the first 2 steps to the epiphany: customer discovery, customer validation and the customer...

The First 2 Steps to the Epiphany

Jason @EvanishJanuary 30, 2014

Geekdom SFSan Francisco, CA

Who is Jason @Evanish?100’s of customer development interviews with:

Cofounded:

Blog my learnings at:

JasonEvanish.com

Today’s Topics

Customer Discovery Overview

Customer Development Interview Process

Customer Validation Overview

by @Evanish

Why Customer Development?

• Move faster• Reduce risk• Bring process to chaos• Stay in tune with customers• Replace HiPPO & opinions with data• Discover the best market opportunities

by @Evanish

The Core: Learn-Build-Measure

by @Evanish

Customer Discovery

by @Evanish

Who is Your Customer?

Phase 1:State

Hypothesis

Phase 4: Verify

Phase 3:Test Product

Concept

Phase 2:Test Problem Hypothesis

by @Evanish

Map Your Ecosystem

• Who are the entities in your business?

• Connect the entities based on the flow of $$

• How does the product move through channels to meet users?

by @Evanish

The Hypothesis : C-P-S• Customer–Who is using your product?

• Problem–What problem do they have?

• Solution–How will you solve the problem?

Be Specific. It’s better to be wrong than vague.by @Evanish

The Intermediate MVP

• Map out the basics of your MVP based on the solutions from C-P-S

• Identify the riskiest parts & test them • This is before you build anything…just map out

what you think is the solution

BUILD

by @Evanish

Helping you map it: The Lean Canvas

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Why all this work?!?

• Save Time and Money by discovering early on if something won’t work.

• Make course adjustments before you build a large product.

by @Evanish

Customer Discovery Wrap Up

To Exit means you’ve:• You’ve identified a problem a

customer wants solved.• Your product solve the customer’s

needs.• You believe you have a viable and

profitable business model.• You feel you’ve learned enough to

go out and sell.by @Evanish

How to do Customer Development Interviews

Learn in detail at: bit.ly/CustDevInterview

A Customer Development Interview is like a house…

by @Evanish

It starts with a good foundation.

by @Evanish

Then you build on it.

by @Evanish

Finally, you add the roof.by @Evanish

Your foundation is the Person.

by @Evanish

The walls are their Problems.

by @Evanish

The roof is your Solution to their Problems.

by @Evanish

Let’s get down to the nuts and bolts.

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Build the foundation: Get to know the Person you’re interviewing.

by @Evanish

Person Questions:• Who are they? What’s their role?• Where do they interact with peers?• How do they find new products for home

or work?• How much time do they spend on [Task

X]?• How is their budget handled?

Let’s write the scriptby @Evanish

Person Questions Goal:Learn about them &

their role in the industry

by @Evanish

Add the walls: Learn about their problemsby @Evanish

Problem Questions:• What are your top 3 challenges you

face in your job related to [industry]?• Why? Tell me more…• What’s frustrating or time consuming

about [problem area]?• If you could wave a magic wand…

what would the solution be?

Let’s write the scriptby @Evanish

Problem Questions Goal:Learn if they have the problem you’re solving

by @Evanish

Finally: Share your Solutionby @Evanish

Solution Questions:• Does this solve any of the problems

we discussed earlier?• Would you be willing to pay for this?• Are you interested in signing up to be

one of our early users?• What’s your biggest concern with my

product?

Let’s write the scriptby @Evanish

That’s interesting = Kiss of Deathby @Evanish

Read their body language

by @Evanish

Solution Questions Goal:Gauge their interest & gather feedback

by @Evanish

Tips to make the most of your interviews

by @Evanish

Take good notes.by @Evanish

Involve other team members.by @Evanish

Help solve their problems. Don’t sell.

by @Evanish

Be conversational. Go off script.

by @Evanish

Ask to see any MVPs they have.by @Evanish

Share mockups, designs or MVPs.by @Evanish

End with an ask & always follow up.by @Evanish

Be open to new problems & ideas.by @Evanish

Summarize and share your notes.by @Evanish

Don’t fear rejection. 10-20% response rate is normal.

by @Evanish

Find people to interview at bit.ly/1stcustomers

by @Evanish

Now what?

• Interview in groups of 8-10 people per customer type.

• Summarize notes and review with others.

• Look for common patterns matching C-P-S.

• Compare to your high level metrics to see if anecdotes match data.

by @Evanish

Customer Validation

by @Evanish

Can You Sell It?

Phase 1: Get Ready

to Sell

Phase 4:Verify

Phase 3:Develop

Positioning

Phase 2:Sell to Visionary

Customers

by @Evanish

Not time for Glengarry Yet…

You’re still in learning mode.…about what customers will buy and how!

by @Evanish

Break Down Your Sales Road Map

• Who influences a sale?• Who recommends a sale?• Who is the decision maker?• Who is the economic buyer?• Who is the saboteur?• What is the budget for purchasing your type of

product?• How many calls does it take to make a sale• What is the profile of an early customer?

by @Evanish

The Word According to Blank – Phase 1 : Get Ready to Sell

Articulate a Value

Prop

Prelim Sales &

Collateral Materials

Prelim Distribution

Channel Plan

Prelim Sales

Roadmap

Hire a Sales

Closer

Formalize Advisory

Board

Goal: Take what you learned from Customer Discovery and apply to development of Sales Process

by @Evanish

Map out the Food Chain of your Sale

by @Evanish

Find out how to (reliably) get your foot in the door…

• At what level do you want to enter?

• How many people on the org chart need to say yes?

• Does each department perceive the problem the same way?

• In what order do you need to call on people?

• Who can derail the sale?

by @Evanish

The Word According to Blank – Phase 2: Sell to Visionary Customers

Contact Early-

vangelists

Sell to Early-

vangelists

Refine Sales

Roadmap

Sell to Channel Partners

Refine Channel

Roadmap

Goal: Get someone to Pay for your product and learn how to repeat the process.

by @Evanish

Free != Customer

Customer =

by @Evanish

Build Your Sales Roadmap

Get Lead Send initial outreach Qualify a lead Validate the

lead

Preliminary Sales Call

Win over the CIOSecond PitchWin over IT

Formal Proposal

Negotiate & Close

by @Evanish

The Word According to Blank – Phase 3: Develop Positioning

Product Positioning

Company Positioning

Present to Analysts & Influencers

Goal: Based on problem and sales lessons, optimize positioning for your product & company.

by @Evanish

Positioning

• Speak the language of your customer• Written by those that interact directly with the

customer• Verify with Product team to ensure what’s built

meets expectations setby @Evanish

The Word According to Blank – Phase 4: Verify

Verify the Product

Verify the Sales

Roadmap

Verify the Channel

Roadmap

Verify the Business Model

Iterate or Exit

Goal: Verify all the work you’ve put into Customer Validation to iterate or move onto Customer Creation.

by @Evanish

Productive Paranoia

by @Evanish

Questions to Ask…Product:-Are you repeatedly losing any deals? Why?-Are customers satisfied? What else do they

expect?-Are you building the right features?-Were there any pricing issues? Did you lose

customers on pricing?

Sales: - Can you verify the sales process and accurately

project its success rate?- Can you realistically map your sales pipeline?-Are you closing deals? by @Evanish

More Questions to Ask…Channel:-Did you factor in the channel costs to the

overall costs of your product?-How do various channels affect the sales

time?-What does your sales force look like?

Business Model: -Based on known factors, how profitable is

the business?-Will costs be the same as you grow?-How much funding do you need to reach

profitability? by @Evanish

Customer Validation Wrap Up

To Exit means you’ve- Proven you found a Customer

Problem- Found earlyvangelists that will pay

you- Found a repeatable and scalable

sales process- Demonstrated a viable business

model

by @Evanish

Common Sense + Diligent Process + Thought =

by @Evanish

Questions? I’m happy to help.

On Twitter: @EvanishEmail me with questions,

mentorship or consulting: Evanish.J@Gmail.com

Find all my Lean learnings at: JasonEvanish.com/lean-startups/

Find a detailed, blog form of the interview process at: bit.ly/CustDevInterviewAnd tips for finding your first customers at: bit.ly/1stcustomers