When starting out with Cloudalize, we intuitively reached out to potential customers and partners, innovators in their field. Without realizing it, we were basically validating the prototype that we made with the market.. in search of the product/market fit.
The road to the product/market fit - the holy grail - is called "customer development" and consists out of several phases.
Customer Development involves a mix of marketing tactics and biz dev to make sure that the product is validated adequately.
1. Customer Discovery
At the very beginning, you usually have not much more than a few "hypotheses". Examples are for instance:
- "our product might be very useful for this type of end-user"
- "In the past, I worked with architects and they miss flexibility for their home office"
- "The best channel for our SaaS product are IT service providers", etc.
These hypotheses can be correct or not, so we need to map the ecosystem and validate them if what we believe is right. Or in other words, we get out of the building and talk with relevant people. We do some reality checks, and at the end, we'd like to see the hypotheses verified.
2. Customer Validation
When we are about 50-70% certain that our products can solve problem Y in market Z, then we can start creating some sales and marketing collateral and reach out to a potential buyers. Let's focus first on the innovator / early adopter type, or we lose our time. This is a very iterative process which costs time.
In the meantime, online content (such as the website) is being continuously adjusted according to the new insights and value propositions. We also share our information with the product development team for product adjustments. We measure as much as possible and make our decisions based on the data.
This is also the point where we can start mapping preliminary product- and sales roadmaps, position the product and a verify the business model, sales channels and marketing strategy.
3. Customer Creation
Adequate customer creation requires a good understanding of product and markets, optimised online content (blogs, design, social media, website, branding,..) and sales channels that work.
We create sales and marketing processes and align these with the fulfilment (delivery of the product) and customer service. This is also a good moment to hire sales and marketing employees and prepare the scale-up phase.
4. Company Building
The startup evolves into a "normal" company or scale-up. This is usually the moment where the company starts working on company culture, management structure and structured departments (HR, sales, product, service,..).
Read my blogposts about customer development:
- Value of Experiments when searching for the product/market fit
- Setting up a sales department in a startup