This is the subject of most of my talks and workshops.

Customer Development: Getting out of the Building

The objective for the workshop is to be able to start testing your startup the next day. You will leave the program with specific action items for testing risky elements of your specific business model.

Participants work at:

• Understanding of the proposed business model
• —Documenting core assumptions
• —Assessing and prioritizing risk
• —Developing plan for testing assumptions
• —Developing interviews and aurveys
• Planning the Minimum Viable Product

I use the “Startup Bluebook” methodology, as described in The Entrepreneur’s Guide to Customer Development.

Please contact me for more information.

Past Events:

Lean Startup San Diego

Entrepreneur Week, Santiago Chile

Forward Technology Festival, Wisconsin

Kuala Lampur International Venture Capital Symposium

Qualcomm Workshops

Eco-entrepreneurship class at UCSB (June 2011)

Agile Vancouver – Lean Startup in Vancouver, Canada

Momentum Lean Startup Conference in Grand Rapids, MI

Startup Weekend Belgium

Startup Lessons Learned Conference Panel 2010

Columbia-Berkeley MBA Program

Entrepreneurship class at NYU

Rady MBA School

UCSD Entrepreneur Challenge

Caltech

Lean Startup Circle San Diego & Chicago

Lean Startup Machine NYC, Chicago, San Francisco

Boston Lean Startup Circle (July)

Lean Startup Challenge Kickoff (July)

Your email:

Marketing is not simply the execution of tasks pulled from a marketer’s toolkit.  One doesn’t “turn on” marketing or “do” viral marketing and expect to see a significant return. The key to effective marketing is learning which right activities will reach and convert the right customers. Marketing activities must be tailored to who you are as a business: your customers, their problem you are addressing, and the solution you’re providing them.

Customer Development marketing uses an iterative, learning approach toward finding the right tools, activities and methods to capture and convert the right audience for your products.

To learn more, contact me at brant@ marketbynumbers of fill the form below.

More on Marketing

Appropriate marketing tactics totally depend on where you are as a company, your type of product and your market segment.  Beware the marketing consultant or PR agency that “puts you on a program.”  I can help you with any of the following, including reviewing plans put together by others:

• Market strategy, product strategy, marketing plans, segmentation, marketing analytics;
• Social media services, including blogging, blog promotion, twitter, facebook, etc.
• Demand creation, lead generation activities, email campaigns, webinars, seminars, trade shows
• Web site creation, funnels, e-commerce, SEO, SEM, SFA integration
• Messaging, positioning, web content, white papers, sales decks
• Marketing vendor management, including PR, Design, marketing automation, etc.
• Marketing team management, sales-marketing alignment, product management

How Will you Get to Product-Market Fit?

1) Problem-Solution Fit

You propose and validate with prospects that a specific solution will solve a known problem to such a degree that they will buy it.

2) Minimum Viable Product

You build a product that achieves (1) and validated it with prospects.

3)  Sales and Marketing funnel

You validate how to acquire and convert your market segment customers.

Market By Numbers Customer Development Program

No matter if you are just starting out or are a funded startup looking for market traction, we can help you design and implement a tailored Customer Development program that gets you on track toward finding Product-Market fit.  Our CustDev program guides you through the iterations you are likely to experience:

1) What is your true value proposition from the customer’s perspective?

2) What features are core to your value proposition?

3) Which is the right market segment to focus on?

4) What messaging resonates?

5) How do you best acquire and convert your prospects?

You might get lucky and stumble into Product-Market fit.  But if you don’t want to count on that, you must apply a rigorous process to iterate through these elements of your business in order to find Product-Market fit.

To speak to us about applying this program to your startup, email brant at marketbynumbers or fill out the contact form below:

[contact-form]

A new way of looking at sales and marketing

Have you ever viewed a world map where South is up? It’s a useful frame of reference, since our Eurocentric view of North as “up” and South as “down” is really just an arbitrary one (a sphere has no top or bottom – nor left or right for that matter). Perspective affects our perceptions…

But what if we turn the funnel upside down?

For most entrepreneurs, the top of the [sales] funnel represents the world-at-large. It’s unfiltered; it’s not segmented. In a traditional funnel, the mouth at the top is wide open for attracting both suspecting and unsuspecting potential customers (aka suspects) into the sales process. Marketing’s job is to find and lure live bodies into the top, while sales is responsible for to pushing ‘em through. Continue Reading

How to avoid being blinded by the idea aura

The glow of a new, sure-fire idea is a wonderful feeling. You feel you’ve discovered something (or some angle) that no one has ever imagined before. As you expose that idea to the light of the day and begin vetting it and taking it to market, though, that enthusiasm can dim…Your product or solution fights more than just competitors. It also battles all of the other problems your prospective customer faces. While your awareness of the problem and the weight you grant it is relevant, that doesn’t accurately predict how important it is to others – even if they ‘fit your profile.’

you must conquer the “status quo coefficient”

In fact, one of the most difficult dilemmas entrepreneurs face is determining whether fading excitement is part of the natural decay of the creation process or because the idea – ultimately – is a bad one. Continue Reading

The hidden secrets of market research

The last time I checked, the world’s population was around 6.8 billion. If only 0.1 percent were to visit your website… and if you were to convert only 1 percent of those to paying customers… and they each paid $2 for a Thneed, for example, then revenues would be over $135M. (And everyone knows you could get way more than 2 bucks for a Thneed, which everyone needs!)

I can prove anything by statistics except the truth.

To some, market research only goes as far as finding a really big revenue number to put on the TAM (Total Available Market) slide of their business plan or investment pitch… Continue Reading

Is social media worth your marketing dollars?

As social media has reached mainstream consciousness this year, businesses have been inundated with the message that they must immediately get on board or risk doom and calamity. The hyperbole (and the frenzied buzz it creates) is confusing and many businesses could use a practical guide on how to evaluate social media and how to engage – if it’s appropriate.

It’s amusing to hear that “Word of Mouth” is new.

So the first benefit of using social media in your marketing efforts (and the first thing to keep in mind) is that social media systems are designed to facilitate person-to-person communication, as opposed to traditional media and most first generation web efforts, which are predominately one-way communication. Continue Reading

Download marketplace business model example. (.pdf)

Download this package to help you with your customer development tips.  This download is best used in conjunction with my book, The Entrepreneur’s Guide to Customer Development, but also can be used by itself.

Business Model Examples

Price: $9.00

What’s inside:

Four examples of how to think your business models when trying to come up with your core Customer-Problem-Solution assumptions, how to evaluate risk, and determining what to test first when creating your MVPs.  Business model samples include:

• Freemium business,
• B2B SaaS, w/ free users,
• Solar lighting manufacturer
• Writer’s Marketplace

Guarantee

No risk.  If you are not satisfied with the tips provided in the download, contact me within 2 days and I’ll refund your money.

Customer Development is a four-step framework developed by serial entrepreneur and  business school Professor Steve Blank for discovering and validating the right market for your idea, building the right product features that solve customers’ needs, testing the correct model and tactics for acquiring and converting customers, and deploying the right organization and resources to scale the business.

At a high level, Customer Development is about questioning your core business assumptions. In other words, Customer Development teaches that rather than assume your beliefs about your business to be true, you should apply an engineering, or scientific method, to what is really not a scientific endeavor (building a business), in order to validate the ideas.

The primary advantages of implementing the framework are that you don’t spend gobs of money discovering what works, but rather save the money for executing and scaling what you have already shown to work. An organization applies a learning process, rather than merely executing what you assume to be the right business model.  If implemented properly, Customer Development helps a business become highly focused,  capital and resource efficient, and while not a guaranteed success, more likely to find Product-Market Fit and market traction.

The process resembles the scientific method:

• Observing and describing a phenomenon
• Formulating a causal hypothesis to explain the phenomenon
• Using a hypothesis to predict the results of new observations
• Measuring prediction performance based on experimental tests

When building a business, the process is used to discover, test and validate the following your business assumptions:

• A specific product solves a known problem for an identifiable group of users (Customer Discovery)
• The market is saleable and large enough that a viable business might be built (Customer Validation)
• The business is scalable through a repeatable sales and marketing roadmap (Company Creation)
• Company departments and operational processes are created to support scale (Company Building)

Where to Start?

Where you are as a business determines where you are input into the Customer Development process.  The earlier you start the better, since you are less likely to waste time and money.  Where do you fit?

Companies that are pre-Product-Market fit should start with Customer Discovery.

You are pre Product-Market Fit if you:

• Have a great product idea, or
• Are building the product, or
• Have finished a product, but have few to no customers, or
• Have a product and several customers, but little market traction

There are three phases to Customer Discovery:

1. Problem-Solution fit: You validate with prospects that a specific solution will solve a known problem to such a degree that they will buy it.
2. MVP: You build a product that achieves (1) above and have validated it with prospects.
3. Sales Funnel: Through interviews, surveys and analytics you have crystallized a proposed “sales and marketing roadmap,” which lays out the customer’s buying process and the business activities you must undertake to move prospects through the process (funnel).

Companies that are at Product-Market fit should start with Customer Validation.

You are at Product-Market fit, if you have built a product that customers need and this has been validated by high user adoption or through a significant number of paid users, and to some degree adoption and retention are “running themselves.”  P-M fit is an esoteric concept you only know you’ve achieved after you’ve achieved it.  It’s like declaring the “turning-point” in a game: only once you’ve won or lost, can you reasonably hypothesize the actual turning point.

Customer Validation is about validating your proposed MVP and sales and marketing roadmap.  You’re not ready to scale — hire outside sales, conduct a PR blitz, etc. — until after Customer Validation.

There are three phases to Customer Validation:

• Validated MVP:  You understand the core value you are providing your customers and they are passionate about your product.
• Validated Sales and Marketing roadmap:  You understand your market segment and have optimized its conversion funnel from initial knowledge of your product through reference-able (or referring) customer. You have proven that every dollar you put into marketing and selling your product results in more than one dollar back.
• Validated Business Model: You have proven that your market can scale to sustain the business and that the lifetime value of your customer exceeds to costs of operating the business.

Non Customer Development Death Spiral

Customer Discovery and Validation are often overlooked.  Businesses go straight from concept to product to scaling with little external validation.  Customer Discovery is replaced by “market research,” which serves to support your assumptions rather than validate them.  Money flies out the door, while little comes in.  Pressure to be “first to market” is greater than “fitting the market.”  In the B2B world especially, the downward cycle is almost inevitable:

CEO blames VP of Sales, who blames VP or Marketing, who blames budget.  Eventually, they are all replaced by the Board and the cycle continues.  The reasoning being, “Who can afford to stop and validate at this point?”

Myriad unforeseen problems arise during this stage of the company.  Unseen, since they were not accounted for and tested.

• The market isn’t big enough (relative, perhaps, to investment)
• The distribution plan doesn’t scale
• Buyers aren’t buying the way it was assumed
• The competition pivots
• Sales are too expensive
• Competition outspends on marketing

It is in the Customer Validation stage that Steve Blank’s insightful “Market Type” analysis truly comes into play and if you’ve implicitly chosen a strategy corresponding to the wrong type, when that lack of validation comes home to roost.  I won’t repeat the market type analysis here, other than to say that how you position your product (relative to the competition for your customers) depends on market type.  And how much money you need to spend on marketing depends on market type.  In a nutshell:

• if you are a completely new product type, you have to spends lots of money teaching your customers what you are and why you exist.
• if your key benefit is higher performing or less expensive (regardless of how new your technology is), you have to spend lots of marketing money to compete with existing players.  Don’t fool yourself:  your competition will do anything it can to squash you; all is fair in love and product wars.  Not only will your competition spread FUD, your ideal customer will resist you (status quo coefficient).
• if you can take your higher performance or lower cost and target a specific market niche, then your marketing costs are lower, but your segmentation and funnel discipline must be extremely high and your revenue plan must reflect the niche you’re in.

Upcoming: My take on the remaining Customer Development phases.

If you would like to learn more, you should check out my book The Entrepreneur’s Guide to Customer Development,) look at my services and downloads, or feel free to contact me.