Conclusions

You should meet my friend Paul. He’s a successful entrepreneur, and one of the principals of the consumer web startup P.au/lWeb. They’ve spent countless person-years of engineering time building out their new web application to track distributed social widgets in 3D. I’d like to say that he should be an inspiration to all of us, except that the site isn’t generating any revenue, or none to speak of anyway. They’re still looking for their customer.

Okay, the truth is there’s no Paul… well, not exactly. But there are thousands of Paul-clones out there, desperately building new startups, with the sole marketing strategy of getting a mention on TechCrunch. In fact, I did it this way myself for a period, believing I should just ”Build it and they will come.” Fortunately, a few years ago, I made a change. I learned to forget about the product. The world may or may not want it. Instead, develop your customers first, then let them tell you what product they want; at that point, all you have to do is give it to them. Think about it – how much more business could you do if you knew exactly who your customer was, what they wanted, and how to reach them?*

* This is somewhat of an over-simplification. In practice, not all customers are the customers you want or should listen to. This is especially true of early adopters. Nevertheless, on the balance, you'll run a far more effective business strategy if you do more than a little analysis to determine who your customer might be, how and whether you can reach them profitably.

The catch-phrase is Customer Development. It sounds odd, doesn’t it – I mean, what the heck is Customer Development? We all know what product development is, but how do you develop a customer? Think of it as more akin to developing an picture on photographic film. The image is out there, and if you just go through the right “developing” process that image becomes clear. Similarly, we don’t create our customers so much as develop a picture of them. To succeed, we need to know all about our customers, especially the ones we don’t have yet, and haven’t marketed to. The ones that we didn’t have a product for, primarily because we didn’t even know that they wanted something. We can find these customers by using a systematic approach - we start with a hypothesis and test its fit with our audience until the image of customer resolves itself. Our tools are surveys and interviews with clear metrics and sufficient depth so that the picture of our ideal customer resolves itself, and our business’s path follows.

I found this concept well-articulated in Sean Ellis’s excellent Startup Marketing Blog. I emailed Sean about his ideas, and was invited to coffee with him to share thoughts on startup marketing. Sean recommended The Four Steps of the Epiphany by Steve Blank, which I ordered and read. The book expounds on Customer Development, (arguably coined the term and is the definition of it) and gives an overview of the critical task of (as Sean writes):

“Finding the right fit between the problem, product, message and target customer … achieved through interviews, surveys, and A/B message testing….”

There is a Customer Development process that is fundamentally the same, yet unique, for every business out there. By researching and surveying, rather than jumping on the hot market drivers, I’ve found that I’m able to make much more effective use of my marketing dollars. It’s a very systematic, measureable approach, with quantifiable results. Stay tuned to this blog for more on this topic.

I want to thank Sean Ellis for sharing his most effective business practices with me, and to pay it forward: if you’d like to meet me for coffee and share thoughts on startup marketing, I’ve love to hear from you.

Labels: customer development, marketing, sean ellis