December 12, 2017 / by Tristan Senycia

A Tale of Two Cities, a Customer Development Case Study from Sydney and Melbourne

Stage 1 – First Contact with the Target Audience

My story starts in Perth, Western Australia at a time that my home state was experiencing quite a significant economic slowdown. The so-called mining boom was over and this in turn was affecting the local commercial property industry which was the target market of my start-up ‘Green Unity’.

This being the case, I mustered up the courage to start calling professionals from the target audience in Sydney and Melbourne. Quite to my surprise, almost everyone who picked up the phone was open to talking with me.

Next step was to cut a pitch deck to help introduce the slick Mockups we had developed in Lviv, Ukraine, and then to jump on a plane to visit the Target Audience first in Sydney and then in Melbourne for the first wave of Customer Development interviews.

It was an overnight flight, so the first challenge to try to remain awake for the Customer Development Interviews. I had to load up with coffee and drag myself around the CBD, North Sydney & St Leonards – a tiring process. I had put a lot of effort into preparation though, so the process went fairly well indeed. There was a lot of interest in what I had designed in Ukraine. Although it was early days so I didn’t know my revenue model, charging a large lump sum wasn’t going to cut it and I hadn’t fully thought through how I was going to fund development.

Once I had finished the dozen or so interviews, up and down the supply chain in Sydney, I then went to Melbourne with my father. He was a pre-seed investor in Green Unity and was interested in sitting in on the presentations to gauge the reaction of those in attendance.

At this point I must stop and highlight that it is HUGELY advantageous to have more than one founder/founder-representative in the Customer Development interviews, so that the second person can watch the body language and other behaviourisms of the Target Audience of the Product. It is so easy to come out of a presentation with completely the wrong impression of whether the audience is finds your product interesting, dis-interesting or even threatening.

Here is an example… about a year after the first wave of Customer Development interviews, I was presenting a variation of the same concept to the market-leaders and thought they were disinterested due to the price point. It took my co-founder to notice the terror in the body language of the audience as they witnessed a slickly designed product that threatened their leading market position. So the first mistake I made was to do too many presentations solo!

 

Stage 2 – Move to Sydney & Ongoing Customer Development

Later that same year I managed to make the move to Sydney and continue interviewing in target audience. However, in spite of conducting all these interviews and follow up interviews I didn’t know where I was up to in an objective sense, and what the next steps of the process should be. The lesson here is to try to plan the whole Customer Development process before you leave the building and mix with the target audience. Of course you can update you plans later as the go-to-market strategy changes but it never hurts to think through it through as a process!

Another one of the classic errors of budding entrepreneurs make during Customer Development interviews was asking ‘loaded questions’, resulting in them receiving answers that support their existing theories. So easy to get catch in this trap and I fell for this trap hook, line and sinker.

Three other problems I can identify with my approach (in hindsight) were that:

  • I didn’t list out a specific set hypotheses that were important to test for each set of Customer Development trails
  • I had a strong pitch deck but didn’t iterate the Question Set as I learnt more about the market and customer related risks
  • I spent too much time with Earlyvangelists, those early adopters who are super-positive about the prospects of your product.

However, I have left the most sinister issue with my approach to Customer Development until last, hoping that you will understand the gravity of getting this wrong! The biggest mistake I made was to avoid asking the most critical, make or break questions until the end.

A very quick way to test your idea is to go networking with the target audience and ask their opinion on a topic of interest. In my case, that was to ask about their predictions for the uptake of a particular set of guidelines for operating existing building stock. So who better to ask than the Sustainability Managers of the largest property development and property management firms in Australia? One after the other, after the other. From that one series of interactions it was clear that there was only real interest from 2 or 3 developers in pursuing a rating for their buildings. The other complained about cost, return on investment and usability of the guidelines. This spelled disaster for Green Unity, but it was a success of sorts because I had asked a falsifiable question to the most critical part of the supply chain in a matter of hours. I had just saved years of wasted effort!

Another factor that surprised me as I went through the process of simultaneous product development & customer development was how resource intense it was! I have since learnt that there are many hacks to speed up the process, but it isn’t just a case of approaching and wowing your target audience with a prototype and slide deck.

Traditionally, most first-time startup founders need to manage all this while working a full time job. Other than being somewhat of a stressful exercise, it is difficult to make much headway when taking a substantial start up on as a side project. Remember your project will need enough velocity to get anywhere near the coveted inflection point which often occurs after Product-Market fit.

Anyway, I hope by reflecting on my Customer Development adventures I can help others avoid the pitfalls I faced along the treacherous process of taking a product to market. And btw, it is now part of my job to design and manage the Customer Development process for a range of start-up projects. If you are at the start of your own Customer Development process or need assist somewhere along the way… feel free to reach out! I’d be happy to help 🙂

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