Presentation for VCs, angels and incubator coaches on how to help startups implement customer development, specifically how to identify and test startup hypotheses. Draws heavily on ideas and content from Steve Blank, Cindy Alvarez and Jason Evanish.

1.
Henrik
Berglund
Chalmers
University
of
Technology
Center
for
Business
Innova8on
henber@chalmers.se
www.henrikberglund.com
@khberglund
#bogl2014
Customer
Development
2014-­‐08-­‐13
1

2. 1) Why customer development?
2) Identifying central hypotheses
3) Testing hypotheses

3. 1) Why customer development?
2) Identifying central hBrief
ypotheses
3) Testing hypotheses (interviews)

4. Strategy

5.
Start by developing a Business Plan…

6.
…make the financial forecasts…

7.
…then Execute

8. “Everybody
has
a
plan
un?l
they
get
punched
in
the
face”
Mike
Tyson

9. Searching for a Business Model
comes before
Executing a business plan

10. Process

11. Tradi8onal
Development
Process
Concept
Product
Dev.
Alpha/Beta
Test
Launch/
1st
Ship

12. Concept
Product
Dev.
Alpha/Beta
Test
Launch/
1st
Ship

13. Organiza?on

14. Hire and Build a
Functional Organization

15. Founders run an agile
Customer Development Team
No sales, marketing and business
development

16. Opera8ng
Plan
+
Financial
Model
Product
Management
Agile
or
Waterfall
Development
Func8onal
Organiza8on
by
Department
Business
Model
Hypotheses
Organiza?on
Customer
Development
Team,
Founder-­‐driven
Customer
Development,
Agile
Development
Search
Execu?on
Strategy
Process

17. 1) Why customer development?
2) Identifying central hypotheses
A) Surface all Assumptions
B) Write down Problem Hypothesis
C) Create Customer Persona

18. A)
Surface
all
assump8ons
Exercise
with
founders!
1) Brainstorm/iden8fy
hypotheses
individually

19. Examples
of
hypothesis
to
get
started
www.cindyalvarez.com

20. I
believe
that
my
customers
have
a
need
to
_____________.
This
need
can
be
solved
with_________________________.
My
ini8al
customers
will
be__________________________.
The
#1
value
a
client
wants
to
get
out
of
my
service
is
____.
The
client
can
also
get
these
addi8onal
benefits
___
and
___.
I
will
acquire
most
users/customers
through
____and
_____.
I
will
make
money
by
_______________________________.
Examples
of
hypothesis
to
get
started

21. Cluster
around
themes
www.cindyalvarez.com
Group
exercise
with
founders!
1) Brainstorm/iden8fy
hypotheses
individually
2) Then
discuss
and
cluster
them
as
a
group

22. hypothesis
hypothesis
hypothesis
hypothesis
hypothesis
hypothesis
hypothesis
hypothesis
hypothesis
hypothesis
hypothesis
hypothesis
Map
them
onto
the
canvas
in
LPC

23. Map
them
onto
the
canvas
in
LPC

24. B)
Write
down
problem
hypothesis
“I
believe
[type
of
person]
experience
[type
of
problem]
while
doing
[type
of
task]”
Or
“I
believe
[type
of
person]
experience
[type
of
problem]
because
of
[limit
or
constraint]”
www.cindyalvarez.com

25. Example
“I
believe
[tech
opera8ons
teams]
experience
[wasted
8me
and
budget]
while
[predic8ng
network
bandwidth
usage
for
their
growing
companies]”
www.cindyalvarez.com

26. Example
“I
believe
[small
businesses]
experience
[inability
to
grow
their
businesses]
because
[tradi8onal
email
marke8ng
pla`orms
are
to
expensive
and
complicated]”
www.cindyalvarez.com

27. Problem
Hypotheses
“I
believe
[type
of
person]
experience
[type
of
problem]
while
doing
[type
of
task]”
Or
“I
believe
[type
of
person]
experience
[type
of
problem]
because
of
[limit
or
constraint]”
www.cindyalvarez.com
Specific
>>
General

28. Name
Persona type
Age
Technical comfort
Job Title
Back story
Their ideal experience
Feel free to doodle!
Persona Template
Quote
“
_”
Tell us a bit about their lives
What concerns do they have? Why do they need this website/service? How have they found or heard about the website?
What’s stopping them from choosing the service/website or annoying them?
Their story including features and content which will help them have a great
experience
Sum up their experience with the
C)
Create
a
Customer
Persona

29. 1) Why customer development?
2) Identifying central hypotheses
3) Testing hypotheses

30. guess
guess
guess
guess
guess
guess
guess
guess
guess
guess
guess
guess

33. If
customers
could
talk…

34. If
customers
could
talk…
Here’s
why
it’s
a
problem!
Here’s
how
we
try
to
deal
with
it
now!
Here’s
who
is
involved!
Here
are
the
contexts
where
it’s
a
problem!
Here
are
our
constraints!
Here’s
what
we’re
willing
to
pay
to
solve
it!

35. Suggested
Interview
Flow
1) Person
2) Problems
3) Solu8on

36. 1.
Person
• What
is
your
name
and
role
at
your
company?
• How
do
you
fit
into
your
company’s
structure?
• What
is
your
budget
like?
• Who
has
to
approve
your
purchases?
• How
do
you
discover
new
products
for
work?
• Do
you
need
any
approval
to
try
them?
• What
is
a
typical
day
like
on
your
job?
• How
much
8me
do
you
spend
on
[Task]?
Learn
about
them
and
their
role
in
your
industry
www.jasonevanish.com

37. 2.
Problems
• What
are
the
top
3
challenges
you
face
related
to
[X]?
• How
do
you
deal
with
them
today?
• What
do
you
like
about
your
current
solu8on/process?
• What
other
solu8ons
have
you
tried?
Were
they
beher
or
worse?
• Who
is
involved
with
this
solu8on/process?
How
long
does
it
take?
• If
you
could
wave
a
magic
wand…what
would
the
solu8on
be?
Learn
about
the
problems
they
priori4ze
www.jasonevanish.com

38. 3.
Solu?on
Concept
• Describe
you
product
concept.
• Would
you
be
willing
to
pay
[X]
for
such
a
solu8on?
• If
they're
willing
to
pay:
“Would
you
be
willing
to
start
right
away?”
• “That’s
interes8ng”
=
Kiss
of
Death.
• Read
body
language,
voice
inflec8on
and
energy
level
for
signals
of
interest.
See
if
they’re
interested
&
get
feedback
www.jasonevanish.com

39. Interview
8ps
and
examples

40. Be
prepared
to
go
off
script
If
users
get
worked
up
–
don’t
stay
on
script,
but
follow
their
lead
and
drill
down!
Emo?on
=
Importance!

41. Don’t
talk
You
should
be
talking
as
8hle
as
possible!
Don’t
fear
”uncomfortable
silence”
(let
them
break
it).
80/20
is
a
good
ra8o
to
aim
for.

42. Ask
brief
follow-­‐ups
(remember,
they
should
be
takning)
That
sounds
expensive/inefficient/painful…
Tell
me
more!
When
was
the
last
4me
that
happened?
Can
you
give
an
example?
What
do
you
mean
by
that?
Can
you
explain
that
a
liHle
more?
What
else
do
you
do
when
that
happens?
How
do
you
feel
about
that?
Parrot
back
and
misrepresent
=>
More
elaborate
answer

43. Get
psyched
to
hear
things
you
don’t
want
to
hear

44. Give
permission
to
disagree
”Other
people
say”
”Others
have
told
me
the
opposite”

45. Don’t
assume
things
Bad:
You
love
walking
your
dog!
Good:
How
do
you
feel
about
walking
your
dog?
Even
BeZer:
What
was
it
like
the
last
8me
you
walked
your
dog?

46. Write
up
results
a.s.a.p.
Take
notes!
Write
upp
results
and
extract
key
insights
immediately
ater
the
interview!
Surprises,
Trends,
(In)validated
hypothesis

47. Interview
8ps
hhp://www.cindyalvarez.com/communica8on/customer-­‐
development-­‐interviews-­‐how-­‐to-­‐what-­‐you-­‐should-­‐be-­‐
learning
hhp://giffconstable.com/2012/12/12-­‐8ps-­‐for-­‐early-­‐
customer-­‐development-­‐interviews-­‐revision-­‐3/
hhp://jasonevanish.com/2012/01/18/how-­‐to-­‐structure-­‐
and-­‐get-­‐the-­‐most-­‐out-­‐of-­‐customer-­‐development-­‐
interviews/

48.
“nice
to
have”
Jackpot!
1.
Has
a
problem
2.
Understands
he
or
she
has
a
problem
3.
Ac8vely
searching
for
a
solu8on
4.
Cobbled
together
an
interim
solu8on
5.
Commihed
funds
for
a
solu8on
Useful
people
to
talk
to

49. Much
faster
to
build
=>
get
quan8ta8ve
feedback
sooner
Web

50. Tes8ng
Solu8on
Hypothesis

54. www.pretotype.org

57. www.pretotype.org

58. www.pretotype.org

59. Test Solution Hypotheses
Ater
demoing,
ask
about
other
things:
Posi8oning
–
how
do
they
describe
the
product?
Product
category
(new,
exis8ng,
resegmented)
Compe8tors
Features
needed
for
first
version
Preferred
revenue
model
Pricing
Addi8onal
service
needs
Marke8ng
–
how
do
they
find
this
type
of
product?
Purchasing
process
Who
has
a
budget?
etc.