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Customer Development Strategies by Amazon Sr PM


Hello everyone very excited to be here to share some tools and techniques that i found very useful for customer development so let's get some definitions out of the way for those who have not done customer development or didn't google it before you got here customer development.

Customer Discovery

Right before agile engineering and focusing on customer development customer development has four different phases first being customer discovery that's where you harness the company's founders vision and you create a series of hypothetical business models then you create a strategy to test and validate those hypotheses with real customers then customer validation examines the scalability and repeatability of the viable hypothesis customer creation that's where you create a market or you access the market by building demand and awareness for the solution by activating sales channels and finally company building that's when you get out of the start-up mentality and move to a more ongoing execution focused business or in the case of a the source for big companies - that's where you move from like a product idea or mvp stage to an actual line of business so you can really split these into two different areas the first two are about searching for a viable scalable repeatable business model and the last two are about executing on that business model so for this talk today i'd like to focus on searching you know validating your hypothesis by getting out of the building and getting close to customers and you're not gonna get it right the first time there's going to be a lot of iterations you're gonna fine tune your business model over and over again as you discover more things with your customers and sometimes you'l make a full pivot from what you thought the business model would be in the first place why is this important because a lot of products fail studies show about 60 to 80 percent of products fail and a lot of times the students lack of understanding the customer this guy understood customers.

Customer Understanding

Pretty well he was quoted as saying get close closer than you ever closer than ever to your customers so close that you can tell them what they need before they realize it themselves now despite what people think steve didn't have a crystal ball where he can look in and say i know what customers need before they even know it themselves what he did was in the first sentence he got close to the customers that's how he found out their needs and then address those needs with solutions for example if you're sitting in a in a restaurant and you look across the restaurant and see someone by themselves sitting down and eating breakfast you could look at them and think yourself. Oh they're here 6 a.m. in the morning. Probably cuz they're hungry they need breakfast. Alright. But if you got up and walked over to that person and sat down and engage with them maybe you'd find out that they have to be here at 6 o'clock in the morning every day because they have a certain dietary requirement maybe they have a medical condition and maybe this restaurant is the only place that gets that has the food that they need that was prescribed by the doctor when you engage with the customers you find out the underlying meat need what motivated them to get to that place and when you.

Asking the Right Questions

Sit down with them you have to ask the right questions einstein said if i had an hour to solve a problem and my life depended on the solution i'd spend the first 5 minutes determining the proper question to ask for once i knew the proper question i could solve the problem in less than five minutes proper questions to ask is important how you ask him is important as well you want to ask open-ended questions you want to stay away from leading questions for example a good opening the question was what made you purchase this brand a leading question you want to stay away from with be something like don't you like my shoes maybe product manager knows this quote.

Focus on a Need

From henry ford if i'd asked my customers what they wanted they would have said a faster horse henry ford knew a long time ago that focus on focusing on addressing a need is more important than focusing on customer requirements so product managers have to ask themselves these questions what a customers really need how.

Create Sustainable Advantages

Better meet those needs how might we create sustainable advantages sustainable because you want to be a build a viable business out of them advantages so you can beat the competition during the innovation process in the beginning there's a lot of uncertainty there's many ideas out there and then as you do your discovery you start seeing patterns and then you get more insights and then you hone in on a more viable solution you put a prototype out there then you.

Divergent Converged

Get down to meeting the customer needs of the most personas out there this is the divergent converged concept for example if you and your co-workers want to go out to lunch first you would diverge by saying what cuisine are we going after do we want indian food italian food mexican food korean food you know smokehouse barbecue what are we gonna do. And then you converge on a cuisine then you diverge again well how far do we want to go do we want to take the scooter somewhere. Do we want somewhere we can walk to that we're gonna jump it uber then you converge on how far you're gonna travel then you diverge again on the price points what some high-end medium low-end you get the picture but at the end you come out with a decision that satisfies most of the customers involved now there.

Creativity in Innovation

Is some creativity in innovation but most of it is really a process and it's about the intersection of these three things people and their desirability people have to want it business viability it has to make money or it has to move whatever metric that's important to your company and then technically feasible we have to be able to build it build it.

Design Thinking

And i've discovered that design thinking stanford university's design thinking aligns very nicely to steve likes customer development especially in the empathize and defiant phages one of the tools i like is need finding there's a saying good products respond to customer.

Need Finding

Demands great products respond to customer needs so neat finding is observing and engaging people to learn about their goals and values to be able to uncover user needs and opportunities for improvement so let's talk about this.

Case Study

Case study there was this brilliant engineer named david doug dietz and he was a medical imaging systems designer for ge healthcare and he came out with this great mri machine state-of-the-art award-winning high-tech bleeding-edge and he couldn't wait to see it in action so decided to go to the hospital and observe it being used so all excited he waits to see it and the character the healthcare worker was walking a pediatrics patient and to get an mri scan and this kid was scared to death tears in his eyes couldn't move frozen solid so bad that they had to call in an anesthesiology anesthesiologist to sedate the kid so he would stay still throughout the mri process so doug was like man this is not viable and i got to do something maybe it's maybe it's the noise and the mri machine scares the people and i got to figure this out so he actually took a course in human centered design when did some design thinking techniques where you get out the building get close to your customers so he talked to different child life specialists different healthcare workers healthcare professionals even went to a children's museum and talked to people that you know did things with children and brainstorm a bunch of different things and when he came up with is this he made an experience park out of the mri room so on the right you see a pirate's adventure where patients are on a dock and there's a shipwreck and some sand castles in the corner. And then you know children they work on a plank they walk the plank in order to get scanned and then down on the bottom you see a coral city. And it's an underwater adventure and they have a disco ball in there and lights go all over the room and it makes the children think they're underwater. And he did a few different one of these and what do you think the result was kids couldn't wait to get an mri scan they didn't need to be sedated they didn't need you know they didn't want to leave they wanted to say they're in play so. And you know the result what do you have the child stay still there's less repeat scans there's less need for anesthesiologists so you get a great customer experience you get a great employee experience and you it helps the bottom line less repeat scans means the process moves quicker another case study students at the stanford design school were challenged to design a less expensive ink you bator for babies born prematurely in nepal so the course they were in was called designed for extreme affordability so it couldn't just be a little incremental change couldn't make the incubators ten percent less that had to be a drastic change so design thinking course of course they're gonna travel to where the process is they travel to nepal and you know they talk to different stakeholders in this. And they were surprised to discover that there was a lot of donated incubators there that were unused at the hospital they weren't even being used they have this great mortality rate here with problem with premature births and these incubators uneven mused so they dig deeper to find out. Why and they used empathy to discover that the doctors weren't their users. But it's really the parents who had the need so they had to pivot their thinking and after the visit they understood that the primary need was keeping the baby warm so they used pictures and videos and storytelling they brainstormed about solutions and they came out with this infant warmer that you see here and it costs ninety nine percent less than an incubator this is a huge innovation so they took the pilot and formed a company called embrace and now they have programs in over 1 countries with this infant warmer they've never would have understood this if they didn't go and engage with the customers and understand what the need was so the first phase of design.


Thinking as i said is empathy the ability to understand and share the feelings of others taking on the feeling of others walking in someone's shoes to get it i can't talked about a lot of biases i'm gonna throw a few more on the mix this is what you have to be aware of when you're doing empathy studies projection bias you assume other people think the same way you do we're all guilty of it confirmation bias we look for interpret and remember information that fits our existing models so we did a great job making this business model and now we're gonna go out and try to prove that our business model is right that's confirmation bias no you want to go out and learn what the need is and change your business model defeat that need fundamental attribution error you we overestimate the effect or disposition of disposition or personality and we underestimate the effect of the situation in explaining social behavior for example you driving on the highway and someone cuts you off you yell that jerk. Or you may use some other words you are you're overestimating the personality of that person you figure they cut you off because they're a jerk now i know no one in product con here ever cut anybody off. But you know i when i've cut someone off it wasn't because i was a jerk you know it was an external factor it was a situation. Sure. Yeah. I'm not a jerk we have to watch out for that when doing up in these studies let's not confuse it with sympathy is you know feeling pity or compassion or sorry.

Sympathy vs Empathy

For someone oh man that sucks all right that sucks to be you which what you need to do is this or what you should have done that's sympathy empathy is putting yourself in their shoes it's taking on their feelings for yourself actors. Have to do this when they want to play a role accurately when they want to be that person in the role have to empathize with the person that they're playing so the steps in.


When you go to observe a customer it's either in their current state or maybe you there you observe them using a prototype you want to look at the people around what are they doing what are they struggling with or their pain points you want to look at the environment the objects they're interacting with what is the environment like you want to use all this data to understand the customer situation on the engage side open-ended like i said open-ended questions you want the people you want to get the people talking you want to have a conversation with them.

Openended Questions

You want to get them to tell you stories you don't want to end in two questions like just yes or no questions or just one-word answers you want to you want to say how did you feel about that what did you like about that get them talking and then you'l get insights out of that conversation you're listening more than talking theodore roosevelt had a quote where he said no one cares how much you know until they know how much you care to learn about a customer's needs they have to be convinced that you care about their needs and when you go and talk to these people this is not a sales meeting and it can be tough especially in b2b sales in order to access the customers you have to tag along with a salesperson you have to have a talk just like you have to talk to a little kid before you go in the supermarket and tell them not to touch anything you have to have a talk with the salespeople and say i'm in here to do customer discovery this is not a sales meeting do not talk about all the great things that our product is do we're here to learn about the customer to empathize with them you need to come with a disposition of curiosity and not of knowing on this side you have curiosity where you're coming with not knowing the answer and you want to figure it out you don't come with knowing the answer already you look for surprises you look to learn things you don't come in and saying that i know everything already use open-ended prompts not leading questions so again this is discovery not selling most importantly you leave your ego at the door when you're going in for customer discovery then you make a map you log.

Customer Journey Map

Everything that you heard said you log everything that you saw the customer do at the bottom you write down what they think you write down how they feel you're saying yourself how do i know what my customers think well you know what they think a lot better when you're face to face with them than just reading a bunch of data you know data gives you information but being face to face with a customer gives you a why behind that information customer journey map is a good tool this is where you map out a complete process this is an example of you know and a person going in for to fix their lcd screen going into the genius bar all the different interactions that they have with your brand and customers all the back-end processes that happen and then the moment of truth at the end so in the customer draining map you map out the process all the pain points all the struggles and frictions they have during the process you all the touch points any time the customer interacts with your product or your brand you note that and the moment of tooth truth is when the person decides whether they love your product or they don't love it whether they decide to buy or not buy let's take the example of buying a car you're walking into the showroom some pain points might be you don't like the lighting or maybe you're waiting too long to get waited on some touch points would be maybe on the parking lot one of the sales people talked to you there then you talk to their receptionist when you walked in and then maybe someone on the sole room floor that would be touch points and then the moment of truth is when you decide you're gonna buy now even though you had a bad experience you may have bought the car anyway because of the price and in that case price was the motivating factor to make a decision but so on a different type of customer a different persona may have bought the car because they love the customer experience they appreciate the customer service or the fact that maintenance world-class maintenance is important to them or the fact you don't have to do any maintenance at all this is how you segment your customers and in we have.


Personas. So a good amount of customer discovery you do you're gonna talk to tens of hundreds of customers hopefully and you'l find that there are certain types of customers and. You'l bucket them and different customer types these are personas you get as detailed about these customer types as possible and then you make a person out of them a persona you give them a name you. You know you talk about their likes you get their background what they do on the weekends what their age range is how much money they make you get as detailed as possible about this person you give them a name you use them in your user stories and even though you get that detailed this is not an actual person it represents a customer segment and then you'l have different customer segments that you want to target your solution to when i was a process engineer we use.


This term a lot go to gamba so gamba is a japanese term that refers to the actual workplace location so again you get out the building and you get close to your customers by being where they perform the work and when you observe them performing the work you learn a lot point of view is another one this is where you know.

Reframing the Problem

You change your point of view based on the data you have a concise reframing of the problem that is grounded in the needs not the product itself mr. Leavitt said people don't want a.

Job to be Done

Quarter-inch drill they want a quarter-inch hole he's turning his point of view away from the product a drill to what the job to be done this is job to be done theory when you look at what the customer is trying to achieve the job to be done then you can innovate better ways to do it that you wouldn't have thought of if you were focusing on the product itself what a customers really want what is their motivation get to the why behind it.

User Story

Components a point of view is you have a user this is kind of like a user story here you have what they're trying to do and the insight you get from what they're trying to do let's go back to the infant warmer example so embrace the company their point of view is now that the user is the desperate nepali mother living in this remote village where they didn't have the means to get to these hospitals the need is to keep their premature baby warm to give it a chance to survive the insight is that most mothers don't have the means to bring their baby to the hospital so the point of view changed from the doctor or the hospital and move to the parents needs are pretty consistent but.


Solutions aren't we can all agree that we want to capture memories and our daily lives right. But i doubt too many of us are still using kodak to do that. Right so you find the needs and you can innovate on solutions to meet those needs because those needs are pretty much always going to be there and lastly i'd like to talk about my favorite.

Business Model Canvas

Method for working through these business models alexander osterwalder and yves pannier designed this business model canvas maybe familiar with it and because you're not just testing a product idea you're testing the whole business model the sustainability of it need finding that helps with the value proposition you see in 1 personas help you with customer civic segments you see over in number 2 their journey maps can help you figure out the right sales channels and empathy can help with pretty much everything and help you determine the customer relationship you know is to say do you is this customer your relationship with them via the web do you use a salesperson to interface with your customers is it brick and mortar in empathy can also help with the revenue models how much is the person willing to pay for something and you know if you look if you look in the upper right side that is really the people desirability portion of innovation over on the left side is can we do this is it technically feasible you know do you have the right partners in place do you have the right processes in place do you have the right resources to do this and along the bottom is the business viability. It's the revenue equation is the costs in the revenue gonna balance out to where you're making a profit so really all this is innovation and all of your needs studies and empathy maps feed the business model until you have a viable one and you understand your customer and can execute on something that they will actually love. So i. You know i hope you learn something and can take some of these tools and tips on customer development in your daily product lives and if you're gonna remember one thing from this presentation get out of the building and get close to your customers thank you.

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