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Strategist, Project Manager, User Experience Expert
Entrepreneurship is about being in service to human needs and wants.
Know who your customers are and who they are not.
Serve your target customers efficiently and do not bother everyone else.
Lesson: Creating Customers Personas with Julie Hamwood
Step #1 Clarity: Improve your aim with interviews
Entrepreneurship is very much about being in service to human needs and wants, and it's actually a tricky thing. Because if you think about it, all the people that we know and actually love, family members, friends, when we think about all the ways that we bump into the people that we know and love and how hard it can sometimes be to choose the right gift for them or respond the right way, it is even harder when we're working with customers who are at arm's length removed from us.
So we need to do our customer development work to really understand who our customers are and who they aren't. So customer development is really about understanding: What characteristics of this person makes him my customer and what doesn't? What is their pain point? How can I service that for them, and how do they get to hear about what we're doing?
All of us who are entrepreneurs are actually trying to create a viable business around meeting somebody's need. Now in order to meet somebody's need, we need to understand that person. We need to understand who they are, what context they're in, what is the problem that they're trying to solve, how do they solve it currently, what works for them, what doesn't, and also if they're looking to change, how they're solving that need, how they need to hear about what we're doing and how would we form a relationship with them so that it is mutually beneficial so that we're offering something that is of value to them, that's more valuable than the money they're paying us, and we're making enough money to cover our costs in making this for them.
Overview, that's what customer development is understanding needs. However, it's actually a process, because we're learning over time. Every single one of us is a human being in the world, and we all have a sense, on some level, of what it is to have a certain need. Certainly when we have an idea and we're going to focus on that idea, we have a picture in our mind, often quiet clear, about this is the type of person and this is the need, and this is how my idea will solve it, and this is how it will all work, and it will be beautiful, and I just can't wait to do it.
However, usually what we're imagining is at least 50% wrong or unclear. That's what customer development is all about and validation is all about is basically working with our customers to get a lot more clarity, a lot more nuance, a lot more finesse around, a lot more accuracy, so that we can be a lot more efficient in how we service them and that we can find the people who actually really need what we're doing and not bother the people who don't need what we're doing.
Where I like to I start in the process is I actually like to start with the business model, because we're entrepreneurs here. So first of all I really want to understand what that overall picture is. There are different canvases around. The business model canvas is fantastic. I personally really like the lean canvas. So I basically will spend, maybe it depends on how strong the idea is, but it might be 15 minutes, it might be an hour, where I go through who I think the customers are, what the problem is, what I think the solution is, what channels are, what the unique value proposition is, the unfair advantage, the revenues, the costs. I go through each of those areas.
The customer development piece is all about principally understanding customer segments, but it also is telling me what is the problem. It's also going to be telling me what are the channels. It will give me some information about the unique value proposition, some information about what metrics they need to track, definitely information around pricing and therefore revenue, and maybe stuff around unfair advantage.
So I use the lean canvas to help give me overall context. Then I evaluate everything I have put in there to say, "What most needs to hold here for this overall business model to work?" So I'm looking things like: What's my product risk? Which aspects of this product or problem that I'm trying to solve need to hold? I'm looking at my customers. Which facts, at least facts that I think are true, need to hold for these customers to be motivated and even enthusiastic to give me their money for the service that I'm offering?
Then there's, obviously, overall market risk like: What's the total addressable market? What's my defensible position? Both of those two questions are things I'm not looking at all in this stage, but those are my other main risks around making this business.