![Customer Development basics Your startup or new product fails because No one wants what you have No one wants to pay for what you have Your cost of acquisition is > what they’ll pay [hint: you can’t make that up in volume] And…because you run out of cash before you can fix it](https://image.slidesharecdn.com/customerdevelopment-111201191303-phpapp02/85/Customer-development-and-Agile-development-3-320.jpg)
![Customer Development basics Your startup or new product fails because No one wants what you have No one wants to pay for what you have Your cost of acquisition is > what they’ll pay [hint: you can’t make that up in volume] And…because you run out of cash before you can fix it](https://image.slidesharecdn.com/customerdevelopment-111201191303-phpapp02/85/Customer-development-and-Agile-development-4-320.jpg)
Customer development and Agile development
- 1. Extending Agile Applying Customer Development to Agile Projects Dave Churchville ExtremePlanner Software @dchurchville
- 2. Customer Development basics Most new products don’t fail because of your technical execution Except maybe drug discovery and space ships
- 3. Customer Development basics Your startup or new product fails because No one wants what you have No one wants to pay for what you have Your cost of acquisition is > what they’ll pay [hint: you can’t make that up in volume] And…because you run out of cash before you can fix it
- 4. Customer Development basics Your startup or new product fails because No one wants what you have No one wants to pay for what you have Your cost of acquisition is > what they’ll pay [hint: you can’t make that up in volume] And…because you run out of cash before you can fix it
- 5. Customer Development basics How can we fix this? What if we could find out if people wanted our product before we ramp up expenses? Even better, what if we could find out what people really needed instead of guessing?
- 6. Customer Development basics Customer Development Focuses on validating hypotheses about the customer, problem, and solution we want to offer Keeps cash burn low until we validate that someone wants and will pay for what we have
- 7. Customer Development basics Customer Development Turn hypotheses about the customer, problem and our solution into facts Requires “Getting out of the building” via customer interviews (aka Talking to Real People) MVP – Minimum Viable Product (increase learning, minimize burn rate)
- 8. Customer Development basics “ Scientific”approach Start with a hypothesis about market, customer, problem and solution Test each hypothesis with experiments E.g. Interview potential customers about their problems E.g. Determine a minimum viable product to test Falsifiable hypotheses are easier/faster to test “ 40% of our users will use Feature X this month, and stick around 10% longer as a result”
- 9. How can we learn faster? Minimum Viable Product (MVP) What’s the least we can build that will address the pain in a way that someone will “pay” for (with money, time commitment, etc.) Landing page? Product prototype or mockups? “”Wizard of OZ” automation? Fail fast to learn quickly Experiments should fail fast, not your business
- 10. How can we learn faster? Lean Startup Cycle (in any order) Build (MVP) Measure (engagement, conversion, ??) Learn (Interviews, market feedback)
- 11. How can we learn faster? Goal – minimize cycle time through this Build-Measure-Learn loop to create a sustainable business. Dave’s Law Luck = Preparation X Opportunities Minimizing cycle time means more chances to figure things out before running out of cash
- 12. How can we learn faster? Applications for Agile Development Product owners? Team structure? Goals for a sprint/iteration? Tests? Deployment? Metrics/accountability?
- 13. Extending Agile Development Product Owner hacks Interviewing customers Don’t ask them what they want Learn about what problems/ pain they have and how they’re dealing (or not) with it now Validate/invalidate problem hypotheses “Other customers said they had a problem with X…”
- 14. Extending Agile Development Product Owner hacks (cont) Prioritize features based on LEARNING KEY QUESTION: How can we learn what we need to know in the least expensive way possible (time, resources, money)? Do we need to build the whole feature to learn? Do we need to build the REAL feature or is there a cheaper way to learn?
- 15. Extending Agile Development Product Owner hacks (cont) “ Innovation accounting” What key metric am I trying to improve with this feature? How much am I hoping to improve it? How will I measure the improvement (or lack of)? When will I followup to validate/invalidate? What will I do if it works/ doesn’t work? (remove feature? Extend it? Promote it?)
- 16. Extending Agile Development Developer hacks Optimize for learning – consider a “technical spike” might also be a “business spike”/MVP that can prove/disprove something Unit testing, integration testing, functional testing…but what about hypothesis testing? May need to instrument code for usage/metrics A/B testing for features? Flexible reporting for metrics (Excel dump?)
- 17. Extending Agile Development Developer hacks (cont) What if we deployed EVERY change? “Continuous deployment” Feature flags to turn off/on partial/beta features Automated exception reporting / tracking Quick rollback? Even better - quick roll-forward Limited scope? (test with subset of opt-in customers)
- 18. Extending Agile Development Developer hacks (cont) Keeping product owners accountable “What metric or goal will this impact?” “How can we measure that?” “Do we really need to write code to test that?” “Would this simpler approach accomplish that?” “Can we do that manually to test?” Focus on fastest way to LEARN, then build
- 19. For more… Resources Books: Four Steps to the Epiphany by Steve Blank Custdev.com ( Entrepreneurs Guide To Customer Development ) – eBook Getting to Plan B by Randy Komisar (investor perspective on dashboarding for startups) Blogs: Steve Blank, Eric Ries, Ash Maurya, Cindy Alvarez, Brant Cooper My Blog: blog.usermood.com