Lesson: Finding Customers with Cindy Alvarez

Step #1 Lean Customer Dev: Customer Discovery basics

Lean Customer Development is the practice of making sure that this thing that you want to build or create has a market. That there are going to be customers who want to buy it.

Lean traditionally has a very specific meaning. It dates back to Toyota's Lean manufacturing principles and in that way, Lean Customer Development is almost a little bit redundant because customer development is a part of the Lean start-up principles. But I've used Lean basically to mean something that you can do for early quickly, something that is highly pragmatic and that only takes a short period of time that anyone can do.

The Lean start-up talks a lot about the principles of developing software without waste. What actually preceded it was, "Four Steps to the Epiphany" which is Steve Blanks book, which is a phenomenal book and it really is targeted at start-ups who are trying to build a company. He goes through customer development, customer discovery. And then, the second half of the book is really building on your company.

There's kind of a running joke that a lot of people haven't quite managed to get through the book, as it's fairly dense. And so, one of my desires in writing my book was to have something that was more approachable. But the other was just to focus on that first half, that customer validation discovery part because that's so important and it's the thing that I think is less natural to entrepreneurs, the actual building of a company. If you get that far, there are a lot of people who can help you do it. There's a lot of modeling that is more visible.

But, how do you talk to a customer? How do you figure out that you really have a market? That feels like something that happens fairly invisibly a lot of the time. All you see is that the company has gotten successful and it's not really clear how you would reproduce that. So, I really wanted to focus on, how could you reproduce that? How could you take your idea which you're sure is brilliant? As an entrepreneur or an entrepreneurial person, your success relies on being confident in your ideas but you also need that healthy degree of skepticism and most people have a very hard time applying that with rigor.

One of the questions I get the most is, "So, what if you talk to customers and you don't discover anything?" This makes me laugh a little bit because in the past before we did this, we were building specifications. We were writing product requirements documents based on stuff that was in our head. And so, there was no way to really know that that was true. We built up a lot of artifacts but we didn't actually know that they were going to work.

Now we say we'll go out and talk to customers and you're sure to uncover things and people's first response is, "But what if you don't?" I just never found that to be true. I can understand people's disbelief but in my experience, I have never had a series of customer conversations where I walked away saying, "I don't know, I just didn't learn anything."

Lean Customer Development is not an inoculation against product failure. It's not going to guarantee that you succeed. And so, I have heard it was used in this way before. We did customer development, we talked to 20 people, so it's going to be a success. It's not. There's a ton more things going on. There's the actual quality of your product. The ability of your team to execute. The ability to sell. Partnering with other people and everything you would see in a Osterwalder business model generation, all those squares are still there and you could still go wrong in anything. You can run out of money. There's tons of things. So, customer development is not a guarantee of success, it's a massive derisker.

The other thing that I hear sometimes a little bit defensively is that, "Oh, does this mean that we don't need product managers or we don't need researchers or we don't need designers?" Absolutely not. Customer development is not going to write your spec for you. You're going to hear a ton of stuff from people and they're going to ask a lot of times for very specific things. I've had people pull out pieces of paper and started sketching features that they want. You can't just take that and go implement it because people are not very good at defining products that they would buy. And so, it's not something where it obviates the need for a good product manager or researcher. You still need that person to say, "Okay, out of 60 minutes of conversation, here are the nuggets that we're going to focus on and here are the things that I'm going to take in to my next conversation to see if other customers agree."

When I started my career, usability testing was something where you hired a professional in a lab and it was $10,000 a day. Honestly, by the time you did usability testing was probably too late to make changes. And so, any good researcher out there was going out and trying to figure out ways of, "How can we validate this thing before we build it?" Sometimes, it was mock-ups. Sometimes, it was just watching people.

I mean, into it, it was really the original customer development with your Follow-Me-Home Program. They would literally send the product managers into the stores and watch people buying TurboTax and say, "Hey, can I go home with you and watch you use that?" Again, to the doubters, people said yes to this. Can you imagine, we don't think people will pick up the phone and yet, 25 years ago, humans in a software store would say, "Yes, you can follow me to my house and come in and sit at my messy kitchen table and watch me install TurboTax. So, people have always been willing to do this as unbelievable as that is.