The difference between scouting a new market and scouting a promising market is that the former may not exist–or come into existence–while the latter clearly exists because it’s already occupied.
Howard Marks wrote “Dare to be Great” in 2006 as a summary of challenges for successful investment: you have to be unconventional but correct. This advice applies to startups as well.
Mark Hanzo, CTO of Hanzo Archives, was interviewed by SimpleWeb as part of a series on validating startup ideas. I found his remarks on very practical and insightful and have added some observations of my own.
Chip Conley shares how he was able to look at AirBNB’s operation with newcomer’s eye when he chose to reconceive bewilderment as curiosity.
Customer development–discovery driven sales–requires that you first understand the customer’s problem then present a vision of a solution. If that is acceptable you can proceed to a demonstration that provides technical proof of value.
Our May 2017 Newsletter features four articles on new market exploration, one of the most difficult customer development challenges that entrepreneurs face. It requires strong interview, observation, and sense making skills.
There are a lot of misconceptions about finding early adopters of a new product or technology. It’s a question that comes up often in early market exploration: this post is a summary of my experience and current best thinking.
It’s important to understand who your customer is and what their critical business needs are. Helping customers is only possible once you have identified who you are truly serving (who will pay you) and which of their needs or problems you can help them address.
The customer determines the details that matter in assessing the quality of your product. Here is a true story where this was brought home to me.
Some models I like for change management in organizations. Startup entrepreneurs frequently have to navigate the challenges managing change as a part of the sales process. Intrapreneurs should find this list useful as well. I welcome any suggestions for additions, refinements, or improvements.
A startups social capital, the network of relationships that the founders have with friends, former co-workers and associates, and friends of friends represent a key resource for the team. It’s possible to activate this network to help you solve a variety of problems–e.g. finding a cofounder, finding early employees, finding contractors, finding early customers, finding investors, finding advisors–but you can normally only activate for one purpose at a time.
Trying to take on established competitors using their same business model and value proposition is called “attacking a walled city.” It’s important to understand what your customer is actually paying for and find some way to offer a different value proposition.
A common mistake technical entrepreneurs can make is to focus on what’s easy to build, and enter a market with dozens of competitors without thought to differentiation. Or to hope that by making it “free” they can make money by selling ads.
David Telleen-Lawton has more than two decades of customer development. This blog post on the nitty gritty of setting up customer discovery meetings is adapted from his presentation at the 2015 Lean Startup Conference.
Getting better at customer discovery conversations requires preparation, practice, note taking, and follow-up. It can also be tremendously helpful if you can arrange for a partner who can observe, contribute, take notes, and de-brief with you. Even if you are a solo entrepreneur “trade interviews” with another entrepreneur: agree to help them with one of their interviews if they will help you with one of yours. Here is a recent exchange I had during an office hours edited for clarity.
There are no undefended markets. Established markets are characterized by entrenched competitors who have strong brand identify and deep customer relationships. Although Bill Hewlett always strove to “attack the undefended hill,” the reality is that any market worth having is at least lightly defended by the status quo of current alternatives. When scouting a new market you have to determine where you can make a clear contribution that will differentiate your offering from the alternatives currently available–including “doing nothing.”
I led a very interactive session on customer development and pricing for startups on Jan-19-2016 with the Montreal Lean Startup Circle. I have included the slides and their text but they comprise only about 1/6 of the session, the bulk of which was having different entrepreneurs in the audience present their challenges with customer development and pricing and helping them to walk around the situation.
An entrepreneur who succumbs to the illusion of progress does a startup more self-inflicted damage than almost anything else. Working on the wrong things squanders effort and irreplaceable time without gaining the learning needed for the actual efforts required.
If you missed The Nitty Gritty of Setting Up Customer Discovery Meetings by David Telleen-Lawton at The Lean Startup Conference 2015, he shared the down and dirty details of setting up meetings for Customer Discovery. Having set hundreds of B2B and B2C discovery meetings over the years, Telleen-Lawton tells how to reach out and set these meetings.