Lean Customer Development is available now from O'Reilly in e-book format. You can also pre-order the hard copy from Amazon, out June 14!

Lean Customer Development

Don't waste months and millions building a product that no one needs.

This practical guide shows you how to validate your product and company ideas through customer development – whether you're part of a startup or a large enterprise.

Read an excerpt from Chapter 1:

Why You Need Customer Development

Customers are what make a product successful.

Without customers willing to buy, it doesn't matter how good or innovative or beautiful or reasonably priced a product is: it will fail.

It makes no sense, then, that we spend most of our time and effort optimizing our product development process. What about customer development? Shouldn't we invest at least as much time in understanding our customers, their needs and pain points, and how to deliver solutions to them?

Customer development is an approach for doing just that.

It's a way to reduce your business risks by challenging your assumptions about who your customers are, what they need, and why and how they buy.

By applying the scientific method to learning about your customers, you can help confirm that you're on track to a business model that works and a product that people want to buy.

Sounds great in theory, right?

But theory is useless if you can't put it into practice. That's why I've written this book -- because I've worked with, mentored, and spoken to hundreds of companies who love the lean ideas and principles but struggle to make them work.

The First Challenge Is Inside the Building

Customer development is a big change for most organizations.

To many people, customer development sounds like saying, "Hey! You know that expertise that we've amassed over decades of experience, dozens of products, and millions of customers? Let's shelf it and start from scratch."

Of course that's not what we're saying. But as a pragmatist, I recognize that it's difficult to correct a mistaken first impression. If your team doesn't understand what customer development is and how it enhances (rather than replacing) your competencies, it'll be far more difficult to get started.

Customer development is admittedly the new kid on the block. Everyone knows about the role of product development, marketing, customer support, and even user research in an organization. But customer development? You're likely to encounter some skepticism. Unless your team has been exposed to lean startup conferences or Steve Blank's work, you may find yourself having to sell customer development to your organization before you can really get started.

This chapter takes a step back, explaining what customer development is (and isn't), why you need it, and who can do it. It also offers responses to some common objections.

What Is Customer Development?

So let's back up a minute and talk about definitions. What is customer development? What does it replace? What does it not replace?

The term customer development is meant to parallel product development. While everyone has a product development methodology, almost no one has a customer development methodology. And the truth is, if you don't learn what customers really want, you're at a very high risk of building something that no one wants to buy.

Customer development is a hypothesis-driven approach to understanding:

  • Who your customers are
  • What problems and needs they have
  • How they are currently behaving
  • Which solutions customers will give you money for (even if the product is not built or completed yet)
  • How to provide solutions in a way that works with how your customers decide, procure, buy, and use

You probably have ideas or intuitions about all of these. Let's identify what those really are: guesses. Let's make it sound a bit better and call them hypotheses. Those hypotheses may be around forming a new company, building a new product, or even adding new features or capabilities to an existing product.

Everything you do in customer development is centered around testing hypotheses.

What Is Lean Customer Development?

You may have heard of customer development. So what's the difference between "customer development" and "lean customer development"?

I call my approach to customer development "lean customer development." I'm using "lean" as a synonym for pragmatic, approachable, and fast.

Lean customer development takes the heart of Steve Blank's ideas and renders them into a simple process that works for both startups and established companies. It's what I write about on my blog, speak about at tech events, and teach when I mentor companies.

Lean customer development can be done by anyone who speaks with customers or prospects. It works whether you're a startup founder with no product and no customers, or at an established company with numerous products and customers. Now that I've explained my perspective on lean customer development, from here on out, I'm going to talk simply about customer development.

In my experience across multiple companies and in mentoring startups, every hour spent on customer development has saved 5, 10, or even more hours of writing, coding, and design (Figure 1-1). That doesn't even include the harder-to-measure costs such as opportunity cost, snowballing code complexity, and eroding team morale from working hard on features that no one ends up using.

Customer development starts with a shift in mind-set. Instead of assuming that your ideas and intuitions are correct and embarking on product development, you will be actively trying to poke holes in your ideas, to prove yourself wrong, and to invalidate your hypotheses.

Every hypothesis you invalidate through conversations with prospective customers prevents you from wasting time building a product no one will buy.

Lean customer development is done in five steps:

  • Forming a hypothesis
  • Finding potential customers to talk to
  • Asking the right questions
  • Making sense of the answers
  • Figuring out what to build to keep learning

If your hypothesis is wrong or even partially wrong, you want to find out fast. If you can't find customers, you modify your hypothesis. If customers contradict your assumptions, you modify your hypothesis. Those course corrections will lead to validating an idea that you know customers want and are willing to pay for.

You should keep reading!
Super useful tactics await you as soon as you buy Lean Customer Development.

You can also download a sample chapter (PDF) from O'Reilly now.