2016.02.25 Techstars Customer Development

Copyright DKParker, LLC 2015

Customer DevelopmentDave Parker

@DaveParkerSEA

www.dkparker.com/blog

[email protected]


Agenda

¤ About Dave

¤ Customer Development ¤ What to do ¤ What not to do

¤ +5 Hypotheses

¤ Iterations/Pivots

¤ Q&A – Your questions


Where to start?

You have opinionsYou have Data You get money!

Investors have opinionsThey have money


You are not Henry Ford


Customer Development Goals

¤ Find out if customers care?

¤ What do they want?

¤ Determines the difference your product at launch and at scale

¤ Feature priorities

¤ Product Roadmap

¤ Market Timing – see Bill Gross Ted Talk


Customer Development

¤ Steve Blank – Four Steps to the Epiphany¤ Customer Discovery ¤ Customer Validation ¤ Customer Creation ¤ Company Building

¤ Eric Reis – Lean Startup ¤ Learn - Ideas¤ Build – Code ¤ Measure – Data


What To Do

¤ YOU get out of the building and interview prospects (they aren’t customers until they use or pay) ¤ 50 B2B interviews ¤ 100 B2C

¤ Standard set of questions ¤ Google form – you fill it in

¤ 1) Face to face 2) Skype or hangout¤ Watch

¤ Ask the next question – why?


What Not To Do

¤ You are not the customer

¤ Don’t tolerate a small sample set – this could delay your success by Years

¤ Avoid “Selection Bias” ¤ “Isn’t our product amazing”

¤ No rhetorical questions

¤ No blind surveys

¤ Can’t outsource


What do you want to know?

Negatives

¤ If you have a fatal flaw in your assumptions – when do you want to know?

¤ If it was to fail why would it fail?

Positive

¤ Do they really want it ¤ Pain Pill ¤ Vitamin

¤ What will they pay

¯\_(ツ)_/¯


Tooth Brush Test


+5 Hypotheses


What can you test?

¤ Price

¤ Sales Model Hypothesis – how will you sell it?

¤ Demand Hypothesis – is anyone looking

¤ Business Model Hypothesis – how will you make money

¤ Customer Acquisition Cost (CAC) /Life Time Value (LTV) Hypothesis

All of these are required for your forecast


Price

¤ Value based pricing vs. cost base pricing

¤ Monthly Recurring Revenue

¤ Packaging

¤ 90% startups start too low


Sales Model Hypothesis KnownMarket

Unknown Market

Low Price Point

High PricePoint

Known Search Words

Unknown Search words

Web Direct ✔ ✔ ✔

Direct ✔ ✔ ✔ ✔ ✔

Indirect ✔ ✔ ✔

Licensing ✔ ✔

Retail


Demand Hypothesis

¤ Is anyone looking for what you are doing

¤ Key word/phrases ¤ SEO – long time to build ¤ SEM

¤ AdWords Key Word Planner ¤ Display Ads

¤ This gives you top of funnel/marketing spend


Business Model Hypothesis

¤ B2B¤ 9 Model ¤ Market Metric

¤ B2C ¤ 10 Models ¤ Market Metrics

http://dkparker.com/businessmodels/


Customer Acquisition Hypothesis

The following apply regardless of models

¤ Cost of Customer Acquisition (CAC)

¤ Lifetime value of Customer (LTV) ¤ 36 month calculation in a mature business, 12 months for you

¤ Time to close sale ¤ How does this change with product/market maturity?

¤ Churn/Retention

¤ Word of mouth vs. Virality


Iterations & Pivots


Iterations and Pivots

Iterations

¤ Features

¤ Target customers

¤ Pricing

Pivots

¤ Are painful – Tires to Airplanes

¤ Mike Maples – Thunder Lizards

¤ Five Famous Pivots ¤ Odeo become Twitter


Repeat after me…

¤ I’m an entrepreneur

¤ Half my ideas are amazing

¤ Half are crap

¤ We need to find out which one this is!


Q&A – Your Questions


[email protected]@DaveParkerSEA

2016.02.25 Techstars Customer Development

Business

Transcript of 2016.02.25 Techstars Customer Development