3 Rules for Startup Product Development

Rule #1: Don’t forget customer development

What is customer development? Customer development is the process of codifying the set the guesses you’ve made about your startup and turning them into concrete testable hypotheses. 

Steve Blank breaks the customer development model into 4 steps, 2 for figuring our and validating your customers and then 2 for testing your ability to create these customers and finally executing on your tested business model.

Why is it important when building a startup? This is important because it’s essentially the only way to test the model you’re trying to build and figure out whether you’re truly solving a problem for someone. This includes clearly defining the value you’re looking to provide and who that person is that is going to be receiving that value.

How do you pair customer development with product development? Customer development goes hand in hand with product development. Your product is your proposed solution to someone’s problem. So, in customer development, we are mainly focusing on the who but with product development, we focus on the what

The issue is you can’t really know what you’re going to build if you don’t know who your customer is. And even if you do know who your customer is, you don’t know if your solution is something they’d be willing to buy.

In his chapter on his customer development manifesto, Steve talks about rule #1 is that “There are no facts inside your building, so get outside.”

Often times, we sit down around a table with our co-founders and talk thinking about either way we can improve or execute better. What we should really be doing to being outside finding people to talk to and ask them. Their opinion matters a whole lot more than ours because we have an emotional tie to our idea – they don’t (well maybe they do if you hit it out of the park). But the thing is you won’t know that until you actually talk to them.

Rule #2: Make sure to use agile product development

What is agile methodology? Agile methodology is a way of developing a product that allows for many iterations. Rather than just starting to build your entire product before you have even spoken to a single possible customer, you start with customer development then incrementally build your product stopping often to ask the customer whether they think your solution would solve their problem and more importantly would they be willing to pay. I love how Agile Alliance defines agile, “Agile is the ability to create and respond to change.”

One agile framework I’d encourage you to check out is Scrum, it’s my framework of course. You can explore it on your own, but essentially it consists of time-boxing clearly defined “stories” in 2-4 week sprints. Each day team members give a quick explanation of what they worked on the day before and will be working on that day.

As you can probably see, this works perfectly with the customer development model because it has frequent (but not consuming) feedback thrown into the system not only from the team but you can choose to pivot based on customer feedback as sprints are short in duration.

How is it better than the traditional product development method? This approach is far better than the traditional product development method because it minimizes risk. As humans, we get a lot of things wrong. So it’s always good when we are given a reality check that we can’t just automatically assume we are right. Of course, in our case – in regards to building a product.

So avoid the tendency to want to build the perfect product right away, spend time developing and testing the business model then you can make sure you’re actually getting an ROI on your time and money.

Rule #3: Always start with an MVP

What is a minimum-viable-product (MVP)? A core feature of agile development is the concept of a minimum-viable-product (MVP). An MVP is the simplest way to provide your core value propositions to your potential customer. It has only the bare minimum features necessary for the customer to get a feel for what you’re trying to do and be able to gauge their reaction.

One of the main benefits to the MVP is the saved time and money from not building something that has no possible product-market-fit. One that will not make you any money.

Use it to test your potential customer’s reaction. As mentioned above, the MVP allows you to test your customer’s reaction to your product early and often. It doesn’t have to be a production-ready product with all the bells and whistles. It just has to allow the customer to visualize how they would actually go about using it in their daily lives.

For you B2B startups, this could even be as simple as a Powerpoint presentation explaining the pain points and your solution to their problem.

Don’t be scared to pivot. Of course, another benefit of focusing on only the least amount of features needed is that if you show it to a customer and they absolutely hate it, then you can scrap that feature knowing you haven’t thrown out months worth of time and money with it.

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