Understand The Personas Of Users And Of Buyers

By Christian Dahlen & Oana Olteanu

To build a minimum viable product (MVP), it is critical to identify the end users and the person who benefits economically. In the SaaS world, the users are absolutely vital for adoption and retention, and user personas and buyer personas are often synonymous. In large and complex corporate sales, the end user may often have little influence in the sales process.

Key stakeholders in the buying decision - the decision maker or their key influencer -  should be sought out to become the executive sponsors. These sponsors should be developed into a buyer persona describe the ideal customer to help the product owner make decisions about the right marketing and sales processes.

The executive sponsors nominate the user whose job will be made easier by the product.  A deep understanding of the users needs and motivations is vital to define the MVP. A release can only be for a single persona at a time, and therefore it is just as important to decide who a release is for, and who it is not.   

Read next: The mechanics of engaging with the different customer personas.

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It Takes 10 Visionary Customers To Play The Game

By Christian Dahlen & Oana Olteanu

A product owner needs to work closely with visionaries to develop a product that will meet the need of thousands of customers and millions of users. In almost all cases, working with a single customer will result in a product which does not scale to other customers, with one possible exception: The first customer is a standard setting lighthouse customer in its industry segment; the ‘job to be done’ has already been widely adopted by others.

It is always difficult to recruit multiple charter users and customers without much more than a storyboard. If it is impossible, it is very likely that the product owner is chasing a problem that is not urgent or important. For teams in an accelerator program, finding enough customers within the prescribed three month period until the demo day can be major issue. For product teams in large enterprises, the pressure of a marketing driven release schedule often cuts short the time spent on customer development in favor of frantic engineering activity.

There is agreement that about ten customers in the target market segment is a good number to get to product/market fit. To get to ten actual customers, the team will need to talk to hundreds of people. Only a few dozen will be in the eventual target group, and less than 25 will have the appetite to move forward. Those ten customers will lead to about five reference customers that publicly state their use and satisfaction with the product.

Read next: How to focus on business outcomes and not features.

Special thanks to Allen Bannon, Ryan Nichols, and Riley Scott for their insights.

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How to Get To The Only Thing That Matters

By Christian Dahlen & Oana Olteanu

The only thing that matters for a new startup is to achieve product/market fit. Product/market fit has been achieved when the minimum viable product (MVP) has beta quality, is used in a similar way by ten customers, and the customer acquisition process is repeatable and scalable. For startups, building an MVP first has become commonly accepted practice. Increasingly, the methodology is finding its way into large companies where it can be equally applied to new products and to new versions of existing products.

It is the product owner’s job to pick a problem to solve, figure out how to solve it, and to understand how much the solution is worth to potential customers. The way to go about it is to create a product which sells to many customers and is delivered with the minimum amount of resources - the MVP. Ben Horowitz states that ‘Good product managers crisply define the target, the “what” - as opposed to the how - and manage the delivery of the “what” ‘. As soon as enough software is built to address that crisply defined ‘what’, release. As the old adage goes ‘if you are not embarrassed by your first release, you have waited too long.’

Product owners have been advised to listen to the ‘voice of the customer’ to build the MVP, and all product and customer development will magically take care of itself. In reality, the implied single voice of the customer often is a cacophony from many stakeholders, and distilling an MVP is not as much of a no brainer as it would appear at first. Building an MVP as opposed to just a minimal product is a continuing struggle, and getting to product/market fit often requires the product owner to make multiple iterations over several quarters:

• Should my first customers be visionaries or tech enthusiasts?
• How many customers do I need to talk to?
• What type of feedback should I prioritize?
• Do I need to talk to both the users and the buyers?
• How can I efficiently interact with my early customers?

The road map is clear: a product owner and her team need to push beyond just one customer and remain steadfast in their discovery of a viable product - the ‘what’.

First up: How to pick the right customers.

Many thanks to Allen Bannon, Manny Cortez, Chris Hallenbeck, Ryan Nichols, Karl Christian Roediger, and Riley Scott for providing input and feedback to this series of blog posts.

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Six Steps to The Maximum Desirable Customer

By Christian Dahlen & Oana Olteanu

Technology startups and mature companies alike know that building successful products requires a close collaboration with the customer. Steve Blank in particular has championed the idea of the Customer Development where startups can systematically improve the chances of product success by developing a better understanding of their customers.

So why is it that so many startups still end up in the product graveyard, need to pivot after significant development investments have already been made, or, even worse, gain only a handful of customers and join the living dead?

Much has been written about the Minimum Viable Product. Based on our experience with startups and large companies in the enterprise software space, there seems to be a common theme: Not picking the ‘right’ customers and not spending enough time with those customers from the beginning is likely to cause damage which proves irreparable.

Here then are six steps to finding the Maximum Desirable Customer

• Profile and qualify your initial customers. A startup need to have a crystal clear hypothesis about its product target audience, unless it wants to be at the mercy of random customers with ulterior motives. Early customers in particular may simply want to use the start-up as an extended development bench, and that hidden agenda is easy to overlook when a startup is hungry for first customers.
  Two caveats are particularly noteworthy: A mature company with existing customers needs to watch out for Christensen’s innovator’s dilemma and actively seek new users, buyers and partners. And everyone likes to brag about Fortune 50 companies as customers: However, these sought-after brands usually have the most complex requirements that far exceed a Minimum Viable Product.

• Validate problems/solution with all your channels. It may be comfortable to validate your product with the initial and existing customers only. But the reality of today’s channel landscape is complex and imposes product requirements on your product from day one. Involving partners early will also prepare the ecosystem when the product is finally launched.

• Talk to all of your customer stakeholders. The buying decision is never influenced by one person only. One must ensure that each layer of customers wants to hire the product for the job that they have to do: The end user needs a great user interface and a necessary and sufficient set of functions. The buyer has to weigh competing priorities, and may have a different job for which he might want to hire the product for. Other stakeholders in IT and in finance may have the final budget authority. There is a whole ecosystem around these stakeholders who influence the buying decision.

• Solicit active feedback from your customers. It may be very comfortable for both parties to have the product team broadcasting what they plan to do. But shouting out and not getting an engaged response is a clear warning sign that things are not going well. If in doubt, make sure to engage with the business users.

• Find a stable use case and persona. Working with only two or three initial customers only is a risky undertaking. A customer advisory council helps build a stable persona that survives even if some initial customers decide to drop out. Moreover, the more customers are involved in defining the persona, the higher the chance of catching the common traits and building a true Minimum Viable Product (MVP).
  

• Build a low fidelity Minimum Viable Product for customers requiring the least amount of features. Now that the ‘right’ customers have been picked, comic book type storytelling and simple proof of concepts can save the startup from wasting months of development work and having to start all over again.

In a nutshell, the time spent with future customers before beginning a massive development effort is time well spent. Following the six simple rules to finding the Maximum Desirable Customers ensures that the right customer pipeline is built from the start.

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