One of my favorite quotes is Nike's, "Just do it". It applies so much to entrepreneurship. Ideas are really a dime a dozen, stop talking and just do it!
Customer Development argues that there's a slight caveat to the 'just do it' mantra. I now full-heartedly agree. I believe many startups are irresponsibly spending investment $ to recursively 'just do it' - we were one of them.
It's irresponsible to 'just do it' without questioning your core business assumptions and validating them in a scientific manner. Sure, getting a product out is a great test of its viability. However, spending a bunch of money to discover what works isn't near as smart as using that money to scale what you've proven to work. Customer Development involves four steps (I'll expound upon the first two) for scientifically increasing your odds of success in finding a product-market fit for executing a repeatable and scalable business model.
Customer Discovery
The first critical mistake that many make is to use marketing research to support that their product solves a discrete customer problem rather than validating that it does from the customers themselves. You don't need to have the product built to get a "yes" or "no" from customers (strangers, not your friends!) that a) they have the problem, b) they feel your solution solves that problem, and c) they will buy your solution.
If any of the answers to the aforementioned three questions are "no", do the infamous pivot! Celebrate. You learned in a week what would have taken you well over a month by building, releasing, not getting traction, and even looking bad. Brilliant.
This is us celebrating our recent pivot to our new product, "PlaySay Survival". Sign up for beta access!
Customer Validation
Once you substantially get three yes's from the aforementioned questions, make that beautiful baby of yours. Do it, however, in the minimum viable product (MVP) method. Confirm your customers (beta or public) love your product as much as you do and are buying it. Next, your marketing assumptions need to be validated by having a demonstrable funnel that converts to additional sales. Simply put, a dollar in must equal more than a dollar out.
Kevin O'Learly, "Here’s how I think of my money – as soldiers – I send them out to war everyday. I want them to take prisoners and come home, so there’s more of them."
In this phase you must finally prove that your market is scaleable to the point of profitability. At PlaySay, we hit a dead end at the scaling point with our first product - digital vocabulary flashcards. We captured 18% of our initial target market (proven product-market fit) and had a 60% return on investment (proven sales funnel). However, we could not successfully replicate the model in other markets we attempted to scale into.
Customer Creation
You're well ahead of most startups if you're at this point. Celebrate! It will not be hard for you to get major investment to scale your business to acquire a critical mass of customers and likely make some serious green.
Company Building
Now that you've scaled your market, scale your business and operations. At this point you'll surely be more than 5 guys with C-level titles and will appropriately have a COO, CTO, CFO, CMO, etc.
What Customer Development Is Not
It's not a surefire method for success, it's simply a method to highly increase your chances for success. Through the method you'll likely discover what you won't want to discover. It's incumbent upon you to adopt accordingly. Persistence is critical but knowing when to walk away [adopt] is as important.
Sign up for beta access to PlaySay's biggest product yet! http://signup.playsay.com
p.s. my favorite software as a service (SaaS) for customer development is Ben's LeanLaunchLab