So that's, that's an overview to customer development, a bit of a taster and we're going to look at some theory now.
So customer discovery, where does it sit in the customer developed model?
And this is the customer development model of the theory.
There are four parts. You can look this up, there are books about it.
A great guy to look up who came up with this idea is Steve Blank.
And we start off with customer discovery.
So customer discovery is the phase where you're trying to work out if the people that you want to sell to exist,
do they have the problems that you think they do? And can your solution help them solve those problems and see each of these phases as iterative?
You shouldn't move on from one to the next until you've been successful.
So until you've validated the fact that the people do exist and they have those problems and your solution can help them,
you shouldn't move on to the next phase, which is customer validation, and that's can you build your product and get it to market.
And once you get it there, will your customers actually buy it from you?
Will they spend money on it? When she when she validated that that is all true.
And then you move into customer creation and that's scaling your enterprise.
So expanding it into the market.
And then finally you stop that expansion and stop searching for your business model and start running the one that you've you've got in your hands.
And that's company building and that's completely different. And today we're just going to look at the first one of these.
That's customer discovery. It's where you'll start. It's really hard work.
It's probably going to take up most of your time, and if you're successful there,
I'm sure you'll buy the book and read about the the other phases from I actually urge you not spend too much time planning for those for
those last couple of phases in particular have a good idea about how your company is going to run and how you're going to scale it,
but don't do any preparation for it because until you've shown that you've got customers who will who will buy a product and it solves it,
solve their problems, there's just no point going there. A couple of weeks ago, you heard about the business model canvas from Maria.
So how does that fit in with this customer developed model? Well, you remember the canvas.
Maria, explain that you should put Post-its on there explaining your ideas about how various aspects of your business are going to work.
And it's a really neat way of describing and understanding the business that you're about to create.
And if customer development is a way of systematically validating and adapting a business model,
then the business model coming to us is at the heart of customer development. It's it's the tool that you used to run your customer development.
So where does customer discovery live in that on the business model?
Well, it's over on the right hand side and on the right hand side, you're talking in the see if I can do this value proposition section.
You're talking about the needs that you're serving on your for your customers and how your solution is going to solve those needs.
Over on the right hand side, you're describing who those people are.
And then you're over here, you're talking about how are you going to get to them and.
Well, in custom development, we're checking everything that you stated in this canvassing tree and changing ideas if it's not.
So all of the stuff that you're writing down here is what we're going to start testing.
And in customer discovery in particular, you're looking at and understanding whether or not your customers exist.
Well, that's that's the customer segments over here.
And then whether or not your solution is going to serve our needs, and that's in the value proposition here.
So these two these two panels on the business model canvas are really where
you'll start in in customer discovery and the fundamentals of the business.
If you get these parts wrong, then there's just no point carrying on your debt in the water.
So it makes complete sense if you think about it. To start with, who are my customers?
What are their needs and how am I going to solve solving their needs?
This may get slightly theoretical, but we'll see how it goes.
And in his book, Steve Blank, this Start-Up Owner's manual, which you should probably all get, Steve Blank,
suggests this is a way of thinking about how the business model canvas fits in with with customer development.
So the canvas is at the bottom. It's your business model. It's your sketch of how your business is going to work.
And on top of this, Steve suggests that you write a one or two page hypothesis for each of these panels.
So one explaining in detail how your product is going to serve the needs and deliver value for the value propositions.
And this can feel a bit onerous at the start, but I've definitely found it useful on the projects that I've been working on
to go into more detail and just post-it notes that you get with the business,
with the business model canvas, and you can pick the right parts of the business model canvas to expand on.
Certainly those two that I spoke about earlier on, they're a good place to start.
But you might you might find certainly at the beginning that some of them it's difficult to write more than the Post-its that you've got in there.
So don't don't if it's really difficult, don't worry too much about it.
Just get the essentials done. And that's the value propositions, the customer segments, the channels, the revenue.
And then on top of that, you design tests to test your assumptions.
Now, your hypothesis layer, you're basically stating all of your assumptions about how your business is going to work.
So on top of that, you need to design tests that will then validate those assumptions and.
It's a bit complicated. So I'm going to give you an example to show you how it would work.
This is a project that I did with foils, the bookstore.
And then the last year and what we were doing was creating a mobile search within the bookstore for,
for people to search the inventory within that bookstore and find out if a book is in stock and if it is.
Find a map to find that book. And it should sound like a neat idea is.
This mobile shop search had a very simple value proposition, which was to the customers, search this shop on your mobile.
Really, really simple. So let's think about that. The value value proposition hypothesis for this product.
One of the and one way that makes it really easy to think about the value proposition is just to
write a little story and write a bullet point story that explains how your product is going to work.
So start by setting the scene. What's happening today? Explain the need of the of your customers here.
Am I going to be using your product? Describe your solution to that need and then describe the results that you're expecting.
And so here's that example that we've written out for FOIL. So today, many store customers need help finding a book.
That's true.
I've certainly been to a bookstore bookstore and gone to ask a bookseller if they can help me finding a particular book I'm looking for today.
Some of those customers will leave without asking for help. For whatever reason, the queues might be too long.
A mobile store search will appeal to some of those customers,
and customers using the search will find that if a book is in stock and get a map to its location and then having found that book,
customers are more likely to make a purchase. You can see this is really simple.
It's just setting out in detail how that product is going to work and what value it's going to bring to its customers.
And if you can't write something like this for your business, then your business is probably too complicated.
If you can't convince it down into, you know, 5 to 10 bullet points, then you probably need to think about ways to simplify it.
And it's also really easy to spot the assumptions when you've written it in this form and pick out the risk.
So here's this one. A mobile store search will appeal to some customers.
How how do we know? We haven't built it. We've got no idea whether or not anybody in going into that store is going to use our book search.
So that start there when we're thinking about how to validate this business model.
And you should also be able to spot clear need statements as well.
So what the customers need. So having written our hypothesis and identified a risky assumption,
it's time to design the and run the experiments to validate that assumption, to test whether or not that that assumption is true.
So here's how we went about dealing with foils, and we put these signs up inside a store for one day.
Over in Westgate, we took a Wi-Fi router,
the sort that you might find in your and your house at home and put that in the store and called it and called the network the foils wi fi.
And you can see that the sign says, log on to the foils wi fi to search the store on your phone.
And when customers actually logged onto that, the wi fi and tempted to search, they saw a reply message saying It's time to come clean.
We haven't actually built this yet. We're just testing it. Take this to the council and we'll give you 10% off.
And we were counting the number of people who were coming into that store.
And we were also came to the number of people who attempts to make the search.
And we had expectations about how many of them we wanted to actually engage with our search.
And that was a pass fail test. Either enough of them would do it, making the whole thing worthwhile, or they wouldn't.
And the idea is flawed. And so we didn't need to build that search to validate that assumption.
We just faked it. And your tests don't need to give you statistically significant results.
This one did. Actually, we were able to work out with a confidence interval how valid the results were,
but you're just looking for a strong signal that you're onto something.
And some of the experiments that you run, the test that you run and will involve speaking to customers,
some of them will involve faking a product like we've done. Some of them will involve building bits of your product.
And what you're looking for is the simplest test that you can possibly run as quickly
as possible for as little time and money as possible to test your ideas and move on.
So here here are a few of the types of tests that you could think about running interviews with customers,
and we'll talk a lot about that in a moment. Channel Activation Test.
So ah, if I think I'm going to be able to market to people via direct mail, does that work?
Sales channels are a great way of validating your business if you're actually going to sell something.
Thanks. Products. We just spoken about hand-cranked products.
So if you've got a product that involves lots of automated back office systems that are going to take a long time to build great expense,
can you make it work with you doing the work of that automation,
running around in the background, making making the business appear like it's working,
but actually you haven't really built anything yet that's hand crunching. And then we've got to at the bottom, minimum viable products.
These are basically simple versions of your products. We'll talk about those a lot later on.
And so these are your methods, but really, you're only restricted by your imagination, you know?
You know what you need to achieve. You need to do it quickly. You know, get creative.
And when you get into the mindset of constantly, ask yourself, how can I test this?
What am I solutions? How can I test them?
You'll find it's enormous amounts of fun coming up with those ideas and extremely satisfying when you get a good idea for them.
I'm and some some rules for designing those tests.
Well, the very last thing you should do is build your product.
I will admit that in some cases it will be unavoidable. But in most you shouldn't.
You shouldn't have to.
I find it really helpful in all of my work for clients and in the enterprises that I run to have this rule in the back of my head all the time.
How do I not build this? I get my whole team to ask themselves, How do I not build this?
How can I test this without building it and. The signals.
So in your test, you're looking for a signal that the assumption is correct.
And there could be anything that could be a trend that you notice in a number of customer interviews
that could be a decent level of sales and they could be a statistically significant conversion rate.
Don't get too up on the precision of the of the signal.
It's not a randomised controlled trial.
You just need to be objectively sure that you've seen the evidence to back up your assumption and then move on.
If your test fails, you can still learn something along the way.
And this is really important to think about when you're designing your tests. How can I get the most out of this test?
What can I learn? Even if if a test shows me that my assumption is wrong?
How do I maximise my learning from it? So think about that as you're designing the.