Originally published in the Growth Design Newsletter, August 2019
Dear Readers,
Given my intense gravitation towards quantitative data, I am often asked about customer research. Designers want to know—how do you connect quant and qual? You know...to get INSIGHTS!
The answer is customer development. As a lean startup consultant, I taught customer development to my clients as a foundational part of product development. Now that I’m in-house, I find it’s a term almost no one has heard of and more importantly, it is rarely practiced beyond the lean community.
Customer development is the most valuable type of user research for growth because it focuses on real situations, real problems and real behaviors. When we focus on our own products too much, we miss the bigger market opportunity. Opening up the human side of these conversations is how you stay competitive.
Just in time for the end of August, I give you my simple run down of customer development.
Get Outta Your Dreams, Get Into Cust Dev
Lex
Why Customer Development
Customer development is the idea that you should build your business through deep relationships with your actual customers. Specifically, it’s a technique for talking to your customers in depth about how they think and what they need. With cust dev, you focus on them and their problems rather than on your solution for them.
Perhaps you’ve heard the famous Henry Ford saying:
“If I had asked people what they wanted, they would have said faster horses.”
Years later, my former boss, Ian McFarland, retorted with:
“Turns out you learn things when you find out people want faster horses.”
What Ian meant was that, had you asked Ford’s contemporaries, they may well have said they wanted faster horses. It’s your job—as a designer, as a founder, as an innovator—to hear the problem there and solve it.
Customer development techniques can help you zoom out of your day to day product work to truly understand how your product fits into your customers’ lives. Or how it doesn’t. For example, I once worked on a team that was trying to build an investment product for twenty-somethings. When we talked to these young people, all they could talk about was how they could barely pay their rent. They couldn’t save money. They could barely find jobs and leave their parents’ houses. Investing wasn't going to solve their problems. Instead, we had identified a much bigger market opportunity: to help young people save money.
The Origin of Customer Development
Steve Blank is known as the originator of customer development. He famously coined the phrase “get out of the building” and paved the way to the lean startup movement. His customer-centric approach became a substantial shift in how founders were looking at their businesses. Instead of guessing what customers would want, need and buy, you could understand how your product fits into their life. He wrote about this new approach to startups in his book, The Four Steps to the Epiphany.
Here’s an excerpt from Blank’s 2013 piece in the Harvard Business Review on how the lean startup movement took off:
“In 2003, I wrote The Four Steps to the Epiphany, articulating for the first time that start-ups were not smaller versions of large companies and laying out the customer development process in detail. In 2010, Alexander Osterwalder and Yves Pigneur gave entrepreneurs the standard framework for business model canvases in Business Model Generation. In 2011 Eric published an overview in The Lean Startup. And in 2012 Bob Dorf and I summarized what we’d learned about lean techniques in a step-by-step handbook called The Startup Owner’s Manual.”
As you can see above, Blank’s work laid the foundation for Eric Ries’ Lean Startup and for Ash Maurya’s Running Lean. Customer development became a critical part of how many successful startups were finding product market fit.
The Problem Interview
For me, customer development really clicked when I read Ash Maurya’s Running Lean. In the book, Maurya describes two types of customer interviews: the problem interview and the solution interview. A problem interview is a conversation with a potential or actual customer about the problem space you’re working in. On the flip side, a solution interview is focused on how you’re solving that problem.
For example, let’s say we’re working on a startup that’s making “Tinder for Jobs.” Swipe to find the perfect job. The problem space for candidates is finding the right job. We might ask potential customers questions like these:
Where do you look for jobs?
How do you know a job is a good fit for you?
When was the last time you looked for a job?
Tell me about the last great job you had.
How did you find that job?What’s challenging about looking for jobs?
Your goal is to get them talking and telling stories. To build a rapport with them so you can begin to understand their honest approach to the problem you’ve solving. Do they even have that problem? How much pain are they in? You’ll learn from every interview. If you don’t, you either haven’t found the right customer or you haven’t found the right problem.
Widen Your Lens
Back to the question about bridging quantitative and qualitative information. With customer development in your toolkit, you can create a fuller picture of what’s actually happening. You have a partial story with your quantitative data. You gain a much wider lens through customer development.
This practice can help you put your product into context. It helps you understand the situations and conditions that surround your customers. And it helps you unlock opportunities that truly deliver value to them.
Essential Reading
Articles
Why the Lean Start-Up Changes Everything by Steve Blank