Will you buy

these?
Customer Discovery
BUSINESS MODEL & CUSTOMER DEVELOPMENT

The key to CUSTOMER DISCOVERY is to 'GET OUT OF THE BUILDING'

and learn from real potential CUSTOMERS
STARTUP
JOURNEY
 SEARCH EXECUTION

 Searches for a repeatable,  Executing a business model

scalable business model means transitioning fro a
startup venture to an
“Repeatable” - a system can be established organization
created on a consistent basis

“Scalable”- a repeatable system can

handle volume for a growing
customer base
Customer Discovery
1. Pre-Planning
2. Interviews
3. Analysis & Insights

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Customer Discovery
1. Pre-Planning
1
 Find out where your potential user's offices or where they hangout?
 In B2B, start interview with the middle people in the company (not
the CEO)
 In B2C, do person to person interview to get face-to-face data -
and observe their reaction
 Practice your interviews (with a script)
 Design PASS/FAIL tests to validate hypothesis
 Experiments yield insight (why you are right or wrong?; then
what's next step?)
Customer Discovery
2. Interviews
2
 It's all about testing your hypothesis & assumptions - not
pitching the product or idea
 Market type and competition (existing market, re-
segmented, or new market)
 Finding patterns meaning in the data
 Surprises in interviews can lead to new ideas and insights
 Insights requires a lot of interviews (data)
 You're only done when responses seem predictable (hearing
the same thing over and over again)
Customer Discovery
3. Analysis & Insights
3
Look for Early Evangelists
 Your early adopters
 They know the problem
 They have great ideas, give great feedback, & will
spread the word

Filter your insights

 Write them up
 Share with your team
 Keep Communicating & get feedback
“ COMPANY VS STARTUP

a business organization a temporary

which sells a product organization designed to
or service in exchange search for a repeatable
for revenue & profit and scalable BUSINESS
MODEL

10
“no business plan”

“if we only knew BMC

earlier...”

11
 What is this
Business
Model Canvas?
12
 CHESTER CARLSON
Patent Attorney in NY
Part-time researcher and inventor

1937
Problem: Frustrated by the difficulty and expense of
copying documents, motivated him to conduct
experiments with photoconductivity.

Solution: He invented a method of transferring images

from one piece of paper to another using static electricity.
His patented process was later renamed „Xerography‟.
The first known photocopy was the "10-22-38 Astoria".

The Xerox 914 was the world's first one-piece, plain

paper photocopier and sold in the thousands.
13
Source: Osterwalder on BMC
 LARRY PAGE & SERGEY BRIN
Founders of Search Engine Google
1997
launched in 1998

Problem:
• Created a search engine that listed results according
to the popularity of the pages
• Search Engine is for free

Solution:
• Contextualize Advertising (Selling search terms)
• Auctioning
• Pricing Mechanism
After raising $1 million from family, friends and other investors, the pair launched the company
in 1998. Google has since become the world's most popular search engine, receiving an
average of 5.9 billion searches per day in 2013. Headquartered in the heart of California's
Silicon Valley, Google held its initial public offering in August 2004, making Page and
Brin billionaires.

On August 10, 2015, Page and Brin announced the creation of a new parent
company called Alphabet to oversee Google and other subsidiaries.

14
Source: Osterwalder on BMC
What are in
common?

15
1 they empower
the product through
the business model
They focused on product innovation alone

16
2 they invented
a new business
model
They simply copied from competitors

17
3 they had to
take some risk
and experiment
They could prove in advance that the model would work

18
BUSINESS
MODEL
CANVAS
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 What is a business model canvas?

How a company
creates value for itself
while delivering products or
service for customers

Alexander Osterwalder
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 6 4
8 2 1
7 3
9 5
 1 Customer Segment

• For whom are we

creating value?

• Who are our most

important customers?

Notes: If you‟re spending a lot of time on this first item, that’s OK (that means your taking time looking for
the right person to be your customer).
Customer Segment Types
For whom are we creating value

 Mass Market

 Niche Market

 Segmented Market

 Diversified Market

 Multi-side Platforms
Customer Segment Types
For whom are we creating value

 Usually how
startups identify
their customers is
through a
persona.
 2 Value Proposition

• What value do we deliver to the

customers?
• Which one of our customer’s
problems are we helping to
solve?
• Which customer needs are we
satisfying?
• What makes us unique compared
to the competition?
Elements of the Value Proposition
What are you offering to them?

 Newness

 Performance

 Customization

 Brand/Status

 Design

 Price
 3 Channel
• Through which Channels do our
Customer Segments want to
reached?
• How are we reaching them now?
• How are our Channels integrated?
• Which ones works best?
• Which ones are most cost-efficient?
• How are we integrating them with
Customers routines?
Four things to consider in Channels

● Product
● Market
● Middlemen
● Company
Types of Channels
Through which channels the customer segment can be reached?

 Sales Force

 Web sales

 Own stores

 Partner stores

 Wholesaler

 Retailer
 4 Customer Relationship

• What type of relationship does each

of our Customer Segments expect
us to establish and maintain with
them?
• Which ones have we established?
• How costly are they?
• How are they integrated with the rest
of our business model?
Types of Customer Relationships
What type of relationship should be established and maintained with CS?

 Personal assistance

 Self-service

 Automated services

 Communities

 Co-creation

 Dedicated personal assistanc

 5 Revenue Streams

• What are customers really

willing to pay for?
• How? Are you generating
transactional or recurring
revenues?
Types of Revenue Streams
For what value the CS are really willing to pay?

 Asset sale

 Brokerage fee

 Subscription fees

 Renting/leasing/lending

 Licensing

 Advertising
 6 Key Resources
• What Key Resources do
our Value Propositions
require?
Distribution channels?
Customer Relationship?
Revenue Streams?
Types of Key Resources
What key resources do the value proposition require?

 Physical

 Intellectual

 Human

 Financial

 Natural
 7 Key Activities
• What Key Activities do
our Value Propositions
require?
• Distribution channels?
Customer Relationships?
Revenue streams?
Types Activities
What key activities do the value proposition require?

 Production

 Problem solving

 Platform/networking

 Partnership

 Service
 8 Key Partners
• Who are our key Partners?
• Who are our key
Suppliers?
• Which Key Resources are
we acquiring from
partners?
• Which Key Activities do
partners perform?
Types of Key Partners
Who are our key partners?

 Strategic alliance

 Joint ventures

 Cooperation

 Buyer-supplier

 Franchising
 9 Cost Structure
• What are the most important
cost inherent in our business?
• Which Key Resources are
most expensive?
• Which Key Activities are most
expensive?
Types of Cost Structures
What are the most important costs inherent in the business model?

 Value-driven

 Fixed costs

 Variable costs
To simplify
HOW? WHAT? WHO?

HOW MUCH?
“ "You have to see failure as the
beginning and the middle, but never
entertain it as an end."
-Jessica Herrin, founder and CEO of Stella & Dot

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Thanks!
Any questions?

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