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Value proposition and Blanks

customer discovery method
Phase 1: State your hypotheses
16 Dec 2011

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RECOMMENDED
 Advice for
This article is part of a four-phase process designed to help entrepreneurs entrepreneurs... from
develop their value proposition (https://www.marsdd.com/mars- entrepreneurs
library/value-proposition-a-reflection-of-the-relationship-between-your- (https://www.marsdd.com/news-
customer-and-brand/). This article describes the first phase in the process and-insights/advice-for-
entrepreneurs-from-
which is based on the method of customer discovery entrepreneurs/)
(https://www.marsdd.com/mars-library/developing-your-value-
proposition-an-overview-of-customer-discovery/) in Steven G. Blanks
This weeks top jobs in
book, The Four Steps to the Epiphany. The other three phases are discussed in
the innovation
the following articles:
community
(https://www.marsdd.com/news-
Value proposition and Blanks customer discovery and-insights/this-weeks-top-
jobs-in-the-innovation-
methodPhase 2: Test your hypotheses community/)
(https://www.marsdd.com/mars-library/blanks-customer-
discovery-method-part-2-the-customer-development-model- Upcoming events in the
innovation community
in-value-proposition/)
(https://www.marsdd.com/news-
Value proposition and Blanks customer discovery and-insights/upcoming-events-
in-the-innovation-community/)
methodPhase 3: Test your product concept
(https://www.marsdd.com/mars-library/blanks-customer-
discovery-method-part-3-the-customer-development-model-
in-value-proposition/)
Value proposition and Blanks customer discovery
methodPhase 4: Evaluate customer feedback and set next
steps (https://www.marsdd.com/mars-library/blanks-
customer-discovery-method-part-4-the-customer-
development-model-in-value-proposition/)

For more information, see The Customer Development Model

(CDM), product development and technology startups
(https://www.marsdd.com/mars-library/the-customer-
development-model-cdm-product-development-and-technology-
startups/).

Getting started with the Customer Development

Model and customer discovery
STATE YOUR HYPOTHESIS
For a robustCustomer Development Model
(https://www.marsdd.com/mars-library/the-customer-development-
model-cdm-product-development-and-technology-startups/), you
must write down your most important business assumptions on the
following:

Product concept
Customers (https://www.marsdd.com/mars-
library/marketing-strategy-for-startup-success-
identifying-and-understanding-your-target-customer-
and-market-segments/) and the problems they want to
solve
Distribution (https://www.marsdd.com/mars-
library/distribution/) and pricing
(https://www.marsdd.com/mars-library/your-tech-
product-pricing-and-product-positioning-in-the-
marketing-mix/)
Demand creation (https://www.marsdd.com/mars-
library/what-is-marketing-communication-marcom/)
 Market type (https://www.marsdd.com/mars-library/the-
four-types-of-market-market-maturity-where-does-your-
startups-product-belong/)
Competition (https://www.marsdd.com/mars-
library/does-competition-exist-for-startups-introducing-
tech-products-into-the-market/)

Documenting these assumptions (that is, your hypotheses) is both

practical and psychological. Having something in writing means that
you can avoid the pitfall of mentally readjusting your hypotheses
between or during conversations with customers (which would lead to
poor testing and poor reliability of your hypotheses).

Summarize each hypothesis and your reasoning behind it. In cases

where you lack some information, these briefs may be short. When
documenting your hypotheses, employ these tactics:

DO IT AS A TEAM
Do not delegate the work of writing the briefs. Sit down as a team and
ensure that what you document reflects a shared understanding of the
issues you aim to test.

The benefit of making this a group eort is two-fold. First, with this
possibly being your first team-building exercise, those involved will
feel a joint ownership of some of the most fundamental ideas that
underpin your business.

Second, since the onward journey might lead to discoveries that will
require you to change your initial hypothesis, having a starting point
that reflects the entire teams opinions will make it easier for the team
to understand what changes are necessary.

MAKE IT TESTABLE
When creating the briefs, include all the essential information you
believe to be true about the dierent hypotheses you are about to test,
and be as specific as possible.

For example, you may assume that 15% of all hypertension patients
forget to take their medication at the appropriate time and would
benefit from a mobile app to remind them of the schedule and dosage.
If your business plan is based on that number, this is the time to test
whether that is true and the severity of the need, as well as any other
specific features such an app must have.

Question your assumptions carefully and determine the right questions

to ask. Accuracy is key to arrive at information that will be of most use
to you.

DO IT QUICKLY
Time is perhaps the most important competitive factor for a startup.
The underlying goal for an early-stage startup is to get a product to
paying customers as quickly as possible, so do not spend too much
time perfecting the initial briefs. Instead, spend the time with
customers, asking questions and getting valuable feedback.
 You are on your way to creating your value proposition. Once you have
completed this phase of the customer discovery process, you are ready
for the next phase, Value proposition and Blanks customer discovery
methodPhase 2: Test your hypotheses
(https://www.marsdd.com/mars-library/blanks-customer-discovery-
method-part-2-the-customer-development-model-in-value-
proposition/).

Researching a market? Our free online course Introduction to Market Sizing

(https://www.marsdd.com/collections/introduction-market-sizing/) oers a
practical 30-minute primer on market research and calculating market size.

REFERENCES
Blank, S.G. (2005). The Four Steps to the Epiphany. Self-published:
Cafepress.com.
Maurya, A. (2011). Running Lean. Self-published.
Ries, E. (2011). Lean Startup. New York: Crown Business.
Vlaskovits, P. and Cooper, B. (2010, July 29). The Entrepreneurs Guide to
Customer Development: A cheat sheet to The Four Steps to the Epiphany.
Self-published.

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