The foundation of Lean StartUps - Customer Development

Customer Development is a four-step framework developed by serial entrepreneur and  business school Professor Steve Blank for:

1) discovering and validating the right market for your idea,

2) building the right product features that solve customers’ needs,

3) testing the correct model and tactics for acquiring and converting customers, and

4) deploying the right organization and resources to scale the business.

One of the interesting things on the bottom of this diagram is something called a “pivot” - an iterative process that I advocate is ideally supported by design thinking.

The pivot is what will save your job/start-up: once you find this repeatable and scalable business model, then you go into the execution phase of customer development.

Search Phase

 

 

Customer Discovery: This is where you (1) construct your hypothesis and (2) you get out of the building and start testing your assumptions about whether people actually have the problem or need you think they have.

Customer Validation: This is where you see if your proposed solution actually matches what you think the customer problem was. This test between problem and solution, and your features and customers, is sometimes called product market fit. Here you validate the alignment of what you offer (your value proposition) with customer needs. That is what you are out testing, and this is what we call the search for the business model.

Execution  Phase

Customer Creation: This is where you create and grow end user demand.
Company Building: This is where you scale / grow the organization by transitioning from customer development into a functional organization that is oriented for constant and rapid execution.

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Please bear in mind a word of caution from Ash Maurya: do not attempt to literally apply Steve Blank’s Customer Development techniques without consideration for specific business and channel types.

“The Four Steps to the Epiphany” was written for a specific type of business – Enterprise Software, and a specific type of channel – Direct Sales.

While Customer Development is still the fastest way to learn, you have to adapt the tactical techniques for your business and channel to avoid hitting a wall after Problem/Solution Fit.

Read Lesson #4 by Ash Maurya - Customer Development Adapted for Web Apps.

Customer Development as an innovation methodology, powered by Design Thinking

In order to realize Eric Ries’s full vision of the Lean Startup, Customer Development HAS to scale.

• It can’t just be applied at the head and tail ends of the product development cycle but needs to be ingrained throughout the product development cycle using Design Thinking methodologies.
• It can’t just be applied to finding a problem worth solving and building a MVP but needs to be part of an ongoing process for how features are built and validated.
• It can’t just be limited to interviews, but needs to incorporate other forms of qualitative learning (usability tests) and techniques for reaching customers (lifecycle messaging).