September 30th, 2017

Customer Development
Five years later

What we’ve learned so far about Customer Development.

by Yannick Frank - Sept 30th, 2017

‘The Lean Startup’ — Probably everyone who works in a startup has already heard of it. The idea behind The Lean Startup is great — no doubt. But as it’s often the case in a startup’s life — ideas usually sound much easier than execution really is.

One of the core principles that emerged out of The Lean Startup Movement is to talk to potential customers really early in the relationship. Instead of staying inside of the building developing a solution you think is needed, you should “Get outside of the building!” to ask your customers what they really want . When you have your answers, then you build it.

Sounds obvious right? But it isn’t!

The simplicity of necessity masks the complexity of execution.

We’ve experienced it…

With hatchery, we have helped more than 100 startups to build from scratch. Of course, we always implement the great idea of validating your business before building the final solution.

The most common reaction we have observed when founders hear about the lean approach follows as such.

They think about it. Understand. Accept. But then, they ignore it.

Why is that?

We have tried to sort out the reasoning through of customer interviews so that we could walk a mile in their shoes, understand their experience, and try to overcome it.

1. It’s cold!

Staying inside the building is a lot more comfortable  —  I get it. Especially compared to getting out of the building and talking to people you’ve never seen before, which can feel really cold. There are not many people who really enjoy jumping into the cold water and talking to strangers.

We've found a way to heat up that cold water just by changing a bit of perspective. Most people think about interviews like cold-call sales. Founders tend to sell their idea. The magic trick we have experienced is:

Don’t sell your idea. Ask for advice!

The first time I experienced that little trick myself was when I was responsible for sales at one of our first startups. At dozeo, we developed a web-based meeting solution. Selling this solution via telephone  was not easy. And then it hit me! Stuck in middle of a sales call, totally frustrated, I asked the client: “So what do you want then?” Although I had been educated in the field of customer development, this was the first moment I really understood what it meant.

If you start your interviews by pointing out that you want to learn more about your customers’ problems and how you potentially can fix these problems, they will see themselves in an advisory role. And I mean — who doesn’t want to be an advisor?

This slightly different perspective can change the way a startup approaches Customer Development.

2. It’s painful!

Yes, we all would love to get nothing but compliments. But how could we improve then? It’s necessary to accept feedback as a good thing. Moreover, we need to search for something more painful than feedback.

Why would you need to search for it? Can’t I just ask for feedback? No, because people will lie. But it’s not their fault. They just want to be nice. You shouldn’t ask anyone whether your business is a good idea. It’s a bad question that invites people to lie to you. There are great techniques to unlock real, honest feedback. ‘The Mom Test’ is a great read for you if you struggle to find the right questions.

A good friend of mine and entrepreneur himself once told me:

Feedback is breakfast for champions!

And it is. Keeping feedback in your mind is the only thing that can make your business better. If there is one thing I’ve learned about building startups, it is that it’s not about building what you would love to build. It is about building what your customers would love. Therefore, you can either always just guess about what the right thing is (not going to happen!) or you need to start collecting the real-kind-of-feedback!

We think that searching for honest feedback early is the key to successful customer development.

3.It’s dirty!

Customer Development totally falls under the category of ‘getting-your-hands-dirty-out-of-the-comfort-zone’ tasks you have to do as a startup founder. From finding potential interview partners to running the interviews and creating conclusions, this job can cost a lot of energy.

And I think that is absolutely great! The hustle is where you as a founder will improve yourself most.

Too often we see founders who try to build surveys or other fancy ways that will keep them from getting their hands dirty. Don’t do it! At least until you’ve made the first steps without the help of any tools. You need to start by doing the tasks yourself.

To scale, do things that don’t scale!

We’ve met founders who hired themselves as cleaners to understand the business processes and customer expectations. You wouldn’t be able to collect this knowledge by sending out surveys.

I advise any founder to read Paul Graham’s essay — Do things that don’t scale!

4. It’s them — not you!

Many founders like to see themselves as visionaries. They have that ‘I’m the next Steve Jobs’ mentality. We’ve seen many of these Steves hiding behind closed doors building ‘the next big thing’.

Often the thing is so big and visionary that they try to tell us that it can’t be tested with customers. They won’t understand it, we need to create demand, and so on… Statements like “If Henry Ford had asked people what they wanted they would have responded faster horses” get thrown out during meeting. Guys, really?

Building the future of your business on personal narratives can be a real danger for any startup. Instead building conclusions based on real-world feedback is taking out the risk of your business model.

We totally advise any startup to base its focus on real-world feedback, not what somebody said decades ago — maybe.

I totally agree that the customer is not necessarily always right, but at the end they pay the bills. You need visionary people to keep the world of innovation turning. But there is a big difference if you can deliver it or not. Trust me, it’s much easier to deliver based on early customer feedback!

In the end — It’s magic!

Don’t take Customer Development as a theoretical approach but as a great way to de-risk your business model by learning exactly what makes your business valuable to your customers. Building something people want is the magic component for any sustainable business success.

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