How to know whether your idea is a good one
How can entrepreneurs build a successful product? A useful starting point is to draw on Steve Blank’s Customer Development Model that focuses on three key areas:
- Conviction: The entrepreneur’s Achilles’ heel
- Customer Discovery: How to recognise and test your assumptions
- Customer validation: Does my customer’s problem actually exist?
Conviction: The entrepreneur’s Achilles’ heel
It’s a cruel paradox. One of the qualities you need to be a successful entrepreneur is the very thing that can trip you up early on: conviction.
You must be ready to truly challenge your conclusions. Searching should lead us to ask:
- Who are my customers?
- Do they really need my product?
- How am I going to reach them?
- Does my product solve their problem?
- Finally, will they buy it?
When it’s done properly the product development process will likely lead you to a totally different end product. Avoid the very common mistake of just going ahead and building it.
Customer Discovery: How to recognise and test your assumptions
Blank suggests you write a one- or two-page hypothesis for each part of the Business Model Canvas. In truth, it will save you time and hard-earned cash.
Example: Finding assumptions for the Foyles app
We recently helped Foyles extend the book shopping experience onto their customers’ smart phone. Their value proposition was “search this store on your mobile”. This proposition had to be tested before Foyles spent time and money building an app. And this meant working out their riskiest assumptions.
But how? By putting their value proposition down on paper, we were able to see the need for the product, as well as the solution and the expected results. This is how Foyles was enabled to easily spot their riskiest assumptions.
For one day, they posted signs around their West End stores, promoting the in-store search app with wi-fi to enable customers to try. Except (and here’s the thing) there was no product yet. When a customer logged on they were told the app was currently being developed, with a thank you for showing interest of 10% off a book.
This enabled Foyle’s to validate their assumptions. Your decision to proceed should be based on evidence you’ve collected.
Customer validation: does my customer’s problem actually exist?
Your product will be used by people. So it makes sense to get a deeper understanding of your customer. Certainly, understanding your typical customer and the issues they have goes hand-in-hand with collecting the quantitative data in the Foyles example above.
And having both forms of validation allows you to go back and strengthen your Business Model Canvas.
Once you’ve completed your customer conversations, you’ll be ready to adapt your Business Model Canvas. From here, your decision to proceed with a product should be deliberate.
Establishing whether a customer problem actually exists will help you make your decision and it is what will enable you to move on to building your Minimal Viable Product – or the simplest version of your product that will get people excited.
White October will be an Exhibitor at this year’s Venturefest on 29 June. Dave Fletcher will be speaking at the session on Digital Product Development at 9.30am and a session on Procuring an agency at 16.15. Get connected now.