Adventure Lab, part 4: 5 lessons learned on customer development

This is part 4 of the Adventure Lab series documenting the Technology Entrepreneurship course at Stanford. For more information about the series please see the introduction. For a list of all articles in this series please see the Adventure Lab collection.

With last week teams completed the Opportunity Analysis Project (OAP) and started planning for the Opportunity Execution Project (OEP). There was a lot of stuff involved in the OAP, but I'd like to focus on customer development and validating the value proposition as that was by far the most important thing and biggest hurdle everybody faced.

While there were different ways to go about this, the class is heavily influenced by the framework explained in Steve Blank's book the four steps to the epiphany (check out Steve Blank's new book The startup owners manual) so pretty much everybody went that way. One of the big concept in the book is what goes under the name of customer development and the idea that your best chance to build a successful product is to get of the building and talk to your prospect customers. Like most new entrepreneurs found out however, there is a big gap between saying get out of the building and actually getting out of the building.

5 lessons learned on customer development

When we got out of the building these were the things that tripped us and that I wish I was reminded of. The biases and problems you tend to encounter once you step out of your office are so pervasive that steering away from them takes more than just awareness, but that's the first step.

  1. Empathy maps - know thy customer. The first rule of the customer development club is that you don't talk about the customer development club. You talk to your customers about their problems. But who is your customer? How do you decide who to talk to? if you pick the wrong people you will get to completely wrong conclusions. If you are at this stage in the class you probably went through the Business Model Canvas and filled in the target customer pane. If it's your first time you have likely spent not enough time thinking about this and described some generic individual that potentially represents half of the world population. Speaking to everybody is like to speaking to nobody. This becomes even more important when you get to sit in front of these people to discuss their problems. Part of the process is certainly to find more about them, but you need to come prepared if you want to get the most out of it. So who's in front of you? A good way to nail down that answer is to use the empathy map as represented in the Business Model Generation book . How to fill in and use an empathy map is beside the scope of this blog post, but if you don't have the book you can refer like I did to this great post by XPLANE that presents the map and how to use it.
  2. Test for the problem first and then the solution. When you first get out of the building it's tempting to go speaking to people about your solution, you're all excited and eager to know if they'll like it. But you're making a mistake and getting ahead of yourself. Why? Because we tend to retrofit problems into solutions, skewing our judgement, so you won't get as much value out of those interviews. Your first order of business when starting interviews should be to validate the pain or need you're trying to address. Once you've done that you can start validating your solution and if does really address that pain/need.
  3. Don't look for confirmation. Wait, what? Isn't that the whole point? Yes, but you need not to be looking for it. As difficult as it is you need to stay as impartial as possible and let the experiment speak. The biggest problem with customer interviews is that when we reach out to people we tend to pick dear friends or otherwise folks that are on the same wavelength we are or we feel are most likely to support our idea. Steer away from that. Especially if this is your first time, if you're not uncomfortable you're probably talking to someone that won't give you the best feedback.
  4. Surveys aren't the cure to all your problems. A lot of people when they hear about customer development they think "I know, I'll run a survey". Now you have two problems. As appealing as they are, surveys aren't the cure to all your custdev problems. Whenever you run experiments you should make a distinction between verifying things qualitatively and quantitatively. One is not a replacement for the other. Qualitative verification is what you get by talking to people face to face, taking the time to really understand their situation and background and being able to dig deep and uncover biases and things that the person didn't even realise. Surveys are the right tool for quantitative verification, and while really hard to write properly they can be powerful to add to your qualitative feedback.
  5. It's hard to know when it's enough. Have I talked to enough people? Is the feedback I got enough to validate my idea? Have I tried hard enough without success to justify a pivot? We love Yes-No answers, they are simple and clear, but that's rarely the case with entrepreneurship (or life for what it matters). Most times, especially with questions like the above, it's all about probabilities, grays rather than black and white. Remember, entrepreneurship is for a good part about reducing risk. If you're seeking certainties you're probably in the wrong place. So next time you meet with a VC or other entrepreneurs do ask those questions, but bear in mind that whatever is the feedback you get they can't know for sure. There's plenty examples of companies, Zappos to name one, that stuck with their idea for years when everything was going against them to eventually became some of the most successful companies on the market; and there are others that pivoted and found success only after that, PayPal being a good example of that. If anybody is offering certainty they are either lying to you or trying to sell you something. Or both.

Bonus: 6 tips for better survey results

Surveys look trivial to do, but like most things are really hard to get right. There are both biases and psychological triggers linked to technical choices that you should be aware of if you're trying to get the best out of your survey. Mike Greenberg on the Adventure Lab's blog put together a very good intro and some pro tips to writing great surveys, check it out.

What's your top 1 lesson on customer development?

What is the one thing you learned doing customer development that others could benefit from knowing? Share it in the comments!

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