The First 2 Steps to the Epiphany

Jason @Evanish
August 29, 2013
 Who is Jason @Evanish?
100s of customer development interviews with:

Cofounded: Blog my learnings:

JasonEvanish.com
Today’s Topics

Customer Discovery Overview

Customer Development
Interview Process

Customer Validation Overview

 Why Customer Development?

• Move faster
• Reduce risk
• Bring process to chaos
• Stay in tune with customers
• Replace HiPPO & opinions with data
• Discover the best market opportunities
The Core: Learn-Build-Measure
Customer Discovery
 Who is Your Customer?

Phase 3:
Phase 4:
Test Product
Verify
Concept

Phase 2: Phase 1:
Test Problem State
Hypothesis Hypothesis
 Map Your Ecosystem

• Who are the entities in

your business?
• Connect the entities
based on the flow of $$
• How does the product
move through channels
to meet users?
 The Hypothesis : C-P-S
• Customer
– Who is using your product?

• Problem
Take 5 & write
– What problem do they have?
this for your
• Solution startup
– How will you solve the problem?

Be Specific. It’s better to be wrong than vague.

 The Intermediate MVP
• Map out the basics of your MVP based on the
solutions from C-P-S
• Identify the riskiest parts & test them
• This is before you build anything…just map out
what you think is the solution

BUILD
Helping you map it: The Lean Canvas
Why all this work?!?

• Save Time and Money by

discovering early on if
something won’t work.

• Make course adjustments

before you build a large
product.
Customer Discovery Wrap Up
To Exit means you’ve:
• You’ve identified a problem a
customer wants solved.
• Your product solve the customer’s
needs.
• You believe you have a viable and
profitable business model.
• You feel you’ve learned enough to
go out and sell.
The Customer Development Interview

Learn in detail at: bit.ly/CustDevInterview

 The Structure
3. Solution

The MVP House 2. Problem

1. Person
 The Structure – 1. Person
Learn about them and their role in your industry.

• Who are they? What’s their role?

• How is your budget handled?
• How do you find new products
for work?
• How much time do you spend on
[Task X]?

Goal: Get a baseline background of the person

you’re talking to. Be broad.
 The Structure – 2. Problems
Learn about the problems they recognize first.
• NOT about the problems you think
they have.
• What are your top 3 challenges
you face in your job related to
[industry X]?
• If you could wave a magic
wand…what would the solution
be?
Goal: Get them to say the problem you want to
solve is a problem they have (prefer unprompted)
 The Structure – 3. Solution
Now you tell them about your product concept.
• “That’s interesting” = Kiss of Death.
• If they’re not anxious to use right
away, they’re not a key target.
• Read body language, voice
inflection and energy level for
signals of interest.
• Best reaction is actually following
through after the meeting or calls.
Goal: Discover if they’re interested in your solution
and gather feedback.
 Tips for making the most of Interviews
1. Take good notes.
2. Involve other team members.
3. Be Conversational.
4. Go off script.
5. Ask to see any MVPs they’ve made/use.
6. If they’re excited about something, ask if they’ll pay for it.
7. Show them mockups or early concepts if you have them
and pay attention to their reactions/feedback.
8. Always Follow up.
9. End with an ask.
10. Be open to new problems and opportunities!
11. Summarize and review your notes with your team.
Where do you find people to interview?

Learn in detail at: bit.ly/1stcustomers

The Best Place to Find Candidates:
Help not Sales
Manage Expectations
• Only 10-20% of those you
reach out to will respond.
• Getting started is the hardest,
then you can find the
channels.
• Different target customer
usually means having to find a
new goto channel.
Now what?
• Interview in groups of 8-10
people per customer type.
• Summarize notes and review
with others.
• Look for common patterns
matching C-P-S.
• Compare to your high level
metrics to see if anecdotes
match data.
Take 10 minutes!
Write your own script:
–WHO will you talk to?
–WHAT will you ask?
–WHAT are you
validating?
Customer Validation
 Can You Sell It?

Phase 3: Phase 4:
Develop Verify
Positioning

Phase 2: Phase 1:
Sell to Visionary Get Ready
Customers to Sell
 Not time for Glengarry Yet…

You’re still in learning mode.

…about what customers will buy and how!
Break Down Your Sales Road Map
• Who influences a sale?
• Who recommends a sale?
• Who is the decision maker?
• Who is the economic buyer?
• Who is the saboteur?
• What is the budget for purchasing your type of
product?
• How many calls does it take to make a sale
• What is the profile of an early customer?
 The Word According to Blank –
Phase 1 : Get Ready to Sell

Prelim
Articulate Prelim Prelim Hire a Formalize
Sales &
a Value Distribution Sales Sales Advisory
Collateral
Prop Channel Plan Roadmap Closer Board
Materials

Goal: Take what you learned from Customer

Discovery and apply to development of Sales Process
Map out the Food Chain of your Sale
Find out how to (reliably)
get your foot in the door…
• At what level do you want to
enter?
• How many people on the org
chart need to say yes?
• Does each department perceive
the problem the same way?
• In what order do you need to
call on people?
• Who can derail the sale?
 Take 10 minutes!
Map out your food chain!
• Who is your end user?
• Who makes the purchase
decisions?
• Who is looking for a solution
like yours?
• What are their alternatives?

Remember: It’s okay to be wrong. When you write it down, it forces you to measure
whether you are right or wrong and make changes.
 The Word According to Blank –
Phase 2: Sell to Visionary Customers

Contact Sell to Refine Sell to Refine

Early- Early- Sales Channel Channel
vangelists vangelists Roadmap Partners Roadmap

Goal: Get someone to Pay for your product and learn

how to repeat the process.
 Free != Customer

Customer =
 Build Your Sales Roadmap

Send initial Validate the

Get Lead Qualify a lead
outreach lead

Win over the Preliminary

Win over IT Second Pitch
CIO Sales Call

Formal Negotiate &

Proposal Close
 The Word According to Blank –
Phase 3: Develop Positioning

Present to
Product Company
Analysts &
Positioning Positioning
Influencers

Goal: Based on problem and sales lessons, optimize

positioning for your product & company.
 Positioning

• Speak the language of your customer

• Written by those that interact directly with the
customer
• Verify with Product team to ensure what’s built
meets expectations set
Take 10 minutes!

• What problem(s) are you

solving?
• How would your customer
describe the problem?
• What is the outcome your
customer wants?
(i.e.- Your solution)
 The Word According to Blank –
Phase 4: Verify

Verify the Verify the Verify the

Verify the Iterate or
Sales Channel Business
Product Exit
Roadmap Roadmap Model

Goal: Verify all the work you’ve put into Customer

Validation to iterate or move onto Customer Creation.
Productive Paranoia
Questions to Ask…
Product:
- Are you repeatedly losing any deals? Why?
- Are customers satisfied? What else do they
expect?
- Are you building the right features?
- Were there any pricing issues? Did you lose
customers on pricing?

Sales:
- Can you verify the sales process and
accurately project its success rate?
- Can you realistically map your sales
pipeline?
- Are you closing deals?
More Questions to Ask…
Channel:
- Did you factor in the channel costs to
the overall costs of your product?
- How do various channels affect the
sales time?
- What does your sales force look like?

Business Model:
- Based on known factors, how profitable
is the business?
- Will costs be the same as you grow?
- How much funding do you need to
reach profitability?
Customer Validation Wrap Up
To Exit means you’ve
- Proven you found a Customer
Problem
- Found earlyvangelists that will
pay you
- Found a repeatable and scalable
sales process
- Demonstrated a viable business
model
Customer Development in a Nutshell

Common Sense + Diligent Process + Thought =

Questions?
 Contact me…I’m happy to help.
On Twitter: @Evanish
Other sites: About.me/Evanish
Email: Evanish.J@Gmail.com

Find all my Lean learnings at

JasonEvanish.com/lean-startups/

Find a detailed, blog form of the interview process at bit.ly/CustDevInterview

And tips for finding your first customers at bit.ly/1stcustomers
 Further Reading - Books
The Entrepreneur’s Guide The Startup Owner’s Manual
to Customer Development By Steve Blank
By Patrick Vlaskovits &
Brant Cooper An in depth guide to lean
Startups for your company.
The Cliff Notes for Lean Helpful from Day 1 to 1,000.
Startups; a must read for
everyone on your team.

The Lean Entrepreneur The Four Steps to the

By Patrick Vlaskovits & Epiphany
Brant Cooper By Steve Blank

Awesome, actionable The Bible of Lean Startups.

examples for any market. Tough read, but excellent
content.

These books, especially 4 Steps, were key sources in creating this presentation & my learning of this methodology
 Further Reading – Helpful Presentations
• The Customer Development Methodology
– by Steve Blank
• Startup Metrics are for Pirates
– by Dave McClure
• The Top 10 Reasons to not be a Lean Startup
– By Patrick Vlaskovits & Brant Cooper
• How to recruit and interview potential customers
– by Elizabeth Yin
• Minimum Desirable Product: Customer
Development for the “Winner Take All” Web
– by Andrew Chen