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Fire Yourself

During the next week of reflection, a non-early adopter, but loyal user of the product called the founder to announce that he would not after all, pay for the product. Not at the proposed price, not at the price they had argued for, not at any price.

So he fired himself as Founder and CEO of his company. And then he fired me. (“I no longer need your services. But in the future…”)

We talked briefly about his future, including possible pivots and leaps, but essentially, the gig was up. I admire his self-awareness and the honesty with which he evaluated his situation.

Cement Mixers and Customer Development

Brant and I have finally finished our book, The Entrepreneur's Guide to Customer Development:  A cheat sheet to The Four Steps to the Epiphany, within which we have included interviews from successful entrepreneurs in order see if their startup experiences mesh well with Brant's and my interpretation of and experiences with Customer Development.  (I won't beat around the bush, while our interviewees may not have called it Customer Development per se, they certainly practiced elements of what Steve Blank has codified as Customer Development in almost all but name.  And without exception, they applied fierce and relentless skepticism to all aspects of their businesses.)

We've had the pleasure of speaking with Jeff Smith (Smule), Fabrice Grinda (Zyngy, OLX), Ranjith Kumaran (YouSendIt), and Bruce Moeller (DriveCam).  We've condensed their experiences into case studies which are featured in the book.  However, there was so much great material, we simply could not include all of it.  Therefore, I'd like to take this opportunity to share an insight that came out of our interview with Bruce that we found quite edifying, one that goes to the heart of the Customer Development methodologies.

Background:  DriveCam uses video technology, expert analysis and driver coaching to reduce claims costs and saves lives by improving the way people drive.  From the DriveCam website:

DriveCam's palm-sized, exception based video event recorder is mounted on the windshield behind the rearview mirror and captures sights and sounds inside and outside the vehicle. Exceptional forces such as hard braking, swerving, collision, etc. cause the recorder to save critical seconds of audio and video footage immediately before and after the triggered event.

[Emphasis mine.]

Bruce shared an interesting story about how assumptions made in the lab, based on data and "sophisticated" math undertaken by "sophisticated" analysts, fared in the real world of cement mixer trucks.  Remember, the DriveCam device's core feature is to record audio and video when triggered by exceptional forces such as swerving.  When DriveCam went after the cement mixer truck market, they calibrated their devices based on the assumption that cement mixers would flip only if subject to a large sideways g force.

Seems reasonable, right?  After all, cement mixers are big, heavy trucks, and not to mention, filled with, well, the eponymous cement.

Turns out, not so reasonable after all.

Bruce recounted that when one of their first customer's cement mixer trucks flipped over, the DriveCam device had failed to record what had occurred and what may have caused the accident -- the customer was irate and Bruce was more than a little embarrassed.

Turns out that (outside of the lab!) cement mixers trucks can flip at very low speeds (1-2 mph) while at normal g forces when encountering things in the chaos of the real world, very ordinary and common things such as soft road shoulders.  Bruce's customer knew this and was counting on Bruce and the DriveCam team to know this as well.

Lesson learned:

"My philosophy is you don't know what you don't know and if you were ever right in a given moment, and if your guesses were ever true it would be serendipitous.  You must attack your assumptions at all times. My basic tenet: question yourself, because the world is ever-changing.”

-Bruce Moeller

For more insights that speak directly to the Customer Development processes, please purchase The Entrepreneur's Guide to Customer Development:  A cheat sheet to The Four Steps to the Epiphany.

State of Customer Development Survey Raffle Winners

Hi everyone!

Thank you for your participation in the survey, especially if you were kind enough to tweet about it.  (While the raffle is over, if you haven't responded, the survey is still open.) The purpose of the survey was two-fold.

First, we thought it would be interesting to see a little detail about who is involved with Customer Development. You can see those results here.

While the survey results add a bit of color to who is implementing Customer Development methodologies or thinking about doing Customer Development, I wouldn't draw any hard conclusions from the data.  BTW for the those who read 4 Steps to the Epiphany, n ≈ 33.  For those who didn't read 4 Steps to the Epiphany, n ≈ 28.

Second, we are thinking about tools, templates, and other resources to help people understand and implement Customer Development in their business ventures. Stay tuned, for in the coming months, we plan to make some of these resources available to you.

Almost forgot!  Our two winners of the random raffle are: Dave Concannon and Kevin Donaldson.

Thanks again to everyone.  Happy holidays!

Seller Beware: Customers Have Their Own Agenda

Note: One of the more difficult aspects of customer development is understanding when to listen to customers/prospects and when not to. When should you rely on intuition and when is the customer right, if not always? Steve Blank's oft quoted clarion call to "get out of the building" demands that you listen to customers, but not that you necessarily heed what they say! You may have the wrong customer for your business. You may have the right customer who emphasizes the wrong root cause to a problem. As I tweeted the other day:

maybe your product focus should be what your current customers don't ask for or what your lost customers wanted.

I invited "CustDevGuy," author of the "Fake Screenshot/LOI" customer development case study, to write up a continuation of that story, which illustrates an easy trap to fall into when interacting with potential customers. Here's his story:

--------------------------------------------------------

Hi there.

This guest-post is a follow-up to my original Case Study posted at the Lean Startup Circle.  (Thanks Brant for lending me your digital soapbox.)  I wanted to further flesh out an important insight that came out of conversations about my ongoing Customer Development experiences as well as address a common fallacy that keeps popping up in conversations and email threads with regards to what Customer Development is and isn't.  The fallacy being that customers will simply hand over the Holy Grail (read: Product/Market Fit) if you go and chat a bit with them.
Continue reading “Seller Beware: Customers Have Their Own Agenda” »

Entrepreneurs: Know Thy Marketing!

I don't know who is more exasperated, entrepreneurs flummoxed by marketers or me, upset that another entrepreneur has been flummoxed by marketers!

People, language is for communication and marketing terms, abused as they are, fall somewhere within the scope of language.  To communicate you need to learn the terms.  To practice marketing or to hire a marketer you need to grasp some basics. Please.

Marketing Help Rule 1.

(<> means "not equal to")

Blogging <> PR <> Brand <> SEO <> Logo <> Advertising <> Tagline <> Messaging <> FaceBook <> Positioning <> Twitter <>Lead Gen <> [Enter mktg term here]

Marketing Help Rule 2.

Trust me, you don't need all the marketing tactics listed in Rule 1.

Marketing Help Rule 3.

The right marketing tactics for you, right now depend on WHO your prospective customers are and WHAT stage your company is in.

Marketing Help Rule 4.

All Marketers have a core competency (or two).  Regardless, (almost) all Marketers will sell (almost) all marketing services.

Marketing Help Rule 5.

You need marketing to grow your business.  And more likely than not, you need or will soon need help marketing.  Admit it.

For a moment, forget everything you know or think you know or have heard about marketing.  Start with a clean slate.

Now imagine you are a new customer of a particular product or service.  You just finished buying.  You are a bit giddy: Continue reading “Entrepreneurs: Know Thy Marketing!” »

Customer Development is Hard.

I've been working in technology for a pretty long time, having weaved my way along an illuminating path through development, IT, project management, product management, product marketing, marketing and executive leadership.

The two key principles that tie the threads of my career together are customer development and project management. (One could probably look at all of life this way, too.)

Two epochal moments happened in my career at one company, Tumbleweed (now part of Axway), that helped me consciously acknowledge these two principles.

  • I learned from CFO Joe Consul that what I had been doing for years was actually called project management.  (Yes, some of us are slower than others.)  I was able to structure and formalize what I was doing, which allowed me to become more efficient, teach others, scale, etc.
  • I learned from marketing that although I was an IT Manager, my views on how to sell to IT Managers (our target market), was not necessary.

(I should mention a third moment, because it was a pivotal for my learning.  I learned from CEO Jeff Smith that passion is a key (though not sufficient) ingredient to success.  Jeff was out to change the world and he in infected us with his enthusiasm.)

Tumbleweed was an interesting ride; it reached the highs and suffered the lows that all businesses that last 10+ years endure.  A lot of mistakes were made, and a lot of lessons learned.   There were many success stories, too, and, unsurprisingly, lessons learned there, too.  I saw evidence of certain elements of Geoffrey Moore's  Chasm, as well as in retrospect, a lack of customer development.

Not to fault anyone, but the late 90s saw a lot of customer defumblement.

Steve Blank's presentation of Customer Development is persuasive.  Eric Ries' Lean Startup, combining customer development and agile development principles is even elegant.

The simplicity of necessity masks the complexity of execution.

Whether internal or external, formally defined or not, no matter what you are doing, you have a customer.  Whether explicitly defined or not, you also have at least one objective associated with your customer, e.g., make them happy, accept their money, increase their market share. To reach objectives, you must execute on a carefully-crafted plan; a carefully-crafted plan that you must defenestrate the moment you conclude it doesn't work.  Hopefully your plan includes post-defenestration steps.

Steve Blank @ startup2startup joked that, to put it mildly, The Four Steps to the Epiphany, is a difficult read.   But customer development isn't hard because Blank's book is difficult to read.  Customer development is hard because the answers to the questions that will test your assumptions are difficult to come by.   As any project manager who has ever had to "gather requirements" knows, customers don't know what they don't know.

The customer is not always right, but they do have the last word.

It's your job to empower and persuade customers to act in a way that achieves your objectives for them.  But how do you know how to get them to act? You can guess. You can hard sell. You can ask. You can lie.

If you go about empowering and persuading the wrong way, you will lose your customer. You will lose your customer because of some combination of:

  • You never actually located your customer.
  • Your objectives for the customer were not clear.
  • Your tactics for achieving the objectives did not match the  customer's behavior.
  • Your process for "listening" to the customer was wrong or incomplete.
  • You failed to execute.

A disciplined approach for web-based products allows for faster learning, but for "offline" products, customer development is a particularly meticulous and  time-consuming process.

Here are some customer development hurdles entrepreneurs and executives need to overcome:

  • A dislike of "cold-calling" potential customers;
  • The propensity for selling, not listening;
  • Habitual requirements gathering, instead of learning the pains;
  • Over dependence on surveys;
  • Reliance on focus groups, not interviews;
  • Belief that past experience guarantees future;
  • Basing conclusions on personal narratives.

I'm sure there are more; feel free to share in comments.

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