You may have your hypotheses about who will buy, why they will buy and at what price they will buy, but until you validate those hypotheses , they are all educated guesses.

It is impossible to build a sales pipeline without first having developed a sales roadmap.

Attempting to execute before you have a sales roadmap in place is pure folly.

The company`s founders and CEO need to be out in front of customers at least through the first iteration of the Customer Validation step.

Early sales are to Earlyvangelists, not Mainstream Customers.

Finally you should have answers to these questions:

– Do you have enough orders proving your product solves customer needs?

– Do you have a profitable sales and channel model ?

– Do you have a profitable business model?

– Have you learned enough to scale the business?


Phase 1

1. Articulate a value proposition

Elevator pitch – ideally one sentence and at most a few sentences.

For a new product in existing market, yout value proposition is about incremental performance . Incremental value propositions describe improvements and metrics of individual attributes of the product or service.

2. Prepare a Preliminare Collateral Plan

Prepare a complete set of sales materials, product data sheets, presentations (different ones for different groups inside a company), price lists, etc. Develop a “collateral plan”, a list of all the literature you will put in front of a customer in different phases of the selling process. Visionary customers require different materials than mainstream customers!

Website – should have a clear information on the vision and problem you are solving, but no detailed product information. You don`t want a customer to have enough information to make a decision not to buy without you.

Sales presentations – should be an updated and combined version of the problem and product presentations used earlier, except now add your value proposition.

Demos – all you need is a slide-based “dummy demo” to illustrate the key points.

Data sheets – if you are bringing a new product to an existing market, your focus will be on the product, so you should develop product data sheets.

Additionally you need a ROI white paper.

Price lists, contracts and billing system – you are going to need a price list, quote form and contracts.

3. Develop a Preliminary Distribution Channel Plan

4. Develop a Preliminary Sales Roadmap

Your goal is to determine who your true customers are and how they will purchase your product. You`re ready to begin building a sales team only when you completely understand the process that transforms a prospect into a purchaser and know you can sell the product at a price that supports your business model.

Organization and influence maps – create a matrix and plan of customer access map.

Sales strategy – questions

– At what level do you enter the account? Do you sell to high executives or low to the operational staff ?

– How many people on the organizational map need to say yes for a sale?

– Does each department perceive the customer problem in the same way ?

– In what order do you need to call on these people? What is the script for each?

– What step can derail the entire sale?

Implementation plan – the goal is to write down all the things left to happen before the sale is actualy finalized and the product delivered and to determine who will follow up to manage them ?

For example:

– Does the CFO or CEO need to approve the sale?

– Does the board need to approve the sale ?

– Does the customer need to get a loan to finance the sale ?

– Are there other systems/components from other vendors that need to be working first ?

5. Hire a Sales Closer

A sales closer is someone with a great Rolodex in the market you are selling into. Good sales closers are agressive, want a great compensation package for success, and have no interest in building a sales organization.

When you understand where the lack of sales skills is holding back progress, hire the closer.

Sales closers are invaluable in getting meetings set up, pushing to follow-up meetings, and closing the deal.

Hovewer having a sales closer is no way a substitute for getting founders to personally gather customer feedback.

6. Align your executives – they must review and agree on the following :

– Engineering schedule, product deliverables and philosophy

– Sales collateral

– Engineering role in selling, installation, and post-sales support

7. Formalize your Advisory Boards

Recruit only the advisors you need now, but make exceptions for “brand names” and “influencers” you want to cultivate.

Ensure key potential customers are on the “Customer Advisory Board” – they are great references for other customers.

Phase 2 – Sell to Visionary Customers

Your task is to see whether you can sell early visionary customers before your product is shipping.

Giveaways  do not prove customers will actually buy your product. The only valid way to test your assumptions is to actually sell the product.

Alpha and beta testing are Product Development functions that belong to engineering. They are about validating the product technically, not the market.

Customer Validation is not about having customers pay for products that are engineering tests. It`s about validating the entire market and business model.

Use the word “customers” only for people who pay money for your product.

1. Contact Visionary Customers

Use the same techniques you used in the Customer Discovery process: generate a customer list, an introductory email, and a reference store/script. Even with all the preparation, assume one out of twenty prospects you call on will engage in the sales process. Of those, depending on the economic climate, one out of three to one out of five will actually close when you get around to selling. That`s a lot of sales calls.

Don`t confuse early evaluators with paying customers.

2. Refine and validate the Sales Roadmap

One of the insidious traps for a startup is proising different customers a different feature set. This is creating custom products. Creating custom products is not a scalable business. Sometimes these custom features requests are good news. If enough customers have asked for the same set of “custom” features, then they are not custom at all.

You can`t know how well you are doing unless you keep win/loss statistics on sales calls.

The goal is to understand where in the sales process you get turned down (introduction, product presentation, organisational issues, not invented here issues, technical issues, pricing ) so you can refine your sales roadmap.

3. Refine and validate the Channel Plan

Channel partners do not create demand! Only your company can. Until customers become familiar with the brand, they are never going to look for the product.

Update your channel/service partner presentation with information about early customer orders. Then hit the street and present to them. Your goal is to come back with a committed relationship ( usually evidenced by an order ) .

Phase 3 – Develop Positioning for the Company and its Product

Positioning is the attempt to control the public`s perception of a product or service as it relates to competitive products.

Develop two positioning statements – one for the company and one for the product.

1. Product Positioning

For new product in existing market – compare your product to your competitors. Describe how some feature or attribute of the product is better, faster – an increment improvement.

2. Company Positioning

Product positioning focuses on the attributes of your specific product in a Market Type. Company positioning answers the questions, “What does your company do for me?” and “Why does your company exist and how is it different?”

For new product in existing market – compare your company to your competitors. Describe how your company is both different and credible.

3. Make presentation to Analysts and Influencers

In some technical markets a sale to a large company is very difficult until one of the large analyst firms (Gartner, Meta, Yankee) has blessed you.

You also need to line up industry analysts and influencers as references for the press you will be getting in the Customer Creation step.

Develop a short script explaining why they should meet with you. If you understand what they cover and why your company is going to shake up their market , and can explain  why your company is important, the “what`s in it for them” is obvious; they wont want to miss an influential and important company. When they agree to meet with you, ask them how much time you will have , what presentation format they like and whether the presentation should focus on technology, markets, customers, problems, or all of the above.

When you meet with the influencers and analysts, remember the goal is to gather feedback and learn from them what is critical for you :

– What other companies are doing anything like what you`re doing ?

– How does yout vision fit with market needs? With customer needs ?

– How should you be positioning your product, market, and company ?

– How should you be pricing the product?

– How do others price theirs?

– Who in a company should you be selling to?

– What kinds of obstacles will you face inside a company?

– What kind of obstacles will you face as you try to build your company: getting funded? hiring? competition?

– What do they think you should do next?


Phase 4 – Verify

1. The Product Solution

– Did you lose deals because of missing features?

– Did you lose because your product wasn`t important enough to buy until it was a “whole product” ?

– Does your plan for future releases have the right features in the right order ?

– Did you lose any deals over pricing? Was there any objection to your pricing? ( If not, your product may be priced too low – you should always get a modicum of grumbling ) .

The most important exit criterion is whether the sales closer believes other salespeople can sell the product as specified in a repeatable manner.

2. The Sales Roadmap

– Did you get the organizational or consumer map right ?

– Did you get the selling strategy right ?

– Did the organizational map and sales strategy result in a sales roadmap with a step-by-step sales forecasting process and sales pipeline ?

– Did you get orders ?

3. The Channel Plan

If you anticipate building a direct sales force, how many people need to be in a sales team (salesperson, technical presales, post-sales integration, technical support, etc.) ? How many teams will you need?

What kind of demand creation activities (advertising, PR, tradeshows, etc ) will be needed to drive customers into the channel ?

Customer acquisition cost need to be less than customer lifetime value !

4. The Business Model

The outcome of this testing process consists of two documents:

1) an updated sales and revenue plan

2) an operation plan to scale the company

Some key issues to address :

– How much additional funding to you need to reach profitability?

– Are the Product Development costs still the same?

– Is there any manufacturing involved in building the product?

– Is the projected selling price different from your initial business plan assumptions?

– Is it profitable enough for your needs?

5. Iterate, Return or Exit

In some cases there may be nothing wrong with the sales roadmap. The problem may be in the product itself. If you have exhausted all the options in selling and positioning, you might find you need to reconfigure or repackage the product offering. This requires a loop all the way back to the first step, Customer Discovery.
The end of Customer Validation is a major milestone. You have prove you have understood customer problems, found a set of early evangelists and delivered a product customers want to buy, developed a repeatable and scalable sales process, and demonstrated you have a profitable business model.



Introducere in Customer Development

by graileanu on November 10, 2011

Am mai mentionat termenul in alte articole si cred ca s-a mai auzit de el.

A fost introdus de catre un antreprenor de succes, profesor de la Stanford Business School – Steven Gary Blank in cartea sa “The Four Steps to the Epiphany”.

Customer Development e un concept de evolutie a unei afaceri, caracterizat prin testare, invatare, iteratii in jurul ipotezelor detinute despre produs, clienti si piata. La un nivel mai abstract este vorba de o simpla chestionare a auditoriului implicat si testarea  ipotezelor de business.

Ideea de baza e ca majoritatea proiectelor ( nu mai folosesc termenul de startup in acest context ) isi incheie existenta sau nu succed nu din cauza ca nu au creat un produs/serviciu ci deoarece nu au creat piata care sa solicite acel produs.

O problema majora a fondatorilor este ca in cadrul procesului de evolutie a produsului il dezvolta conform viziunii proprii despre problema pe care vine s-o rezolve produsul. Asta e foarte costisitor pentru ca fondatorul poate cheltui multi bani pana isi va da seama ca – a stabilit gresit existenta pietei (exista o problema pentru rezolvarea careia  clientii sunt gata sa plateasca), s-a plasat pe un tip gresit de piata (mai jos descrierea celo trei tipuri de piata), a ales gresit categoria de clienti, nu s-a pozitionat corect in fata clientilor, nu a ales canalele corecte de distributie, etc.

Pentru a evita toate aceste greseli fondatorul trebuie sa-si stabileasca setul de ipoteze despre problema, piata, client, canale de distributie si sa urmeze un proces lung de chestionare si corectie continua a ipotezelor stabilite.

Dupa ce a chestionat un numar sufucient de potentiali clienti ( minim 50, pentru un produs tehnologic ) se ia decizia de pivot – schimbarea totala a ipotezelor ce tin de modelul afacerii si o iteratie noua a procesului de chestionare, cu aceeasi sau o alta problema, piata, clienti si canale de distributie. Atunci cand se confirma ca problema exista si clientii alesi sunt gata sa plateasca  – se trece la urmatoarea etapa – testarea procesului de vanzare pentru a crea un roadmap repetabil de vanzare si marketing.

In aceeasi carte – 4Steps Steven sistematizeaza tipurile de piata in trei categorii –

1) Produs nou intr-o piata noua. Strategia de baza este educarea segmentului de clienti ales. Dupa definitie business-ul nou aparut acopera initial 100% din piata.

2) Produs nou intr-o piata existenta. Va avea de infruntat jucatorii deja stabiliti iar bugetul de marketing nu trebuie sa fie mai mic de 2/3 din valoarea anuala a vanzarilor marilor jucatori de pe piata – pentru a obtine un loc.

3) Resegmentarea unui market existent – nisa sau low-cost. Un produs poate intra pe o piata existenta, segmentand-o printr-un pret redus, posibilitati adaugataore solicitate de un grup nou de clienti – prin aceasta expanzand piata si nu doar incercand sa castige o bucata din piata existenta.

Paradoxal, viziunea clientilor asupra pietei pe care intra un produs nou e mai importanta decat viziunea celor care lanseaza produsul.

Un alt termen – Minimum Viable Product ( in continuare MVP ) este un produs cu un set minim de functional venit sa rezolve o anumita problema, pentru care un client este gata sa plateasca.


Crossing the Chasm

7 November 2011

Un market high-tech este caracterizat prin   un grup de clienti actuali sau potentiali interesati intr-o serie de produse sau servicii caracterizati prin cerinte si necesitati comune si sunt referinte unul altuia in procesul deciziei de cumparare   Esenta dezvoltarii pietelor high-tech este in trecerea de la un market incepator ( early market ) dominat […]

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De ce nu e bine sa ceri investitii de la un VC

19 October 2011

Scriu acest post de pe iPad, din sala de asteptare a unui aeroport, inspirat de ultima carte citita – “Venture Deals”, unul din autori fiind Dick Costolo – CEO in Twitter.  De ce nu e bine sa iei investitii de la un VC (Venture Capitalist) ?  1. Pierzi controlul deplin asupra companiei. Investorul obtine cel […]

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Eric Ries – Lean Startup

26 September 2011

Am facut pre-order cartii Lean Startup vreo 6 luni in urma. De atunci am asteptat-o cu nerabdare si am fost putin dezamagit dupa ce am citit inceputul. Prima treime a cartii e foarte vaga . In continuare urmeza idei interesante si aplicabile pentru mine, precum: Da-i clientului oportunitatea sa descarce,foloseasca sau chiar sa cumpere produsul […]

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Marketing High Technology

15 September 2011

Am citit cartea “Marketing High Technology” de Williahm H. Davidow. Este utila pentru investori, antreprenori, conducatori implicate in marketingul produselor tehnologice. Descrie specificul marketingului produselor tehnologice vazuta din interior, de catre un specialiast Intel care a contribuit multi ani la evolutia companiei. Urmeaza ideile de retinut si aplicat, sortate pe categorii. Strategie marketing si dezvoltare […]

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Customer Development pentru un produs IT – partea 2

21 July 2011

Caut in continuare peroane sa interviewez in legatura cu produsul pe care l-am conceput. Pana acum am facut 4 intreviuri, prin telefon si skype. M-am ciocnit cu faptul ca oamenii business fiind foarte ocupati nici nu raspund la incercarile de a discuta cu ei.  Incerc sa trec de asta prin crearea unor studii online, usor […]

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Customer Development pentru un produs IT – cum a inceput

18 July 2011

Customer Development este un framework de creare si lansare a produselor pe piata. Poate fi folosit nu numai in IT ci si in alte industrii. A fost gandit si pus la punct de Steven Blank si este descris in detalii in cartea sa “The Four steps to the Epiphany”. Conceptul implica o relatie stransa cu […]

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Tim Ferris – The 4-Hour Body, intro

17 June 2011

Tim Ferris este autorul bestseller-ului controversat “The 4–Hour Workweek” (4hw). Peste cativa ani de la lansarea 4hw autorul a publicat urmatorul bestseller – “The 4–Hour Body” (4hb) in care descrie rezultatele muncii sale de peste 10 ani in  studiul corpului uman. Cartea e foarte voluminoasa si la moment  e disponibila doar in engleza. Cu toate ca am […]

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Cum am devenit antreprenor

15 June 2011

Am meditat asupra trecutului meu antreprenorial si am hotarat sa scriu acest articol. Pe la 8 ani toata familia mea locuia in Ungaria, tata fiind militar. Eu ramasem in Moldova la bunica si invatam in clasa a doua. Regulat primeam de la parinti cadouri precum gume de mestecat si alte bunataturi care nu se gaseau […]

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