sThere are many tools that can be used within the realm of Customer Discovery Research for early-phase startups, including interviews, phone engagements, surveys, field trips, etc.. It is beneficial to have all of these tools in your Customer Discovery Toolkit and know when to use which tool based upon the circumstances. Our experience with Giggso is a perfect example of how a variation of tools may be more effective than using just one approach.
Giggso has become one of the most well-known projects in the history of The SearchLite. For the past 3 months, we have been talking about this project in all of our weekly project update meetings, and when we weren’t talking about it, we were thinking about it. Giggso is one of the longest and toughest Market Discovery Challenges yet it happened to be my first project!
If you define success as the ratio of outcome over goal, I can’t say Giggso is a successful project. However, from an experience gaining perspective, people grow faster in the process of tackling tough problems rather than being handed easy solutions. I grew tremendously because of Giggso.
Did you know much of what The SearchLite does is based off of Alex Osterwalder and Steve Blanks foundational models for lean startups? We follow their lead because quite simply it works! As our main goal is to help inventors and entrepreneurs commercialize their inventions and startup solutions we focus on Customer Discovery and Market Validation. Since customer discovery is the very first step, developing useful customer interview questions is one of the first things we must think about and learn how to do effectively. In a blog titled “A Quick Guide To Asking Good Customer Questions,” published by Kavi Guppta for Strategyzer, Guppta presents 8 fundamental rules to keep in mind while conducting customer interviews including:
Over the last year, The SearchLite has conducted over 40 Market Discovery Challenges for university technology transfer offices (TTOs), Angel Investors and Business Incubators on behalf of inventors and startups. Market Discovery Challenges are designed to help identify “Who Cares and Why” about a new technology or solution. The idea is to use Customer Discovery Interviews and other tools to validate or invalidate key hypothesis about Value Propositions, Customer Segments, Product-Market Fit and other key aspects of the business model that a new venture is pursuing.
The primary framework, which serves as the foundation for The SearchLite’s Market Discovery Challenge, is “Lean Startup” and, more specifically, the Customer Development Process. The four primary disciples of Lean Startup over recent history are Geoffrey Moore, Steve Blank, Eric Ries and Alex Osterwalder. While there are many other thought leaders on the Lean Startup Subject, these four have laid the primary foundation with Crossing the Chasm (Geoffrey Moore), Customer Development (Steve Blank), Agile Development (Eric Ries) and Business Model Generation/Value Proposition Design (Alex Osterwalder). The HBR article from May, 2013 by Steve Blank –“Why the Lean Start-Up Changes Everything”, is a good place to start for those unfamiliar with these concepts.
For The SearchLite, one of biggest challenges we encounter on almost every Market Discovery Challenge is understanding “Where the Start-up Is” as a starting point. Inevitably, each inventor or entrepreneur tends to believe his or her technology, solution or startup is further along the Customer Development Process than it really is. Two of the key outcomes of the early phases of Customer Development are “Problem-Solution Fit” (Customer Discovery) and Product-Market Fit (Customer Validation). Almost without exception, Start-Ups are trying to execute Customer Creation or Company Building without ever having achieved Product-Market Fit. They may be trying to do Company Building when they should be focused on Customer Creation. Start-Ups focused on Customer Creation often should step back one or two steps back to Customer Discover or Customer Validation.
In one example, The SearchLite recently worked with a university spinout that had developed wireless monitoring and control technology which was early stage in development and broad in terms of potential market application. This situation was most suited for Customer Discovery, but the Start-Up Team felt that they already had identified their best-fit customer and wanted to focus on Customer Validation. As a result, the Market Discovery Challenge was focused narrowly on validating interest in the technology only from Plant Managers at OEM Stamping Plants in the Automotive Industry. The results of the Customer Discovery Interviews indicated that the industry, application and customer type were all overly constrained and that there was little interest from this customer in this technology. This was a classic case of confirmation bias on the part of the Start-Up Team.
Recently, The SearchLite has been working with some post-revenue, Second-Stage Companies in addition to Start-Ups. In many cases, the introduction has come from digital marketing agencies who have been brought in to help the Second-Stage Company to grow sales via marketing automation platforms. In the context of Steve Blank’s Customer Development Process, Marketing Automation is synonymous with Customer Creation. Marketing Automation is a fast growing software category with players such as Hubspot, SharpSpring, Infusionsoft, Marketo and Act-On. In the course of investigating the Second-Stage Company’s current marketing tactics including their website analytics, the digital marketing agency often finds that the Second-Stage Company, while able to sustain a minimal level of sale, is not able to scale because they never truly understood the best-fit beachhead customer, their persona, jobs-to-be-done or pains & gains in enough granularity to automate the sales funnel.
In their recent publication – “The Entrepreneur’s Guide to Customer Development”, Brant Cooper and Patrick Vlaskovits discuss the application of a Proposed Funnel during Customer Discovery and a Sales & Marketing Roadmapduring Customer Validation. A funnel represents each step a prospect goes through, from blissful ignorance to happy customer, or from Internet “Googler” to satisﬁed user. The main point is that it is never too early in the Customer Development Process to begin to not only identify the target beachhead customer, but also to use the Customer Discovery Interview Process to identify their buying process. This helps to get in front of Customer Creation when it is time to activate marketing automation platforms.
As a result of this insight, The SearchLite has modified our Customer Discovery Interview Guide and other elements of our toolkit to help our inventor or Start-Up clients get ready to scale even as they conduct their early stage customer discovery and business model validation. If you would like more information about The SearchLite or our Market Discovery Challenges, please visit TheSearchLite.com or contact Scott Phillips at email@example.com / (734) 787-7509.
Last but not least, structure a learning plan. Embrace the Lean Startup tools and methods. Following this structure will cause you to write a learning plan. A foundational question to guide your learning plan in every part of your business model is “What do we need to learn before we invest more time and money?”
I especially like Todd Dunn’s final piece of advice!
“Last but not least, structure a learning plan. Embrace the Lean Startup tools and methods. Following this structure will cause you to write a learning plan. A foundational question to guide your learning plan in every part of your business model is “What do we need to learn before we invest more time and money?”
I-Corps™ Energy and Transportation is a customized curriculum to help teams of participating researchers discover the commercial potential of their technology, build a business model, and garner insights from leaders in the energy and transportation industries. This is the second year in a row that Next Energy has teamed up with the CFE I-Corps Program, a program offered by the University of Michigan Center for Entrepreneurship. CFE I-Corps is a region-wide program designed to foster, grow and nurture an innovation ecosystem. Through partnerships between the National Science Foundation (NSF), Michigan universities, Midwestern universities, Michigan SmartZones, and venture capital and entrepreneurial communities, the program has created an opportunity for teams throughout the state and region to turn technology into commercial opportunities.
Jonathan Fay, Clay Phillips and Dan Radomski led the Trasportation Track of the I-Corps Program. As the primary instructors, they gave constant feedback to the teams regarding their value propositions, target customers and other aspects of their business model hypothesis.
Visha, Scott and the The SearchLite had the privilege of working with Alternative Fuel Containers, LLC (AFC). AFC is developing Natural Gas storage tanks for a range of motor vehicles that will minimize refuelling time and maximize miles driven per tank. The AFC tank design uses MOF (metal organic framework) adsorbent to capture Natural Gas at the molecular level. This means an AFC tank will store an amount of fuel comparable to CNG technology but without the limitations of tank shape, compression costs and safety concerns. Visha and Scott enjoyed working closely with Dillon Fuerth and Joong Lee. Dillon is the Business Unit Manager, is responsible for guiding the company from proof-of-concept to commercialization. Joong is the Development Manager, is creating alternative natural gas tank systems using technologies developed by framergy Inc. and Texas A&M University.