“Cindy Alvarez – How to Create a Product That Will Sell. The Lean Customer Development Method” Summary Review

What you should know
• Who are our consumers?
• What are their problems and needs?
• What does their behavior depend on today?
• What new products (even unfinished or non-existent ones) are they willing to pay for?
• How do our customers make decisions: how do they make purchases, find suppliers, select products and consume them?

Why we need to know this:
An hour of effective communication with the consumer will save 5, 10, 20 hours of planning and development of an unnecessary feature.

Lean customer development includes five components:
• development of a hypothesis;
• search for potential consumers with whom you will negotiate;
• asking the right questions;
• correct interpretation of the answers to these questions;
• understanding what product you need, taking into account the information received.

In the Build-Measure-Learn cycle (from Eric Ries' book The Lean Startup), customer development is responsible for forming the most suitable hypothesis for further testing and study.

Developing a hypothesis.
Cindy Alvarez suggests doing three exercises in a row:
Exercise 1. Formulate initial assumptions.
Exercise 2. Formulate a hypothetical problem.
Exercise 3. Formulate the characteristics of target clients.

Exercise 1.
The initial assumptions can be formulated by answering these questions:

• Consumers have problems (what?) _______.
• Consumers are willing to invest in solving these problems (how much?) _______.
• List of investors willing to invest money in the product, or its buyers _______.
• List of partners willing to participate in the development and distribution of the product _______.
• What resources are needed to produce and service the product? _______.
• If consumers will not buy and use this product, what product will they buy and use? _______.
• What will consumers get from using the product? _______.
• What problems do consumers face? _______.
• Consumers will use the following products: _______.
• What influences consumer decision making? _______.
• Where do consumers work? What is their social background? _______.
• This product will be useful to consumers because _______.
• How savvy are consumers with technology? _______.
• How do consumers feel about change? _______.
• How long will it take to develop/produce the product? _______.
• How long will it take to acquire a certain number of customers or achieve a certain frequency of use? _______.

If the work is carried out by a team, internal contradictions can be identified and discussed.

Exercise 2.
The hypothesis should include answers to the five questions on which any journalistic investigation is based: “Who?”, “What?”, “How much?”, “When?” and “Why?”

For example: I think some people [какие?] in progress [чего?] are facing a problem [какой?]I think some people [какие?] are facing such and such a problem [какой?] due to shortage [чего?].

The people who face the hypothetical problem are the customers you will be interviewing. And what the problem is (the “what?”, “how much?”, “when?”) is what you need to figure out. The “why?” is what you need to solve or eliminate.

Examples of hypothesis development for existing products:
• I believe that [группы технической разработки] are facing a problem [теряют время и деньги] When [пытаются предсказать коэффициент загрузки сети растущей компании] (Amazon S3).
• I believe that [мелкий бизнес] faces a problem [невозможности роста]because [традиционные маркетинговые платформы (рассылка электронных писем) слишком дороги и сложны] (MailChimp).

Exercise 3.
You can start with the following questions.
• What is the problem?
• Who faces this problem?

The task of a startup is to find and focus on those who are ready to buy MVP (Innovators).

Cindy Alvarez suggests creating a portrait of an innovator based on the indicators that influence the purchase decision. Here are the basic ones, which can be expanded later:

And accordingly, the questions:
• What is more important for consumers – time or money?
• Do they make decisions on their own or follow someone else's instructions?
• Do they like to lead or are they willing to obey?
• What is their level of technical training?
• How often do they make purchases and how long do they use the product?
• Do they like new things or do they prefer tried and tested products?
• Do they like thrills or do they prefer predictability?
etc.

Search for consumers.
As we already understood above, we are looking for innovators,
those who are ready to take a risk and buy an unfinished, unpolished product (MVP).

The rest of the book is devoted to finding respondents, but it boils down to the banal:
1) Introduce us to the audience through acquaintances
2) Use blogs and forums
3) Use social networks (e.g. Linkedin, Instagram, etc.)
4) Use events, communicate live

Cindy insists that there is no need to pay respondents for interviews, as these should be people who are genuinely interested in having their problem solved through our product.

It also describes the fairly obvious pros and cons of choosing a meeting place (home, office, neutral territory) and choosing a method of communication (video call, phone call, messengers, etc.).

Asking questions and interpreting answers.
1) How are you doing _________ today?
2) Do you use [инструменты/продукты/приложения/технологии] ________?
3) If you had a magic wand, what would you do? It doesn't matter if it's possible, just name the wish.
4) When you last did ___________, what actions did you take before starting work? After finishing it?
5) What else would you like me to ask you? _________

These are the main five questions (I didn't change the translation), which she asks in any case, everything else is clarifying questions. All of them serve to understand:
• What is consumer behavior today?
• What frustrates your customers and what motivates them?
• How do your customers make decisions and spend money? What do they value most?

She then describes the technical aspects of the interview: whether to take a voice recorder, how to organize notes, emotional and psychological aspects, how to get the respondent to talk, why respondents themselves may not know what they want, and the like.

The next chapter is devoted to skeptical processing of the information received, so that it does not contain what the interviewer unconsciously pushed the respondent to. It is mainly about emotional intelligence and checking speech patterns.

On the number of interviews required: “After five interviews, you will meet your first enthusiastic customer. If this does not happen, your hypothesis is wrong. After ten interviews, you will see patterns. Challenge them in subsequent interviews by referring to “other people” who behave differently. Ask them if they are behaving according to the pattern or like “other people.” If you do not hear anything new, then you have conducted enough interviews and can finish.”

Formation of a product taking into account the information received

This section describes the types of MVP, their pros and cons, and which type is best used for which tasks. I partially touched on this in the article on Eric Ries's book Lean Startup.

The following parts describe how to make an MVP in already formed companies and how to look for consumer evangelists for new MVPs of such companies. There are no big differences, I was interested in describing in this summary how to form a hypothesis and confirm it through consumer development, I will not go into detail.

At the end of the book there is a handy appendix: with a description of the questions and their purpose, for new and existing products, this should be highlighted. The rest are success stories, praises of lean manufacturing, footnotes, advertising, etc.