Customer Discovery: 5 Key Lessons from Product Leaders

A product manager’s goal is to build a product that customers want. The old approach to discovering what customers want was to come up with an idea, write a business plan, build the product, launch it, and then see what happens. All too often, however, the product manager would discover—after months and hundreds of thousands of dollars—that customers didn’t have a need for the product.

Modern product managers have flipped this approach on its head. Rather than wait months to see if customers want the product, they begin customer discovery work from the beginning of the product life cycle. They then run experiments and iterate throughout the product life cycle.

customer discovery process

Marty Cagan described the shift from business plans to experimentation quite succinctly:

We realized of course, that almost all of those assumptions, or many of those assumptions turn out not to be true. So, the business plans today, most people I think rightly scoff at a typical old school business plan, just because they know it’s going to prove to be ridiculously misleading. Today we really highlight ‘what are those assumptions and what are the risks?’ and we tackle them.”

Customer discovery enables product managers to validate user needs and identify their first customers. It was first chronicled by Steve Blank in his book, The Four Steps to the Epiphany. Customer discovery entails testing your assumptions about who your customer is and the problem that you’re solving for them – primarily through surveys, interviews, and experimentation.

Customer Discovery Tips from Product Leaders

This is Product Management guests have shared their favorite customer discovery strategies and techniques. This article covers lessons from Bob Dorf, Teresa Torres, Noopur Bakshi, Dan Martel, and Melissa Perri.

1. Be willing to learn and iterate

The underlying assumption behind the value of customer discovery is that we don’t know everything about our users. It’s challenging for product managers to admit that they don’t have all the answers, and that not all of their ideas are good. In some companies, there’s actually a reputational risk associated with trying a new idea and having it not go as planned. Bob Dorf describes this phenomenon in Episode 64 of This is Product Management:

Typically in big corporations, you bury the mistakes – you run from them – and you try very hard not to make them because big companies are all about execution. Lean, in the startup world, where the risk tolerance is infinitely higher, is all about getting it right and taking the risks and saying ‘oh that’ll never work, let’s try this’ and doing that over and over again until you get the right mix of value proposition, customer targeting, marketing, distribution to create a business that starts to thrive and grow.”

Bob adds that it’s important for product teams to adopt this startup oriented culture and mindset of testing ideas, if they want to succeed:

If a corporation is going to strive for organic growth, through new divisions, new geographies, new customers, new products, it has the be comfortable enough and courageous enough to adopt the trial and error method and to operate in that search mode, which most big companies don’t like. They much prefer execution – where they can measure performance against revenue numbers, customer targets, attrition targets, marketing achievements, things like that, where you can put it all on a spreadsheet.”

Customer discovery requires product managers to be open to learning and be willing to iterate based on user feedback.

2. Overcome customer biases

In Episode 156, Teresa Torres discusses the importance of overcoming your natural tendency to believe your ideas are great and for your customers to be biased about their propensity to use your product.

It’s not about ‘have the idea,’ it’s about ‘ok, we have an idea. Are we verifying that it meets a customer need? Are we verifying it drives an outcome? Are we verifying that it’s ethical, desirable, viable, feasible?’”

It’s challenging to get accurate feedback from customers because of personal biases. It’s often hard for people to predict how they will act in the future. Often times, we trick ourselves into thinking that we will make better or healthier decisions than we actually do. For example, many people sign up for gym memberships in January, but stop going after a month.

Teresa emphasizes the need to focus on learning what people actually do, not just what they speculate that they will do. To overcome this bias, Teresa recommends throwing away the discussion guide and asking customers to tell a story about a recent experience. When customers speak about a recent experience, they are limited to telling you about the facts rather than predictions or formulation of their ideal self.

3. Ask open-ended customer discovery questions

Noopur Bakshi, Senior Product Manager at Adobe, shares a technique for overcoming the biases that Teresa describes and gaining more accurate and actionable customer feedback. She says that it’s crucial for product managers to remain unbiased and exploratory:

The one thing people misunderstand about user interviews is that they go in wanting to validate a hypothesis. They unconsciously ask questions specifically to validate their hypothesis. In my mind, we really need to be questioning without a bias. You shouldn’t go in asking questions just to validate the hypothesis.”

Noopur recommends interviewing customers while they’re usual environment and asking task-oriented questions. She asks customers to open a new browser window, look for a pricing plan that works for them, and think aloud as they do so.

customer discovery questions

Similarly, Samuel Clemens emphasized the importance of visiting customers in their environment:

When it comes to really building an insightful product, it’s all the context that matters. That’s why it’s absolutely critical. You can’t just do surveys. You can’t just do phone calls. You have to actually go visit the customer on premise. One of the processes I have for my teams is that mandatory, once a month, every one of my PMs gets out of the building, off the property, and visits customers on premise.”

4. Conduct customer discovery with multiple segments

In Episode 114, Dan Martel, serial entrepreneur and angel investor, shares his how he conducted customer discovery for his company, Clarity. Dan asked himself “How can I add more value than anybody else for this customer base?” After several customer interviews and experiments, he developed a marketplace for people to get and receive advice. However, his initial customer segment changed based on the what he learned in this process.

customer discovery segments

By listening carefully to his customer types, Dan learned that the highest-profile experts weren’t the best supply side users for his marketplace because their rates were too high for most of his demand side users. As a result of this learning, he shifted his focus to different segments. Dan stresses the importance of falling in love with the problem and the customer discovery process, not the solution.

5. Continuously discover and iterate

The most effect product managers don’t stop customer discovery after they validate a solution. Melissa Perri urges listeners to avoid simply adding more features without testing whether customers actually want them. She refers to this common tendency as “The Build Trap.” Here’s how she describes it on the episode:

We tend to get married to our ideas and we start building a lot of these features, and we keep building and building and building and we’re releasing features constantly. But we rarely stop and take time to measure if they’re working or not, or say, ‘Hey is this really a good idea? Should we really be building this?’ Because I think we [get] this mentality that as long as we’re releasing features or new things, we’re working, we’re growing, when in reality that may not be the case. Customers might not want those things.”

Melissa recommends listeners continue to get feedback from customers, run experiments, measure the results, and iterate accordingly. She says that it can be challenging for teams to shift towards this way of working, but shares a relatable story about how starting small helped her make it happen. When Melissa’s former CEO had an idea for a new feature, she suggested that they test it before spending excessive amounts of time and money on it.

I had the developers estimate it too and they said it was going to be like four months to build it and I had a team of six people. I said ‘Instead of that, why don’t you give me two weeks to see if this is a good thing to build, right? We’ll do some tests, they’ll be contained, we’ll measure to see if we get an increase in sales on them and we’ll just test it.’”

Melissa and her team ran the experiments and found that the feature idea didn’t deliver results and therefore wasn’t worth building out in full. However, she estimated that running these tests, as opposed to simply building out the feature, saved the company about $100,000. Melissa reported this to the CEO, who was of course thrilled with the savings. After conducting customer discovery for this small initial project achieved meaningful results, the team was more motivated to conduct customer discovery on an ongoing basis.

Lessons on customer discovery

Customer discovery enables product managers to identify target customer segments, learn what problems they have, and develop the best possible products for them. This is Product Management guests have discussed the importance of being willing to learn and iterate, avoiding user biases, testing with multiple segments, continuing to conduct customer discovery throughout the product life cycle.

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