Getting to Product Market Fit - An Overview of Customer Discovery & Validation
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The First 2 Steps to the Epiphany
Jason @EvanishJanuary 30, 2014
Geekdom SFSan Francisco, CA
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Who is Jason @Evanish?100’s of customer development interviews with:
Cofounded:
Blog my learnings at:
JasonEvanish.com
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Today’s Topics
Customer Discovery Overview
Customer Development Interview Process
Customer Validation Overview
by @Evanish
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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
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The Core: Learn-Build-Measure
by @Evanish
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Customer Discovery
by @Evanish
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Who is Your Customer?
Phase 1:State
Hypothesis
Phase 4: Verify
Phase 3:Test Product
Concept
Phase 2:Test Problem Hypothesis
by @Evanish
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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
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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
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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
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Helping you map it: The Lean Canvas
by @Evanish
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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
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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
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How to do Customer Development Interviews
Learn in detail at: bit.ly/CustDevInterview
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A Customer Development Interview is like a house…
by @Evanish
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It starts with a good foundation.
by @Evanish
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Then you build on it.
by @Evanish
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Finally, you add the roof.by @Evanish
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Your foundation is the Person.
by @Evanish
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The walls are their Problems.
by @Evanish
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The roof is your Solution to their Problems.
by @Evanish
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Let’s get down to the nuts and bolts.
by @Evanish
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Build the foundation: Get to know the Person you’re interviewing.
by @Evanish
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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
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Person Questions Goal:Learn about them &
their role in the industry
by @Evanish
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Add the walls: Learn about their problemsby @Evanish
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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
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Problem Questions Goal:Learn if they have the problem you’re solving
by @Evanish
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Finally: Share your Solutionby @Evanish
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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
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That’s interesting = Kiss of Deathby @Evanish
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Read their body language
by @Evanish
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Solution Questions Goal:Gauge their interest & gather feedback
by @Evanish
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Tips to make the most of your interviews
by @Evanish
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Take good notes.by @Evanish
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Involve other team members.by @Evanish
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Help solve their problems. Don’t sell.
by @Evanish
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Be conversational. Go off script.
by @Evanish
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Ask to see any MVPs they have.by @Evanish
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Share mockups, designs or MVPs.by @Evanish
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End with an ask & always follow up.by @Evanish
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Be open to new problems & ideas.by @Evanish
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Summarize and share your notes.by @Evanish
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Don’t fear rejection. 10-20% response rate is normal.
by @Evanish
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Find people to interview at bit.ly/1stcustomers
by @Evanish
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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
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Customer Validation
by @Evanish
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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
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Not time for Glengarry Yet…
You’re still in learning mode.…about what customers will buy and how!
by @Evanish
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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
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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
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Map out the Food Chain of your Sale
by @Evanish
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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
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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
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Free != Customer
Customer =
by @Evanish
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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
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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
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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
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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
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Productive Paranoia
by @Evanish
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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
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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
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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
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Common Sense + Diligent Process + Thought =
by @Evanish
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Questions? I’m happy to help.
On Twitter: @EvanishEmail me with questions,
mentorship or consulting: [email protected]
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