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Talking to Humans: The Art of Customer Discovery

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Lecture 2 from our 5-Day Lean Launchpad Class discussing how to put customer discovery to work out of the building. Based on the acclaimed book, Talking to Humans, by Giff Constable & Frank Rimalovski. More at http://talkingtohumans.com.

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Talking to Humans: The Art of Customer Discovery

  1. @NYUEntrepreneur Talking to Humans: The Art of Customer Discovery 2B. Story
  2. @NYUEntrepreneur Why are we here? Share ideas, tips, tricks and secrets on how to best do customer discovery
  3. @NYUEntrepreneur Faster IS better, but it’s complicated!
  4. @NYUEntrepreneur “You can’t just ask customers what they want and then try to give that to them.” 4
  5. @NYUEntrepreneur “New ideas come from watching something, talk(ing) to people, experimenting, ! asking questions " and getting out of ! the office!”
  6. @NYUEntrepreneur The Business Model Canvas Revenue Streams Channels Customer SegmentsValue PropositionsKey ActivitiesKey Partners Key Resources Cost Structure Customer Relationships Designed by: Date: Version:Designed for: designed by: Strategyzer AG The makers of Business Model Generation and Strategyzer This work is licensed under the Creative Commons Attribution-Share Alike 3.0 Unported License. To view a copy of this license, visit: http://creativecommons.org/licenses/by-sa/3.0/ or send a letter to Creative Commons, 171 Second Street, Suite 300, San Francisco, California, 94105, USA. strategyzer.com What are the most important costs inherent in our business model? Which Key Resources are most expensive? Which Key Activities are most expensive? is your business more Cost Driven (leanest cost structure, low price value proposition, maximum automation, extensive outsourcing) Value Driven (focused on value creation, premium value proposition) sample characteristics Fixed Costs (salaries, rents, utilities) Variable costs Economies of scale Economies of scope Through which Channels do our Customer Segments want to be reached? How are we reaching them now? How are our Channels integrated? Which ones work best? Which ones are most cost-efficient? How are we integrating them with customer routines? channel phases 1. Awareness How do we raise awareness about our company’s products and services? 2. Evaluation How do we help customers evaluate our organization’s Value Proposition? 3. Purchase How do we allow customers to purchase specific products and services? 4. Delivery How do we deliver a Value Proposition to customers? 5. After sales How do we provide post-purchase customer support? For what value are our customers really willing to pay? For what do they currently pay? How are they currently paying? How would they prefer to pay? How much does each Revenue Stream contribute to overall revenues? For whom are we creating value? Who are our most important customers? Mass Market Niche Market Segmented Diversified Multi-sided Platform What type of relationship does each of our Customer Segments expect us to establish and maintain with them? Which ones have we established? How are they integrated with the rest of our business model? How costly are they? examples Personal assistance Dedicated Personal Assistance Self-Service Automated Services Communities Co-creation What Key Activities do our Value Propositions require? Our Distribution Channels? Customer Relationships? Revenue streams? categories Production Problem Solving Platform/Network What Key Resources do our Value Propositions require? Our Distribution Channels? Customer Relationships? Revenue Streams? types of resources Physical Intellectual (brand patents, copyrights, data) Human Financial Who are our Key Partners? Who are our key suppliers? Which Key Resources are we acquiring from partners? Which Key Activities do partners perform? motivations for partnerships Optimization and economy Reduction of risk and uncertainty Acquisition of particular resources and activities What value do we deliver to the customer? Which one of our customer’s problems are we helping to solve? What bundles of products and services are we offering to each Customer Segment? Which customer needs are we satisfying? characteristics Newness Performance Customization “Getting the Job Done” Design Brand/Status Price Cost Reduction Risk Reduction Accessibility Convenience/Usability types Asset sale Usage fee Subscription Fees Lending/Renting/Leasing Licensing Brokerage fees Advertising fixed pricing List Price Product feature dependent Customer segment dependent Volume dependent dynamic pricing Negotiation (bargaining) Yield Management Real-time-Market Hypotheses & the BMC Hypothesis Hypothesis Hypothesis Hypothesis Hypothesis Hypothesis Hypothesis Hypothesis Hypothesis Hypothesis Hypothesis Hypothesis Hypothesis Hypothesis Hypothesis Hypothesis Hypothesis Hypothesis Hypothesis Hypothesis
  7. @NYUEntrepreneur More than half of your assumptions are wrong! 7
  8. @NYUEntrepreneur Your job is not to validate your product….
  9. @NYUEntrepreneur Your job is not to validate your product…. It’s to validate the problem and how best to solve it?
  10. @NYUEntrepreneur Customer Discovery u Apply the scientific method to business model development 10 Modify hypothesis Observe phenomena Formulate hypothesis Test hypothesis via rigorous experiments Establish theory based on repeated validation of results
  11. @NYUEntrepreneur Customer Discovery u Apply the scientific method to business model development PIVOT! Observe phenomena Formulate hypothesis Test hypothesis via rigorous experiments Establish theory based on repeated validation of results You are here ____ v
  12. @NYUEntrepreneur Talk to >50 People! u  GOTB: The #1 lesson of this class u  Within five days u  You must gain insight into your customer & market u  You are doing pattern recognition… Must have sufficient data points to see u  It works…It is proven
  13. @NYUEntrepreneur Who do you want to learn from?3A. Who Do You Want To Learn From (Inked) 13
  14. @NYUEntrepreneur Who Cares?
  15. @NYUEntrepreneur Meet People You Don’t Know u  People you know will be nice and tell you what you want to hear u  Those interviews are possibly harmful u  Let other teams use people you know u  People you don’t know have no relationship to protect…Only they will tell you the truth
  16. @NYUEntrepreneur
  17. @NYUEntrepreneur What do you want to learn?4D. What Do You Want To Learn 17
  18. @NYUEntrepreneur What do you want to learn? 18 The Business Model Canvas Revenue Streams Channels Customer SegmentsValue PropositionsKey ActivitiesKey Partners Key Resources Cost Structure Customer Relationships Designed by: Date: Version:Designed for: designed by: Strategyzer AG The makers of Business Model Generation and Strategyzer This work is licensed under the Creative Commons Attribution-Share Alike 3.0 Unported License. To view a copy of this license, visit: http://creativecommons.org/licenses/by-sa/3.0/ or send a letter to Creative Commons, 171 Second Street, Suite 300, San Francisco, California, 94105, USA. strategyzer.com What are the most important costs inherent in our business model? Which Key Resources are most expensive? Which Key Activities are most expensive? is your business more Cost Driven (leanest cost structure, low price value proposition, maximum automation, extensive outsourcing) Value Driven (focused on value creation, premium value proposition) sample characteristics Fixed Costs (salaries, rents, utilities) Variable costs Economies of scale Economies of scope Through which Channels do our Customer Segments want to be reached? How are we reaching them now? How are our Channels integrated? Which ones work best? Which ones are most cost-efficient? How are we integrating them with customer routines? channel phases 1. Awareness How do we raise awareness about our company’s products and services? 2. Evaluation How do we help customers evaluate our organization’s Value Proposition? 3. Purchase How do we allow customers to purchase specific products and services? 4. Delivery How do we deliver a Value Proposition to customers? 5. After sales How do we provide post-purchase customer support? For what value are our customers really willing to pay? For what do they currently pay? How are they currently paying? How would they prefer to pay? How much does each Revenue Stream contribute to overall revenues? For whom are we creating value? Who are our most important customers? Mass Market Niche Market Segmented Diversified Multi-sided Platform What type of relationship does each of our Customer Segments expect us to establish and maintain with them? Which ones have we established? How are they integrated with the rest of our business model? How costly are they? examples Personal assistance Dedicated Personal Assistance Self-Service Automated Services Communities Co-creation What Key Activities do our Value Propositions require? Our Distribution Channels? Customer Relationships? Revenue streams? categories Production Problem Solving Platform/Network What Key Resources do our Value Propositions require? Our Distribution Channels? Customer Relationships? Revenue Streams? types of resources Physical Intellectual (brand patents, copyrights, data) Human Financial Who are our Key Partners? Who are our key suppliers? Which Key Resources are we acquiring from partners? Which Key Activities do partners perform? motivations for partnerships Optimization and economy Reduction of risk and uncertainty Acquisition of particular resources and activities What value do we deliver to the customer? Which one of our customer’s problems are we helping to solve? What bundles of products and services are we offering to each Customer Segment? Which customer needs are we satisfying? characteristics Newness Performance Customization “Getting the Job Done” Design Brand/Status Price Cost Reduction Risk Reduction Accessibility Convenience/Usability types Asset sale Usage fee Subscription Fees Lending/Renting/Leasing Licensing Brokerage fees Advertising fixed pricing List Price Product feature dependent Customer segment dependent Volume dependent dynamic pricing Negotiation (bargaining) Yield Management Real-time-Market
  19. @NYUEntrepreneur Don’t Assume You Understand the Problem!
  20. @NYUEntrepreneur What do you want to learn? u  Do not sell! No demos! No presos! u  You are there to learn! u  Get stories, not speculation u  Ask open-ended questions u  Learn about their problems and how they solve them today u  Ask why? Then why? They why again! u  Create a guide (not a script) 20
  21. @NYUEntrepreneur How do you find interview subjects?5A. How Do You Find Your Interview Subjects (Inked) 21
  22. @NYUEntrepreneur How do you find interview subjects? u  At least one degree of separation u  Learn to love LinkedIn u  Make referrals happen u  Get creative…recruiting hacks u  Fish where the fish are… u  …In the wild u  Promise to be brief u  Play the student/researcher card u  Enterprise customers are people too! 22
  23. @NYUEntrepreneur How to ensure an effective interview?6B. How To Ensure An Effective Session (Draft) 23
  24. @NYUEntrepreneur How to ensure an effective interview? u  Beware of confirmation bias u  Do it in person, one at a time u  Get subjects to tell a story u  Look for solution hacks u  Understand their priorities u  Follow your nose & drill down u  Listen and STFU! u  Have someone take notes 24
  25. @NYUEntrepreneur Pro Tips u  Practice, practice, practice u  NO email, focus groups or surveys u  Don’t start with your dream customer u  Being an entrepreneur means being aggressive & persistent u  Flatter subjects u  Be transparent u  Follow up/stay in touch u  Write up key insights right away 25
  26. @NYUEntrepreneur26 “It's grueling listening to customer feedback. And if it isn't, you're probably " doing it ! wrong."
  27. @NYUEntrepreneur Exercise 27
  28. @NYUEntrepreneur Your Last >$100 Purchase 1.  Write description of item on top of page 2.  Find partner sitting next to you & swap 3.  Create interview guide: ~5 questions u  Explain what you bought and why u  What was the process from desire to acquisition? u  What other options/alternatives did you consider? u  How did you decide to buy it? Who/what did you consult? u  How did you decide where to buy it? 4.  5 minute interview…take notes 5.  Switch
  29. @NYUEntrepreneur Discuss: Observations, challenges & questions 29
  30. @NYUEntrepreneur Documentation u  Assign someone to take notes u  Write down any key a-ha’s as they happen u  Note questions that worked & use them again! u  Take pictures or videos! u  Capture key insights
  31. @NYUEntrepreneur How do you make sense of what you learn?7B. How Do You Make Sense Of What You Learn (Draft) 31
  32. @NYUEntrepreneur Gaining Insight u  Facts are interesting…Insights are your goal u  Be honest…Don’t be too quick to validate or too slow to disprove your hypothesis u  Don’t just scratch the surface, dive deep u  Find the hidden motivations u  Ask why? And why? Then why again? u  Don’t fear picking the wrong market u  Depth of understanding always leads to insight
  33. @NYUEntrepreneur What’s an insight? (the a-ha’s along your journey)
  34. @NYUEntrepreneur in•sight |ˈinˌsīt| noun the capacity to gain an accurate and deep intuitive understanding of a person or thing
  35. @NYUEntrepreneur in•sight |ˈinˌsīt| noun something you’re so excited about you tell strangers on the train
  36. @NYUEntrepreneur Learning Is Paramount u  The knowledge you gain in customer discovery is critical to the success or failure of your business u  >Half of your assumptions are wrong u  You must not try to validate what you already think or want to be true
  37. @NYUEntrepreneur Pro Tips v2 u  Focus on actual behavior, not speculative or abstract feelings u  If they’ve made an MVP…ask to see it! u  Listen, don’t talk u  Follow your nose & drill down u  Parrot back or misrepresent to confirm u  Ask for introductions u  Write up your notes ASAP u  Avoid premature conclusions
  38. @NYUEntrepreneur GOTB! 38
  39. @NYUEntrepreneur Questions? 39

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