Startup Marketing

Customer Development is Hard.

I’ve been working in technology for a pretty long time, having weaved my way along an illuminating path through development, IT, project management, product management, product marketing, marketing and executive leadership.
The two key principles that tie the threads of my career together are customer development and project management. (One could probably look at all of life this way, too.)
Two epochal moments happened in my career at one company, Tumbleweed (now part of Axway), that helped me consciously acknowledge these two principles.

  • I learned from CFO Joe Consul that what I had been doing for years was actually called project management.  (Yes, some of us are slower than others.)  I was able to structure and formalize what I was doing, which allowed me to become more efficient, teach others, scale, etc.
  • I learned from marketing that although I was an IT Manager, my views on how to sell to IT Managers (our target market), was not necessary.

(I should mention a third moment, because it was a pivotal for my learning.  I learned from CEO Jeff Smith that passion is a key (though not sufficient) ingredient to success.  Jeff was out to change the world and he in infected us with his enthusiasm.)
Tumbleweed was an interesting ride; it reached the highs and suffered the lows that all businesses that last 10+ years endure.  A lot of mistakes were made, and a lot of lessons learned.   There were many success stories, too, and, unsurprisingly, lessons learned there, too.  I saw evidence of certain elements of Geoffrey Moore’s  Chasm, as well as in retrospect, a lack of customer development.
Not to fault anyone, but the late 90s saw a lot of customer defumblement.
Steve Blank’s presentation of Customer Development is persuasive.  Eric Ries’ Lean Startup, combining customer development and agile development principles is even elegant.
The simplicity of necessity masks the complexity of execution.
Whether internal or external, formally defined or not, no matter what you are doing, you have a customer.  Whether explicitly defined or not, you also have at least one objective associated with your customer, e.g., make them happy, accept their money, increase their market share. To reach objectives, you must execute on a carefully-crafted plan; a carefully-crafted plan that you must defenestrate the moment you conclude it doesn’t work.  Hopefully your plan includes post-defenestration steps.
Steve Blank @ startup2startup joked that, to put it mildly, The Four Steps to the Epiphany, is a difficult read.   But customer development isn’t hard because Blank’s book is difficult to read.  Customer development is hard because the answers to the questions that will test your assumptions are difficult to come by.   As any project manager who has ever had to “gather requirements” knows, customers don’t know what they don’t know.
The customer is not always right, but they do have the last word.
It’s your job to empower and persuade customers to act in a way that achieves your objectives for them.  But how do you know how to get them to act? You can guess. You can hard sell. You can ask. You can lie.
If you go about empowering and persuading the wrong way, you will lose your customer. You will lose your customer because of some combination of:

  • You never actually located your customer.
  • Your objectives for the customer were not clear.
  • Your tactics for achieving the objectives did not match the  customer’s behavior.
  • Your process for “listening” to the customer was wrong or incomplete.
  • You failed to execute.

A disciplined approach for web-based products allows for faster learning, but for “offline” products, customer development is a particularly meticulous and  time-consuming process.
Here are some customer development hurdles entrepreneurs and executives need to overcome:

  • A dislike of “cold-calling” potential customers;
  • The propensity for selling, not listening;
  • Habitual requirements gathering, instead of learning the pains;
  • Over dependence on surveys;
  • Reliance on focus groups, not interviews;
  • Belief that past experience guarantees future;
  • Basing conclusions on personal narratives.

I’m sure there are more; feel free to share in comments.