Image by Adam Berk
Customer development process. Everybody talks about it. Everybody.
Yet surprisingly, not that many people actually walk the walk.
I understand it – the process is freakishly gruelling. I hated it, for example: why would anyone half sane try her best to dismiss her shiny new idea. To find that nobody, not even her mom, cares about it.
It’s against human nature to seek negative feedback. That’s why so few people do it. We rather just rush into building our dream product. It’s sexier.
Image by Dave
And it’s probably also the single biggest reason why most new products fail.
Now, after having done it a couple of times, I would argue that customer development is crucial, especially in the SaaS B2B space. And not just to learn whether your idea makes sense.
No, the potential learnings go way beyond that. Here are my four biggest benefits of a well thought-through customer development process:
- Get initial customers: Fast track your way to the first 10 customers.
- Meet potential advisors: Get to know influencers and opinion leaders that know your industry and could eventually help you as advisors.
- Connect with future employees: Meet potential hires that work or have worked in a similar industry.
- Build a network of super fans: People that can help you spread your content marketing and help with customer and hiring referrals.
Below is my list of 7 things that should help you during your customer development process based on our own experience. At Pipetop, we did some of the things great and miserably failed at others.
1. Don’t rush it
As I said above, a lot of people try to fast-track customer development process. Don’t be one of them.
These few weeks will determine your high-level direction for the next couple of years. Take your time.
Image by Steve Jurvetson
Here’s a few things I would make sure to do before starting the process:
- Prepare a set of quantifiable goals,
- Make a list of people to contact for the interviews,
- Prepare email scripts and notes for booking the actual meetings,
- Read a book or two on how to conduct the interviews,
- Prepare your after meeting process.
The only point I won’t go deep into here is the fourth one. There are already awesome resources covering the art of conducting customer development interviews. My favourite ones are:
- Startup owner’s manual: The legendary lean startup book by Steve Blank. It’s written like a manual, so for the customer development you only need to read the first few chapters.
- The Mom Test: This short book is a must read for anyone remotely serious about customer development. It goes deep into the interview facilitation process and how to avoid the basic pitfalls.
- Actionable blog article and video: 5 Question Customer Interview Script: A comprehensive post with actionable tips on how to facilitate the process and ask the right questions.
- Quora answers to favourite methods for doing customer problem interviews: Awesome answers with tons of useful small tricks to hone your customer development interview skills.
The gist of all the resources above is quite simple: make sure NOT to pitch your idea. At least not at first. Instead, dig as deep as possible into the problem area to see if the solution you have in mind actually solves it.
2.Make it a numbers game
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As mentioned before, having real, measurable goals is crucial in order to make the most out of this process.
For example, your expected outcome of the customer development process might be:
- 5 initial customers,
- 3 super relevant hiring candidates,
- 2 advisors.
Now – you won’t be able to win each potential customer. You won’t like all the possible hiring candidates. Nor will you “click” with every advisory candidate.
Let’s assume a very decent conversion rate of 25% for each of the above categories. It means you’ll have to talk to at least:
- 20 potential customer interviews,
- 12 potential hiring candidates,
- 8 potential advisors.
Voila! Now you have some actionable numbers to work with. I find it much easier to work on a concrete quantifiable plan: it makes you accountable to yourself and your team.
3. Target 3 different groups of people
The primary target of your customer development process will and should be your potential customers.
Make a targeted list of those that you can preferably talk to face to face.
Side note regarding offline vs online interviews: I’ve tried doing online customer development interviews, but advise you to avoid it if possible. At least in my experience, it was much easier to go deep into the problem area in person and establish a deeper, long-lasting connection. If you really need to do online interviews, this is a well thought-out step-by-step tutorial on how to do them.
This is the point at which most customer development processes stop.
I encourage you to take the process one step further and talk to two more groups of people. The groups that CAN’T directly buy from you, but can greatly benefit your company in the long run:
- Industry experts: Find people that have worked in the industry for many years and have experienced the pain you’re trying to solve. Some of them can later become advisors for your company.
- Potential hires that have worked in your industry: Use Linkedin to track down relevant previous employees of the companies you’ve listed as potential customers. These people usually have invaluable insights into the problem area. Moreover, combined with the right skill set, they could become your best possible future employees.
4. Hack the meeting booking
It’s not easy to come up with 40–50 connection that are ideally suitable for your customer development process. You probably don’t have so many relevant people in your direct network, so you’ll have to come up with creative ways to expand it.
Here’s how we hacked our own meeting booking process:
- Find the obvious 1st degree Linkedin connections: Go through your Linkedin network and find people that you already know would make sense to interview.
- Leverage your close network for intros to 2nd degree connections: Ask your close network for intros to interesting people you see they’re connected to on Linkedin.
- Do extremely focused cold emails to relevant people: Can’t get an intro to a really great fit you found on Linkedin? Send a cold, yet thoughtful email – if you do it right, you’ll get a meeting at least 1 out of 4 times. (Relevant: check a simple email template in the section 7 below.)
- Attend niche events: Go to meetups close to you, especially when you can pre screen attendees. For example, just by attending one event, we were able to book three relevant interviews.
- Ask for referrals: After each meeting, ask the interviewee if they know someone that might be experiencing the same problem or is an expert in the problem area. This method probably helped us book the last 20% of meetings with people outside of our direct network.
A word of caution: If you are having trouble setting up at least 10 customer development interviews you should take a step back and re-examine whether to pursue this particular startup idea.
Here’s why: there might be nothing wrong with your idea. That said, to have a decent chance of success, you need a somewhat established support network in your market of choice. Network of people that might help you get past the baby step hurdles. People that might invest in you. And people that might, well, buy from you when nobody else will care.
5. Offer something in return
Play the long game and don’t treat these interviews as an easy way for you to get some information out of busy people.
Instead, focus on building relationships. – Think about what’s in it for them?
Here are a few hacks you can apply easily:
- Hand out a book: In the middle of our customer development process, we came up with an idea to buy a pack of Predictable Revenue books and give them out to our interviewees. We bought a title that we’ve read and loved and that was fitting for the segment we were talking to. They loved it.
- Share high-level learnings from the process: You are going to learn interesting information on how other companies are currently solving your problem. Share some of the non-confidential information with other interviewees without mentioning specific company names.
- Form and share your view of the market: You are probably obsessed about your market. Reading all the books and all the blogs about it. Don’t be shy to share the learnings and your thoughts on it.
- Connect on Linkedin, follow them on Twitter: Don’t miss an opportunity to connect with people on social media. I like to create private lists on Twitter for this purpose, so I remember to re-engage with them later.
6. Build a tribe of supporters and don’t be a stranger
by Scania Group
I admit, we could have done this one much much better.
You get caught up in day-to-day operations of building the product, talking to early customers and… you miss a great opportunity to nurture these valuable relationships.
Don’t repeat our mistake.
Obviously, you’ll follow up with people that you’re interested in selling to, hiring or having as advisors. But, once again, I encourage you to go way beyond the normal way.
Send a three sentence status email on your startup’s progress every few months to a broader group of people you’ve interviewed. Put them in a dedicated Twitter list: favourite, comment, retweet them. Do everything to stay on top of their mind without being annoying.
Doing this well can bring you many benefits of an extended network of early supporters. They can:
- Help spreading your content marketing: Who doesn’t like to help spread the word about a fledgling startup? Especially, if they had a small influence on its development. And you’ll need the support in the beginning – it’s super hard to break the noise.
- Help with hiring: Hiring has become a major hurdle in scaling early stage startups. Having a bigger list of people you can eventually employ or ask for help with hiring can be a major differentiator for your startups’ success.
- Refer you potential customers: Maybe they currently don’t need your solution. But they all interact with a ton of other interesting people and some of them might be in the market for your product. We’ve got quite a few early customers this way.
- Introduce you to potential investors: Investors love to receive warm intros from people that have followed a company for a while and have a connection with the founders.
Make your startup a big fat favour and nourish these early relationships carefully; it’s probably the easiest way to get 40–50 super fans for your company.
7. Prolong your customer development as long as possible
Once you start actively selling your startup’s solution, you normally don’t have much to offer.
You can’t do a credible demo.
Your product is riddled with bugs.
You can’t show existing customer success metrics.
There is one thing you have on your side, though: you’re a startup.
Why not improve your early sales meeting booking rate by simply asking for a customer development interview rather than a sales call?
Nobody knows how old your company is and that you’ve already done 50 other customer development interviews. But instead of getting “NO”s from people that are not interested, you can still get them to talk and learn from it.
Obviously, you can’t immediately sell anything to John in this case. It would make your small hack too obvious.
But if he seems interested in your solution, you can promise to reach back in a few weeks with a beta version of your product.
And one more thing: it’s obvious by now that the most successful companies of this era run a constant customer development process.
They might not call it customer development. But actively seeking brutal and honest feedback and gauging market interest seems to be working extremely well for the top tech companies.
Therefore it doesn’t hurt to start the exercise even before starting a company by running a diligent customer development process.
P.s. Would love to learn if you’ve tried some other customer development tricks. Hit me up in the comments section.
by Jakob Marovt @jmarovt
Jakob is Cofounder and CMO at Pipetop, providing data-qualified prospects to Sales teams.