Sean Murphy

Steve Blank had a great post today “Building a Company with Customer Data, Why Metrics Are Not Enough” that highlights the need–even for Web Startups–to get out of the BatCave and talk to strangers who may be potential prospects. Engineers in particular can feel that this is not as productive a use of their time as some form of automated interaction. As Steve recounts, here is a typical reaction when he suggests that surveys in particular are not the best way to start:

“We’re a web startup, all our customers are on the web.  Why can’t I just get them to give me the answers I need this way?”

Often founders may try and substitute market research data for “seeing the elephant” or having actual contact with live prospects. Blank warns:

…market research firms are excellent at predicting the past. If they could predict the future, they’d be entrepreneurs.

There were two questions in the comments related to when and how to talk to prospects:

Q:  At what point in the process of our startup do we want to start getting interactive feedback from our target market? How much focus should we give to gathering customer preference while we are still in the inception phase of our idea?

As soon as you can clearly articulate your hypotheses about the customer’s problem you should get out of the building and start having serious conversations. Customer Development proceeds in parallel with product development and informs it.

One piece of paper with a prospect’s name and a few questions can communicate that you care about their perspective and have given some thought to making it a productive 10-20 minute conversation (if they want to talk longer you should let them, but you should be able to finish a short conversation in ten minutes or so).

Q: Talking to your customers directly is awesome. But, what is even better is to get a group of your customers to talk to you AND each other.

In the early market this is can cause problems when interviewing prospects: focus on one conversation at a time. Don’t let one prospect’s perspective who speaks first on a topic inadvertently anchor the group somewhere. Instead ask open ended questions and listen, prepared to be surprised.

Consider an appreciative inquiry approach to understand the customer’s operating reality.

Customer focus groups are effective for feature planning but more problematic in determining product/market fit in the early market.

Entry Filed under: Customer Development, Finding your Niche Stage, skmurphy