March 8, 2014

Customer Problems for Startups

Paul Graham “Too often startups assume that because they will build an interesting web site, product, or service, that customers will beat a path to their door,” says David Skok. What are Customer Problems for Startups? Given the right context, customers can clearly articulate their problems, but it’s your job to come up with the solution. “It is not the customer’s job to know what they want. You‘ve got to start with the customer experience and work back toward the technology – not the other way around.”—Steve Jobs Customer problems can arise out of a brand new idea that the customers themselves didn’t realize they have. But more than likely the problem has existed and has some solutions, though not necessarily from an obvious competitor. A good way to think about the customer problems is what jobs do customers need done. ” When people need to get a job done, they hire a product or service to do it for them. The marketer’s task is to understand what jobs periodically arise in customers’ lives for which they might hire products the company could make.” Clayton Christensen

Keep in mind your product is not ready for mainstream customers at the beginning. Your sole job should be to find and target early adopters, which requires bold, clear and specific messaging. The key is to document how you think the early adopters address their problems today and what they will need tomorrow. Your awareness of how your startup’s solution to your customer’s problem is important, but your passion for your customers and their problems must be of utmost importance to you or your customer’s will sense that.

How does a Startup address Customer Problems? Solve a real problem: The problem you solve for your customers should be real in that it should address a valid pain point. For instance, Netflix solved a real problem of usurious late fees charged by Blockbuster. In the excellent article, Is Your Startup Solving A Worthwhile Problem? Seven Questions to Ponder , Mohan Sawhney says the customer problems must be real (like the Netflix need above), focused (to a segment that needs it), big (a lot of people money will be spent on it), difficult (not everyone can solve it), obvious (easy to define), complete (problem 100% solved, not 80%) and worsening (over time the need becomes bigger).” “Even though building a product is the purpose of a startup, product development actually gets in the way of learning about customers,” clarifies Ash Maurya This is a bit counter-intuitive and best explained with a picture: Traditional Product Development Cycle

“The classic product-centric approach front-loads some customer involvement during the requirements-gathering phase but leaves most of the customer validation until after the software is released.” Along with listening to the customer problems comes the creative skill to know what the customer is expressing, but what the real innovative need is. This is well developed in Steve Blank’s article, “Killing Your Startup By Listenting to Customers.” “If I had asked people what they wanted, they would have said faster horses.”—Henry Ford “Companies no longer decide what’s good for the customer – customers decide what they want to use. Startups are spending more and more time in the development phase than ever before – testing it out on a small number of key customers and morphing their concept around end-user engagement, clarifies Beth Bungee. “It is not uncommon for startups to stay in beta for upwards of a year to ensure they are market ready. It’s smart to ensure you’re actually solving a real-world problem rather than contributing to the onslaught of unproven ideas.” Online Resources are Available for Customer Problems for Startups