Ask HN: Product/Market Fit (Customer Dev) as a Service?

17 points by jwillgoesfast 11 years ago | 17 comments

"What if everything you think you know about taking products to market is wrong? What would you do differently if you realized that only 1 out of 10 new product introductions result in a profitable business? Would you continue to operate the same way, week after week, year after year?"

- Steve Blank, Four Steps to Epiphany

Like most startups, I have struggled through the pains of product market fit, multiple pivots and struggling to find customers.

What if there was a way to quickly and accurately determine not only if your idea is on the right track but to iterate through product/market fit and even pivots before you endure the sweat and heartbreak of building a few MVP's?

Obviously there are lots of challenges to creating such a service, but I think it is a discussion worth having. In the spirit of CD, let's start the ball rolling with some questions:

1. Does your resume include a failed startup? 2. With hindsight being 20/20, should you have done more Customer Development? 3. Would you now consider a service to improve and expedite that process?

ef4 11 years ago |

Your proposal sounds like a wish-fulfillment fantasy for founders who want to skip the hard part.

I'm skeptical that you could generalize the process. But even if you could, it wouldn't make any sense to offer it as a service to startup founders, because you would then control the biggest value creation step. They would be nothing but idea sources, and ideas are worth very little. Instead you would just use your fantastic process to churn out your own products, possibly paying small royalties to people who come to you with good introductions & ideas.

Or let me put it another way: every angel fund, startup accelerator, and VC would love to have a magic way to "quickly and accurately determine if an idea is on the right track". That's what they spend all their time thinking about. Do you really think they're missing something obvious?

guybrushT 11 years ago | |

That is certainly one interpretation of the OPs question. And you are right: there is no silver bullet/magic formula/secret recipe. There are some nuances in the way the original question is framed. So the framing that 'a way to quickly and accurately determine if your idea is on the right track' is not good - ideas aren't good or bad, they are never on the right or wrong track - they are what they are, just ideas. Its the execution of an idea that paves the way and propels the idea in a specific direction. So, while there isn't (and may never be) a great tool/process/discipline to evaluate ideas - there are tools/processes/disciplines available to evaluate execution.

So, I read the question slightly differently - and I would say there is definitely something here. I can imagine a consulting service (problem-solving and execution discipline for startups - kinda like what mckinsey does for the fortune 500 :)) that could bring structured problem solving, fact-based de-biasing (countering delusions of optimism), focussed execution, research, 'talking to users' (the famous YC mantra) and (I don't have good name for it) lets call it "learning from experience and experiments of others" etc may be possible as a service.

Its the help a startup needs between "office hours" and execution. I do think that there is a piece missing here, that can be developed.

jwillgoesfast 11 years ago | | |

> "Its the help a startup needs between "office hours" and execution. I do think that there is a piece missing here, that can be developed."

Pretty much agree with everything you said, this is a good unpacking of what I was trying to briefly convey in the OP.

For example, if one of the founders is strong in Biz Dev, then they probably don't need this (though some level of assistance would still be helpful), but if this is not the case, then getting guidance and potentially full-service assistance with an all-in effort in gaining customer feedback in a valid way that could be just the frequency shift that determined success or failure in an otherwise solid product/idea.

Basically you would be taking the product from something potential customers respond with "maybe" into something they say "Heck yes, take my money!"

MCRed 11 years ago | |

Writing software can be hard, certainly coming up with solutions to difficult problems is hard.

IDEs are a tool that are a relatively recent invention that makes a lot of this easier.

But nobody would say that IDEs are doing the "hard work".

I don't think a CDaaS App could be sentient enough to do all the hard work.

But that doesn't mean there aren't tools and services that could be very useful.

For instance, if someone curated a massive list of customers who were interested in hearing about and talking about new products, with a chance to try them out if they get built, and that service was rented out as a CDaaS to startups to quickly identify potential customers with particular interests or in particular markets.... that would be extremely valuable.

jwillgoesfast 11 years ago | |

I don't think the accelerators/funds are missing the obvious, but I do believe that (because of the high signal-to-noise ratio of the startup bubble) many rookie founders don't discern the importance of this process to their success, and end up "hearing what they want to hear" from mentors/books/etc and pick out things like "focus on the experience", "leverage network effects" or the dreaded "get a distribution partner" instead of simply finding customers who would immediately start paying for a solution to their biggest problems.

ed209 11 years ago | |

I don't think it should be about skipping the (or one of) the hard parts. It should be about guidance through it and helping founders understand how to read the signals coming in. Some startups think they're doing it, but they're really not.

A service to push founders through it would be great.

gbelote 11 years ago |

To give you an embarrassing personal anecdote: In my first startup I wanted to do customer development. The lean startup was a fresh and growingly popular idea, and we devoted more time and energy talking to potential customers than turning our proof-of-concept prototype into an MVP. It looked smart on paper. Unfortunately that didn't go so well and my conclusion was that we were doing customer development wrong. So we tried to do customer development "better" instead of pivot.

I was so mentally set in my idea that I consistently gravitated to the next-simplest explanation when I encountered sad evidence. And even though I believed I was being smart and understood customer development, I was following a checklist of things I thought I was supposed to do and was confused when we stagnated. I pretty much was asking to learn my lesson the hard way. :)

It seems very plausible that new products and services can be built to help founders be more effective at customer development. However one major obstacle if you outsource customer development too much will be dodging bullets as the messenger.

If I had used a CD service I'd probably assume the person was doing it wrong. They don't get my product, they are bad at sales, they aren't finding the right customers, etc. And then I'd wonder why I was throwing away my money (out of my personal pocket) for a service that wasn't "working". Unless you're a customer development superhero there might even be a little truth in all those things – it's going to take you a while to orient to the company's vision and market.

Another issue is that you'll probably see adverse selection from your clients. Folks who are good at customer development or stumble into promising early traction probably aren't going to hire a consultant for that stuff. So you're going to get people who either have an aversion to talking to customers and/or have hit a wall finding customers. And it's quite possible that the stuff you'll try is very similar to the stuff they tried and failed. So most of your clients might be biased towards failed startups, which may create a lot of churn and make it harder to gain inbound leads.

zefi 11 years ago |

There is an absurdly high need for this service, but my god this is a hard task. I think the way to do this is spend 6 months working exclusively with about 10 early stage startups (pre PMF) which are relatively similar in the type of market they're going after. You then help them however you think you can in getting to PMF. Keeping the types of markets similar lets you get to actionable learnings quicker; an important learning for a gaming startup isn't going to be as useful for one built on enterprise sales. The help you provide could be customer interviews/sales/lead generation/landing page testing/anything. But the goal is to try and work out which of the tactics lead to the most progress for each startup, then create a playbook that can be applied to the next batch of 10 startups you help. Then as that playbook becomes more refined you slowly start to productise some of these services to speed up the process and add more startups to each batch. Then a few years down the line you have a low touch software product that will take founders through each of the steps you have worked out are most useful for startups operating in their type of market. This is a slow process for sure, but I think to be successful at this you have to acknowledge how broad the problem is and how little you know how to solve it right now.

MCRed 11 years ago |

1. YES!

2. Well this seems like one of those questions you could always say yes to. "Do you think you should have saved more money in your 20s?" "Do you think you should have worked out more over the past 5 years?" Who isn't going to say yes?

That being said, the failure of our business came about because the business model of the market we were serving shifted, as a result of a new piece of technology. Our customers didn't anticipate this shift (customers don't know what they want until they see it in some cases) and we, when the other business model came about, didn't recognize its significance. So, alas, I don't think customer development would have helped because nobody had invented the thing that killed us at the time we would have been doing customer development.

3. YES! I would love to buy a customer development as a service type service. Part of the problem for me is that customer development is sometimes very hard, it's not always easy to identify the customers for a particular idea.

vishalchandra 11 years ago |

Wow ! I think it is great to see the comments on this thread. Thanks jwillgoesfast for asking this question.

I have actually been working on building a Product/Market Fit (Customer Dev) as Service product for the last 12 months and before that I had been advising (mostly on shaping up ideas to get the product definition right) / helping out two new startup teams every month, for about 7 years now. This happened primarily because I enjoy meeting startups and because I was part of a large alumni network which would reach out.

The key assumption for the P/M-F service is whether something like this can be scalable and work in a self-serve mode (i.e. where I am not in the room)

So I have kept iterating on the framework, took inputs from the founders I had advised in the past. My key question to them was "How did I help you even though I was not really a expert in the marketing you were targeting?"

I also conducted lean canvas workshops with startups in US and India (and across sectors including one 7-year old pharma company trying to launch a product) till I could start standardizing (so that it could then be coded into software) the P/M-F process and build a self-serve tool. The tool has now taken the shape of an "intelligent" software which asks startup founders questions and assigns them tasks to do.

There is a lot of complexity in the tool. And it needs to be much more intelligent as well. We have explored using machine learning at the backend, but so far the intelligence is based more on a decision tree structure, rather than any machine learning.

Currently in private alpha, testing with some startups and an accelerator, and will release this soon for others, hopefully by end of this month.

http://www.uberstarter.com

jwillgoesfast 11 years ago | |

Very cool, Looking forward to seeing how uberStarter grows. I think you have a good model to target incubators and accelerators.

apabon21 11 years ago |

Attended the Chicago Lean Startup Challenge this summer. They push teams to do experiments to determine if their guess/business idea is solving a real need of a customer segment. This 8 week program has saved a lot of companies from building the wrong product and addressing the wrong problem. Watch some of the videos on BuiltinChicago.org to hear how the interview process lead to a major pivot and the start of a company. Summary: Don't built it unless you have done considerable customer interviews and determined A. you are addressing a morphine problem not an aspirin problem and B. The customer base will pay for your solution. Then you build and A/B test. :)

jwillgoesfast 11 years ago | |

This. I think the biggest problem startups make is finding a problem and building a solution, but not realizing there is a difference in problem size, value and pain per your medicine analogy.

nostrademons 11 years ago |

If you could do this quickly, reliably, and repeatedly - in other words, if there's actually a business in this - then you are far better off starting a conglomerate to own these businesses outright than to sell the service to founders.

benologist 11 years ago |

I think if a startup has spent a bunch of time building a product without considering who should use it and how they should reach those people then they're pretty fundamentally isolated from the industry they wish to service.

Steve Blank's not saying the other 90% were good ideas.

jwillgoesfast 11 years ago | |

Good point, there are a lot of bad ideas out there. But, even the best ideas/products are not what they started out as, they involved pivots and market changes. Was this due to luck, or were the founders fundamentally committed to creating a business that adds value vs. simply in love with their "great idea"?

benologist 11 years ago | | |

I like to think successful founders "got there" pivoting or otherwise, by being good at bringing a product to market and building a company around it.

Startups that need to as ef4 put it "outsource the hard stuff" are pretty much proven bad at bringing a product to market, I don't think it's likely their problems will be as simple as customer development vs. being underprepared, inexperienced or just plain unsuitable to found companies.