Customer Validation in Business Planning

40 Questions

What are the assumptions that need to be validated in the company building process?

All of the above

You should ask questions to your professors or parents during the customer discovery process.

False

What is the purpose of Customer Discovery?

To validate assumptions and get feedback from potential customers

It is cheaper to revise your idea during the _____________ process.

beginning

What is the purpose of Customer Validation?

To obtain hard evidence regarding the possible success of your business model

You should move on with your original idea without incorporating customer feedback.

False

Match the following steps with their descriptions:

Step One = Define the problem and propose a solution Step Three = Ask potential customers questions Step Four = Evaluate and refine the idea

What is the outcome of performing the customer discovery process correctly?

You'll discover some things that you had not originally considered

Who are the two serial entrepreneurs known for their contribution to the 'Lean Startup' methodology?

Steve Blank and Eric Ries

Customer discovery involves a process that exactly follows the traditional scientific method.

False

What is the primary goal of customer discovery?

To question your core business assumptions

The Lean Startup is all about utilizing ______________ very early on in the business development process.

customers

Match the steps of customer discovery with their descriptions:

Step One = Define a hypothesis that defines both the problem and the solution Step Two = Define your assumptions about your idea Step Three = Not mentioned in the content Step Four = Not mentioned in the content

What is the role of the founder in customer discovery?

A scientist or detective

Customer discovery is a customer-centric process.

True

What is the outcome of performing customer discovery correctly?

Evidence behind an assumed product-market fit

What is the primary goal of company building?

To transition from a start-up to a fully-fledged business

True or False: The company and product launch will occur multiple times.

False

What is the purpose of defining year one objectives in the customer creation phase?

To define specific and reasonable goals for the company to accomplish in the first year

To create a demand creation strategy, you need an understanding of ___________ and how they purchase products.

customers

Match the following steps with their descriptions:

Year One Objectives = Defining specific and reasonable goals for the company to accomplish in the first year Company and Product Positioning = Positioning the product and company within the market Company and Product Launch = Launching the product and company Demand Creation = Creating a demand for the product

What is necessary to create a demand creation strategy?

Both a and b

True or False: Company building is focused on learning and discovery.

False

What is the purpose of positioning the company and product within the market?

To define how the product and company will be perceived in the market

Why is customer validation important according to Steve Blank?

Because it helps you avoid building a product that no one wants

Iteration is not important in the customer validation step.

False

What is the main goal of the customer creation step?

To provide an experience that drives market demand straight into the sales channel of the company.

Hearing customers say that they would buy your product is nice but it is ultimately ______________ until they actually put their money where their mouth is.

meaningless

What happens when a business moves on to the customer creation step?

It finds its initial customers and makes its initial sales

Customer validation is only necessary for startups.

False

Match the following steps with their corresponding goals:

Customer Validation = To validate assumptions and avoid building a product that no one wants Customer Creation = To provide an experience that drives market demand straight into the sales channel of the company

What is the importance of early evangelists and adopters in the customer creation step?

They validate your value propositions and demonstrate that you have a real customer base.

What type of customers are mainstream customers?

Pragmatists

Mainstream customers want revolutionary solutions.

False

What is the purpose of Phase 2 of company building?

To review the current management, including the CEO and executive staff

In Phase 3 of company building, you begin to set up your departments according to your _______ and strategy.

mission statement

What is the goal of Phase 4 of company building?

To ensure that everything built is agile, scaled, and capable of being a “fast-response” department

Mainstream customers want minor flaws in the products they use.

False

Match the following phases of company building with their descriptions:

1: Reach out to your mainstream customers = Phase 1 2: Review your current management = Phase 2 3: Begin your transition to functioning Departments = Phase 3 4: Maintain Your Moment with Agile Departments = Phase 4

What type of solutions do mainstream customers look for?

Evolutionary solutions

Study Notes

Customer Development Process

Customer development process is a customer-centric, scientific process that puts evidence behind an assumed product-market fit.
It involves questioning core business assumptions and getting out of the building to talk to real customers.
The process helps avoid building a product that no one wants and allows for iteration and refinement.

Customer Discovery

Customer discovery is all about staying lean and questioning business assumptions.
The process involves observing and defining a phenomenon (problem or market need), developing a hypothesis, and conducting an experiment to test the hypothesis.
The goal is to find evidence that proves or disproves the hypothesis.

Steps of Customer Discovery

Step One: Define a Hypothesis
- Define the problem and solution being proposed
- Fill in the sentence: "My idea solves [insert problem] by [insert solution]"
Step Two: Define Your Assumptions
- Make assumptions about the idea and identify what needs to be validated
Step Three: Ask (Good) Questions
- Get out of the building and ask questions to potential customers
- Target people who could be potential customers
Step Four: Evaluate and Refine
- Evaluate customer responses and refine the hypothesis
- Revise the idea based on customer feedback