Founder Institute 2015

Research and

Customer Development

Humphrey Laubscher

23rd March 2015

About Me • GM of Innovation @

Loud&Clear

– Corporate Innovation and

Startup Incubator

• Product Strategy Manager

and Lean Startup Innovation

Consultant

• Newcastle Slingshot

Accelerator / Lean Startup

Sydney

• Ex Corporate IT Architect

(BHP, Coles, NAB, CBA)

Humphrey Laubscher @HumphreyPL

Overview • What research can you do to validate or to kill an idea?

• How do you determine the key assumptions of your business?

• Can key assumptions be tested?

• What are tactics to test key assumptions when you just have an idea?

• How do you identify and interview potential customers?

• What are some tactics for effective surveying?

• Does the market that you choose matter?

• What are good markets, and what are bad markets?

• Do competitors matter and why?

• How do you define your competitive landscape?

What is Lean Startup? Steven Blank steveblank.com

Eric Reis StartupLessonsLearned.com

Ash Maurya ashmaurya.com

Customer Development

Customer Development

Experiments

Hypothesis

Design Experiment

Test

Insight

New Product Lifecycle

Problem / Solution Fit

Product / Market Fit

Scale

Do I have Problem worth

Solving?

Have a built something

people want?

Can I repeat the processes

profitably?

Validated Learning Growth

Pivots Optimizations

Lean Startup Canvas

Find a

Problem

Curiosity in Business

Market Size from Marc • Which is more important?

– The caliber of a startup team?

– The quality of a startup's product?

– The size of a startup's market?

• I'll assert that market is the most important factor in a startup's success or failure. – In a great market — a market with

lots of real potential customers — the market pulls product out of the startup.

https://www.linkedin.com/pulse/marc-andreessen-product-market-fit-startups-marc-andreessen

Andy Rachleff

ex-Benchmark Capital • When a great team meets

a lousy market, market wins.

• When a lousy team meets a great market, market wins.

• When a great team meets a great market, something special happens.

Competitors • Competitors validate market

• Direct and Adjacent meet Petals Diagram

http://steveblank.com/2013/11/08/a-new-way-to-look-at-competitors/

2x2

http://www.startupshk.com/pitch-club-the-competion-slide-in-your-startup-pitch-deck/

Checklist

http://www.startupshk.com/pitch-club-the-competion-slide-in-your-startup-pitch-deck/

Searching for a

Business Model

Failure and Search

Hypothesis

Testing Hypothesis

Listen Your Customers

Listening

Early Adopters / Earlyvangelists

The Revised Technology Adoption Life Cycle

Early Adopters

Persona’s

Fictitious

Represents

Target

Customers

User Motivation

User Expectation

Helps Teams Focus!

Resolves Disagreements

User Empathy

Channels

“Customers don’t care

about your solution.

They care about their

problems.”

- Dave McClure,

500Startups

Startup Metrics for Pirates

• Acquisition: users come to site from various channels

• Activation: users enjoy 1st visit: "happy” experience

• Retention: users come back, visit site multiple times

• Referral: users like product enough to refer others

• Revenue: users conduct some monetization behavior

Dave McClure @DaveMcClure

http://500.co

http://500hats.typepad.com

http://slideshare.net/dmc500hat

s

AARRR!: Startup Metrics Model

Website.com

Biz Dev Ads, Lead Gen, Subscriptions, ECommerce

Homepage /

Landing Page

Product

Features

ACQUISITION

SEO SEM

Apps &

Widgets

Affiliates

Email

PR Biz

Dev

Campaigns,

Contests

Direct, Tel,

TV

Social

Networks Blogs

Domains

Emails & Alerts

System Events & Time-based Features

Blogs, RSS, News Feeds

Emails &

widgets

Affiliates, Contests

Viral Loops

Role: Marketing / Sales

Q: What channels? Which users? Why?

A: High Volume (#), Low Cost ($), High Conv (%)

• Design & Test Multiple Marketing Channels + Campaigns

• Select & Focus on Best-Performing Channels & Themes

• Optimize for conversion to target CTAs, not just site/landing page

• Match/Drive channel cost to/below revenue potential

• Low-Hanging Fruit:

– Blogs

– SEO/SEM

– Landing Pages

– Automated Emails

Where from?

Create Content

Cold Call

Friends!

@WebbJS © John Webb 2013

WHY

HOW

WHAT

Simon Sinek: Start With Why

Traditional, product-led marketing

OUTSIDE - IN

@WebbJS © John Webb 2013

Innovators / Early Adopters engage with beliefs first

WHY

HOW

WHAT

INSIDE - OUT

Simon Sinek: Start With Why

@WebbJS © John Webb 2013

What

Compaq 1996

IBM 1997

Why

Apple 1997

Simon Sinek: Start With Why

@WebbJS © John Webb 2013

Rockstar)Games)

11th)February)2011)

When your WHY is seen as a

“Noble Cause” people will follow Simon Sinek: Start With Why

Workout • 3 Top Problems

• 3 Top Solutions

• Target Market

• Customer

Empathy Map

• Early Adopter

Persona

• Facebook/Goog

le Ad

Test Hypothesis through

Interviews • Customer Segments: Who has

the pain? – How to identify early-adopters?

• Problem: What are you solving? – How do customers rank the top 3

problems?

– What is their pain level: must-have, nice-to-have, don’t-need?

– How do customers solve these problems today?

Example Problem and Exercise:

• Write out a list of interview questions using your Lean Canvas that allows you to:

– Confirm your Target Market

– Helps you confirm and rate your problems in order of importance by the customers from #1 to #3

– Rate your solutions in order of important by asking if they are “Nice to Haves” or “Must Haves”

– Also ask the magic wand question.

Interview Script

Track your Results

Time to Get out of

the Building!

Overview • What research can you do to validate or to kill an idea?

• How do you determine the key assumptions of your business?

• Can key assumptions be tested?

• What are tactics to test key assumptions when you just have an idea?

• How do you identify and interview potential customers?

• What are some tactics for effective surveying?

• Does the market that you choose matter?

• What are good markets, and what are bad markets?

• Do competitors matter and why?

• How do you define your competitive landscape?