quick & dirty customer validation
TRANSCRIPT
Quick and dirty customer validation
Erik Pöntiskoski | Summer of Startups | June 9, 2014
This is what you have now.
This is what you need to
get next.
Learning objectives• After this session, you should be able to
• Understand how startups validate ideas and concepts at an early stage
• Explain how you engage various stakeholders when developing new offerings
• Plan and implement communications (marketing and sales) programs utilizing digital (interactive and social) media
Agenda
• Talk on customer validation
• Workshop on quick and dirty customer validation
• Discussion on what you need help with
Any big problem is a big opportunity. If there is no problem, there is no solution, and no reason for a company to exist. No one will pay you to solve a a problem that doesn't exist. - Vinod Khosla
A startup is a temporary organizationsearching for a repeatable and scalable
business model. - Steve Blank
How to get out of the building
• Parallel process to Product Development
• Measurable Checkpoints
• Tied to customer milestonesEmphasis is on learning & discovery before execution
Steve Blank
Customer discovery: Find a problem and product
• Identify what are main problems for customers
• What major challenges do they face in their everyday life?
• Do we have a solution?
• Do customers agree your solution solves the problem?
• Are they willing to pay for it?
Task 1: Customer discovery
• Find places where your customers talk about their problems online
• Consumer markets - general forums and special online communities
• Business markets - Linked in, Quora…
• Read, ask questions, participate in discussions
Task 2: Customer discovery
• Take one customer segment you have identified
• Book meeting(s) to pitch your startup
• Do people agree on the problem and your solution?
• How much do they spend on such solutions on average and do they have plan as well as budget to invest?
Customer validation: Develop a repeatable sales process
• Can you grow your customers from one to many?
• Gain insight into the customer decision making process, whether you sell to organizations or consumers
• Who are decision-makers, influencers, users, gatekeepers or other stakeholders?
Task 3: Customer validation
• Find out who makes purchase decisions
• Draw org chart
• What specific requirements, concerns or needs to different stakeholders have?
Task 4: Customer validation• Define your industry recipe for sales based on talks & research
• Average selling price, customer lifetime value, ROI, etc.
• Time to market and revenue
• Forms foundation for assessing market potential of your business model
• Bottom-up method: # of deals in given time x avg. size of deal x lifetime - Cost of acquisition and servicing
Task 5: a-Day-in-the-Life Story• Summarize insight you have gained into everyday life of the chosen segment
• Create a story about what the customer’s life would be like with your solution
• Write in first person to put yourself in the position of the customer
• Explain the steps your startup will take to make this reality
• Publish content in your startup blog
• Make it as audiovisual as possible - pics, video, podcast interviews, drawings, mockups, …
Task 6: Build a list• Gather list of potential clients and
followers for newsletter
• Ask people to sign up for launch at the end of your Day-in-the-Life story
• Use Launchrock, Google Forms or similar services
• Can be used to A/B test early stage concepts
Discussion
• Give elevator pitch to remind what your team does.
• What are issues do you need most help with now?
Closing thoughts• Effectuation explains how ‘super-
entrepreneurs’ think and act
• Start with who and what you know
• Instead of potential upside, think how much you can lose testing ideas
• Get people to volunteer and commit to help
• Experiment with minimum risk and investment until you find success
Prof. Saras SarasvathySociety for Effectual Actionhttp://www.effectuation.org/
http://www.freeimages.com/profile/ravasolix
Your failure is inevitable, accept it! However, so is your eventual success,
so believe in it!!
