“ Startup success can be engineered by following the process, which means it can be learned, which means it can be taught. ” — Eric Ries
T he Lean Startup provides a scientific approach to creating and managing startups and get a desired product to customers’ hands faster. The Lean Startup method teaches you how to drive a startup-how to steer, when to turn, and when to persevere-and grow a business with maximum acceleration. It is a principled approach to new product development.
Too many startups begin with an idea for a product that they think people want. They then spend months, sometimes years, perfecting that product without ever showing the product, even in a very rudimentary form, to the prospective customer. When they fail to reach broad uptake from customers, it is often because they never spoke to prospective customers and determined whether or not the product was interesting. When customers ultimately communicate, through their indifference, that they don’t care about the idea, the startup fails.
“ The Lean Startup method teaches you how to drive a startup-how to steer, when to turn, and when to persevere-and grow a business with maximum acceleration. ”
“ Using the Lean Startup approach, companies can create order not chaos by providing tools to test a vision continuously. ”
“ By the time that product is ready to be distributed widely, it will already have established customers. ”
The lack of a tailored management process has led many a start-up or, as Ries terms them, «a human institution designed to create a new product or service under conditions of extreme uncertainty», to abandon all process. They take a «just do it» approach that avoids all forms of management. But this is not the only option. Using the Lean Startup approach, companies can create order not chaos by providing tools to test a vision continuously. Lean isn’t simply about spending less money. Lean isn’t just about failing fast, failing cheap. It is about putting a process, a methodology around the development of a product.
Work Smarter not Harder
The Lean Startup methodology has as a premise that every startup is a grand experiment that attempts to answer a question. The question is not «Can this product be built?» Instead, the questions are «Should this product be built?» and «Can we build a sustainable business around this set of products and services?» This experiment is more than just theoretical inquiry; it is a first product. If it is successful, it allows a manager to get started with his or her campaign: enlisting early adopters, adding employees to each further experiment or iteration, and eventually starting to build a product. By the time that product is ready to be distributed widely, it will already have established customers. It will have solved real problems and offer detailed specifications for what needs to be built.
Develop An MVP
A core component of Lean Startup methodology is the build-measure-learn feedback loop. The first step is figuring out the problem that needs to be solved and then developing a minimum viable product (MVP) to begin the process of learning as quickly as possible. Once the MVP is established, a startup can work on tuning the engine. This will involve measurement and learning and must include actionable metrics that can demonstrate cause and effect question.
The startup will also utilize an investigative development method called the «Five Whys»-asking simple questions to study and solve problems along the way. When this process of measuring and learning is done correctly, it will be clear that a company is either moving the drivers of the business model or not. If not, it is a sign that it is time to pivot or make a structural course correction to test a new fundamental hypothesis about the product, strategy and engine of growth.
Progress in manufacturing is measured by the production of high quality goods. The unit of progress for Lean Startups is validated learning-a rigorous method for demonstrating progress when one is embedded in the soil of extreme uncertainty. Once entrepreneurs embrace validated learning, the development process can shrink substantially. When you focus on figuring the right thing to build-the thing customers want and will pay for-you need not spend months waiting for a product beta launch to change the company’s direction. Instead, entrepreneurs can adapt their plans incrementally, inch by inch, minute by minute.
“ Progress in manufacturing is measured by the production of high quality goods. The unit of progress for Lean Startups is validated learning-a rigorous method for demonstrating progress when one is embedded in the soil of extreme uncertainty. ”
You don’t have to work in a garage to be in a startup. Read More
A startup is an institution, not just a product, so it requires management, a new kind of management specifically geared to its context. Read More
Startups exist not to make stuff, make money, or serve customers. They exist to learn how to build a sustainable business. This learning can be validated scientifically, by running experiments that allow us to test each element of our vision. Read More
To improve entrepreneurial outcomes, and to hold entrepreneurs accountable, we need to focus on the boring stuff: how to measure progress, how to setup milestones, how to prioritize work. This requires a new kind of accounting, specific to startups. Read More
The fundamental activity of a startup is to turn ideas into products, measure how customers respond, and then learn whether to pivot or persevere. All successful startup processes should be geared to accelerate that feedback loop. Read More
Saturday, November 8, 2008
What is customer development?
When we build products, we use a methodology. For software, we have many — you can enjoy a nice long list on Wikipedia. But too often when it’s time to think about customers, marketing, positioning, or PR, we delegate it to «marketroids» or «suits.» Many of us are not accustomed to thinking about markets or customers in a disciplined way. We know some products succeed and others fail, but the reasons are complex and the unpredictable. We’re easily convinced by the argument that all we need to do is «build it and they will come.» And when they don’t come, well, we just try, try, again.
What’s wrong with this picture?
Steve Blank has devoted many years now to trying to answer that question, with a theory he calls Customer Development. This theory has become so influential that I have called it one of the three pillars of the lean startup — every bit as important as the changes in technology or the advent of agile development.
You can learn about customer development, and quite a bit more, in Steve’s book The Four Steps to the Epiphany. I highly recommend this book for all entrepreneurs, in startups as well as in big companies. Here’s the catch. This is a self-published book, originally designed as a companion to Steve’s class at Berkeley’s Haas school of business. And Steve is the first to admit that it’s a «turgid» read, without a great deal of narrative flow. It’s part workbook, part war story compendium, part theoretical treatise, and part manifesto. It’s trying to do way too many things at once. On the plus side, that means it’s a great deal. On the minus side, that has made it a wee bit hard to understand.
Some notable bloggers have made efforts to overcome these obstacles. VentureHacks did a great summary, which includes slides and video. Marc Andreeson also took a stab, calling it «a very practical how-to manual for startups . a roadmap for how to get to Product/Market Fit.» The theory of Product/Market Fit is one key component of customer development, and I highly recommend Marc’s essay on that topic.
Still, I feel the need to add my two cents. There’s so much crammed into The Four Steps to the Epiphany that I want to distill out what I see as the key points:
- Get out of the building. Very few startups fail for lack of technology. They almost always fail for lack of customers. Yet surprisingly few companies take the basic step of attempting to learn about their customers (or potential customers) until it is too late. I’ve been guilty of this many times in my career — it’s just so easy to focus on product and technology instead. True, there are the rare products that have literally no market risk; they are all about technology risk («cure for cancer»). For the rest of us, we need to get some facts to inform and qualify our hypotheses («fancy word for guesses») about what kind of product customers will ultimately buy.
And this is where we find Steve’s maxim that “In a startup no facts exist inside the building, only opinions.” Most likely, your business plan is loaded with opinions and guesses, sprinkled with a dash of vision and hope. Customer development is a parallel process to product development, which means that you don’t have to give up on your dream. We just want you to get out of the building, and start finding out whether your dream is a vision or a delusion. Surprisingly early, you can start to get a sense for who the customer of your product might be, how you’ll reach them, and what they will ultimately need. Customer development is emphatically not an excuse to slow down or change the plan every day. It’s an attempt to minimize the risk of total failure by checking your theories against reality.
Theory of market types. Layered on top of all of this is a theory that helps explain why different startups face wildly different challenges and time horizons. There are three fundamental situations that change what your company needs to do: creating a new market (the original Palm), bringing a new product to an existing market (Handspring), and resegmenting an existing market (niche, like In-n-Out Burger; or low-cost, like Southwest Airlines). If you’re entering an existing market, be prepared for fast and furious competition from the incumbent players, but enjoy the ability to fail (or succeed) fast. When creating a new market, expect to spend as long as two years before you manage to get traction with early customers, but enjoy the utter lack of competition. What kind of market are you in? The Four Steps to the Epiphany contains a detailed approach to help you find out.
Finding a market for the product as specified. When I first got the «listening to customers» religion, my plan was to talk to as many customer as possible, and build them as many features as they asked as possible. This is a common mistake. Our goal in product development is to find the minimum feature set required to get early customers. In order to do this, we have our customer development team work hard to find a market, any market, for the product as currently specified. We don’t just abandon the vision of the company at every turn. Instead, we do everything possible to validate the founders’ belief.
The nice thing about this paradigm is it sets the company up for a rational discussion when the task of finding customers fails. You can start to think through the consequences of this information before it’s too late. You might still decide to press ahead building the original product, but you can do so with eyes open, knowing that it’s going to be a tough, uphill battle. Or, you might start to iterate the concept, each time testing it against the set of facts that you’ve been collecting about potential customers. You don’t have to wait to iterate until after the splashy high-burn launch.
Phases of product & company growth. The book takes its name from Steve’s theory of the four stages of growth any startup goes through. He calls these steps Customer Discovery (when you’re just trying to figure out if there are any customers who might want your product), Customer Validation (when you make your first revenue by selling your early product), Customer Creation (akin to a traditional startup launch, only with strategy involved), and Company Building (where you gear up to Cross the Chasm). Having lived through a startup that went through all four phases, I can attest to how useful it is to have a roadmap that can orient you to what’s going on as your job and company changes.
As an aside, here’s my experience: you don’t get a memo that tells you that things have changed. If you did, it would read something like this: «Dear Eric, thank you for your service to this company. Unfortunately, the job you have been doing is no longer available, and the company you used to work for no longer exists. However, we are pleased to offer you a new job at an entirely new company, that happens to contain all the same people as before. This new job began months ago, and you are already failing at it. Luckily, all the strategies you’ve developed that made you successful at the old company are entirely obsolete. Best of luck!»
Learning and iterating vs. linear execution. I won’t go through all four steps in detail (buy the book already). I’ll just focus on the paradigm shift represented by the first two steps and the last two steps. In the beginning, startups are focused on figuring out which way is up. They really don’t have a clue what they should be doing, and everything is guesses. In the old model, they would probably launch during this phase, failing or succeeding spectacularly. Only after a major, public, and expensive failure would they try a new iteration. Most people can’t sustain more than a few of these iterations, and the founders rarely get to be involved in the later tries.
The root of that mistake is premature execution. The major insight of The Four Steps to the Epiphany is that startups need time spent in a mindset of learning and iterating, before they try to launch. During that time, they can collect facts and change direction in private, without dramatic and public embarrassment for their founders and investors. The book lays out a disciplined approach to make sure this period doesn’t last forever, and clear criteria for when you know it’s time to move to an execution footing: when you have a repeatable and scalable sales process, as evidenced by early customers paying you money for your early product.
It slices, it dices. It’s also a great introduction to selling and positioning a product for non-marketeers, a workbook for developing product hypotheses, and a compendium of incredibly useful tactics for startups young and old.
When I first encountered this book, my first impulse was as follows. I bought a bunch of copies, gave them out to my co-founders and early employees, and then expected the whole company’s behavior would radically change the next day. That doesn’t work (you can stop laughing now). This is not a book for everyone. I’ve only had luck sharing it with other entrepreneurs who are actually struggling with their product or company. If you already know all the answers, you can skip this one. But if you find some aspect of the situation your in confusing, maybe this will provide some clarity. Or at least some techniques for finding clarity soon.
My final suggestion is that you buy the book and skim it. Try and find sections that apply to the startup you’re in (or are thinking of building). Make a note of the stuff that doesn’t seem to make sense. Then put it on your shelf and forget about it. If your experience is anything like mine, here’s what will happen. One day, you’ll be banging your head against the wall, trying to make progress on some seemingly intractable problem (like, how the hell do I know if this random customer is an early adopter who I should spend time listening to, or a mainstream customer who won’t buy my product for years). That’s when I would get that light bulb moment: this problem sounds familiar. Go to your shelf. Get down the book, and be amazed that you are not the first person to tackle this problem in the history of the world.
I have been continually surprised at how many times I could go back to that same well for wisdom and advice. I hope you will be too.
Entrepreneurship and Innovation
Posted in Customer Development Manifesto
Innovators podcast @ Stanford
Lean Startup In Japanese Companies
Implementing the Lean Startup in any company is hard. All the culture and incentives are designed for execution. Innovation at times seems like you’re swimming up hill. Now compound that level of effort with trying to put a Lean Startup culture in place in Japan.
According to Takashi Tsutsumi and Masato Iino, Japanese companies tend to be technology centric, obsess over quality and have weak leadership. Technology centric leads to companies ignoring their customers and the challenge is that they don’t do customer interviews. The obsession with quality leads to a silo mentality and a mania for procedure, the challenge is a lack of flexibility. And weak leadership leads to a reluctance to change and the inability to mandate Lean as an innovation process.
They list four actionable steps for implementing Lean in Japanese corporations. I think they’re relevant for all companies.
If you can’t see the presentation click here
How Investors Make Better Decisions: The Investment Readiness Level
Investors sitting through Incubator or Accelerator demo days have three metrics to judge fledgling startups – 1) great looking product demos, 2) compelling PowerPoint slides, and 3) a world-class team. Other than “I’ll know it when I see it”, there’s no formal way for an investor to assess project maturity or quantify risks. Other than measuring engineering progress, there’s no standard language to communicate progress.
What’s been missing for everyone is:
- a common language for investors to communicate objectives to startups
- a language corporate innovation groups can use to communicate to business units and finance
- data that investors, accelerators and incubators can use to inform selection
Teams can prove their competence and validate their ideas by showing investors evidence that there’s a repeatable and scalable business model. While it doesn’t eliminate great investor judgment, pattern recognition skills and mentoring, we’ve developed an Investment Readiness Level tool that fills in these missing pieces. Background about the Investment Readiness Level here and here.
While the posts were theory I was a bit surprised when John Selep, an early-stage investor, approached me and said he was actually using the Investment Readiness Level (IRL) in practice.
Here’s John’s story.
As Selections Committee chair for our Sacramento Angels investor group, I review applications from dozens of startup entrepreneurs looking for investment. I also mentor at our local university, and guest-lecture at a number of Entrepreneurship courses on how to pitch to investors, so the task of helping students and entrepreneurs visualize the process of investor decision-making has often been a challenge.
When I first read about the Investment Readiness Level (IRL) on Steve’s blog, I was excited by Steve’s attempt to bridge the capital-efficient Lean Startup process for founders with the capital-raising process for funders. But the ‘ah-hah!’ moment for me was the realization that I could apply the IRL framework to dramatically improve the guidance and mentorship I was providing to startup company founders .
Prior to having the Investment Readiness Level framework, this “how to get ready for an investor” discussion had been a “soft” conceptual discussion. The Investment Readiness Level makes the stages of development for the business very tangible. Achieving company milestones associated with the next level on the Investment Readiness Level framework is directly relevant to the capital-raising process.
I use the Investment Readiness Level as part of my sessions to help the students understand that being ready for investment means that besides having a pretty PowerPoint, they need to do real work and show Customer Development progress.
Since I began incorporating the Investment Readiness Level framework I’ve made three observations. The Investment Readiness Level (IRL):
- Ties the Lean methodology (and capital efficiency) directly to the capital-raising process – closing the loop and tying these two processes together.
- Is Prescriptive – offers founders a “what-you-need-to-do-next” framework to reach a higher level of readiness.
- Enables better mentoring. The IRL provides a vocabulary and framework for shifting the conversation between investors and entrepreneurs from simply “No”, to the much-more-helpful “Not yet – but here’s what you can do…”.
Tying Fundraising to the Lean Startup
The premise of the Lean Startup is that a startup’s initial vision is really just a series of untested hypotheses, and that the Customer Development process is a systematic approach to ‘getting out of the building’ and testing and validating each of those hypotheses to discover a repeatable, scalable business model. The Investment Readiness Level adds to this methodology by tying each phase of this discovery process or ‘hypothesis-validation’ to milestones representing a startup’s increasing readiness for investor support and capital investment. For investors this is a big idea.
I remind entrepreneurs that investors are implicitly seeking evidence of progress and milestones (but until the Investment Readiness Level never knew how to ask for it). Entrepreneurs should always communicate their business’ very latest stage of customer development as part of their investor presentation. Given that a startup is continually learning weekly, the entrepreneur’s investor presentation will evolve on a weekly basis as well, reflecting their latest progress.
In our Angel investor group, our Applicant Selections process ranks applicant companies relative to the other applicants. In the past, the ranking process relied on our Selection Committee members having an intuitive “feel” for whether a startup was worth considering for investment.
As part of our screening process, I’ve embraced the Investment Readiness Level (IRL) framework as a more-precise way to think through where applicant companies would rank. (BTW, this does not mean that the IRL framework has been embraced by rest of our Selections committee – organizational adoption is a lot more complicated than an individual adopting a framework.) I believe the IRL framework offers a more-precise method to discuss and describe ‘maturity’, and will likely become a more explicit part of our selections discussion in the year ahead.
Investment Readiness Level is Prescriptive
At first blush the Investment Readiness Level framework is a diagnostic tool – it can be used to gauge how far a business has progressed in its Customer Development process. A supposition is that startups that have validated hypotheses about key elements of their business have reduced the risks in launching their new business and are more ready for investment.
But the IRL is more than a diagnostic. It enables a much richer investor -> founder dialog about exactly what milestones a startup has actually achieved, and ties that discussion to the stages of the business’ Customer Development and business development progress. In the same way that Osterwalder’s Business Model Canvas provides a common vocabulary and enables a rich discussion and understanding of exactly what comprises the business’ design and business model, the IRL provides a common set of metrics and enables a rich discussion and understanding of just where the startup is in the maturity of its processes.
This means the IRL is also a Prescriptive tool. No matter where a startup is in its stage of development, the immediate next stage milestone – where the entrepreneurs should focus their attention next – is immediately clear. Although every business is unique, and every business model emerges and evolves in its own unique way, the logical sequencing of incremental discovery and validation implicit in the IRL framework is very clear. No ambiguity. Clarity is good.
Investment Readiness Level Enables Better Mentoring
As you might imagine, our Angel group receives applications for funding from a wide, wide variety of businesses, with highly variable quality of the businesses and their applications, and highly variable levels of maturity of those businesses. Some of our applicants are not scalable, high-growth businesses, and we tell them quickly if they don’t fit our profile. Others have the potential to be scalable, high-growth businesses, but simply aren’t as compelling or as mature as better candidates in our funnel. During every Selections cycle, as we refine our applicant funnel to select the entrepreneurs to present to our membership, I obviously have to say “No” to far more entrepreneurs than those to whom I can say “Yes”.
The Investment Readiness Level adds a new dimension to those conversations, providing a vocabulary and framework for shifting the conversation from simply ‘No’, to the much-more-helpful “Not yet – but here’s what you can do…”. It has completely changed the nature of the conversations I have with applicants. The prescriptive nature of the IRL means that wherever a business is in its current state of development, the next step on the ladder is nearly always pretty obvious. Of course, there should always be a little latitude for the unique nature of each business, but the IRL framework is a good guidepost. So the “here’s what you can do…” recommendations are clear, logical, and situationally-relevant to the entrepreneur’s business.
I would estimate that perhaps half of the applicants we see have heard of and use some form of Lean Startup or Customer Development methodology. The idea of a “Minimum Viable Product” is something that has entered the general vernacular, but I’m sure that not all of the businesses tossing the term around truly understand the Lean Startup teachings.
So when I’m providing feedback to an entrepreneur applying to our group for funding, I leverage the IRL framework to guide the feedback that I give. I don’t refer to the framework explicitly, but I provide feedback based on where I assess the company to be in their development, and what steps they’d need to pursue to get another rung or two up the ladder.
For example, I might say “The Sacramento Angels have decided that your firm isn’t quite ready for us to consider for potential investment at this point, but if you were able to discuss your prototype with 50-to-100 potential customers and get their feedback, this might help you identify the specific segments that care most-deeply about the advantages you’re offering over the existing alternative. We’d like to stay in touch with you and hear more from you once you’ve identified your initial target segment and how you are going to reach and service them …”
I’ve almost universally found that the entrepreneurs I’m discussing these recommendations with are pleased to have the feedback, even if they’re disappointed that we may not be funding them. For an entrepreneur, receiving guidance of “Not now, but here’s what you can do…” is better than getting a flat, directionless “No”. For me, the ability to articulate the concept of maturity, and investment readiness as a continuum, is extremely helpful. Being able to articulate that an applicant’s current stage of development, along that continuum, is not aligned with our group’s investment goals but that with further progress on their part, there may be alignment – this is a fundamentally superior message.
The Investment Readiness Level has given me the tools to engage in a consultative, coaching and mentoring conversation that provides much more value to entrepreneurs, resulting in a much more-enjoyable conversation for all involved.
- Investment Readiness ties capital-raising to the capital-efficient Lean Startup methodology
- The Investment Readiness Level is Prescriptive
- The Investment Readiness Level enables better mentoring
Customer Development Labs
HOW to do Lean Startup
Overcoming Your Customer Interviewing Anxiety
Why are Interviews so Hard?
For a lot of people, customer interviewing can be a nerve-wracking and anxious endeavor. I’ve found that there are a few common reasons as to why most of us experience this anxiety.
In this post we’ll discuss those common reasons, why we experience them, and how you can overcome them.
1. You’re afraid of losing customers
It’s hard to actually get someone to agree to do an interview, so the last thing you want is to mess up your one-on-one conversation with them.
The fear of embarrassing ourselves in front of someone we hope eventually turns into a paying customer, makes all of us anxious.
2. Feels awkward asking these questions
It can feel really awkward trying to balance having a real conversation with someone while also trying to follow a script, and not break any of the interviewing rules.
3. It feels like you’re inconveniencing your interviewees
You’re getting so much out of these interviews, it’s natural to feel as though your interviewees must be giving up something. It can feel like you’re taking up too much of their time asking weird questions, especially when there’s nothing tangible they’re going to walk away from the conversation with.
4. The whole experience can make you feel inept
Your customers are using a bunch of language and jargon you don’t understand all while you’re fumbling with your next question. The whole thing can make you feel a little…clumsy.
Overcoming Your Anxiety
Luckily, there’s a relatively straight-forward way to overcome all of these anxieties. To do that, we’ll take a:
The first step will be very simple step and as you feel more comfortable, you’ll get closer and closer to what to interviewing a real customer. By the time you’re done with this approach, you’ll replace that clumsy feeling, with one of confidence.
Before we get started: Take a look at the Ultimate Customer Interviewing Script that you can use when it’s time to interview your customers. It will give you an idea of what you’re going to ask your customers when the time comes to interview them.
Crawl: Partner Interviews
After you look at that script it’s time to do the Crawl phase of developing your interviewing skills and increasing your comfort level.
1. Daily Interviews
Start doing “partner” interviews with someone close to you on a daily basis. Your “partner” could be your business partner, your life partner, your housing partner (e.g. roommate), etc. anyone you see on a daily basis.
2. Ask about challenges
Ask about all aspects of their day, but be sure to focus the bulk of your attention on the challenges your partner is experiencing on a daily basis. Ask what the hardest part of their day was.
- Was there anything tough about work today?
- Anything hard with the kids?
- Difficulties at school?
Often times when people recap their day, something negative will come up. Practice asking for more information about that and…
3. Be curious
Dig deep into what is challenging them and see if you can elicit some emotions about those challenges. Imagine yourself in their position and relate how you would feel to the emotions that they’re experiencing.
Your goal here isn’t to offer a solution right there and then. Your goal is just to listen, hear their problems and hear the words they’re using to describe those problems.
Another technique is to focus on asking five questions in a row during this conversation before you answer any. Don’t get pre-occupied with counting the number of questions you ask, but this idea can help you set the intention to really focus the attention on your interviewee.
Remember now is not the time to offer solutions.
Once you’re comfortable with “partner” interviews, say after practicing it for a week or so on a daily basis, it’s time to take a walk.
Walk: Family & Friends
During the walk phase, you’re going to expand the scope of people you interview to include your friends and family.
Through casual conversations that we normally think of as “small talk”, take the opportunity to ask the person you’re chatting with about the hardest part of their job, or the hardest part of their daily routine.
You can do that by asking something like:
- [You] “What are you up to these days?”
- [Friend] “Oh I’m looking for a new job.”
- [You] “Oh, that sounds __ [hard, fun, tiring, etc.] __. What would you say is the hardest part about that?”
This type of questioning will help you focus in on their challenges, and then once you’re talking about their challenges, get curious.
Once they describe their challenge, ask them what it feels like. To do that, say something like:
- [You] “That feels like it would be _ [emotion: frustrating, disappointing, etc.] __ to me. Does it feel that way to you?”
This will help you make an emotional connection with your interviewee. Again, when you’re connecting at the emotional level, you’re starting to really understand the perspective of your customers.
Finally, you’ll want to ask what they’re doing to try and solve this challenge. Remember, this is not your opportunity to solve the problem, but to simply ask them what steps they’re taking. This is going to get you ready to start asking questions about your competitors.
Concentrate on asking five questions before being asked any.
– Don’t worry about counting the questions: Just make an effort to ask more questions than you answer and listen more than you speak. Use this as an opportunity to restrain yourself.
– You’re going to have solutions: But you really need to practice not offering them. If you really think you have something that could help them, great! Just don’t mention it during that conversation. Wait a couple hours or a couple days and then offer them the solution.
During this phase it will become second nature for you to ask about people’s challenges and become genuinely interested in them. In fact, you’ll notice that only will your “small talk” conversations become generally less awkward, you’ll find they’re more fun and rewarding for you, and the person you’re talking to.
This habit of being interested in other peoples’ problems you’re forming will eventually free you from to feel tied to a rigid customer interviewing script down the road. You’ll feel more comfortable interviewing customers because you’ll have found a genuine, low-stress way to have a conversation with them.
After you have a half-dozen of these conversations, you’ll have “walked” your way to higher quality interviewing skills. Now, it’s time to start running.
Run: Networking Events
Here you’re going to really put what you’ve learned to use. Start by going to a local meetup or startup event, and begin asking the questions that are on the customer interview script.
These are largely the same questions you’re going to ask during your actual customer interviews, but with people who only feel like your actual customers. That way, you can be as awkward as you want, without you having to worry about losing a customer.
- Ask them “What’s the biggest challenge you’re facing?”
- Get curious
- Ask about the last time they encountered that problem. Understand both when it happened and what happened when they encountered that problem.
- Ask why it was hard
- Ask about the solutions they’re trying and what’s not ideal about those solutions.
By this point you should be able to rattle off 10 questions or so before anyone asks you anything. This is because you’re getting comfortable with this approach but also because you’re talking to someone who is really passionate about their problems (they’re fellow startup founders).
Don’t offer solutions during the conversation.
- Take notes about the problems that they’re encountering and follow up with an email the next day offering suggestions on solutions to their problem.
By the way, this approach to networking is the core of the Silicon Valley culture. Great networking is genuinely caring about connecting with someone else, and helping them. Not only are you building your customer interviewing skills, you’re building your network and networking skills as well.
After you’ve repeated this process at two or three networking events, you’ve successfully crawled, walked and run your way to confident interviewing skills.
Now it’s time to fly.
Fly: Interview Your Customers
By this point, talking to people about their challenges and connecting with them on an emotional level will feel like second nature. So don’t forget to:
- Get your Interview Script
- Remember what it was like for your previous interviewees. People really enjoy someone genuinely connecting with them and being interested in their problems. You’re not inconveniencing them by genuinely listening to their problems.
You’re not only a great customer interviewer by this point, you’re also:
- A great listener
- A fantastic networker
- An budding, non-sleazy, sales-person
- A strong communicator
Want some more help?
If you’d like some extra help on developing your interviewing skills including:
- How to accelerate your skill development (the above can all be done within a week)
- Some additional tips on eliciting and asking about emotions (other ways to talk about emotions without things feeling uncomfortable)
- What it feels like to be interviewed (this experience will make you immeasurably more comfortable because you’ll know what your interviewees are experiencing)
Check out the Interviewing Like a Pro exercise in the FOCUS Framework. This exercise is the 12th exercise in the 1st workbook in the FOCUS Framework.
Now you know how to crawl, walk, run and fly your way to overcoming your customer interviewing anxiety.
After having conducted dozens of interviews with non-customers, you’ll have developed your interviewing skills to the point that you feel confident and comfortable interviewing anyone, especially your Early Adopters.
How The Lean Startup Team Practices Customer Development
Photo by The Lean Startup Conference/Jakub Mosur and Erin Lubin
Though customer development is one of the toughest aspects to execute in the build, measure, learn framework–and is often seen as an “extra”–it’s a critical part of the process that helps us avoid mistakes early and identify new market opportunities.
In this post, we’ll share how our team at The Lean Startup Conference uses customer development to shape our product design.
1. Talk to your target customers first before you build anything
Every January, a good 10 months before our next conference, our core team holds 45-minute calls with alumni to learn whether or not they’ve gained the knowledge they’d hoped to get at our previous conference. Additionally, we talk to potential customers all year round to discover what struggles new community members are facing.
The benefits to conducting feedback early are two-fold: We make sure that the conference–our product–aligns and evolves with the needs of our audience. We build what brings most value to our customers.
If you’re looking for an additional application of this idea, check out this talk from Daina Burnes Linton, co-founder at Fashion Metric. She learned that her assumptions about her target market were wrong, switched gears, and built technology that was more in line with her customers’ needs.
2. Create low-touch, high-impact feedback loops with customers
We practice a continuous and ongoing learning process. To maximize the time of the core team, we divide and conquer. We segment our customer base into four key groups: young startups, established businesses, enterprise, and government/education/nonprofit. This process allows us to streamline the analysis portion of our efforts, which in turn allows us to see themes and share findings within the team, on an ongoing basis.
Next up, each team member interviews 1-2 customers each week, and take notes in an analysis-ready, living, breathing Google spreadsheet. When a customer conversation really inspires us, we share our notes, news feed style, in Slack.
Once we begin to see themes, our co-founder, Heather McGough, does a full analysis across segments, allowing us to later be ready for synthesis; in other words, decide which content, tools and services we should test based on the needs of our community. It’s a low-touch process that keeps our customers close to our day-to-day operations. Think: It’s a lot like your check-in meetings with your boss, coupled with a semi-annual performance review. Only this time, your boss is your customer.
Our biggest takeaway is that customer development should integrate with your own processes. There’s no right or wrong approach. When we first started building out our systems, we studied multiple methodologies for interviewing, qualitative research, etc… the list goes on. But we realized that the best thing to do first was simply get started. And that’s what we encourage fellow Lean Startup practitioners to do, too.
Conference speaker Charlie Scheinost, an engineering manager at Adobe, spoke about how his team takes turns answering questions through their product’s live chat software. The process takes very little time out of each engineer’s week while providing direct and relevant insight into customers’ key needs.
3. Build MVPs and test ideas in increments
The Lean Startup Conference takes a full year to build out its annual program, but we test editorial concepts iteratively. By the time November hits, we’ll have published more than 50 blog posts, podcasts, and webcasts. The significance? These are all MVPs that lead up to our flagship conference.
Through these content experiments, we look at feedback between the lines: what’s getting shared, and what’s generating sign-ups. We take these lessons learned, adapt, and iterate as much as we can–with more content. For example, one of our most popular webcast, Speed as a Competitive Advantage with GE , helped us see that we have a huge number of enterprise folks who want to see more stories about enterprise innovation in highly-regulated environments. In turn, we created a ‘corporate innovators track’ for the 2015 event and actively pursued speakers like the VP of Product Delivery at American Express and the Head of Digital at Wells Fargo to meet this demand come November.
For another application of this idea, check out this talk from Anita Newton, marketing advisor to CPG startup Mighty Handle.
In 2014, the company faced one of the biggest opportunities in its existence: a pilot with Walmart. Mighty Handle had one shot to perfect its packaging, and couldn’t afford to take any chances. So what did Newton do? She ran a series of Facebook and YouTube ads to test concepts with Mighty Handle’s target audiences. This iterative approach helped her identify the right packaging for her target audience. Today, Mighty Handle is sold in 3,500 Walmart locations nationwide.
Validation Between The Lines
In addition to the steps referenced above, we use multiple channels to sanity-check our assumptions. We run a post-registration survey to give every attendee the opportunity to express what they’re looking to learn, we engage with audiences on Twitter to find popular topics, and we host a live chat on our registration page. The bottom line is that we’re engaging with customers year-round, so that we can come up with a conference program that addresses their current struggles. It’s an iterative process that ensures we’re hitting the mark each new year.
What is one way you can implement these strategies into your own customer development process? Get even more hacks, tips, and case studies from companies that are using Lean Startup in our Explore Lean Startup Bundle . You will get free, instant access to 9 HD video case studies packed full of strategies you can implement now .
This post was written by @ritika puri, resident storyteller and Heather McGough, co-founder of Lean Startup Co.