The Art of Living

Note: This post originally appeared on GreenhornConnect.com on July 27, 2011. I’m organizing all my customer development posts from GHC on here for easy reference (see the Lean Startups tab).

It happens to us all. Your startup is cruising along, or at least you’re really busy running in a million directions. Maybe you’ve also got pulled away with some personal issues like selling your home, caring for children or relationship challenges. No matter what the cause, you get away from the most important thing: Getting outside the building and talking to customers.

So knowing that you have dropped the ball and need to pick it up again, what do you do? How do you get back on the customer development horse?

How Do You Get Back on the Customer Development Horse?

Step 1: Review your previous notes

The first thing you should do is go over all of your past customer development work. Look at how you’ve already progressed and jog your memory on what you have already learned. This should include previous raw interview notes, any summaries of those notes and progress from your Lean Canvas.

This is a good time to find out if you’re taking good enough notes! If you can’t efficiently figure out what you learned, than anyone else using your notes, canvas and summaries can’t either.  A great Lean Startup should be keeping their team and their advisors up to date on customer development progress and most of what they’ll have to go on are these notes.

Step 2: Schedule new customer development interviews

Once your memory is set (this should hopefully only take an hour or two if you’re organized) then go back and see if you had any outstanding interviews to shedule. This is your low hanging fruit to schedule meetings. Reconnect with these people immediately and schedule new meetings with them as soon as possible.

Customer development is a numbers game, so regardless of if you had oustanding interviews, you need to get more feelers out for additional people to talk to; not everyone you reach out to will respond.

Here are a few ways I’ve found work to get more customers to talk to:

1) Your Early Adopters: Ask any of your early adopter users to talk if you haven’t talked to them (also get product feedback if you haven’t connected with them lately).

2) Ask Past Interviewees for Intros: Ask any past customer development interviewees that fit the problem you’re solving if they know anyone they could intro you to. (You should ask this at the end of any interview…it has a 4x success rate of responses compared to cold emailing.) In general, people want to be helpful and if you really are working on solving one of their problems, they’ll be happy to connect you with someone they know that also has the same problem.

3) Cold Email: Cold email, call or walk into the buildings of your potential customers. Unfortunately, this mode has a particularly low success rate (expect a 10-20% response rate on cold emails at best, but 5% isn’t unusual) so be prepared to have to do a lot to get results. I usually email 10-20 people at a time expecting a few responses.

If you know a good blog post on tips for cold emails for customer development, let me know and I’ll link to it here.

4) Use the Reverse Lead Model:  I’ve recently fell in love with the reverse lead model: if your startup serves a group their has their own customers that your tech supports (such as a real estate agent software that helps them interact with homeowners or moving company software for booking moving deals), then pretend to be a lead for your target customer (ie- pretend to be a homeowner or someone about to move).  Then turn the tables when they call you.

The trick I’ve found is when they call play along at first but be chatty. Pretend you’re still selling your house or moving, but then ask them about the software they use as you talk. As this first friendly conversation goes their way…then switch it up to talk about the problems you think they have and see if they confirm. If they do then pitch your product and try to get a face to face meeting (or separate phone call with a decision maker) to talk more.

Trust me, this works. I’ve actually had people complain to me about their software in these conversations…talk about a self-identified problem!

Note: This will take time. I’ve found that it generally takes a week to week and a half to get back into scheduled interviews; if you start emailing on Monday, you’re unlikely to have a full plate of interviews until the middle of the following week.

Step 3: Get your customer development questions updated

Now that you’ve started filling up your schedule with more customer development opportunities, you should determine what your goals are to discover in your current round of customer development.

Go back to your Lean Canvas and look at where you stand in testing assumptions. Remember that the goal is to test the riskiest assumptions you’ve made.  If you’ve already verified some, then you should begin testing new assumptions.

Great customer development starts with a good script of questions. It will make you more confident and comfortable in the interviews and make sure you don’t forget to ask something important.  You can (and should) go off script based on where the discussion takes you, but this is your anchor to bring you back to the key things you want to discover.

Step 4: Set a routine for staying on the horse in the future

In the end, the hope is you won’t fall off the horse again. The best way to do that is to set yourself a plan to keep it in your routine.  This can be as simple as carving out a few hours one day a week to review customer development progress and see how many interviews you have upcoming. If you drop below what you find is an acceptable number of pending interviews, go back to Step 2 and try to get a few more in the pipeline.

You can also give yourself an added boost with some external accountability by setting up to regularly update others on your customer development. At oneforty, I sent out bi-monthly reports to the entire team on key takeaways from customer development and updated the management team every 4-5 interviews. This ensured the whole team was up to date and I had extra motivation to try to keep customer development cranking.

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Getting outside the building is never easy, but if you’re committed to being a lean startup, you have to stay on top of it. It’s easy to get distracted by other responsibilities. When that happens, now you know what to do.

What advice do you have for Lean Startups trying to maintain a routine of customer development?

Note: This post originally appeared on GreenhornConnect.com on September 9, 2010. I’m organizing all my customer development posts from GHC on here for easy reference (see the Lean Startups tab).

“Customers live outside the building.” Every startup is well served to remember this and make sure they’re reaching out to their customers/users to understand them.  As customer development manager at oneforty, I’m on the front lines of that effort and our overall goal of implementing Lean Startups methodologies.  I’d like to share a few things I’ve learned along the way.

Lessons Learned in Customer Development

1) Ask the right questions the right way.

One of the key tools in customer development is the user interview.  At its heart, you’re trying to understand what problems your users have and how your startup may solve some of them.  The greatest challenge in these interviews is keeping the discussion focused on user problems and frustrations instead of features and their ideas for solutions; users are notoriously bad at suggesting features they need or would actually use, so you absolutely need to focus on what problems are behind those feature requests.

There are some great contributions in the blogosphere to help guide you in preparing your interview questions:

• Cindy Alvarez of Yammer/KissMetrics
• Sachin Agarwal of BlueLeaf
• A post by me, Jason Evanish

2) You manage what you measure.

In addition to interviews, metrics are the other big piece of customer development. You have to understand what’s happening on your site and decide what aspects you will work to improve and in what order.

The best way we’ve found to track this is to consider everything under Dave McClure’s AARRR model.  There are all kinds of numbers we can measure on oneforty, but by grouping them into categories of Acquisition, Activation, Retention, Referral and Revenue, a clearer picture of the meaning of all the numbers is formed.  We then take those numbers and focus our engineering sprints on improvements in one of those categories at a time.  This helps engineering understand what they’re building while also making it easier for us to measure for improvements based on those efforts.

3) Communication is key…inside and out!

While Jeremy and I dive into the metrics on oneforty each week in great detail and I interview many users to understand their problems, that’s just the beginning of the work for customer development.  It is essential that what is discovered is shared with the team in a concise and clear fashion; they need the information to act on what we’re seeing and understand the reasoning behind development decisions.  At oneforty, we go over key metrics results with the entire team for 5-10 minutes each week and have a monitor on the wall in the office that displays 3 core metrics we’re focused on right now.

In addition to communicating within the team, it’s important to also communicate outside.  First, you always want to be tweaking your interview questions based on how your site or product is changing; if you’re considering adding a new feature it is important to understand if it solves a significant problem or is particularly compelling for users before you devote significant engineering time.  The best way to do this is through full interviews, but with tools like KissInsights and SurveyMonkey available, you have easy ways to ask large groups of people questions as well.

The other form of outward communication that’s important is with others doing customer development.  Often, it is hard to tell what is a good number for a metric and if you don’t know, you may be trying to improve something that’s already well optimized.

Recently, I discovered two key figures from asking others:

• A 10% response rate on email requests to do a customer development interview is actually good.
• For email newsletters, a 30% open rate and a 20-30% click through are solid and standard across most industries.

To learn these numbers I didn’t do anything special; I simply talked to one of Laura’s mentors, Tweeted a question, tried AskDart and asked some friends.  It didn’t take very long, but saved me a lot of time in the long run.

4) Pattern recognition is your most important skill

In the end, I think customer development is all about recognizing patterns.  You don’t memorize everything a user says in an interview; you’re merely looking for commonalities across many interviews. You should be asking yourself, “Are similar users mentioning the same frustrations or questions?”   These patterns are how you identify your “earlyvangelists” and identify the most important issues to work on.

You can also look at metrics the same way.  The goal is not to have to measure every single activity on your site. Rather, you should be searching for a few specific activities that can lead to the needle moving on many things on your site.

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Customer development is an essential part of an early startup’s life as they search for product market fit. It’s a challenging job, but fortunately there are tons of great resources out there and an open community sharing their knowledge.  If you’re looking to learn more, search for content from Steve Blank and Eric Ries, look for the hashtag #LeanStartups on Twitter and look for Meetups around you on this topic.

What have you learned by doing your startup’s customer development?

Note: This post originally appeared on GreenhornConnect.com on February 23, 2011. I’m organizing all my customer development posts from GHC on here for easy reference (see the Lean Startups tab).

In honor of both the Lean Startup Circle Meetup on Thursday and the Lean Startup Machine coming this weekend, I’d like to share a few lessons I’ve learned in the past year as I’ve served as Customer Development Manager at oneforty and been actively learning the Lean Startups methodology.

5 Lessons Learned in a Lean Startup

1) Don’t ask what people would pay for. They lie.

Yes that’s right. Even Honest Abe wouldn’t have told you what he’d really pay for if you showed him a web app and asked what he’d pay for on top of what you showed.

Customers are terrible at explaining their problems and understanding the root issue. As the saying goes, the one certainty for a patient seeing a psychiatrist is that what the patient says is cause of their problems is never the actual problem.

Even I have lied. I was talking with Chris Keller about his awesome tool Followup.cc, which is an email reminder system, and I said, “I would pay to be able export all of my reminders to my Google calendar.”  Chris wisely also looked at engagement and based much of his pricing system on number of reminders, but he also put the calendar export in his paid version.  I am now a paying customer of Followup.cc but have yet to actually use the Google calendar system.

Did I intend to lie? Of course not. But it just goes to show the mindset you can get in and how far from the truth it can be. Don’t ask people what they’d pay for.

2) Nothing beats getting a customer to actually pay for something.

There is no better validation for your business than getting a user to actually pay for something.  Despite the true value of your time, few people actually account for this. That means they are actually quite likely to be willing to use your free product, while having no intention of ever paying for it.

Paying also moves you beyond the realm of being a favor; friends, acquaintances or just nice guys, no one will pay for your product unless it really solves a pain or strongly interests them.

As an added bonus, once someone pays for something, they have expectations. That means that their feedback will be stronger, because they gave you their money and now expect that you will deliver on what they hoped they were buying. This feedback is priceless, as building something that satisfies them can be built into the repeatable process that goes into a sales funnel.

3) You have to learn the customer’s language.

You may call your product anything you want but if it and the language you use to describe it doesn’t resonate with your customer, you’re unlikely to move forward.  You need to understand your customer’s language and make your product speak that language.

The best way to do this is to look at what words your customer uses to search for the problem you’re solving and, of course, the customer development interview. Remember, your customers should be doing 70-80% of the talking in your interviews.

4) A customer’s stating a problem is more valuable than a customer agreeing with a problem you present.

One of the key tenants of Lean Startups is that you’re solving a customer’s pain.  Often the question is if what you are building is a so called “Vitamin,” which is nice to have, or you’ve created a “Pain Pill,” which they definitely need.

One indicator of which side of the Vitamin/Pain Pill coin your product is on is how the problem that your product solves is surfaced. If in the middle of your interview (before you pitch your solution) the customer talks specifically about the problem you’re trying to solve, you have a much stronger indicator of pain than if you ask them if they are experiencing pain in the area you believe is a problem.

Now, this does not mean that someone who doesn’t come right out and say your problem isn’t a potentially valuable customer. However, when you’re looking for those early adopters (aka- earlyvangelists) you should be thinking about who most desperately needs your solution and that is likely people who have the problem you’re trying to solve on top of mind.

5) Be precise in your Hypotheses.

So you think you have a product solution that is the greatest thing since sliced bread? Great. But who is it for and how does it solve a key pain for them?

One of the risks in creating your lean startup is that you forget to get specific on your hypothesis. Don’t say “this is for doctors”; say “this is for pediatricians in suburban environments that have small, private practices.”

The reason you need to be specific is to avoid false indicators. If you don’t make your hypothesis specific, than you are very likely to talk to a wide range of people. When talking to this wide range, you may not find the interest you would otherwise if you specifically went after a specific group.  You could end up talking to a bunch of chiropractors and surgeons and never realize that the reason there was no interest in your product wasn’t that it’s not a great idea solving a problem; no one was interested because you weren’t talking to the right people.

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There’s a seemingly endless amount to learn about Lean Startups, so no matter what stage you’re at just remember: Stick with it, Be patient and Don’t be afraid to ask for help.

There’s a great community on Twitter (look for hashtags #LeanStartups and #CustDev), many awesome blogs (Eric Ries, Ash Maruya, Dan Martell, David Cancel and many others) and of course great events (Lean Startups Circle) to help.