Learn how to raise your odds of success

 

Customer Development Checklist for My Web Startup – Part 1

Written by Ash Maurya

Customer Discovery for a Web Startup

Last year, Steve Blank threw out a challenge to Lean Startup Circle members to update his customer development checklist (Appendix B in his book) for their specific business. His checklist is built for Enterprise Software which doesn’t readily translate to other types of startups including web startups (especially when you get to Customer Validation).

After the talk, David Binetti pulled together a great group of people from Lean Startup Circle to create a Customer Development Checklist for web startups. I was honored to be asked. However, after a few exchanges trying to nail down the type of web startup to tackle first, we uncovered a number of tactical differences that made me come to the realization that defining such a model in a group setting is too hard to do. We would either end up with a highly generalized model or no model. I, for one, am not comfortable extrapolating a model from third-party accounts of what might have worked for other companies (like 37signals), and especially not without first-hand experience building a similar type of startup.

So I decided to take a stab at defining a Customer Development Checklist for my web startup.

First Some Background

This model is based on my experiences building and running 2 products: BoxCloud and CloudFire. Both use a subscription pricing model. BoxCloud was built using a release-early release-often development model and was initially launched with a Freemium pricing model – later changed to a free-trial only model. CloudFire is being built using a lean-startup/customer development model and was launched with a free-trial only model.

For a SaaS product like mine, I strongly believe you need to
a) charge for your service, and
b) validate pricing sooner rather than later.

Free trials, Freemium, free introductory periods, etc. are all tactics to lower sign-up friction and should be applied (split-tested) judiciously on a case-by-case basis. However, my key takeaway is that even if you’re considering Freemium, you should validate the premium part of Freemium first before giving anything away.

I’ll cover Customer Discovery in Part 1 and Customer Validation in Part 2. Hopefully, I’ll get to write Parts 3 and 4 one day.

Customer Discovery: What should I build and for whom?

Here’s my Customer Discovery Flow (you’ll probably want to click to enlarge and skim it before reading on).

Click to Enlarge

The 3,000 Foot View
For a web startup, the purpose of Customer Discovery is to identify a problem worth solving, defining the “right” minimum viable product to build, and testing the business model using 3 separate Build/Measure/Learn loops. Most web startups rely on a product website for distribution and blogs, SEO, SEM, for initial customer acquisition channels- leaving price as the biggest unknown in the business model.

Sidebar: There is a somewhat loose definition of how the term MVP gets used. Many have used it (myself included) to refer to anything (a landing page, a problem presentation, screenshots, etc.) that allows you to learn about customers with the least effort. Here, I am using the stricter definition of MVP to mean the minimum set of features needed to learn from earlyvangelists. In other words, Release 1 of your Product.

It All Starts With Stating Your Assumptions
State your hypotheses

Before you can test what you think you know, you have to write it down. It’s normal to try and short this step but I found it to be a very worthwhile exercise. Apart from minor terminology changes, most of Steve’s questions in his hypothesis worksheets hold up even for a web startup. I am not going to reproduce them here but if there is interest, I’ll make my versions available as a separate download.

Test the Problem
Test Problem

This will look very similar to Steve Blank’s flow. That’s because when it comes to Customer Discovery I haven’t found a more effective way for maximizing validated learning than “Getting out of the Building”. This is coming from someone who used to prefer to stay in the building and talk to customers over email. Now, I have an 800 number tied to my mobile phone and schedule for face-time opportunities with customers.

With my last product, I used a teaser/landing page with some pre-launch buzz to collect email addresses and measure interest. While it was encouraging to have interested users, it told me nothing about what problem they had, who they were, what I should ship first, or what I should charge. What does 10 email addresses a day tell me? What does 20, 40, 100? Why did the other 70% abandon my landing page? Was it the product, was it the copy, graphics, something else. What?

Building a good landing page is hard. Unless you have exceptional customer insight (or are your own customer), iterating without talking to customers is slow and painful as you split-test one page against another with very little initial test traffic. Yes, it feels like more legwork to find people who will have a conversation with you but a 15 minute unscripted conversation has more validated learning pound for pound than all the data you can crunch from web analytics.

I have never tried using surveys with my landing page registrations because I hate filling them out myself. Plus, to make them easy to fill, you have to be very specific which assumes you know exactly what you want to know, which is hardly the case.

The beauty of Steve’s process, is that it tests the problem separately from your solution.
To paraphrase Dave McClure:

Customers care about their problems NOT your solution.

During the “Problem Presentation”, you state the top 3 problems, then shut-up and listen which is key to getting it to work. It works because you aren’t asking customers to validate or design a solution which addresses the “Customers don’t know what they want” argument. It works because it isn’t a pitch. Actually, I take that back. It is a pitch. But it’s the customer that’s pitching their problems to you. I know I’ve hit the right “problem nerve” based on how passionate a customer gets during an interview.

I like to structure my “Problem Presentation” like this:

1. State the top 3 problems
2. Ask customer to prioritize problems and identify any higher priority problems
3. Have customer describe how they solve the problem today
4. Very briefly describe how you might solve the problem
5. Ask Customer whether your approach would solve their problem
6. Would they use your solution if it were free?
7. Would they pay $X/yr?
8. Ask for referrals to other customers

Build Your MVP
Build MVP

Unlike Enterprise Software, which can be chock full of features, web startups need to focus on the smallest feature set needed to learn from earlyvangelists or the MVP. After the first reality check, you should end up with a prioritized top 3 problem list which drives the features for your MVP. I stress the importance of then building out the MVP to the point where it’s demo-able. It will be hard for customers to visualize your solution without one. Screenshots and mockups may be used as stand-ins only if a demo is absolutely out of the question.

Test Your MVP
Test MVP

With the MVP built out, you then go test it against the original set of interviewees plus some.
I like to structure my “Product Presentation” like this:

1. State the problem
2. Use the demo to tell a story of how your solution solves the problem
3. Test pricing again
4. Ask for referrals to other customers
5. End with a call to action: sign-up, or commitment to sign-up

Tip: I practice delivering the demo using screencasting software which not only lets me iterate till it’s short and crisp, but I also end up with a video I can use later on the product website.

Iterate or Exit
Verify

The last step in Customer Discovery is to summarize what was learned and make a decision to iterate or exit.

What’s Next?

Next time, I’ll cover my flow for Customer Validation which I promise will look very different (from Steve’s) for a web startup.


Update: The workflow described in this post has been refined even further and turned into a book: Running Lean – with step-by-step guides, techniques for finding prospects, and field-tested interview scripts.

You can learn more here: Get Running Lean.

Translations

This article has been translated to Serbo-Croatian language by Jovana Milutinovich.

Become a Practice Trumps Theory member
(it's free)

Get access to more tactical content, videos, and hands-on techniques for systematically building a successful product...

  • http://www.introspectrum.com Craig

    Great post, I think a lot of us would appreciate also seeing your hypothesis questions if you care to share them. It’s very helpful to see the process in action.

    Just a heads up – looks like a dangling sentence in Test the Problem: “This is coming from someone who would rather have”

    [Reply]

    Ash Maurya Reply:

    Thank you Craig.

    [Reply]

  • Pingback: uberVU - social comments

  • Joshua Ho

    Thanks for sharing Ash. Really look forward to your posts on customer validation, customer creation and company building.

    One question. In his book, Steve recommends speaking to at least 20 customers. How many did you actually speak to, considering that yours is a web startup?

    [Reply]

    Ash Maurya Reply:

    Good question. I was going to cover that point but I guess I forgot.

    I had my “problem presentation” pipeline set up with 50 people but after about 30 I felt I wasn’t learning anything new so I stopped and waited to talk to the rest when I had the “product presentation” ready. As I’ll cover in the next post, you never want to stop talking to new customers and I am still doing a more later-stage variation of “product presentation” even today.

    [Reply]

  • Joshua Ho

    Thanks for sharing Ash. Really look forward to your posts on customer validation, customer creation and company building.

    One question. In his book, Steve recommends speaking to at least 20 customers. How many did you actually speak to, considering that yours is a web startup?

    [Reply]

    Ash Maurya Reply:

    Good question. I was going to cover that point but I guess I forgot.

    I had my “problem presentation” pipeline set up with 50 people but after about 30 I felt I wasn’t learning anything new so I stopped and waited to talk to the rest when I had the “product presentation” ready. As I’ll cover in the next post, you never want to stop talking to new customers and I am still doing a more later-stage variation of “product presentation” even today.

    [Reply]

  • Pingback: Customer Development Checklist for My Web Startup – Part 1

  • http://www.steveblank.com/ Steve Blank

    Ash,

    Thanks for doing this. Unbelievably useful. Your slide is going to show up at my Haas class tonight.

    steve

    [Reply]

    Ash Maurya Reply:

    Thanks Steve. This one was easy. Wait till you see the next slide on Customer Validation. I’m still trying to make sense of it…

    [Reply]

  • http://www.steveblank.com Steve Blank

    Ash,

    Thanks for doing this. Unbelievably useful. Your slide is going to show up at my Haas class tonight.

    steve

    [Reply]

    Ash Maurya Reply:

    Thanks Steve. This one was easy. Wait till you see the next slide on Customer Validation. I’m still trying to make sense of it…

    [Reply]

  • http://www.recessmobile.com/ Vitaliy Levit

    Ash, great post. We’re going through a similar process for a new product right now and it’s good to have some validation for our own processes. We’ll have some lean posts coming up soon as well.

    [Reply]

    Ash Maurya Reply:

    Vitaliy – We definitely need more practitioners sharing their stories. Looking forward to it.

    [Reply]

  • http://www.recessmobile.com Vitaliy Levit

    Ash, great post. We’re going through a similar process for a new product right now and it’s good to have some validation for our own processes. We’ll have some lean posts coming up soon as well.

    [Reply]

    Ash Maurya Reply:

    Vitaliy – We definitely need more practitioners sharing their stories. Looking forward to it.

    [Reply]

  • Pingback: Customer Development Checklist for My Web Startup – Part 1 « Netcrema – creme de la social news via digg + delicious + stumpleupon + reddit

  • Dror Engel

    Great work Ash!
    Please upload the hypothesis worksheets …. :)
    did you collect your soon-to-be customers only by emails via landing page?

    Thanks
    Dror

    [Reply]

  • Dror Engel

    Great work Ash!
    Please upload the hypothesis worksheets …. :)
    did you collect your soon-to-be customers only by emails via landing page?

    Thanks
    Dror

    [Reply]

  • http://www.ashmaurya.com/ Ash Maurya

    Dror/Craig – Let me get my worksheets into a downloadable format. I’ll add a link to the bottom of the post when I’m ready.

    I used a landing page to gather emails for my last product. With the latest one, since it was targeted at new parents, I first hit friends and family, then my kids’ daycare, then referrals. Any event with kids, like birthday parties, are prime for casual customer development.

    A landing page can’t give you this level of micro-targeting.

    [Reply]

  • http://www.ashmaurya.com Ash Maurya

    Dror/Craig – Let me get my worksheets into a downloadable format. I’ll add a link to the bottom of the post when I’m ready.

    I used a landing page to gather emails for my last product. With the latest one, since it was targeted at new parents, I first hit friends and family, then my kids’ daycare, then referrals. Any event with kids, like birthday parties, are prime for casual customer development.

    A landing page can’t give you this level of micro-targeting.

    [Reply]

  • Pingback: Customer Development Checklist for My Web Startup – Part 1

  • http://www.PrintFriendly.com/ Taylor Norrish

    This stuff is great stuff. As an entrepreneur, I’m trying to embrace it… but still love to build first.

    I built PrintFriendly.com. I’m happy to find it on your page!

    Cheers

    [Reply]

  • http://www.PrintFriendly.com Taylor Norrish

    This stuff is great stuff. As an entrepreneur, I’m trying to embrace it… but still love to build first.

    I built PrintFriendly.com. I’m happy to find it on your page!

    Cheers

    [Reply]

  • Pingback: Customer Development Checklist for My Web Startup – Part 1

  • http://kissingfrogs.typepad.com/ Lucas

    Great post. One quick question.

    When you say state the top 3 problems and then listen, are you starting with your problem hypothesis and the 3 drivers you think are most important and then iterating? So for sharing photos (I believe this is the website you are discussing for this) would that be 1) Difficulty of upload 2) difficulty organizing 3) having to sign up to share?

    Thanks again for the great post.

    [Reply]

    Ash Maurya Reply:

    Lucas –

    Yes that is correct. You want to pick the 1-3 most compelling problems you think customers have (ranked in priority) and have them re-rank them/change them. The point is to set a stage and get them talking.

    I detail the specific problems I started with and what I ended up with in my “How I built my Minimum Viable Product” post.

    [Reply]

  • http://kissingfrogs.typepad.com Lucas

    Great post. One quick question.

    When you say state the top 3 problems and then listen, are you starting with your problem hypothesis and the 3 drivers you think are most important and then iterating? So for sharing photos (I believe this is the website you are discussing for this) would that be 1) Difficulty of upload 2) difficulty organizing 3) having to sign up to share?

    Thanks again for the great post.

    [Reply]

    Ash Maurya Reply:

    Lucas –

    Yes that is correct. You want to pick the 1-3 most compelling problems you think customers have (ranked in priority) and have them re-rank them/change them. The point is to set a stage and get them talking.

    I detail the specific problems I started with and what I ended up with in my “How I built my Minimum Viable Product” post.

    [Reply]

  • http://beebole.com/ Yves Hiernaux

    Not sure about the Build “MVP” block.

    While CD is going on, the product development is still happening from day one.

    Unless you are alone, there should be guys developing the software even when you start stating your hypothesis in a more formal way.

    I would say, it is more like a milestone/synchronization between CD and project development teams that has to happen at that time, because, as you rightly say, it will be difficult in a web startup world to create any real interest without a real demo during the MVP presentation.

    [Reply]

    Ash Maurya Reply:

    Yves –

    I disagree. Building a product based on guesses is potentially taking you down the path of building features no one wants which is a form of waste. I would hold off coding until the customer problem and feature prioritization is identified. Being a technologist myself, I know this is hard to follow as we tend to measure progress in terms of what we build. If you do have a product development team already staffed during CD, have them start laying out the infrastructure for measuring metrics and continuous deployment. Once the first MVP is built, you need to constantly be building/measuring/learning. Most people only focus on the first part – building.

    [Reply]

  • http://beebole.com/ Yves Hiernaux

    Not sure about the Build “MVP” block.

    While CD is going on, the product development is still happening from day one.

    Unless you are alone, there should be guys developing the software even when you start stating your hypothesis in a more formal way.

    I would say, it is more like a milestone/synchronization between CD and project development teams that has to happen at that time, because, as you rightly say, it will be difficult in a web startup world to create any real interest without a real demo during the MVP presentation.

    [Reply]

    Ash Maurya Reply:

    Yves –

    I disagree. Building a product based on guesses is potentially taking you down the path of building features no one wants which is a form of waste. I would hold off coding until the customer problem and feature prioritization is identified. Being a technologist myself, I know this is hard to follow as we tend to measure progress in terms of what we build. If you do have a product development team already staffed during CD, have them start laying out the infrastructure for measuring metrics and continuous deployment. Once the first MVP is built, you need to constantly be building/measuring/learning. Most people only focus on the first part – building.

    [Reply]

  • http://apps.facebook.com/refillrevolution aaron

    Steve is talking about this right now in his class at UC Berkeley’s Haas School of Business

    [Reply]

    Ash Maurya Reply:

    Cool – I’ll most likely be speaking at your class in April. Hope to meet you then.

    [Reply]

  • http://apps.facebook.com/refillrevolution aaron

    Steve is talking about this right now in his class at UC Berkeley’s Haas School of Business

    [Reply]

    Ash Maurya Reply:

    Cool – I’ll most likely be speaking at your class in April. Hope to meet you then.

    [Reply]

  • Dave Copps

    Nice Ash, Almost looks like a Rails dev methodology – build/test/validate, build/test/validate. Thanks for sharing.

    [Reply]

    Ash Maurya Reply:

    Thanks for reading Dave.

    [Reply]

  • Dave Copps

    Nice Ash, Almost looks like a Rails dev methodology – build/test/validate, build/test/validate. Thanks for sharing.

    [Reply]

    Ash Maurya Reply:

    Thanks for reading Dave.

    [Reply]

  • Pingback: Customer Development Checklist for My Web Startup – Part 1 : Popular Links : eConsultant

  • Pingback: Studiesinn.com is your source for online C/C++ Tutorial, Java … | Java WebDev Insider

  • http://beebole.com/ Yves Hiernaux

    Ash –

    Thank you for you answer. My comment is probably too “Enterprise” specific where developments are often longer and where the development of infrastructure and basic parts can start without even thinking about the added value features themselves.

    But, correct me if I am wrong, unless you are in a totally new market, you always have some guesses about the MVP looking around you for existing solutions.

    Look at your competitors, their messages, … it is already a point to start your hypothesis and developments.

    Based on your experiences, are your conclusions different ? Is it just “educated” guesses ?

    [Reply]

    Ash Maurya Reply:

    Yves –

    I think the answer depends on market type and yes there are cases where you might be able to start laying out a foundation for the product because it is independent of CD but I would still exercise some caution there.

    For example, even if think you are in an existing market building a knock-off product for half the price, without CD you wouldn’t know whether price alone is really enough to win over customers. Chances are the existing product has a boat-load of features. Do you need to implement all of them, or only 20% to start? Which 20%? This is not always obvious.

    Before I went through CD for CloudFire, I thought everyone would want prints and even started researching APIs to print providers, pricing, etc. After CD, I found very few people cared that much about prints and even if we had it, it would just be a feature on a checklist and be no different from our competitors. Being able to share all your photos from a folder in seconds would be different.

    The ultimate goal of customer development is coming up with a unique value proposition that matters. Until you know that, it’s hard to start building an MVP.

    [Reply]

  • http://beebole.com/ Yves Hiernaux

    Ash –

    Thank you for you answer. My comment is probably too “Enterprise” specific where developments are often longer and where the development of infrastructure and basic parts can start without even thinking about the added value features themselves.

    But, correct me if I am wrong, unless you are in a totally new market, you always have some guesses about the MVP looking around you for existing solutions.

    Look at your competitors, their messages, … it is already a point to start your hypothesis and developments.

    Based on your experiences, are your conclusions different ? Is it just “educated” guesses ?

    [Reply]

    Ash Maurya Reply:

    Yves –

    I think the answer depends on market type and yes there are cases where you might be able to start laying out a foundation for the product because it is independent of CD but I would still exercise some caution there.

    For example, even if think you are in an existing market building a knock-off product for half the price, without CD you wouldn’t know whether price alone is really enough to win over customers. Chances are the existing product has a boat-load of features. Do you need to implement all of them, or only 20% to start? Which 20%? This is not always obvious.

    Before I went through CD for CloudFire, I thought everyone would want prints and even started researching APIs to print providers, pricing, etc. After CD, I found very few people cared that much about prints and even if we had it, it would just be a feature on a checklist and be no different from our competitors. Being able to share all your photos from a folder in seconds would be different.

    The ultimate goal of customer development is coming up with a unique value proposition that matters. Until you know that, it’s hard to start building an MVP.

    [Reply]

  • http://visualwebsiteoptimizer.com/ Paras Chopra

    Ash, a somewhat naive question – but how do you get customers to *speak* to you? I have a feeling that there would be too much friction in getting them to fix a time for a meeting. No? Also, you briefly mentioned in your comment that you get some of your customer leads through a landing page. Can you tell how do you follow up with them to fix a meeting? Perhaps an example?

    The key concern of mine is how to get people to talk for customer validation. A case study or an example on this would be fantastic.

    [Reply]

    Ash Maurya Reply:

    Paras –

    All my customer interviews have been done either face-to-face or over the phone. The added legwork pays off after you’ve talked to them.

    I used a landing page in my last product to collect email addresses but I didn’t use that list for CD but rather to announce the product once it was launched. I guess you could send out an email and see if people would be up for a 15 minute call. After all, they already expressed interest in the product by registering.

    For CloudFire, because I am targeting parents like myself, I first tapped into friends, then my kids’ daycare, then birthday parties. Kids, their parents, and cameras are easy to spot.

    Getting customers to talk is slightly different. A lot of my early customers are local and people I know so I directly get in touch with them and meet over coffee or lunch. I also have an 800 number which is a great way to have ad-hoc conversations with customers. They usually call in with an email or question. After answering, I ask them a question or two.

    KISSmetrics has an interesting way of preparing their private beta customers for CD making them aware that surveys and short calls are to be expected in exchange for early access. You can’t of course make people stick to this.

    In the end, I’d say it’s key to build relationships with your early customers. Just having 5 or 10 really engaged customers can teach you a lot in your quest for product/market fit (maybe there is a blog post in here).

    [Reply]

    Paras Chopra Reply:

    Yes, *desperately* looking forward to you expanding this comment into a blog post. I guess getting people to talk (and not just exchange messages over email) for customer validation is a topic which many people can benefit from.

    [Reply]

  • http://visualwebsiteoptimizer.com/ Paras Chopra

    Ash, a somewhat naive question – but how do you get customers to *speak* to you? I have a feeling that there would be too much friction in getting them to fix a time for a meeting. No? Also, you briefly mentioned in your comment that you get some of your customer leads through a landing page. Can you tell how do you follow up with them to fix a meeting? Perhaps an example?

    The key concern of mine is how to get people to talk for customer validation. A case study or an example on this would be fantastic.

    [Reply]

    Ash Maurya Reply:

    Paras –

    All my customer interviews have been done either face-to-face or over the phone. The added legwork pays off after you’ve talked to them.

    I used a landing page in my last product to collect email addresses but I didn’t use that list for CD but rather to announce the product once it was launched. I guess you could send out an email and see if people would be up for a 15 minute call. After all, they already expressed interest in the product by registering.

    For CloudFire, because I am targeting parents like myself, I first tapped into friends, then my kids’ daycare, then birthday parties. Kids, their parents, and cameras are easy to spot.

    Getting customers to talk is slightly different. A lot of my early customers are local and people I know so I directly get in touch with them and meet over coffee or lunch. I also have an 800 number which is a great way to have ad-hoc conversations with customers. They usually call in with an email or question. After answering, I ask them a question or two.

    KISSmetrics has an interesting way of preparing their private beta customers for CD making them aware that surveys and short calls are to be expected in exchange for early access. You can’t of course make people stick to this.

    In the end, I’d say it’s key to build relationships with your early customers. Just having 5 or 10 really engaged customers can teach you a lot in your quest for product/market fit (maybe there is a blog post in here).

    [Reply]

    Paras Chopra Reply:

    Yes, *desperately* looking forward to you expanding this comment into a blog post. I guess getting people to talk (and not just exchange messages over email) for customer validation is a topic which many people can benefit from.

    [Reply]

  • Pingback: Twitted by Lorne_Smetaniuk

  • http://twitter.com/brianmwang Brian Wang

    This is a fantastic post, Ash. It is the clearest explanation for how Customer Discovery should be done, but that aside, you had me at the flowchart (I’m a sucker for those).

    One question: When formulating your customer hypotheses, how do you suggest narrowing down a target niche when the hypothesized problem could apply to a large segment of the consumer web market (think: anybody that purchases online)? I’m struggling with how to better define a customer niche and moreover, how to find those people. Any thoughts?

    [Reply]

    Ash Maurya Reply:

    Thank you Brian.

    Without knowing the specifics of the problem you are solving, it is hard to make any specific recommendations, but I can share some general thoughts from my experience. First, I don’t know if most people noticed this, but I switched the order of the first two hypotheses from Steve Blank’s flow. Steve had you thinking about your product before the customer problem. I think it should be the other way around, otherwise you are a solution looking for a problem to solve.

    Once you have a clear hypothesis on the problem you are are solving, try to identify subsets of users/verticals and rate the level of pain. Using my first product BoxCloud as an example, which is a dead-simple file sharing product, I looked for people that struggled with sharing large files. Graphic designers, game developers, architects, lawyers, doctors, etc. etc. all came to mind. I ranked them based on which had the most pain and would be easiest to reach. Medical, for instance, is hard to crack because of HIPPA compliance. To me, graphic designers felt like the best place to start so I started there. The exit criteria of Customer Development is determining if you’ve found the right problem to solve for the right customer. If not, rinse and repeat with another customer group. With my second product CloudFire, I considered 2 customer groups – parents, and professional photographers. I chose the first because I had just become a parent, felt the pain first-hand, and could readily reach other parents like me.

    We all want to build mainstream products but you only get there by starting razor focussed. I would look for ways to sub-target your online purchasers based on perceived pain and your ability to identify and reach them. If you want to get into more specifics email me directly and we could chat offline.

    [Reply]

  • Brian

    This is a fantastic post, Ash. It is the clearest explanation for how Customer Discovery should be done, but that aside, you had me at the flowchart (I’m a sucker for those).

    One question: When formulating your customer hypotheses, how do you suggest narrowing down a target niche when the hypothesized problem could apply to a large segment of the consumer web market (think: anybody that purchases online)? I’m struggling with how to better define a customer niche and moreover, how to find those people. Any thoughts?

    [Reply]

    Ash Maurya Reply:

    Thank you Brian.

    Without knowing the specifics of the problem you are solving, it is hard to make any specific recommendations, but I can share some general thoughts from my experience. First, I don’t know if most people noticed this, but I switched the order of the first two hypotheses from Steve Blank’s flow. Steve had you thinking about your product before the customer problem. I think it should be the other way around, otherwise you are a solution looking for a problem to solve.

    Once you have a clear hypothesis on the problem you are are solving, try to identify subsets of users/verticals and rate the level of pain. Using my first product BoxCloud as an example, which is a dead-simple file sharing product, I looked for people that struggled with sharing large files. Graphic designers, game developers, architects, lawyers, doctors, etc. etc. all came to mind. I ranked them based on which had the most pain and would be easiest to reach. Medical, for instance, is hard to crack because of HIPPA compliance. To me, graphic designers felt like the best place to start so I started there. The exit criteria of Customer Development is determining if you’ve found the right problem to solve for the right customer. If not, rinse and repeat with another customer group. With my second product CloudFire, I considered 2 customer groups – parents, and professional photographers. I chose the first because I had just become a parent, felt the pain first-hand, and could readily reach other parents like me.

    We all want to build mainstream products but you only get there by starting razor focussed. I would look for ways to sub-target your online purchasers based on perceived pain and your ability to identify and reach them. If you want to get into more specifics email me directly and we could chat offline.

    [Reply]

  • Pingback: Knowtu » links for 2010-02-17

  • Pingback: Customer Development Checklist for My Web Startup – Part 1 | Drakz Free Online Service

  • http://www.ryderross.com/ Ryder Ross

    Great post. Thanks for sharing it! I found you from hackernews and I’ll definitely be printing this flowchart out. I noticed one possible bug though. Is “1st Advisory Board” supposed to link to “Verify the Problem” ?

    Cheers,
    Ryder

    [Reply]

  • http://www.ryderross.com Ryder Ross

    Great post. Thanks for sharing it! I found you from hackernews and I’ll definitely be printing this flowchart out. I noticed one possible bug though. Is “1st Advisory Board” supposed to link to “Verify the Problem” ?

    Cheers,
    Ryder

    [Reply]

  • http://www.ashmaurya.com/ Ash Maurya

    Ryder – You’re right on the link. I’ll be correcting that shortly.

    Thanks.

    [Reply]

  • http://www.ashmaurya.com Ash Maurya

    Ryder – You’re right on the link. I’ll be correcting that shortly.

    Thanks.

    [Reply]

  • Pingback: Customer Development Checklist for My Web Startup – Part 1 | Drakz Free Online Service

  • http://giffconstable.com/ Giff

    Enjoyed this read Ash. I also really agree with a sentiment you expressed in the comments above — it isn’t about empirical numbers, but continuing to ask and learn until you feel like you aren’t learning anything new, then move on to testing something new.

    In my own situation, we’re past the main wave of customer interviews to understand a problem and focus our efforts, and now about to get an alpha up and running — I’m not even sure I would qualify it as MVP but we need to get beyond what people say and really find out what they will do. I’m optimistic that even an insanely minimal experience will shed meaningful light.

    [Reply]

  • http://giffconstable.com Giff

    Enjoyed this read Ash. I also really agree with a sentiment you expressed in the comments above — it isn’t about empirical numbers, but continuing to ask and learn until you feel like you aren’t learning anything new, then move on to testing something new.

    In my own situation, we’re past the main wave of customer interviews to understand a problem and focus our efforts, and now about to get an alpha up and running — I’m not even sure I would qualify it as MVP but we need to get beyond what people say and really find out what they will do. I’m optimistic that even an insanely minimal experience will shed meaningful light.

    [Reply]

  • Pingback: Customer Development Checklist for My Web Startup – Part 1 | Drakz Free Online Service

  • Pingback: Customer Development Checklist for My Web Startup – Part 1 | Drakz Free Online Service

  • http://hopshopper.com/ Marko

    Ash, great post! I’ve been following your blog for some time now and it’s one of the most sincere and open blogs in this space. Keep up the good work!

    We are in the process of releasing our first iteration of MVP and getting into the what you refer to as “Test MVP” phase. Since our product has two distinct groups of customers, consumers and retailers, it becomes even more challenging to analyze minimum MVP, distribution, pricing, demand creation, market type and competitive landscape.

    You have to take both groups into account, understand all the underlying drivers and then come up with a product that works for both. The whole chicken and egg problem becomes a real challenge, but that’s why we’re here, right :)) Would definitely like to hear any of your insights into products that fit into this category.

    [Reply]

    Ash Maurya Reply:

    Marko – Thanks for the kind words.

    Are both groups of users paying customers? Even so, I’d recommend creating a value stream map and start at the head. My guess is retailers but I might be making the wrong assumption.

    Even for CloudFire, we have 2 sets of users – sharers, and viewers. Even though sharers are the primary paying customers, over time viewers will possibly be more valuable. For one, there are more of them. They are the ones that will help spread the product and the could possibly become secondary paying customers (e.g. order prints). But since sharers have to logically come first, we had to start with that group first.

    [Reply]

    Marko Reply:

    Only retailers are going to be paying, but the only reason they will pay is if there are consumers on the platform. We are initially going to start with a micro segment of retailers in order to minimize the amount of time and effort spent on bringing retailers on board and focus our attention to consumers and their experience. By building the consumer base we will make the platform appealing to a larger number of retailers. Once we expand beyond our retailer micro segment, we will expand our focus to both groups.

    Have you got any good resources around value stream maps that are specific to software products?

    [Reply]

    Ash Maurya Reply:

    You just described your value stream. Your success metrics are a little different than a traditional SaaS since you initially value user engagement more than revenue. I would spend most of the effort during “Test MVP” on consumers first and yes keep working with a small segment of retailers to understand their problems. But getting consumers on board and even through Customer Validation is pre-requisite to building anything for retailers.

  • http://hopshopper.com Marko

    Ash, great post! I’ve been following your blog for some time now and it’s one of the most sincere and open blogs in this space. Keep up the good work!

    We are in the process of releasing our first iteration of MVP and getting into the what you refer to as “Test MVP” phase. Since our product has two distinct groups of customers, consumers and retailers, it becomes even more challenging to analyze minimum MVP, distribution, pricing, demand creation, market type and competitive landscape.

    You have to take both groups into account, understand all the underlying drivers and then come up with a product that works for both. The whole chicken and egg problem becomes a real challenge, but that’s why we’re here, right :)) Would definitely like to hear any of your insights into products that fit into this category.

    [Reply]

    Ash Maurya Reply:

    Marko – Thanks for the kind words.

    Are both groups of users paying customers? Even so, I’d recommend creating a value stream map and start at the head. My guess is retailers but I might be making the wrong assumption.

    Even for CloudFire, we have 2 sets of users – sharers, and viewers. Even though sharers are the primary paying customers, over time viewers will possibly be more valuable. For one, there are more of them. They are the ones that will help spread the product and the could possibly become secondary paying customers (e.g. order prints). But since sharers have to logically come first, we had to start with that group first.

    [Reply]

    Marko Reply:

    Only retailers are going to be paying, but the only reason they will pay is if there are consumers on the platform. We are initially going to start with a micro segment of retailers in order to minimize the amount of time and effort spent on bringing retailers on board and focus our attention to consumers and their experience. By building the consumer base we will make the platform appealing to a larger number of retailers. Once we expand beyond our retailer micro segment, we will expand our focus to both groups.

    Have you got any good resources around value stream maps that are specific to software products?

    [Reply]

    Ash Maurya Reply:

    You just described your value stream. Your success metrics are a little different than a traditional SaaS since you initially value user engagement more than revenue. I would spend most of the effort during “Test MVP” on consumers first and yes keep working with a small segment of retailers to understand their problems. But getting consumers on board and even through Customer Validation is pre-requisite to building anything for retailers.

  • Pingback: Customer Development Checklist for My Web Startup – Part 2

  • Pingback: Customer Development Checklist for My Web Startup – Part 2 « YABOYA Media