The customer development method relies on gathering feedback from customers to adjust the business model. This must be done agile and fast.
The quality and fast response to this feedback are the cornerstones of the Customers Develop method. Only the founder can do this task; it cannot be delegated. This article will show you five main reasons for this.
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5 Main reasons Why Customer Development must be done by founders
- The founder has the authority and courage to change the components of the business model. Moreover, he can do it quickly. The founder can only embrace feedback, respond to it, and brilliantly make the necessary decisions to change or focus the components of the business model.
- Employees are less vulnerable than the founder. So, they usually will not put forth enough effort. Therefore, they rarely listen to problems and feedback from customers seriously enough.
- Feedback from employees is usually not taken seriously, unlike what happens with the founder. It is too easy to dismiss their findings as “hearsay” or ignore critical points in the feedback.
- Employees are often afraid to tell their managers bad news. And, if they do report it, they soften it.
- Consultants or third parties are even less vulnerable than employees. They usually tell the customer what they want to hear or deliver messages that can lead to extended consultative relationships.
In the rest of this article, we go into the topic more deeply to clarify and learn more about why the founder must do Customer Development by himself.
Founder roles in the Customer Development method
In Customer Development, the founder plays an essential role. This makes him directly responsible for the results.
The founder defines the product vision and then uses the Customer Development method to find customers and a market for that vision.
The founder’s job is to translate this vision and hypotheses into facts. The facts live outside the building, where customers live and work, so this is where the founder needs to go.
In the next section, we will show you the deep relationship between Customer Development and the founder.
The Customer Development method
A startup is a temporary company looking for a business model. The Customer Development method is used to organize the search process for a business model.
The essence of Customer Development is straightforward: products are developed by the founder of the company, who gets out in front of the customers early and often wins.
The Customer Development method speeds up searching for a business model and saves cash from being wasted. This gives the founder more opportunities to pivot, iterate, and succeed before the bank account runs dry.
You can see the “How Startup Works” article for more information about the Customer Development method.
The main roles of the founder during the Customer Development method
Here, the primary roles of the founder in Customer Development:
- The founder develops a vision for the product and the business to be transformed into a series of business model hypotheses.
- The founder needs to turn these hypotheses into facts as quickly as possible by getting out of the building, asking customers if the hypotheses are correct, and quickly changing the hypotheses that were wrong.
- Test whether the resulting business model is suitable. If not, he changes the guesses and returns for Business model verification.
The founder must perform these roles. If a team is implementing or performing Customer Development, the founder should lead the team.
The Founder must lead the Customer Development team
Customer development is an intensive process and needs excellent focus. Usually, a team of people does this.
Some founders often underestimate the importance of the Customer Development process. So they delegate this process to the sales, business development, marketing, or product management department. That is a bad idea, possibly resulting in startup failure.
In Customer Development, the founder gathers information directly about every component of the business model. A staff team can support him during this process, but the direct experience cannot be delegated.
Why must the founder lead the Customer Development team? First, the founder manages discussion sessions on modifying and changing the business model and product, and he is responsible for making the decision. He must hear about flaws in the product or business model directly from the customers. Nothing else has the same effect.
Anyone other than the founder who recognizes a serious flaw in the product or business model faces two challenges: no central authority to pivot. They seldom have the courage to report bad customer feedback to the founder.
Startup jobs Vs. Existing company jobs
A startup is a temporary organization in search of a business model. The components of a startup business model are the founder’s guesses and hypotheses and are not confirmed by the market yet.
The existing company executes a well-known business model, so these companies know their customers and contact them. These companies also know the advantages of their products and how they are produced.
In an existing company, job titles reflect how tasks are organized to execute a known business model. For example, the title “Sales” in an existing company means having a sales team that sells to a well-understood group of customers, according to well-known steps and procedures.
Compared to existing companies, startups need executives whose skills vary 180 degrees. Startups look for execs who feel comfortable with uncertainty, chaos, and change – with presentations changing daily and numerous product changes while exploring and gaining insights of failure rather than a great success. In short, they need a rare breed.
Here are some of the qualities of managers and employees that a startup needs:
- Open to learning and discovery – highly inquisitive and creative
- Eager to search for a repeatable and scalable business model
- Agile enough to deal with daily change and operate “without a map”
- Readily able to wear multiple hats, often on the same day
- Comfortable celebrating failure when it leads to learning and iteration
We propose replacing sales and marketing titles and developing traditional business-oriented implementation with one title: customer development team. Initially, this “team” will include the founder(s) of the company, who speaks with customers to gain insights to develop a viable product.
The Customer Development method is the process used to organize the search for the business model.
Founders, not employees, should search for a business model. The best way to search is to get the founder out of the building to gain a deep and personal understanding of the needs of his potential customers before entering a specific path and the exact product specifications. This is the difference between winners and losers.
The speed of decision-making and the authoritative change, which the Customer Development method requires, can only be reached when the founder is present at the top of the executing team.
According to the above information, Customer Development must be done by the founder. And he must lead the customer development team. Only the founder can do the job; it cannot be delegated.
We suggest attending the Free Training course How to Build a Startup for more details and related topics.