Good Customer Development / Bad Customer Development
Customer development is the journey that is supposed to bring startups to product/market fit. Inspired by “Good Product Manager/Bad Product Manager” by Ben Horowitz here are some guidelines on what good and bad customer development in startups might look like and what the respective consequences of implementing either can be.
Good customer development means asking a lot of questions and creating a crisp image of the customer in your mind touching everything from the motivations, the thinking, the preferences, the relationships, the goals, the budgets, the greed, the decision process, the wishes and the fears of the customer. Good customer development is understanding the market and customer problems in incredible detail. Good customer development makes you better at anticipating the reaction of the customers to features, design choices and solutions you provide. Bad customer development is understanding the customer only superficially. Bad customer development is thinking that you know everything about the customer.
Good customer development leads to very precise and tangible marketing messages and value propositions that are easy to understand. Bad customer development creates intangible high level marketing messages that don’t say much. Bad customer development leads to marketing messages that make customers hear nothing more than “Blah” and leave them with a blank expression. It leaves marketing and sales people with difficulties to actually make a sale. Bad customer development makes sales people ask “Why is it so hard to make a sale?”
Good customer development means talking to more than a few potential customers. Bad customer development is talking to one customer and then waiting two weeks before talking to the next one. Bad customer development leads to situations like “I talked to one business owner in our target group and she said she would like to have feature X. We’re building X now.” Bad customer development is trying to sell a product that is impossible to build. Good customer development happens fast, especially early in the product life. That means 10–50 meetings/calls with customers a week.
Bad customer development is when someone says:
- A: “I called potential customer X last week but she was on holiday. They said she’ll be back on Monday.”
- B: “Today is Wednesday. Did you call her on Monday then?”
- A: “No, not yet.”
- B: “Why not?”
- A: “…”
When the customer is back in the office on Monday good customer development means calling on Monday because you don’t have time to wait until Wednesday. Good customer development means hustling. Good customer development means having no fear of rejection, no doubts and no regrets. It means no fear to fail. It means pushing forward while failure is waiting around the corner. It means being free and independent from one’s own limiting beliefs.
Good customer development makes you and the whole team have a quick, crisp and convincing answer to the question “Why is your product better than your competitors’ products?”
Good customer development means being effective. Good customer development is creating a new landing page with a simple landing page tool in 30 minutes. Bad customer development is building a landing page with a backend framework, frontend framework, a fancy customized design and an integrated payment solution that takes two weeks to build. Two weeks is too long for a landing page. 30 minutes is good.
Bad customer development is forgetting to ask for potential customer’s phone numbers on landing pages. Bad customer development is building 20 versions of a landing page without having access to a traffic source that can deliver any significant traffic numbers.
You know that good customer development happened when you were able to increase the conversion rate of outbound sales calls from 1% to 10% because you got deeper insights about your customers which led to a new value proposition that resonated with your customers and that you are able to communicate quickly and clearly.
Good customer development means having the right priorities. Good customer development means understanding the customer before building high fidelity designs. It means understanding the customer before burning through 10 months of runway while building a bad product. Bad customer development is falling in love with your product. Good customer development is falling in love with the customer.
Good customer development means being honest. Good customer development means prioritizing real world feedback and data over one’s own theories and dream castles. Good customer development means letting the dream castle be destroyed. Good customer development means standing up and building a stone castle after the dream castle is gone. It means having a vision made of stone not bubbles. It means accepting that ideas and wishes will be crushed by reality. It means accepting failure and then change and improve everything wherever necessary. Good customer development means persistence and flexibility at the same time depending on what is necessary in the moment.
Good customer development makes the team know exactly what the next steps in product development are and removes insecurity about the future direction of the product. Good customer development gives the whole team confidence that the product will be successful because you will figure everything out sooner or later. Bad customer development makes the team question the future of the company. Bad customer development makes the team feel like they are wasting their time on something that is not going to work.
Good customer development makes it possible to put rough numbers on the market size and the number of customers that can be reached within the first weeks/months after launch and gives the team a rough idea about the customer acquisition costs and the conversion rates. Good customer development is helpful with and leads to successful funding rounds. Bad customer development makes you run out of money.
Bad customer development makes you fail. Good customer development can make you win. Good customer development makes your customers win.