Customer Development : A step towards a successful Business Model

Customer development is an aspect of the Lean Startup methodology originally identified by Steve Blank. It is aimed at understanding the problem a product will solve, determining whether or not the product fulfils a need or needs of the customer, ascertaining if the market is large enough to support such a product, and whether or not the business can scale to meet demands.

Customer development provides a way to use a scientific approach to validate assumptions about your product and business. It also guides a systematic search for a successful business model, which helps mitigate startup risk.

Customer Development Process

Traditionally, the lean startup customer development sequence involves four stages:

1. Customer discovery — During this process, the founders’ vision is translated into testable business model hypotheses and concepts. It is then developed into a plan to test the customer reactions and collect their responses as usable data.
2. Customer validation — At this stage, the resulting business model is tested for repeatability and scalability. In other words, the viability of the business model is explored with real end-users. If it is not viable, then it means returning to the first phase — customer discovery.
3. Customer creation — During Customer creation, the market and product position are established, bringing about demand in the marketplace.
4. Company building — The last stage of Customer development has to do with creating the right conditions in the organization to make the product/business model a success. At this point, the organization grows to support the execution of the business model.

Why is customer development important?

Is customer development really important? The short answer is yes, of course! No business can survive without a loyal customer base that uses its product or service. Customer development is crucial to the success of any new venture or startup. An idea is great, but ideas do not guarantee or translate into great products that users love. Customer development is not easy, it can lengthen the amount of time the product takes to reach the marketplace, especially at the customer validation phase. Sometimes, when user data is examined, it can be counterintuitive. However, Customer development as a concept remains the best litmus test for your product and should be employed and always be re-employed.

Reference(s):

1. Quantic School of Business and Technology (Customer Discovery).
2. Product Plan (https://www.productplan.com/glossary/customer-development/#:~:text=Customer%20development%20is%20the%20portion,meet%20customer%20needs%20and%20demand.).
3. Agile Alliance (https://www.agilealliance.org/glossary/customer-development/#q=~(infinite~false~filters~(postType~(~'post~'aa_book~'aa_event_session~'aa_experience_report~'aa_glossary~'aa_research_paper~'aa_video)~tags~(~'customer*20development))~searchTerm~'~sort~false~sortDirection~'asc~page~1)