The Path to the Epiphany: The Customer Development Model — The Startup Owner’s Manual

Successful start-ups separate from the pack by making use of customer feedback right from the beginning. Most make a mistake of having no feedback until its beta — when it’s too late.

In Chapter 2 of The Startup Owner’s Manual, the author uses IMVU as an example who embraced the Customer Development Process.

The Customer Development model solves nine problems and breaks down customer-related activities of an early-stage company into their own processes and packed into four easy-to-understand steps. The first two are the “search” phase and the last two are the execution phase. The steps:

Search:

  • Customer discovery first captures the founders’ vision and turns it into a series of business model hypotheses. Then it develops a plan to test customer reactions to those hypotheses and turn them into facts.
  • Customer validation tests whether the resulting business model is repeatable and scalable. If not, you return to customer discovery.
  • Pivot if customer validation requires a different solution and return back to customer discovery phase.

Execution:

  • Customer creation is the start of execution. It builds end-user demand and drives it into the sales channel to scale the business.
  • Company-building transitions the organization from a startup to a company focused on executing a validated model

Following the customer development model is one way to minimize waste of cash and time. Too often, founders spend the time to build a ‘perfect’ product then launch it into the market without doing testings before their beta launch. Doing so is synonymous with making a bet on the lottery: there is a chance the idea will work but the chances are slim.

Currently, I am working on a healthy natural beverage brand with a mission to bring healthy natural beverages to underserved communities. While working on making this goal a reality, I am nowhere close to beta launch, and even if I did launch, the customer development process will never end.

One month ago, I began the customer development process by sharing my first beverage (beverage infused with sugarcane and dried winter melon in water). After my first round of testing, I realized customers wanted to know what the calories are and the research behind the ingredients used. Although it was a beverage that I have consumed for many years, the insufficient amount of research allowed me to pivot to something I didn’t know much but is quick to make a new iteration.

Then and there, I started exploring Apple Cider Vinegar. It is low in calories, uses natural ingredients, and has a tremendous amount of research to back up the health benefits.

Apple Cider Vinegar allowed me to explore the world of fermented beverages like kombucha.

A detailed version of Customer Development Model can be found here: https://www.oreilly.com/library/view/the-startup-owners/9781119690689/c02.xhtml