What is the Customer Development Methodology
Our Growth Marketing Specialist Mirko Maiorano wrote an interesting article about Customer Development methodology, which has become very common in the world of startups also thanks to the Lean Startup method.
What is Customer Development?
It is a methodology born and developed thanks to Steve Blank’s in-depth research on the business models of the Silicon Valley startups with which he collaborated.
Through this analysis, he was able to understand that Startups differ from classic companies not only for their size or for the innovative solutions offered, but above all for the uncertainty of the environment in which they grow.
Not only that, he understood before others that, in parallel with the change in the processes applied to product development towards the Agile mindset, new models were also needed for the building of the customer based on the effective research and validation of their needs.
This would have allowed companies to be able to build solutions that face the market issues and to grow with greater awareness.
The Customer Development methodology is based on 14 fundamental principles included in the manifesto written by Steve Blank himself, together with Bob Dorf:
- There are no certainties within your company headquarters, so you need to look outside.
- Use Customer Development in conjunction with Agile development methodology.
- Failure is an integral part of the research.
- Make continuous iterations and turns, the more you do the closer you get to the right solution.
- No business plan survives the first contact with customers, so use the Business Model Canvas. *
- Design experiments and tests to validate your hypotheses.
- Identify the type of your market because this changes everything.
- The metrics of a Startup are different from those of established companies.
- Adopt rapid decision-making and minimize the length of development cycles.
- It's all about passion.
- The working figures needed for a Startup are very different from those for an established company.
- Keep as much liquidity as possible for when it really is needed. At that point, spend.
- Communicate and share everything you learn.
- The success of Customer Development depends on the effective involvement in the process of all the components of the Startup, including investors and founders.
* the Business Model Canvas is a template that is really helpful to design and develop the business model of your company. It was conceived by Alexander Osterwalder as a valid alternative to traditional business plans containing medium/long-term planning and projections, not suitable for the uncertainty in which startups are moving.
Going back to Customer Development, let's find out in detail what it really is. It consists of 4 phases to be applied and followed with great care and patience:
- Customer Discovery
- Customer Validation
- Customer Creation
- Company Building
We invite you to continue reading the article on Mirko Maiorano's blog.