Steve Blank on Leaving the BatCave to Learn from Customers

Steve Blank’s “Four Steps to the Epiphany” was a source inspiration in founding SKMurphy, and I was delighted to see that Steve has started blogging and it seems clear to me that he is using his blog to develop a companion volume. This one is more personal and uses specific experiences from his life to show his inspiration for the customer development model.

He has a great two part series on his time at SuperMac and lessons learned here. What follows is not a summary of the lessons learned that were particular to SuperMac but an outline of how he actively sought both data and serious conversation with his customers (SuperMac was a turnaround, he rightly points out that most new startups don’t have the luxury of 15,000 customer registration cards) to test and evolve hypotheses that he explicitly documented at the start of his investigation.

1. Joining SuperMac
   • After talking to its resellers and customers I realized that SuperMac was the only company that could be described as “fifth in a group of three.”
   • They had no model of who their own customers were and what it would take to make those customers bang down their doors to buy their products.
   • Nothing I couldn’t fix.   I took the job.
2. Facts Exist Outside the Building, Opinions Reside Within – So Get the Hell Outside the Building
• Does anyone know where the registration cards that the customers sent back are?”
• Twenty minutes later a cart rolls into my office with 10,000 unprocessed, unlooked at, and untouched registration cards.  All with names, addresses, phone numbers, job titles; all wonderful data longing for human contact.
• Three hours later I had made up a three-page customer questionnaire.
• After writing up the questionnaire, and before I called the customers, I wrote a one page summary of who I thought the customers were, what markets they were in, how and why they bought, etc.  I was curious to see how close to my hypothesis the actual customer answers would be.
• At the end I had a three-page questionnaire that I timed in a practice session with one of my marketing people.  I could get it done in twenty minutes.
• Three hours and ten customers later I was beginning to feel like this would work.
• For the next three weeks I spent 8 hours a day calling customers and another 6 hours a day managing my new department.  I’m sure the CEO thought I was crazy.  But after three weeks and three hundred customer calls I was done.
• After three weeks I stopped the customer survey when I started hearing the same stories again and again.  Looking at the customer data I realized there were some potential “gotchas”:
• This was a survey of those who had already bought product from us.  Those who didn’t buy from us might have completely different characteristics
• This survey could only reach those who sent back their registration cards.  Those who didn’t might be different.

Too often we talk to teams that want to survey prospects with web forms or e-mail and avoid conversation because it’s “more efficient” to collect data automatically. I think the single most important thing to take away from Blank’s SuperMac narrative was that he prepared himself to be surprised. If he just done an automated survey he would not have learned nearly as much. And by writing down his hypotheses he prepared himself to be able to change his mind and to see what he had learned.

Related blog posts on the value of conversation with prospects and customers:

• Sales 2.01
  In our experience, it’s incumbent on startups to initiate conversation. Not the typical “sell, sell, sell” approach that established firms encourage in their sales teams to “maintain control of the conversation”–that’s an interrogation–but one where you are genuinely committed to understanding the prospect’s needs and are open to letting them teach you something new about your product.
• The Limits of Customer Relationship Management Systems
  Relationships are not best managed by control charts: in some arenas Lord Kelvin was wrong. Complement surveys and metrics with serious conversation and passionate engagement with your customers.
• User Communities are Critical for Complex Products
  We spend a lot of time with firms helping to make sure that not only their offering but their internal metrics and scorekeeping mechanisms are keeping them aligned with the purposes of communities they wish to serve.
• Best Way to Get Feedback From Customers is a Conversation
  One temptation to avoid when trying to get customer feedback on your product is premature automation. There are a number of excellent low cost survey tools out there (we use SurveyMonkey and Zoomerang and have been happy with both) but there is a real risk when you only have a dozen or two dozen early customers that a questionnaire may only give you the answers that you are looking for, not the information that you need.