How the Customer Development Methodology Can Save Your Startup

The success of software depends on many factors like security, performance, user experience, and many more. However, one of the most important criteria is utility. Any software should be practical and should meet users’ demands.

To achieve software utility, software development companies follow the customer development methodology. It means that any software should be developed with a customer in mind. This article will explain why you need to adopt the customer development methodology and how and when to apply it so that it really works.

What is Customer Development?

Customer development (custdev) is the methodology that software developers use to make, test, and validate diverse business assumptions about their products based on the data from their clients in order to popularize it on the digital market.

For example, software developers can test the following assumptions: if software solves certain problems of its target audience, whether the potential audience is wide, whether or not to develop an MVP or release a final product, and many others.

Custdev was created by Steve Blank in the ‘90s and was initially introduced for startups. At that time, Steve realized that the creation of a software product didn’t automatically guarantee its popularity among potential users. Therefore, he found the principles that helped startup companies create demand for their products.

In modern software development, customer development methodology has already become an integral part of the software building process. It goes beyond just a client base and represents one of the three pillars for a lean startup along with business model design and agile engineering.

Customer Development Process

Custdev has a strong theoretical basis and it also includes a practical approach with a set of effective customer development tools. The methodology consists of a 4-step framework. Let’s have a closer look at how it works.

#1 Client Discovery

Customer discovery is about turning your ideas and vision into a series of business hypotheses related to the target audience.

At this stage, you need to understand how well you understand your potential client needs and how effectively your solution can satisfy them. For this, you could answer the following questions:

• What are your buyer’s greatest needs or pain points?
• Are they ready to pay to solve them and how much?
• Can your product satisfy those needs?
• Do your potential clients believe that your product can help them with their needs?

The customer discovery stage requires much attention. Therefore, instead of actively promoting and selling your product, communicate with your potential customers first, and ask for their needs. It can be done in a form of questionnaires, researches, notes, and other ways of getting data.

#2 Customer Validation

Customer validation involves testing and verifying the proposed hypotheses. The resulting data is used to create a viable and scalable business model that will spur the growth of your business. At this step, stakeholders can make several iterations to get more data to verify their business model.

Customer validation includes the following processes:

• Development of a minimum viable product (MVP) – a limited version of a product that has only the essential features to satisfy the main client requirements. Software developers create MVP for gathering quick feedback from potential clients.
• Elaboration of sales roadmap and marketing strategy to reach your early users as fast as possible.
• Presentation on the market and product positioning. The market presentation helps to understand how many users are actually ready to buy the product. The product positioning allows defining and describing your brand and presenting it to the clients.
• Verification of a business model and a product. At this point, your business has to show some stable revenue results and growth.

#3 Customer Creation

Customer creation means growing a client base by increasing the demand for the product in the market. This stage represents an active process of scaling and turning a startup into a full-fledged company.

At this stage stakeholders need to:

1. Elaborate on the objectives that should be fulfilled during the first year.
2. Create a strong company and brand positioning.
3. Launch the product on the market.
4. Generate demand for it.

#4 Company building

Company building is the final stage when you turn your startup into an autonomous organization. At this point, the business has to pay more attention to the inner organization and concentrate on its buyers. This involves:

• Expanding the client base
• Development of the company’s culture
• Creation of formal departments and organizing management infrastructure bringing it closer to Agile methodology.

The company building stage means that your company has already developed its mission, has a stable position on the market and a pool of its clients.

When to Start Customer Development

Custdev is a flexible process that doesn’t have any specific time sets. However, the earlier you implement custdev in your software development project, the better. Its early adoption allows saving significant sums in the perspective and developing a product that will be really useful and popular among its users.

Many software development companies agree that the custdev approach works best at Idea Screening and Feature Specification steps when starting a new software development project.

At the Product Screening stage, custdev helps to analyze how valuable your idea is, what its market opportunity is, and its competitive strategy. While at the Feature Specification stage it allows clarifying the development costs, software features, and price.

Customer development can be also used at some other stages of product development. For example, if you already have your software released, the custdev approach could help you evaluate the software’s prospects and improve sales. Also, it can be useful if you want to improve your market position by validating your marketing and sales roadmaps.

Why Customer Development Is Important

Here are a number of reasons why you need to use custom software development services:

• Better matching your product to its users. Custdev helps you to hear your clients and better understand their needs. Therefore, you can adapt your product to satisfy these needs and improve customer loyalty to the brand.
• Building a well-thought-out concept. Custdev provides its users with effective tools to gain insights about your brand from your loyal and potential buyers. You can apply the gathered data for your further brand development and improved problem-solving.
• Risk minimization. Custdev methods allow making your product development more predictable. It helps to better estimate the potential costs, allocate the resources, find the market niche, build an effective monetization model, predict the risks, and see the perspectives for your product.

Conclusion

In the beginning, the customer development methodology aimed at helping startups to better adjust their products to their customers and grow into independent businesses. Over time this method spread among other software development companies.

Now, a wide range of software development companies successfully applies the custdev methodology in their development processes. With customer development, these companies can build a stable brand and better match their products to the needs of the target audiences.