Bill Meade (@BillMeade) is the Director of Data Science at Neal Analytics, a position he describes as, “Catalyst to a herd of genius cats, riding a machine learning cloud, into a business world about to discover analytical dreams can come true … easily. ” Bill has long experience with innovation, IP management, and customer development. He has contributed this guest post on schmexperts and welcomes other questions on customer development as topics for future posts: please feel free to leave your thoughts, experiences, and questions in the comments. Bill blogs regularly at RestartGTD, a blog devoted to practical understanding and implementations of David Allen’s “Getting Things Done” and also welcomes questions on “Getting Things Done.”
Q: I’m just about to get out of the building to validate hypotheses and start learning, but I have a problem with the business model canvas. I have been advised to develop detailed hypotheses before starting customer discovery. This is my startup and I have no idea how to fill in the business model canvas channel box or answer Steve Blank’s BMC channel/pricing hypotheses question on “the price at which half of the customers say yes.”
Javid Jamae (@JavidJamae) is a Principal Engineer at Tout, where he heads up the experimentation and growth efforts; he leads a team focused on growing the viewership for both local and nationally syndicated content. Javid authored this great guest post on finding early adopters through customer interviews before building a minimum viable product (MVP) and it is published here with his permission.
An MVP is Finished Only After You Have Early Adopters
Any time someone tells me that they have finished their minimum viable product (MVP) and now they’re looking for their first early adopters, a huge alarm goes off. It always seems like they have skipped a few steps. An MVP should not be a guess; it should be a carefully crafted solution that is:
- Viable based on what you have already learned from your early adopters,
- Minimum in that it focuses only on solving the core problems that they face.
One of the hallmarks of the entrepreneurial journey is diving in over your head.
At some point you have to commit fully to a new venture and at a later point you realize that, despite all of your careful preparation, you are testing the depth of water with both feet–or perhaps even head first. This is what can keep many up at nights or otherwise make life miserable.
I am rescuing a dialog on customer development and channel development I had with Ash Maurya from the comments to his “Lessons Learned in 2010” blog post. I am still at work on the “system of simultaneous equations” model and I think his new thinking on the “Customer Factory” is moving closer to iterating against multiple constraints simultaneously. I know with Theory of Contraints you should focus on the rate limiting constraint but after a few iterations everything can start to pinch.
I continue to work with the Okaloa team on Discovery Kanban and think that it also allows for the integration of option management into the next set of actions you are considering. This is still a work in progress and I welcome comments or suggestions for improvement.
Q: I am preparing to launch a website for my minimum viable product (MVP). It’s a few pages and has has some forms and a file upload capability. Potential customers will be able to explain a particular type of problem that they have and then upload some relevant files for review. I will review their situation and send them a link for payment if I can fix the problem. My concern is that if I don’t have pages for “Contact Us”, “Services”, and “About Us then a potential customer may not trust the website to actually start a purchase. Is it waste to add these pages? Would I be smarter to launch a very simple site with a form and file upload.
Build A B2B MVP That Inspires Trust
If the information you are requesting is not particularly proprietary and you are only looking to charge $10 or $20 dollars then the “put up a landing page and see who clicks” model may tell you enough. This is essentially an impulse purchase.
But when you write “I will review their situation and send them a link for payment if I can fix the problem,” I am assuming that you are selling to business and that your target price point is more than $100. This moves beyond the impulse purchase or simple consumer buying models for a $4 E-book or a $19/month service; if you plan to charge more than $300 then you are pretty clearly into a “considered purchase” and need to provide a richer context for the decision than a simple landing page. Also because you are asking for data that they may consider private or proprietary this makes it more of a considered purchase.
Q: What is the target allocation for each of these critical tasks in a successful startup? Here is my list of critical tasks in a startup and a percentage allocation:
- Planning 10%
- Execution 50%
- Ideation 20%
- Talking to Potential Customers 15%
- Recruiting 5%
What Is The Real Decision?
Can you clarify :
- At what stage of company?
- What time frame are the percentages averaged over?
- Is this just for the founders or total effort of all team members?
- What is the distinction between ideation and planning? Can you please elaborate on this?
How would you use or apply any answer that you get? In other words, what is the real decision you are trying to make?
Q: I am launching a new live chat service and trying to decide the best way to acquire new customers from cold calling, email marketing, social media outreach by posting content to Facebook pages. What would you recommend?
Technology vs. Business Model
A live chat service is a technology, what is your business model?
Who is the Customer? What Is Their Need?
In particular who is the customer and why aren’t they using one of the several dozen live chat services already available? To determine the best tool for acquiring a new customer you have to have a clear hypothesis for who the customer, their need or pain point, and how your offering is differentiated from other alternatives already available to them.
Creating value for others is the core of the entrepreneurial mindset. It enables the exchange of value that fuels entrepreneurs efforts to bring new ideas and products to market.
Dan Sullivan: Entrepreneurs Make Two Decisions
Successful entrepreneurs differ from other people–not in their abilities but in their mindset. They have internalized two fundamental commitments, by making these two decisions:
- Decision 1: To depend entirely on their own abilities for their financial security, because they realize that the only security is the security they create themselves.
- Decision 2: To expect opportunity only by creating value for others, because they understand that this is the only unlimited source of economic opportunity.
Q: I am starting an online community for technology entrepreneurs. Can you suggestion some guidelines I can use to help set newcomers expectations for what constitute valuable content and comments?
Here are some good guidelines and articles that I would start with, borrowing what makes sense and adapting it.
- Hacker News Guidelines would be a place where I would start. In particular: defining what is on and off topic, how to write titles, and guidelines for leaving comments. Your rules may be different, your focus certainly is, but it would be a place to start.
- The “Please Do” and “Please Don’t” lists on Reddit Reddiquette are definitely worth reviewing for things to include.
- For “ASK BN” See Stack overflow how to ask a question for some specific suggestions worth considering for those posts
A documentary on entrepreneurship as a calling that I found very compelling was “The Call of the Entrepreneur” produced by the Acton Institute. It addresses both practical and spiritual aspects of entrepreneurship from the point of view of three very different entrepreneurs:
- Brad Morgan, a dairy farmer in Evart, Michigan who transforms a failing farm into a successful dairy and compost company.
- Frank Hanna, a merchant banker in New York City who explains how entrepreneurship transforms the economy into a positive sum game.
- Jimmy Lai who grew up in Communist China and then Hong Kong, emigrating to New York to found retail and media companies.
Q: What are logos good for?
An image is processed by a different part of the brain than a word or phrase, making it both memorable and evocative in ways that are distinct from the name of your company. Having a logo for your company or product makes it more memorable and allows you to suggest connotations that can be put into words.
I have put together a table of a couple of icons or logos that we used and the word or phrase that the replaced. The first version of the SKMurphy logo was just a text treatment as was the first version of the Bootstrapper Breakfast. You can judge for yourself if adding some simple artwork changed your opinion of what each represents.
These are excerpts from Episode 9 of Outlier on Air: Tristan Kromer, A Lean Approach to Business. They are in the same sequence the took place in the interview but a number of stories and asides have been omitted to focus on what I felt were some extremely valuable insights from Tristan Kromer on clarifying and testing customer and value hypotheses.
We Have An Enemy
It is the enemy who defines us as his enemy, and in making this definition he changes us, and changes us whether we like it or not. We cannot be the same after we have been defined as an enemy as we were before.
That is why those who uphold the values of the Enlightenment so often refuse to recognize that those who are trying to kill us are their enemy. They hope that by pretending that the enemy is simply misguided, or misunderstood, or politically immature, he will cease to be an enemy. This is an illusion. To see the enemy as someone who is merely an awkward negotiator or sadly lacking in savoir faire and diplomatic aplomb is perverse. It shows contempt for the depth and sincerity of his convictions, a terrible mistake to make when you are dealing with someone who wants you dead.
We are the enemy of those who murdered us on 9/11. And if you are an enemy, then you have an enemy. When you recognize it, this fact must change everything about the way you see the world.
We face enemies who want to kill us and we need to act accordingly.
Since you are 3D printing and can iterate I would start by getting feedback from five folks: see Why You Only Need to Test with 5 Users by Don Norman for some research on why this is a reasonable place to start.
You will more than likely end up talking to more folks before deciding if there is a market or not but working with a small group at one time and testing iteratively will be easier to manage and teach you things more rapidly.
Q: What is the core mission for customer development at an early-stage start-up? Wat are the skills necessary to execute on that mission?
Customer Development Mission
Core mission is early customers, early revenue, early references. All of these reduce risk, demonstrate traction, and make subsequent sales efforts easier (and for bootstrappers, keep the lights on).
Here are ten tips for managing new product demos to prospects. While it’s always a good idea to preview inside the team and perhaps call in some favors for “friendly fire” review, at some point you have to bite the bullet and start giving new product demos to prospects. Here are my top ten tips (or lessons learned) for a new product demo:
The next few weeks and perhaps the next few years are going to be awful. Keep counting your blessings anyway, remain kind, and continue to make a difference.
Peggy Noonan wrote My Brothers and Sisters on March 8, 2002 in the Wall Street Journal. She subtitled it “A report from New York, six months on” indicating it was a reflection on 9/11. I have re-formatted an excerpt as a meditation on the need for counting your blessings.
Michael S. Malone wrote “Second Sight” for the Dec-3-2001 issue of Forbes ASAP (a great quarterly magazine put out by Forbes and edited by Malone that no longer seems to be available on-line). It’s also collected in his book “The Valley of Heart’s Delight: A Silicon Valley Notebook 1963-2001” as Chapter 3. It’s a meditation on Silicon Valley and 9-11. Writing in the aftermath 9-11 he reflects on the roots of Silicon Valley in the Cold War and World War 2. What follows are excerpts with subtitles and hyperlinks added, intermixed with commentary
Q: Why don’t you ever blog about User Experience Research (UX)?
The short answer is that we don’t do it.
Our Clients Want Leads and Deals
My clients come to me for help generating leads and closing deals, so that narrows my focus.
We don’t sell studies to larger firms that want a lot of fingerprints on the gun if things go wrong. If things go wrong for too long for my clients they are out of business. It tends to keep me–and them–focused very directly on revenue. We tend to focus much more on the “job to be done” by the product instead of constructing user personas.