Customer Development

I am in the early stages of a new start-up idea so I am poking my head up to look around for the latest best practices before getting underway.   I was referred by some friends to Steve Blank’s  idea he calls Customer Development. It’s not brand new, but it is certainly far from mainstream yet.

Not only do I feel that Steve’s framework is right for my start-up, but I was also compelled to write a blog post.  During my research I found a post so well written that I knew it was better to link out rather than write a new one myself.  Therefore, I highly recommend Jussi Laakkonen‘s post called “Customer Development or why 9/10 startups fail“

Please note: just talking to your customers (focus groups) about their needs is NOT customer development.  You need to actually try selling to them and see what happens.  Steve suggests that selling should be brought as far forward as possible in the process.

I have begun forming my customer hypotheses.

1. I will test my hypotheses by talking to a variety of customers (not too many)
2. Building simple iterations and seeing if early adopters will use/buy
3. updating my hypotheses and iterations based on what is learned from early adoption
4. Developing a larger marketing push once adoption/return is clearly good enough.

Innovation through Customer Insight

So many stories lately about how the downturn in the economy will impact innovation.   Many are saying that innovation will be the saviour that will lead us back to more prosperous times.  But, what TYPE of innovation will be more prevalent in this environment?

I was recently taking the InnovationLabs survey on the topic of Innovation in the downturn.  As I answered the questions, it became clearer and clearer to me what the innovation trend is going to be.

Companies are going to create closer relationships with their customers.  Nobody is willing to risk much.  They don’t want to develop a new product or even modify an existing one unless there is a clear revenue stream on the other end.  Tightening the bond with customers is a good thing and will not only increase GOOD innovation now, but it will set us up for even better and faster innovation as we turn the corner.

Michael Treacy and many others talk about sprinkling innovation money around lightly and then dropping what is not working and adding more funds to things that are.  ”Working” should be defined as what customers want.  Companies should be polling their customer base and desirable prospects throughout the innovation process.   

What types of innovation do you believe will thrive right now?