My key notes on “LEAN Customer Development" approach

Having spent the past month on IH I have noticed that Customer Development does not receive nearly enough attention that it should. Everyone discusses ideas, coding, MRR, but almost nobody shares insights from their customer development journey. Is it because it is often neglected? Or because it is boring? I am curious to hear about your experience.

Today I finished reading this amazing book called “LEAN Customer Development” by Cindy Alvarez, which, to my pleasant surprise, proved most of the ideas I shared in my previous post to be true. I would highly recommend this book to every indiehacker, especially those just starting out. Study this book before you make a single line of code.

I have taken a tonne of notes from this book, so decided to share some of them below with you. I know it's a lot, but I hope at least one soul will make it to the end 🙏🏻🤓⏳

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💡 What is customer development?

Customer development is a hypothesis-driven approach to understanding:

Who your customers are
What problems and needs they have
How they are currently behaving
Which solutions customers will give you money for (even if the product is not built or completed yet)
How to provide solutions in a way that works with how your customers decide, procure, buy, and use

Everything you do in customer development is centered around testing hypothesis.

LEAN customer development is the same approach but faster, more pragmatic, and more approachable.

Customer development starts with a shift in a mind-set. Instead of assuming that your ideas and intuitions are correct and embarking on product development, you will be actively trying to poke holes in your ideas, to prove yourself wrong, and to invalidate your hypothesis.

Every hypothesis you invalidate through conversations with prospective customers prevents you from wasting building a product no one will buy.

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💡 Lean customer development is done in 5 steps:

Forming a hypothesis
Finding potential customers to talk to
Asking the right questions
Making sense of the answers
Figuring out what to build to keep learning

Below I provide my key takeaways from the first 3 parts, as these, in my opinion, are the most important ones, and the most neglected ones.

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💡 What customer development is not?

Customer development is not product development.

Product development answers the question: “When (and what) can they buy?”
Customer development answers the question: “Will they buy it?"

Customer development is not market/user research or usability testing.

Market research covers aggregate populations. Usability testing tells us whether someone can use our product, not whether they would buy it.

Customer development is the best low-effort way to confirm our assumptions about who our customer is, what he/she needs, and what he/she’ll buy.

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💡 What will you gain from practicing customer development?

You will get a richer picture of your customer and your competition
You will uncover new opportunities for differentiation
You will reduce the amount of product you need to build (less code!)

You will find out that customers really want only 1 of the 5 features you think you need to build (and they might help you add one that you haven’t even thought of!).

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💡 Where should I start?

Write your problem hypothesis (i.e. what your imagined product will try to solve). Your goal is then to validate your hypothesis or, if invalidated, to come back and revise.

Example: ”I believe that entrepreneurs spend too much time creating and posting content on Twitter” (i.e. if you are planning to build a content management tool for Twitter).

Your hypothesis needs to consider 5 questions: who, what, how much, when, and why. So in the above case we have:

Who? Entrepreneurs
What? Creating and posting content on Twitter
How much, when, and why? These are the constraints you will need to understand from the user interview.

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💡 Mapping your target customer profile

If your product is suited for moms or working professionals, as an example, it is a fairly broad audience. Your prime focus should be on those found on the left side of the Innovation Adoption Lifecycle (please Google this bell-shaped graph, as I didn't know how to insert an image here), as they tend to be the most receptive to trying out new products.

For example, what can you deduce from someone who mentions: “Oh yeah, I tried a few apps, but none of them helped me”. This sentence reveals that:

A person has a smartphone
A person has demonstrated initiative to look for apps to solve the problem
A person is capable of finding and downloading the app

This will most probably prove the assumption that the interviewee belongs to the left side of the bell curve.

Using trait spectrum is also a very useful way to map your potential user’s profile. It shows a sample of traits that may positively or negatively influence a customer’s willingness to solve his/her problem with your solution. Some examples:

Values cash vs time
Decision accepter vs decision maker
Low tech vs tech-savvy
Values adventure vs values predictability
Conservative corporate culture vs progressive corporate culture (if B2B)
etc.

For example, such comments as “I hate it when my coworkers do things out of order” might indicate the person’s inclination towards ‘predictability’.

General questions such as below are also useful/mandatory:

What does this person worry about the most?
What is the person’s job title or function?
What social identity would this person use to describe him/herself?
etc.

Mapping your target customer profile simply means making an assumption about your ideal customer’s traits and habits. Once you have been through a few interviews, you will be able to take each assumption and say whether it was true (and why) or false (and why).

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💡 How to find the customers?

This part does not involve any rocket science and I am pretty sure everyone is familiar with the most popular approaches:

Ask your friends and family for connections
Direct reach out on LinkedIn, Twitter, Instagram, etc.
Quora, Reddit, IH, other forums
Offline locations - coffee shops, gyms, supermarkets (depending on where your target customers hang out)

The key here is to build a focus group of 20-30 people, who you will conduct 1-on-1 interviews with, either via video calls or live.

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💡 Conducting user development interviews

Start with the 5 core questions:

Tell me about how you did ‘Twitter content planning’ today?
Do you use any tools/products/apps/tricks to help you get ‘content planning on Twitter’ done?
If you could wave a magic wand and be able to do anything that you can’t do today, what would it be? Don’t worry about whether it’s possible, just anything.
Last time you did ‘content planning on Twitter’, what were you doing right before you got started? Once you finished, what did you do afterward?
Is there anything else about ‘content planning on Twitter’ that I should have asked?

The above are usually the only scripted questions for every interview. As the customer talks, you should proceed with open-ended questions that are triggered by what the interviewee says:

Can you tell me more about that process goes?
Who is involved in making that decision?
Last time you did ‘content planning for Twitter’, how long did it take? Do you think that’s a lot or just about right?
May I ask, why did you come to that conclusion? etc.

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💡 Customers Don’t Know What They Want!

“It’s not the customer’s job to know what they want” - Steve Jobs.

Building features based on customers’ feedback and yet customers still being unhappy - does that sound familiar? It’s because there is often a clash between customer wants and needs due to a number of subconscious biases. One example is:

Customers know which cultural, time, and resource constraints affect them, but they don’t mention them unprompted.

Once we get used to limitations, we stop questioning or even noticing them. It doesn’t occur to us to mention constraints if we think of them as just the way things are. Sociologists call these ‘taken-for-granted’ assumptions.

Customers may not know what they want, but they can’t hide what they need. It’s your job to uncover those needs. It’s your job to get the details so that you can deduce why or how the previous solutions didn’t work.

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💡 What You Should be Listening For

These are the objective and subjective factors that separate prospective customers from buying customers:

How your customers are behaving today (their current behavior is your competition). This tells you:

what they are capable of doing
what they are comfortable with doing and why
which decisions they are making

The constraints that affect the choices and actions that your customers take:

Problem is not perceived as a problem (you need customers to realize that they have a problem so that they can question current solutions)
Lack of awareness of what’s possible technologically (ask them: “Forget about what’s possible, what if you had a magic wand and could solve anything….?”)
Limited resources (e.g. a busy working parent is less likely to spend time in order to save money)
Cultural or social expectations that limit behaviors (e.g. resentment to admit having a problem)

What frustrates or motivates your customers
How your customers make decisions, spend money, and determine value

Invisible stakeholders (kids and spouse, social circle, compliance department, etc.)

To get the most accurate answers from your customers, frame your questions to ask about specific events or decisions and focus on the present or recent past. Here are prompts that yield aspirational responses versus prompts that yield actual responses (we are after the latter ones!):

Aspirational: How likely would you be to use this tool?
Actual: Tell me about the last time you used something like this tool?
Aspirational: How would your family react if you decided to…?
Actual: Last time you made a significant decision, how did your family react?
Aspirational: How often does …. situation occur?
Actual: In the past month, how many times has … situation occurred?

Next: schedule an interview and get out of the building! Good Luck!

I know it was a lot, but I hope at least 1 person has read the whole bit and learnt something from it. Thanks for your time folks! 🙏🏽🙏🏽🙏🏽