Customer Development legends and myths
Attention: this is a "prickly" article and some will not like it. Without spreading thoughts, he removes the noodles that numerous experts who have appeared recently are hanging on their ears. I must say right away that we will rummage through the details and subtle matters, if there is no time and mood to delve into, feel free to scroll through. I promise everyone else a profit in the form of insight and specific practical advice with examples.
I was prompted to write this article by my good friend and product analyst Alexey Morov, with whom we discussed his recent interview with venture capitalist Igor Shoyfoot on the topic of free business education for startups.... It turned out that most of the founders of early-stage startups are interested in the Customer Development methodology, so I first started googling what was new in this topic, then I was horrified, and then I realized that I would have to burn all this heresy and the hearts of founders myself with a verb. I will not indicate the sources of this nonsense, they are all in the top 10 of Yandex search results for the query: “what is custdev”. I must say right away that there are some decent materials, but they are in the minority.
About the authors of this article and the myths
Why should you trust me? No need to believe, everything should be checked, and me too. But to test me, you will have to go through a bunch of trainings and a couple of accelerators, interview a couple of hundred respondents and conduct desk research with an audience of several million people, launch your startup and become # 1 in your own, albeit small, so far only Russian market. There is also a second way to test me - to do as I advise right away, to save a couple of years of life, budget and motivation.
Fortunately, or vice versa, the methodology of Customer Development is becoming more widespread in recent years. Probably fortunately, because it works, the trouble is that the info-gypsies serve it crookedly, because they themselves have never used it. There is another category of so-called authors parasitizing on this topic, these are copywriters, for sure, they are great guys and they quickly type their thousands of characters without spaces, for which customers pay them. But do they know what they are writing about ... Except for ignorance, it is difficult to explain the content of all these articles.
But let's get started. Here are my top 5 legends and myths about CustDev that I read on runet. We will debunk them in the best traditions of the Mythbusters and, I promise, we will derive practical benefits.
Legend 1. To test a hypothesis, you need to conduct an interview
They say that it is best for the interview to be “in-depth”. You will even be offered interview scripts that someone came up with after reading half of Robert Fitzpatrick's Ask Mom, which was stolen on a filibust. Remember, at the interview we are going to collect data, artifacts, specific information that relate to the circumstances and experience of a particular user (including emotional experience) in a situation where your product, in theory, could be useful. Here stones should fly at me: what about hypotheses? I answer: it is during the interview that they are born, but we do not talk about it, we ask questions and record what we hear and sometimes beatings if we do not know how to ask questions.
For clarity, here's an example: my company sells a mobile navigation service to hunters. I think it will be useful for hunters. I emphasize, this is not a hypothesis, this is a hallucination! During the interview, the person says to me: “I have hunted here all my life and I know the area, I don’t need your maps, but the damned officials have redrawn the hunting grounds again and now I don’t know where to hunt, and where not, but oh well, I’ll take it from the huntsman. a photocopy, the cursed will be fined! " This is where a hypothesis is born: not the Maps themselves are needed, but the boundaries of the lands on the map, otherwise you can violate these very boundaries - then a fine, this may be a problem for some, which is proposed to be solved by taking a photocopy from the huntsman. This is already a hypothesis, it needs to be finalized, add social and demographic attributes of the respondent, and then it is already possible to work with this hypothesis somehow.
You will say: you already knew all this! Of course I knew, or rather, I thought I knew about it. But here's another example, when I also thought I knew, and the most obvious things that seemed to me worthy of the high title of a hypothesis turned out to be hallucinations.
It seemed to me that smartphones would quickly run out of batteries from using my application, but it turned out that hunters cut off the mobile Internet (there is still no network coverage) and use gps, simply by turning on notifications about crossing the boundaries of land. So the mobile phone works longer than the harmines, the competition with which I was afraid of like fire. Conclusion: a hypothesis is born in the course of your interviews and their analysis.
Legend 2. To confirm the hypothesis, you need to conduct a series of 8, 16, 30, 50 ... interviews
Here's a fact! And when, then, is the hypothesis confirmed, if in an interview it is just being born ?! I hope this is what you think now, after realizing that the articles that you managed to read about Kazdev turned out to be slag. Calm, I was in your place, you can live with this, but only if you are not the author of those articles.
After the first few interviews, we have a hypothesis, it can be enriched with new interviews, and this usually happens. Now you can put it into scripts and go to the masses with it.
To be fair, I note that some authors still write that in order to confirm the hypothesis it is necessary to conduct several interviews, which in fact is also nonsense. In those very articles, and when I was writing this article, I read everything I could find, numbers like 8 are indicated, there are 16, 30, 50 and some others that in themselves have no meaning, because in none I have not come across a description of the audience, its characteristics and size, as well as the relationship of all this to the number of interviews to be conducted. That is why all these numbers cannot be taken as a guideline: you have your own solution, which has its own market, which you should study and know the numbers. This is who you need to be to go to interview 16 clients in the market, where these same clients, for example, are only 7. And in Yandex search results, an article with such recommendations fell to me first,bravo marketers, bows to SEO! If you are offered any specific number of interviews in an article, without asking a question about your audience (how many potential clients you have, how many of them you can really reach, etc.), and when I read all those articles, no one has ever I called with these questions, then feel free to scroll through the tape to the cats, at least they would be cute.
Example. In my Russian segment of the hunting market, where there are a little less than 3 million hunters, 70% of whom have smartphones, and even fewer who can use them, and so on along the funnel, the target market is 1 million hunters. Since, as you can see, this million people, although very specific, remain at the same time a million, the question arises about the size and representativeness of the sample. We narrowed down the age range of the audience, got a completely nuclear audience of 25-35 years old, which with smartphones “on you”, in 600 thousand people. So, the recipe is that for a very specific audience, a relatively small number of respondents will be a representative sample, in our case, 1% is enough, That is, 6 thousand people whom I would need to interview in order to confirm or refute my hypothesis after analysis!
Not a single, albeit in-depth, interview, not 5, or 10, or 30, or even 50. And as many as you need for your specific market. Conclusion: to confirm the hypothesis, it is necessary to draw conclusions based on the results of the analysis of a series of interviews of a representative sample.
So how much to weigh in grams? The representative sample size is determined by the size of the audience segment you are researching. I suspect that you should be aware that the audience in this segment should be more or less homogeneous in some ways, which allow you to highlight the audience segment.
Legend 3. Everything must be done according to the rules
Of course, it is necessary, but the authors of this postulate do not see the forest behind the trees, since they studied CustDev from articles by copywriters like themselves. It is important to get back to the essence of the approach itself, which was described by Steve Blank in his book "Four Steps to Insight: Strategies for Building Successful Startups." This, by the way, is the author of the consumer development methodology. According to his concept, the product must necessarily solve the client's problem. First, the problem is identified, then the product is developed, and not vice versa. This is necessary so as not to drain the budget for sawing the product until you are convinced that it solves the problem. This is part of the Lean StartUp methodology. Thrift! Let's take an example straight away.
In my example about hunters, it was like this, somewhere in the 80th interview, I was convinced that 70% of my respondents said the same thing about the hypothesis, both about the uselessness of maps and the importance of the boundaries of land, and about the battery with the absence networks and some other nuances. Let me remind you that this was after the 80th interview and we gradually curtailed this stage, since it did not add accuracy, but continued to consume resources. Just in case, I note that for the purity of the experiment, I called different cities and villages in different regions of Russia, Belarus and Kazakhstan.
Then you will tell me how it is, you yourself just said that you need as much as you need! I repeat: frugality. It was not in vain that we built a high-quality representative sample. It is a high-quality sample that allows you to do this:
Firstly: if the audience is homogeneous and specific, then the sample can be relatively small and at the same time no less representative, 1% is quite enough for large thousands of people, but homogeneous specific audiences.
Secondly: if after conducting at least half of the interviews out of the planned, here I will emphasize, high-quality, the sample is clear to you, round off - remember that resources, including your love of communicating with clients, can be spent on other tasks.
From the above, there are very practical tips that will allow you to save resources for interviewing:
- segment the audience qualitatively, to the point of homogeneity, in order to apply the described saving techniques
- to minimize the risk, the influence of any factors that you can consider, randomize.
In my example, I called different cities and villages in different regions of Russia, Belarus and Kazakhstan, that is, my research was not influenced by the facts of living in these countries in cities / villages.
Legend 4. CustDev is about creating a product
Customer development (abbreviated as custdev) is testing an idea or prototype of a future product on potential consumers. Approximately such a definition is given in all articles, simply copying the definition from the authors. It's hard to argue here and I won't do it. I will say more, I completely agree with this. But, my friends, the books should be read further than the second chapter, if there are only six of them, we are building a business, and not in the 5th grade they scored on Kashtanka!
I propose the following: read our Blank to the end of Steve and take a broader look, first of all, at your product. The task of the founder is to grow the company quickly and successfully in an environment where even resources do not solve everything. It is important not even to have a better product; Facebook, for example, did not have one. Do not view the product in isolation from the market and competitors, especially in terms of positioning and distribution. Here it is possible and necessary, may Steve Blank forgive me, "kazdevit". My example with the "Hunter's Map" is not very clear here, since we immediately provided the user with the best maps and offered the greatest map coverage, although we lagged behind competitors in some features. So let's turn to the pillars.
Facebook wasn't the first social network, Friendster already existed. But Zuckerberg's company was the first to understand the advantages of positioning, or maybe they were just lucky, I don't know, but it would have been worth learning with the help of CustDev already then. The company focused on building a student community at Harvard, and then other universities, first in Boston and further across the country. Then the company was the first to provide an opportunity to store photos on its site for free and took the audience from services that specialized in this, then an application service appeared, and so on, and so on. The Facebook interface still forces the user to wander through the sections, and competitors have long lagged behind, although they were better, first and more.Zuckerberg realized his power of competitive advantage and built his strategy on these advantages - first, clear positioning for students, then - free photo storage, etc.
Microsoft initially distributed its software in close partnership with IBM, using the reputation of the largest manufacturer, which, along with its impeccable hardware, delivered Bill Gates software to the client. At the same time, the love of users for "Windows" is known to all, but we all use it or have used it.
The takeaway is this: when interviewing your potential customers, also find out the circumstances that surround him in a situation where he could use your product. Include service, distribution, positioning in the very concept of your product.
And then, oops, I also do it, here's an example from life.
In the segment of specialized navigation, the “Hunter's Map” service has a strong competitor - this is Garmin, which makes excellent navigators that do not drown in water, although, with our proverbs, this is a bad recommendation, but navigators are good. In short, when buying my cards through an app by subscription, the user does not need to purchase any new device, which, although it costs several thousand rubles, still costs several thousand rubles. It is necessary to update maps for these navigators every time through pain and for money, by the way more expensive than my subscription. And finally, the origin of the maps for all these navigators is unknown, but we conclude agreements with the regional Ministry of Natural Resources and constantly update our maps.
I emphasize that there are enough complaints about my product, but we are very favorably distinguished from competitors by the distribution channel (regular subscription through the AppStore, PlayMarket and now AppGallery) and the absence of the need to spend on buying a navigator - that is, almost everyone has a smartphone.
Take a look not only in the direction of the product, but also when looking for a place in the market.
Legend 5. CustDev is about creating a product (side view)
Here is the definition of CustDev from another article: Customer development is a methodology for creating and developing products through feedback from the consumer.
One cannot but agree. It would seem! See item 4. Why only product creation and development? We have a great tool, why not use it more often. I insist that user development methodology should be used consistently.
For example, users of the Hunter Card mobile service often complain in reviews and during interviews. For example, the lack of maps of the lands of your region in the application. Obviously, this is a request for product characteristics and here you just need to satisfy it, since the importance of this characteristic has been confirmed. But that's not all. There are more than 50 regions where we are present with our maps, but this is still not 100% coverage. For us, creating and rolling out maps of the region's land requires resources that will not be enough for all regions at once. What are we doing? That's right, we prioritize based on the number of hunters in the region in descending order, may hunters from small regions of Russia forgive me, but in order to survive we had to first “draw” regions with million-plus cities, where it is easier for us to reach the target audience.
A simple conclusion suggests itself, use the results of the interviews to build and optimize your business processes, planning and finding "bottlenecks".
What is this all for?
CustDev is not only about the product, it is also about your business as a whole, about marketing, about reputation management, about the team, about the mood with which you pitch the investor (they are also your clients, only you offer them an investment product), about everything immediately. Even the founder himself and his company are a product that is offered to the team, and feedback should be constantly requested from the team members.
I urge you to use CustDev with an understanding of the Lean philosophy, this is the first thing. I suggest looking at your product without interrupting the market and its trends, competitors and your own business - this is secondly. And thirdly, do not immediately take for granted articles that accidentally caught your eye, if they are not backed up by clear argumentation, or at least common sense.
I have tried to write this article so that you can use the technique correctly and effectively for the benefit of your business and without frustration.
Wish you luck! All CustDev
For convenience, I provide links to books that I consider mandatory reading on the topic, I do not drown for specific stores, you can find them completely freely both in Russian (Ozone, Liters, Alpina, etc.), and in English, for example, on Amazon: