Customer development is a four-step framework, originally identified by Steve Blank, to discover and validate that you have identified a need(s) that customers have, built the right product to satisfy that customer’s need(s), tested the correct methods for acquiring and converting customers, and deployed the right resources in the organization to meet the demand for the product. The framework provides a way to use a scientific approach to validate assumptions about your product and business.
The four steps of the framework are:
- Customer discovery – Understand customers and their needs that you may be able to satisfy.
- Customer validation – You have a product that will satisfy your customer’s needs.
- Company creation – You determine whether your product will satisfy all the customers needs
- Company building – You can grow your organization in order to support the demand for your product.
The Lean Startup approach combines customer development, which is helpful when you don’t know the problem, and agile development, which is helpful when you don’t know the solution. Both approaches provide ways to iteratively validate assumptions and learn through feedback.
The first step of customer development, customer discovery, is the part of the framework that plays the biggest part in Lean Startup, and has also been shortened to “discovery” by some in the agile community. Customer discovery helps you determine whether you understand the need you are trying to satisfy and whether you are satisfying the right need.
Customer discovery can be described as:
1. Identify the need.
You may not always immediately know the actual need you are trying to satisfy. In some cases you start with a solution (product idea), at which point you need to work backward to figure out the need you are really trying to satisfy.
2. Hypothesize potential solutions.
Once you have an understanding of the true need, hypothesize a potential solution. If you were initially handed a solution to deliver, you can include that as a candidate, but you may find that the need you’re satisfying requires a completely different solution.
3. Identify assumptions.
Identify assumptions that are central to your hypothesized solution, including assumptions about
- Business environment
- Dependencies
- Minimum requirements for a solution
- Change management required
A helpful way to identify assumptions is to ask, “What must be true for this solution to be effective?”
4. Validate assumptions.
Talk to customers and gather data to validate your assumptions and test your solution. There are many different ways you can go about validating assumptions.
5. Start delivering.
Once you feel you have validated a sufficient number of assumptions, start delivering a minimal, yet viable, solution and get frequent feedback from your customers on whether the solution meets their needs.
6. Constantly reevaluate your solution.
Constantly reevaluate your solution to make sure it is still worthwhile based on new information that comes to light. Regularly ask whether you should commit to, transform, or kill the solution.
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