A Quote by Steve Blank
Market type determines the startup's customer feedback and acquisition activities and spending. It changes customer needs, adoption rates, product features, and positioning as well as its launch strategies, channels and activities.
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The most common way customer financing is done is you sell the customer on the product before you've built it or before you've finished it. The customer puts up the money to build the product or finish the product and becomes your first customer. Usually the customer simply wants the product and nothing more.
What the customer demands is last year's model, cheaper. To find out what the customer needs you have to understand what the customer is doing as well as he understands it. Then you build what he needs and you educate him to the fact that he needs it.
Traditional sales and marketing involves increasing market shares, which means selling as much of your product as you can to as many customers as possible. One-to-one marketing involves driving for a share of customer, which means ensuring that each individual customer who buys your product buys more product, buys only your brand, and is happy using your product instead of another to solve his problem. The true, current value of any one customer is a function of the customer's future purchases, across all the product lines, brands, and services offered by you.
But most automotive dealerships are set up for customer acquisition - which is crazy when you consider the average cost of customer acquisition is $1,000 or more.
Face-to-face customer feedback refines or validates every component of the startup's business model, not just the product itself.
Your business should be defined, not in terms of the product or service you offer, but in terms of what customer need your product or service fulfills. While products come and go, basic needs and customer groups stay around, i.e., the need for communication, the need for transportation, etc. What market need do you supply?
Business is all about the customer: what the customer wants and what they get. Generally, every customer wants a product or service that solves their problem, worth their money, and is delivered with amazing customer service.
When you think of customer research, chances are you think of surveys. Used alongside other strategies, they can be an important way to learn more about your customer's needs, wants and habits.
All the businesses from the beginning of history have struggled with product development (assuming there is a market, doing the market testing and so on). But now they start with customer development. Get the customer who says, "Yes. I want that. I need it. I wanna use it. I'll pay for it." And then you go back and work with your engineers. It is changing the world!
Does the customer invent new product or service? The customer generates nothing. No customer asked for electric lights. There was gas and gas mantles, which gave good light.
The risk of relying on a handful of customers is not just financial. Your product also is at risk when you're at the mercy of a few big spenders. When any one customer pays you significantly more than the others, your product inevitably ends up catering mostly to that customer's specific needs.
What the customer buys and considers value is never a product. It is always utility, that is, what a product or a service does for the customer.
Auctomatic was a compressed start-up experience, going from start to launch to acquisition in under a year. We spent a long time building the product before getting our first customer, whereas with Stripe we made sure we had paying customers from the very start.
Once you establish what activities your company needs to do, the next question is, 'How do these activities get accomplished?' i.e. what resources do I need to make the activities happen?
Using the Product Development Waterfall diagram for Customer Development activities is like using a clock to tell the temperature. They both measure something, but not the thing you wanted.
Foremost is the principle that the purpose of consumer research is to understand the customer's needs and wishes, and thus design product and service that will provide better living for him in the future. A second principle is that no one can guess the future loss of business from a dissatisfied customer.
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