Understand your customer
  • 17 Sep 2020
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Understand your customer

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What does it mean to "understand your customer"?

Early in your startup's journey, your goal is to validate your business idea by getting out of the building and interviewing people who might have something to tell you about the problem would like to solve -- and by making sense of what they tell you.

In other words, you first need to function as a learning organization whose goal is not to sell but to acquire as much unbiased information as possible to avoid spending time, money and resources on something that no one is willing to pay for.

The ABC's of customer discovery

Easier said than done, rigth? At District 3, we have broken this competency down into 5 main skills that need to be developed to demystify what is "customer discovery". You need to be proficient in the following areas:

1. Discovery interviews

"I can plan and run customer discovery (not sales) interviews with potential or existing customers and can extract actionable insights from these conversations."

2. Customer segmentation and market analysis

"I can identify and characterize different potential customer segments for my startup in terms of size, interest, accessibility etc. as well as understand the monetary value of the different segments within a geography."

3. Customer persona creation

"I can easily describe and build the key "customer persona" types that my company sells to."

4. Value proposition definition

"I can create and build a value proposition for a specific persona in a customer segment, identifying the pains they have in their customer journey and the potential gains in their user experience from our offering."

5. Competitor analysis

"I know who my direct and indirect competitors are and I can analyze if and how they are stronger or weaker in overall terms and in terms of product features, sales/marketing, production, etc."

These 5 skills are critical skills that will stand you in good stead long after you have validated (or invalidated!) your first business idea.

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