Materials of the first MERLIN (https://merlin-ict.eu) workshop, delivered on October'18. MERLIN will support market-oriented researchers, SMEs and startups across Europe, to consider the full potential of their research and to shape ideas and outputs into innovations to be ready for market validation and commercialisation, by using modern needs-first, market-led methodologies and offering free training workshops and meetup in 7 European countries.
More information in video https://bit.ly/merlin_video
1. H2020 GA #780460
CUSTOMER DISCOVERY
FACILITATOR NAME
Location
Date
Helping today’s researchers
create tomorrow’s enterprises
This project has received funding from the European Union’s Horizon 2020 research and innovation programme under grant agreement No 780460
2. H2020 GA #780460
Rules for the workshop
š No question is a
silly question
2
š What is said in the room
stays in the room
š Support and
challenge each other
3. H2020 GA #780460
General information
š Workshop length – 4 hours
3
š Coffee break – 20 minutes š Slide availability
4. H2020 GA #780460
About MERLIN project
4
MERLIN project aims to stimulate the interest in the creation of startups, spin-offs and licensing
agreements among ICT researchers, providing them with the business skills that would help them to
commercialize their research findings and successfully introduce them to the market, and introducing
them to their local and European entrepreneurialecosystems
https://merlin-ict.eu
Organization of more than 40
practical thematic workshops in
several European cities, including
Cambridge, Madrid, Poznan, Vilnius,
Berlin, Warsaw, Bucharest, Tallinn
Participation in 5
international
conferences, organizing
workshops and forums
Organization of 8
meetups with
potential customers,
commercial partners,
and investors
Preparation of 4
webinars on SME
growth and PPP
business models
6. H2020 GA #780460
Agenda
6
Customer Development - introduction
Customer Discovery – key activities
What is the problem
Who are my customers?
Discovery interviews
Moving on
Customer Validation
Personal Action Plans and Feedback
Discovering different markets
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Customer Development
7
‘’ A startup is an
organization formed to
search for
a repeatable and scalable
business model.’’
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The process
11
CUSTOMER
DISCOVERY
CUSTOMER
VALIDATION
CUSTOMER
CREATION
COMPANY
BUILDING
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The process
12
CUSTOMER
DISCOVERY
CUSTOMER
VALIDATION
Product-
Market Fit
Problem-
Solution FitPIVOT
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13
“Pivoting for pivoting’s sake is worthless. It
should be a calculated affair, where changes
to the business model are made, hypotheses
are tested, and results are measured.
Otherwise, you can’t learn anything.”
Founder Flowtab
‘Failed Startup’
17. H2020 GA #780460
Why do we do Customer Discovery?
17
What
you
know
What you know
you don’t know
What you don’t know you
don’t know
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18
Customer Discovery
AIMS ACTIVITES OUTPUTS
• Identify if there is a
problem
• Identify who is the
customer
• Identify the market
• Hypotheses
construction
• Customer Interviews
• Experiment design
• Product design
• Initial business model
• Customer needs
• MVP
• Problem-Solution Fit
19. H2020 GA #780460
Customer Discovery Cycle
19
Phase 2:
Test problem
hypothesis
Phase 3:
Test product concept
Phase 4:
Verify
Phase 1: State hypothesis
EXPLORE
PROPOSE
CHECK
THINK
20. H2020 GA #780460
Customer Discovery Cycle
20
Phase 2:
Test problem
hypothesis
Phase 3:
Test product concept
Phase 4:
Verify
Phase 1: State hypothesis
Minimum
features
Develop Concept
Initial MVP
26. H2020 GA #780460
Problem Statement
………(who) has the problem of ………..(what) when they are trying
to………. (when/where)
This is a problem because…….(why)
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28. H2020 GA #780460
Market Type
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Existing Market Resegmented Market
Customers Existing Existing
Customer Needs Performance 1. Cost
2. Perceived need/problem
Product Performance Better/Faster 1. Good enough for low end
2. Good enough for new niche
Competition Existing Incumbents Existing Incumbents
Risks Existing Incumbents 1. Existing Incumbents
2. Niche strategy fails
Example Transferwise, Google Chrome Ryanair, iZettle, Fairphone
Adapted from The Startup Owner’s Manual
€€€ €
29. H2020 GA #780460
Market Type
29
New Market Clone Market
Customers New/New Usage New
Customer Needs Simplicity & Convenience New idea already in other
geographies
Product Performance Low in “tradition attributes”, improved
by new customer metrics
Good enough for local market
Competition Non-consumption/ Other Start-ups None, foreign originators
Risks Market Adoption Cultural Adoption
Example Dropbox/iPod Cabify
Adapted from The Startup Owner’s Manual
€€€ €€
35. H2020 GA #780460
Finding the customers
35
2. Identify
potential
online and in-
person
networks
1. Describe
potential
Customer
Groups
NOT YOUR FAMILY OR FRIENDS
They like you too much!
4. Go where
they will be.
Call them.
Email as a
back-up
3. Prepare a
long-list of key
persons
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Finding the customers
36
2. Identify potential
online and in-
person networks
CEO
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Developing The Hitlist
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• Working in teams of 4, select 1 of the ideas
from the group
• Ensure everyone clearly understands their
problem statement
• Take out your phones
• You have 5 minutes to identify (name, role
and company) as many potential Discovery
Interview candidates as possible.
40. H2020 GA #780460
Phase 2: Outside the Building
Problem Interviews
40
Have a relaxed atmosphere
Do it in pairs
Have an introduction and structure
Follow the flow
Have a close
Stick to the script
Avoid probing
Interrupt
Forget to take notes
Leave without asking for follow-up
41. H2020 GA #780460
41
Questions?
Open Closed Leading
• Long answers
• Provides reflection and
feelings
• Begin with Describe,
How, What, Why
• Hand control over
• Yes/No/ One-word
answers
• Provides facts
• Retains control
• Confirmation of
understanding
• Provide desired answer
• Impose the interviewer
bias
• Avoid! – not sales
meetings
The questions you ask, determine the answers you get
42. H2020 GA #780460
Open or closed?
š Would you use a dashboard to monitor your sales team’s targets?
š Describe the main problems you encounter when trying to manage your team?
š Would you buy a toy that helps your children to learn new languages?
š Do you think that business intelligence dashboards are difficult to understand?
š What type of car would you pick for your commute to work?
š How do you buy services?
š Would you choose a subscription or once-off payment?
š Why do you think that happens?
š Who makes a good product?
š Do you like making higher returns?
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43. H2020 GA #780460
The present is terrible
43
Ask about how someone would
behave, they will give you their
Ideal/Imagined Self
Past behaviour predicts future.
Ask about a previous event to
understand the Real Self
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The anatomy of the interview
44
Intro
The
Person
The
Problem
Processes Outro
Tell me about
your role?
How does that
process work
now?
What are the
top 3 issues you
encounter?
How does your
company
purchase
software?
What do you
look for in a
solution?
Can I call you
to follow-up on
some of the
topics?
Could I show
you a
prototype?
I’m looking to
develop a
solution for
Sales Teams
e.g.
45. H2020 GA #780460
Probing
š Why?
š Tell me more.
š When was the last time that you encountered this problem?
š What caused the problem?
š What did you do to try and fix it?
š How much time do you have to spend on work arounds?
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46. H2020 GA #780460
Role-play
46
PhD students have difficulty
keeping up-to-date lab-
books and supervisors are
often not in the lab to see
progress - why not have a
digital lab-book?
49. H2020 GA #780460
Advanced?
š Are they are willing to introduce you to someone else?
š Willing to meet again?
š Did you convert an assumption into an validation?
š Have you learned something new?
50. H2020 GA #780460
Are they interested?
š Did they spend more than the 30 minutes allocated?
š Have they asked to be kept informed?
š Was their body turned completely towards you?
š Did they ask interesting questions in return?
š Were their pupils focused and/or eyebrows raised?
š Did they leave their phone or computer out of sight?
51. H2020 GA #780460
Moving on…
š If your problem isn’t in the top 3 of the people you
are speaking to
š à Find other customers
š If you keep hearing a need that is currently not
being satisfied
š à Explore it
š If you keep hearing the same thing
š à You’re done, for now
š If you get bored
š You’re probably ready to draft a concept/MVP
š If the response is lukewarm
š à Return to problem interview
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52. H2020 GA #780460
The MVP
52
Phase 2:
Test problem
hypothesis
Phase 3:
Test product concept
Phase 4:
Verify
Phase 1: State hypothesis
Minimum
features
Develop Concept
Initial MVP
54. H2020 GA #780460
Good or Bad Signs?
š “That’s so cool. I love it!”
š “Looks great. Let me know when it launches.”
š “There are a couple people I can intro you to when you’re ready.”
š “What are the next steps?”
š “I would definitely buy that.”
š “When can we start the trial?”
š “Can I buy the prototype?”
š “When can you come back to talk to the rest of the team?”
55. H2020 GA #780460
Customer Validation - Product-Market Fit
COSTSREVENUE
Phase 2:
Sell to early
adopters
Phase 3:
Develop positioning
Phase 4:
Verify
Phase 1: Get ready to sell
56. H2020 GA #780460
56
“You can always feel when product/market fit
isn't happening. The customers aren't quite
getting value out of the product, word of mouth
isn't spreading, usage isn't growing that fast,
press reviews are kind of ‘blah’, the sales cycle
takes too long, and lots of deals never close”
Marc Andreessen
VC, Andreessen Horowitz
57. H2020 GA #780460
57
“In general, hiring before you get
product/market fit slows you down, and hiring
after you get product market fit speeds you up.
Until you get product/market fit, you want to a)
live as long as possible and b) iterate as quickly
as possible.”
Sam Altman
President of Y Combinator
58. H2020 GA #780460
Let’s get personal
58
Core Assumptions Priority Test Method Success Criteria Date
CustomerProblemMarket
CUSTOMER DISCOVERY - PERSONAL ACTION PLANS
Name:
Sales team manager have the problem of understanding
individual and team performance when they are trying to
reach sales targets and are not in the office.
This is a problem because potential sales opportunities are lost
and the sales team’s efficiency is lower-
59. H2020 GA #780460
Let’s get personal
59
Core Assumptions Priority Test Method Success Criteria Date
Customer
Sales team managers in SMEs
Director of sales is purchaser
Interviews
80% of sales team managers
report the same problem
November 2018
Problem
Sales managers struggle to maintain an
understandingof their team member
activities.
Sales teams do not have an way of seeing
their objective progress in real-time.
Market
SMEs are looking for new solutions to increase
their sales efficiency
SMEs will be willing to pay as a % of sales
gained.
CUSTOMER DISCOVERY - PERSONAL ACTION PLANS
Name:
2
5
4
3
1
6
60. H2020 GA #780460
Homework for everyone
60
• https://neilpatel.com/blog/26-customer-development-resources/
• Video: The Rules for Customer Pitching
• 253 Startup Failure Post-Mortems
Internet resources
• Business Model Canvas
Try with your own idea
• The Four Steps to the Epiphany by Steve Blank
• The Entrepreneur's Guide to Customer Development: A cheat sheet to The
Four Steps to the Epiphany by Brant Cooper
• The Startup Owner’s Manual by Steve Blank and Bob
Books
62. H2020 GA #780460
Info about next workshops in CITY
62
2018 April
Lean startup
2018 June
Using Business
model canvas
to assess and
focus business
development
2018 September
Customer Discovery
2018 November
The
Entrepreneurial
Mindset
2019 February
’I Bring the Idea’
matchmaking
session
2019 May
How to design a
product using
User Experience
2019 June
Interpreting the
Custoemr
2019 July
Spinout vs Startup
– differences, how
to operate and
succeed
63. H2020 GA #780460
GET OUT AND ASK THE RIGHT
QUESTIONS!
63
https://merlin-ict.eu @Merlin_ICT