How The Lean Startup Team Practices Customer Development

Photo by The Lean Startup Conference/Jakub Mosur and Erin Lubin
Photo by The Lean Startup Conference/Jakub Mosur and Erin Lubin

Customer development is one of the cornerstones of Lean Startup. It teaches that instead of assuming your beliefs about your business to be true, you should apply an engineering, or scientific method, in order to validate the ideas.

Though customer development is one of the toughest aspects to execute in the build, measure, learn framework–and is often seen as an “extra”–it’s a critical part of the process that helps us avoid mistakes early and identify new market opportunities.

In this post, we’ll share how our team at The Lean Startup Conference uses customer development to shape our product design.

  1. Talk to your target customers first before you build anything

Every January, a good 10 months before our next conference, our core team holds 45-minute calls with alumni to learn whether or not they’ve gained the knowledge they’d hoped to get at our previous conference. Additionally, we talk to potential customers all year round to discover what struggles new community members are facing.

The benefits to conducting feedback early are two-fold: We make sure that the conference–our product–aligns and evolves with the needs of our audience. We build what brings most value to our customers.

If you’re looking for an additional application of this idea, check out this talk from Daina Burnes Linton, co-founder at Fashion Metric. She learned that her assumptions about her target market were wrong, switched gears, and built technology that was more in line with her customers’ needs.

  1. Create low-touch, high-impact feedback loops with customers

We practice a continuous and ongoing learning process. To maximize the time of the core team, we divide and conquer. We segment our customer base into four key groups: young startups, established businesses, enterprise, and government/education/nonprofit. This process allows us to streamline the analysis portion of our efforts, which in turn allows us to see themes and share findings within the team, on an ongoing basis.

Next up, each team member interviews 1-2 customers each week, and take notes in an analysis-ready, living, breathing Google spreadsheet. When a customer conversation really inspires us, we share our notes, news feed style, in Slack.

Once we begin to see themes, our co-founder, Heather McGough, does a full analysis across segments, allowing us to later be ready for synthesis; in other words, decide which content, tools and services we should test based on the needs of our community. It’s a low-touch process that keeps our customers close to our day-to-day operations. Think: It’s a lot like your check-in meetings with your boss, coupled with a semi-annual performance review. Only this time, your boss is your customer.

Our biggest takeaway is that customer development should integrate with your own processes. There’s no right or wrong approach. When we first started building out our systems, we studied multiple methodologies for interviewing, qualitative research, etc… the list goes on. But we realized that the best thing to do first was simply get started. And that’s what we encourage fellow Lean Startup practitioners to do, too.

Conference speaker Charlie Scheinost, an engineering manager at Adobe, spoke about how his team takes turns answering questions through their product’s live chat software. The process takes very little time out of each engineer’s week while providing direct and relevant insight into customers’ key needs.

Extras: we recommend this book by Steve Portigal as a guide for interviewing users.

  1. Build MVPs and test ideas in increments

The Lean Startup Conference takes a full year to build out its annual program, but we test editorial concepts iteratively. By the time November hits, we’ll have published more than 50 blog posts, podcasts, and webcasts. The significance? These are all MVPs that lead up to our flagship conference.

Through these content experiments, we look at feedback between the lines: what’s getting shared, and what’s generating sign-ups. We take these lessons learned, adapt, and iterate as much as we can–with more content. For example, one of our most popular webcast, Speed as a Competitive Advantage with GE, helped us see that we have a huge number of enterprise folks who want to see more stories about enterprise innovation in highly-regulated environments. In turn, we created a ‘corporate innovators track’ for the 2015 event and actively pursued speakers like the VP of Product Delivery at American Express and the Head of Digital at Wells Fargo to meet this demand come November.

For another application of this idea, check out this talk from Anita Newton, marketing advisor to CPG startup Mighty Handle.

In 2014, the company faced one of the biggest opportunities in its existence: a pilot with Walmart. Mighty Handle had one shot to perfect its packaging, and couldn’t afford to take any chances. So what did Newton do? She ran a series of Facebook and YouTube ads to test concepts with Mighty Handle’s target audiences. This iterative approach helped her identify the right packaging for her target audience. Today, Mighty Handle is sold in 3,500 Walmart locations nationwide.

Validation Between The Lines

In addition to the steps referenced above, we use multiple channels to sanity-check our assumptions. We run a post-registration survey to give every attendee the opportunity to express what they’re looking to learn, we engage with audiences on Twitter to find popular topics, and we host a live chat on our registration page. The bottom line is that we’re engaging with customers year-round, so that we can come up with a conference program that addresses their current struggles. It’s an iterative process that ensures we’re hitting the mark each new year.

Get Started

What is one way you can implement these strategies into your own customer development process? Get even more hacks, tips, and case studies from companies that are using Lean Startup in our Explore Lean Startup Bundle. You will get free, instant access to 9 HD video case studies packed full of strategies you can implement now.

This post was written by @ritika puri, resident storyteller and Heather McGough, co-founder of Lean Startup Co.

Five case studies you’ll see at the Lean Startup Conference 2015

Five Case Studies
Photo by The Lean Startup Conference/Jakub Mosur and Erin Lubin

Wondering what’s new in the Lean Startup community? With hundred of thousands of global practitioners, the supply of ideas and best practices is endless. What’s more challenging is finding the right information that will influence positive change within your organization.

Every year, our team conducts more than 500 customer development calls to understand what challenges the community is facing. We come across some interesting stories from people who are really making things happen. Here are some of our favorites:

1. Product Hunt, an 18-month old startup, has evolved from a basic idea into a thriving online community.
Entrepreneur Ryan Hoover transformed an email list experiment into a venture-funded startup community with tens of thousands of active members.

It all started with a small group of founders and product enthusiasts who self-aggregated into an online community. With positive feedback from his peers, Hoover decided to transform his email list into a website. Over Thanksgiving weekend in 2013, right after launching his email list experiment, he built Product Hunt’s first website mockup with his team. Today, that MVP has evolved into a thriving online community with more than $7M in funding.Though Ryan is now running one of the hottest startups around, he’s a down to earth guy with some great ideas on how to get things going. Check out his post on how he launched Product Hunt, a story captured in tweets, emails, and photos.a
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2. Telepathic, a new technology startup, is bringing A/B testing to the world of mass-market fiction and storytelling.
Entrepreneur Prerna Gupta believes that there’s a billion-dollar opportunity in bringing “Lean” principles to the development and distribution of mass-market fiction, and in presenting stories as a mobile-first experience. Her goal? She wants to disrupt Hollywood with the Lean Startup method.
Prerna began her startup journey after leaving a job as a management consultant, and launched Yaari, a youth-oriented social network in India. Since then, she’s applied her business and technology skills to build apps like Songify; and after a period of time wandering the world with her husband, arrived at the idea for her new business.Prerna’s vision is to share stories across multiple platforms, including apps, video, and virtual reality. It’s Lean Startup storytelling for the Snapchat generation. Read about Prerna’s journey here.3. ReadyTalk, a 15-year-old web conferencing software company, launched an internal startup.
ReadyTalk became interested in Lean Startup principles to develop new lines of business. Along the way, the company faced many of the same challenges that Lean Startup practitioners experience: balancing new customers and product lines with existing ones.After attending the 2014 Lean Startup Conference with 6 of her team members, intrapreneur and product strategist Andrea Hill realized that ReadyTalk needed to hold its emerging business lines to a different standard of success. She shares: “We now use metrics like cost-per-learning and validation velocity to show progress since traditional things like ROI weren’t applicable.”

With this approach to establishing and tracking milestones, ReadyTalk launched its beta of UbiMeet.com in March 2015.

4. Dun & Bradstreet, a 174 year old financial services company, has spent the last year building an experiment-driven marketing operation.
Dun & Bradstreet is undergoing a big cultural shift. One of their major initiatives is to launch marketing programs that engage customers in a fresh, new way. As part of this process, the company’s CMO Rishi Dave, is encouraging teams to launch campaigns faster. He shares: “It’s not about being perfect— it’s about being perfect enough to start gathering data.”

He’s encouraging his teams to get confident with this gap and recognize that the present is always a stepping stone towards a new opportunity. Dave is at the helm of an experimentation story in the making. He shares: “You need to test your way through this process until you find that crucial connection point.”

5. The United States Digital Service, a federal government agency, is building a ‘stealth startup.’
At the 2014 Lean Startup Conference, Todd Park, former CTO of the United States and current advisor to the White House, concluded his panel discussion with the following sentence: “come work for us.”

Three Lean Startup Conference attendees have taken him up on his offer, and that number is growing (we’ve heard that they’re very, very happy). They’re working to build a 21st century government, and improving on processes that typically burden government workers. Their mission is to drive efficiency, transparency, and savings. You can read more about 18F here.Want more of these stories?Come hear about them live at the 2015 Lean Startup Conference. All of the people mentioned in this post (and many more) will be speaking at the conference, and they’re excited to meet you. Get the details here.Do you have a cool Lean Startup story to share? Tweet us @leanstartup, and we might feature you in a blog post, too!

Build Your Own Lean Startup Hub

 2013 Photo by The Lean Startup Conference/Jakub Mosur and Erin Lubin
2013 Photo by The Lean Startup Conference/Jakub Mosur and Erin Lubin

Thinking about starting your own Lean Startup group? Here’s a list of ideas on how to get started, from Ursula Shekufendeh, a strategic partnerships manager and former Lean Startup Conference Speaker.

Her company, AppFolio, introduced her to Lean Startup methods in 2012. One year later, Shekufendeh was running an experimental company initiative, RentApp, as part of an internal incubator.

Here are Shekufendeh’s tips for joining and staying close to the Lean Startup community.

  1. Start a book club

Shekufendeh’s initial exposure to Lean Startup was through a company book club. After reading The Lean Startup, AppFolio’s VP of Product decided to launch an internal incubator, to experiment with Lean methodologies and build a cross-functional team.

“We would read a few chapters every week,” Shekfundeh says, “discuss, and share perspectives on how to apply those ideas to ongoing experiments with RentApp.”

Using this approach, AppFolio spent time discussing frameworks, tracking successes, figuring out ways to measure success. The book club, in a way, was its own Lean Startup MVP.

  1. Host a community event

The Lean Startup Conference has a live stream that you can broadcast, if your team members are unable to attend the event in person.

“A few months after experimenting with Lean Startup, our team signed up for for the conference live stream,” Shekufendeh says. “This was the first time that I got to watch the talks. Our team did something similar in 2013, and in 2014, I attended the conference for the first time, as a speaker. Several of my team members and I will be back in 2015.”

In addition to broadcasting the Lean Startup Conference live stream internally, AppFolio hosted an event for the public. The company advertised the Lean Startup Conference through Facebook and Eventbrite and invited local startups to come to AppFolio’s headquarters.

“We broadcasted the live stream in one of our conference rooms and offered food,” says Shekufendeh. “It was a great way to meet people. We actually discussed each talk with one another.”

  1. Tune into a live Lean Startup webcast

Lean Startup Co. hosts 1-2 webcasts per month. These sessions feature live, interactive Q&As with business leaders like Aneesh Chopra, former CTO of the U.S.; Mark Little, head of global research at GE; Laura Klein, UX leader and principal at UsersKnow; and Cindy Alvarez, head of user experience at Yammer.

Why not invite your team (or even companies in your community) to view the webcast and discuss takeaways after? You can access the Lean Startup webcast library here.

  1.  Build your own Lean Startup curriculum

Pick and choose what you want to learn, and use Lean Startup Company’s resources to build your curriculum.

In addition to its webcast recordings, Lean Startup Company has an arsenal of content from past conferences. Co-founder Heather McGough also hosts a podcast series. Instead of watching and listening to these recordings alone, why not invite your company team or meetup group? Here are a few ‘editor’s choice’ recommendations:

  1. Attend the Lean Startup Conference in person

The value of attending the Lean Startup Conference is that you’ll be able to meet practitioners, experts, and community leaders from all over the world. It’s your one annual opportunity to connect with others and see what’s happening at other companies. You’ll get actionable lessons that you can apply immediately.

It was after two years of following Lean Startup from a distance that Shekufendeh decided to join the conference in person. She explains that connection-building opportunities were invaluable and plans to attend the conference, as much as possible, in future years.

One big difference between being there in person, than the livestream, is the conversations that happen outside, of the talks,” says Shekufendeh. “So connecting with people that might be going through the same challenges, or have run into similar situations as you, and exchanging those ideas is invaluable.”

“As you’re there, with everything happening around you, you can bounce ideas off of each other, in the moment,” says Shekufendeh.  “You can ask as many questions as you want and see what the other person’s experience has been, or you can enrich your own as well. If you have people that are familiar with your own context, with your own situation, and your own challenges, and then can pick and choose the lessons that you heard from other companies.”

You can even bring your new connections back home.

AppFolio recently invited Kathryn Kuhn, transformation leader at Rally Software and 2014 Lean Startup Conference speaker, to come give a local talk on product development. Shekufendeh and Kuhn met at the 2014 event and stayed in touch. For this reason, Shekufendeh encourages Lean Startup practitioners to attend events in person.

If you’re interested, you can learn more here.

Final thoughts

At its heart, Lean Startup is a learning experience. The time and energy you spend getting familiar with Lean Startup is an investment in your own education, and a valuable resource for your company.

“We’ve very lucky to have senior management being supportive of our learning,” says Shekufendeh. “They see Lean Startup as an investment and way to grow.”

Prioritize your group like you would any other educational investment. Track milestones, make sure that you’re evolving, and find ways to built on one another’s insight.

If you want to bring speakers like Kuhn to your own event, you can reach out to Lean Startup Company to set up a series of coaching or business education sessions. Just email heather@leanstartup.co for suggestions, case studies, and coaching session options.
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For more info on Lean Startup, check out http://2015.leanstartup.co/ and join us at The Lean Startup Conference in San Francisco, November 16-19