Provide Customer Value Repeatedly with Well-Designed Startup Operations

Over the past three blog posts, I have been exploring the application of the business model canvas to new venture realization. The focus is on startup iterations that facilitate the formulation of early assumptions about how your enterprise will provide value to the customer.

To date, we have reviewed four BMC elements, Customer Segments, Value Proposition, Customer Relations, and Channels. In aggregate, these business model elements help founders to make initial assumptions about target customers, their needs and pain points, and what a solution must do to provide value. Under the banner of customer engagement, the customer relations and channels elements help founders to hone in on vital touch points that facilitate customer acquisition and retention.

In general, the right side of the business model canvas focuses on essential elements to create a good fit between the customer’s problem and practical solutions. These elements highlight what strategies and actions are required to achieve problem-solution fit.

On the left side of the business model canvas, you have three elements that address what Key Activities, Key Resources, and Key Partnerships are essential to delivering your solution to the customer. This section of the business model canvas refers to the infrastructure of your enterprise.

Key Activities & Resources

To effectively execute your business model, specific Key Activities will be required. While many operational actions occur in any enterprise, I suggest you list activities associated with the fundamental requirements for offering your value proposition to the target customer. Usually related to your organization’s core competencies, these activities must operate at a very high quality and performance for your business model to be repeatable and scalable. These activities can be associated with a range of operations, including product development, manufacturing, supply chain management, and industrial design.

As a startup, you must identify the essential activities to create a repeatable transaction between you and the customer. To grow, you must first identify the operations necessary to execute each customer transaction in a standard, high-quality manner. There are several ways to predict the nature of these activities. One simple question to answer: What activities will you and your team spend the most time on regularly. For example, if you develop a new product in-house that will require frequent iterations, you will need to focus on development activities. Another approach to determining what activities are necessary to be successful is t investigate competitors’ core competencies or strengths. For example, if you learn that your competitors focus heavily on logistics and distribution, then need to consider how that influences your business model? Is it essential that you also develop a core competency in this area? On the other hand, your offer may differ, so logistics does not need to be an essential activity. In any case, it helps you understand your competitor’s strengths to assess better how you will develop the appropriate operational competencies that align with your business model.

Key Resources are the assets needed to deliver the solution to your customers. I suggest aligning these resources with the required core competency areas listed in the Key Activities element. Listed assets can be physical, financial, intellectual, or human. For example, if you are a technology-focused startup, your critical assets may include human resources with specific technical skills, such as scientists, engineering, or software developers. Assets associated with the intellectual property may be listed, such as patents or trademarks. If you plan to distribute multiple products globally, your key resources may include regional distribution centers. While there are many resources needed to execute your business model, focus on those assets that align with key activities and are essential to providing the solution outcomes required by your customers.

Key Partnerships

Some experts define a startup as an organization that has minimal resources to solve significant customer problems. However, as founders consider what it is going to take to solve the customer’s problem and provide the desired value, they quickly realize several critical activities, and associated resources are required to meet these goals.

Most startups do not have the requisite experience and expertise to execute many of these crucial activities. For example, I usually consider three operational areas that startups must have expertise in – product development, marketing, and finance. It is rare for all three competency areas to be present in a startup team. How many founders have said that they cannot move forward without a technology co-founder? The point is that there are many key activities and resources needed to create a repeatable and sustainable business model. And startups rarely have everything it takes. 

Key Partnerships are those strategic relationships necessary to execute your business model. These types of non-customer relationships are critical for startups, as they can help lower operational costs, expand distribution channels, or help achieve competitive advantage. These strategic partnerships can be with manufacturers, suppliers, distributors, trade associations, regulatory agencies, competitors, and technology providers.

I advise founders to evaluate the gaps between competencies and resources to execute their business model. Then they can identify which partnerships are needed. Potential partnerships include domain experts, individuals, and organizations that provide specific key activity support, channel partners, and investors.

Domain Experts. You should identify who the “experts” are in your industry or science and technology area. This knowledge is vital if your product is differentiating itself based on emerging technologies or evidence-based science. Many entrepreneurs create products that provide a specific benefit to consumers. It is crucial to validate the efficacy of your product by working with domain experts in the particular field in question.

Key Activity Support. It is vital to discover other organizations and service providers that may fill in a gap in your core competencies and play an integral role in your success. List important ecosystem players that you will need to partner with and leverage to be successful. Examples include suppliers, manufacturers, distributors, support services, government agencies, universities, and industry networks.

Channel Partners. These partnerships are typically focused on helping you with customer acquisition and can be a significant part of your go-to-market strategy. There are many types of channel partners, from resellers to affiliates. The right channel partner arrangement enables you to reach more customers, expand geographical markets, and strengthen your brand. Of course, these arrangements take management, and there are risks. But channels partnerships can be an integral part of early traction and longer-term growth.

Funders. Finally, it is never too early to consider what capital you need to execute your business model. Your needs will change as your venture develops and grows. For this early BMC iteration, think about funding requirements for launching your venture and what capital needs are necessary for the first three years. Who do you need to engage for both immediate and longer-term needs? It can be beneficial to engage potential investors early if for no other reason than to be on their radar when you are ready for outside investors.

Profit Model Elements

The last two elements of the business model are what is sometimes called the profit model.
Cost Structure refers to the main costs incurred while running your business. At this point, you should be identifying the high percentage costs, those related to the core activities and resource requirements. These expenditures can include fixed asset and variable expenses and any high overhead costs that you anticipate to support the business model. Your cost structure must meet the operational requirements to execute your business model but be consistent with the projected revenues to emanate from your customer segments. Of course, if the costs are more than the revenues, you will need to revisit various business model elements.

By delivering your product and service offering to your target customer, you start to generate Revenue Streams. In this element, you can outline each possible way that your various offerings generate income. For example, you can list how customers prefer to pay for your services, cash or credit, one payment or several payments, and the like. In this element, you can also note the length of the sales cycle and the time it takes the customer to complete the purchase from the initial point when they are aware that the product is available.

Next Up

Once you have completed your first iteration of your business model, it is an excellent time to dive deeper into your assumptions about the various elements of your business. I will discuss the different approaches to validate assumptions about how your venture will provide value to the customer in future posts.

For more on this subject and other entrepreneurship topics, get a copy of Patterns of Entrepreneurship Management, 6th Edition.

Consider Early Customer Engagement Strategies in Business Model Canvas

In the last post, we spent time looking at the first two BMC elements – Customer Segments and Value Proposition – as your starting point. Identifying your customer’s needs, pain points, and desired outcomes are essential first steps to developing a successful venture. The alignment of these two elements establishes the focal point of the transaction between you and your customer. Once you identify these assumptions, you can look at all the actions necessary to make the transaction repeatable and scalable.

As you begin to understand better the alignment between your product or service ordering and target customers who may want your solution, you can start to outline two other customer-related elements, Customer Relations and Channels. I see these two elements as your venture’s areas of customer engagement; how and where will you connect with your customers to establish a long-term brand relationship?

Customer Relationships

The Customer Relationships section describes how you plan to interact and engage your customers throughout the product lifecycle. I find it helpful to consider what kind of relationship you want to have with your customers from the moment they become aware that your solution exists to becoming future brand advocates.

Many startups place all their emphasis on acquiring new customers. Of course, new customers are critical for early venture traction and continued growth. However, as any experienced entrepreneur realizes, you must plan for all the ways to engage your customer so they remain enthusiastic about your products and brand.

This planning effort is an excellent time to consider how you would like the customer to experience your brand throughout the whole customer journey. I find the sales funnel concept to be helpful for outline strategies for customer engagement. One model identifies this as the Get-Keep-Grow funnel. The “Get” strategies focus on customer acquisition, starting with creating initial awareness that your solution exists, supporting customer investigation about your solution, and motivating the customer to make their first purchase.

These early “Get” strategies set the tone of relationships with your customers. As the customer initially becomes aware that you can solve their problem, they officially enter the sales funnel. Customers can quickly get a sense of your genuine interest in solving their problems versus just looking at them as a revenue-generating transaction. During these early stages, the customer assesses what kind of guide you will be throughout their journey. They will be deciding if you have the expertise necessary to solve their problem. Are you communicating a deep understanding of the problem to be solved? Are you providing clear steps on how your product will solve their problem or fulfill their needs?

Once they determine your level of understanding and expertise, they will also decide whether you are trustworthy, a credible guide. Customers look for consistent messaging, appropriate response times, and overall transparency about their possible experience with your solution.

Just as a human resource professional evaluates a candidate’s fit for a position throughout the application process, so does the customer assess whether your company and its offering are right for them throughout the sales funnel.
As part of your customer relationship strategies, you should consider whether you plan to a “high touch” versus a “low touch” offering or some combination of the two approaches. There are advantages and disadvantages of both methods, so it is essential to consider the choice carefully. High-touch offerings are customized solutions for the needs of a specific customer. Your touchpoints “hold the customer’s hand” with a concierge-style service approach for this kind of offering.The low touch approach can be more appropriate for a “one size fits all” solution. The solution is standardized, and all customers experience it in the same way.

To start, consider how often you will need to engage the customer throughout the sales funnel? This decision is typically associated with the complexity and pricing of the solution. In addition, the more effort and time it takes the customer to purchase and use your offering, the more the touch points increase. So touchpoint frequency and duration of sales funnel journey are positively correlated.

Secondly, the nature of the problem and associated solution may dictate the level of engagement required to support the customer. For example, if the solution to a specific problem requires frequent, in-depth human interaction with the customer, nature will require the high-touch approach. On the other hand, a low-touch strategy may be the optimal approach to solve the problem through standardized information and “prompts” delivered through automation.

While you consider these issues for your business model, there are tradeoffs when deciding low versus high touch. Low-touch approaches lend themselves to automated interactions, thus making it easier to scale for future growth. High-touch transactions can support differentiation in your offering, but the operating costs are higher and harder to scale. In some situations, you may take a hybrid approach where some interactions are low-touch, but you offer premium services with more intensive touch points. Also, many startups by design apply a more high-touch approach during the early iterations of their product to learn how to provide value to the customer best.
In the end, you may want to look at this BMC element as answering the question – How will you keep the customer happy? Questions that you can be asking now are how your venture will address customer questions pre and post-purchase? How will problems or repairs be handled? How will you let customers know about new products or updates to existing products? This element articulates the strategies you will put in place to create a positive, long-term relationship with your customer.


An essential part of customer engagement is deciding which Channels you plan to use to deliver your solution to the customer. Channels refer to how you deliver your product and communicate with your customer throughout the product lifecycle. These touch points may range from the point of purchase, provision of customer support, and collection of customer feedback.

In today’s business environment, you will probably engage your customers through several channels, sometimes referred to as the omni-channel approach. Today’s customers are used to having access to products and services when and where they want them. This business environment has led to multi-channel access, with physical and online access converging at differentpoints of the customers’ life cycle. One typical example of multi-channel access is ordering a product online and picking it up at a local store. In this case, the business is reaching the customer early in the process online and then providing an option to visit the local store.

Your channel selection should correspond directly with the customer relations strategy and align with the envisioned touch points identified in the customer relationships section. You start with how you expect your customer to learn about your solution in the first place. During early iterations of the BMC, you need to make assumptions about where your customer goes to learn about possible solutions? What sources do they go to for information? Who do they speak with about the problem and possible solutions? In general, how they conduct their research will provide insights into the optimal channels to build initial awareness and interest. By understanding this aspect of customer purchasing behavior, you can decide on the right mix of virtual and physical channels to move them down the sales funnel.

As you consider the purchase stage of the sales funnels, you decide as to the best way to deliver your solution. For example, are you planning on selling and delivering the product directly to the customer (DTC)? Are you planning on distributing through a dedicated third-party marketplace such as Amazon? Does your solution lend itself to e-commerce delivery options, or do you need a physical location? Or a combination of physical and virtual channels?
As with all BMC elements, you will be making many assumptions about the optimal way to engage and deliver your solution to your customers. At this point, you must align the customer relationship and channel strategies. 

Next Up

In our next post, I will review the remaining business model canvas elements focusing on your venture’s operational needs and profit model.

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Business Model Canvas: Where to Start?

In the last post, I made the case that a startup has many good reasons to develop a formal business model early in the process. The reasons are plentiful, but a core reason is that it provides a way for the founder to investigate and, hopefully, validate the assumptions on how the enterprise repeatedly offers optimal value to the customer, a foundation for growth.

While any formal business model process will benefit founders, I advocate for applying Osterwalder’s Business Model Canvas as a templated steeped in lean startup philosophy and practice. This post will review the first two of the nine elements core to the Business Model Canvas. There are several templates on the internet that you can download to help you think about each element of your business. I am using the Osterwalder blank template with my content prompts added as a resource for you to review throughout this and future posts.

Where to start?

While there are several opinions on where to start, I suggest founders focus on Customer Segments and Value Proposition in the early brainstorming activity. These two elements are essential for illustrating the alignment between your customer’s needs and your product offering, often called the problem-solution fit or product-market fit.

As mentioned in my last post, many founders focus on an initial product solution that they assume is missing from the marketplace. While the original BMC is structured to support an early conception of the solution, I always advise entrepreneurs to take a step back and look at the customer need areas. The best practice is to start with a clear articulation of the customer needs, the problem, and the associated context.

Customer Segments. So let’s turn our attention first to the Customer Segments element in the BMC template. This BMC element focuses on the specific problem you hope to solve and who experiences this problem the most. I suggest that you highlight the following sub-elements in this template area. First, what problem is the customer trying to solve or underlying task they need to accomplish. You can think of this as the customer objective.

The Customer’s Objective. An excellent way to better understand what problems the customer is experiencing is to start with what they are trying to accomplish in the first place. We usually run into a problem or challenge while we are attempting to achieve a specific task. It could be a simple task like changing a lightbulb or something more complex like navigating a foreign city for the first time. Tasks can range from functional to social, from satisfying an essential need to something more aspirational. Whatever the job, and no matter the degree of challenge, there is usually some aspect to improve, making it easier or less costly in terms of money or time. So your first step is to consider the details of the customer’s task and the challenges experienced from start to finish.

Your customer segment description provides details about the problem to be solved or the job to be done. Additionally, you list the challenges or frustrations that the customer is experiencing while attempting to solve the problem or complete a task. These are the “pain points” that you hope to reduce or eliminate as part of your solution.

These challenges can be emotional, creating undue stress or annoyances. Pain points can occur because of unnecessary dollar expenses, wasted time, or excessive effort. Once you identify the problems, it is vital to see a way to quantify the challenge using some metric. For example, if the customer feels that a task takes too much time to complete, find out how much time it takes. Later on, this information will serve as the baseline by which you will measure the improvement generated by your venture’s solution.

Once you have identified the customer’s objective – problem to be solved or job to be done – you need to answer who primarily experiences the problem the most? During the first iteration of your business model, the team should brainstorm all the potential groups of customers that share the problem. While identifying these possible customers, think about how you might group them based on the context they are experiencing the problem. For example, it might be by the job or tasks or where the problem is encountered. Consider contextual or situational factors when segmenting your customers. Here is an excellent time to consider your customer’s profile and how various groupings may differ in needs, demographics, behavioral characteristics, and purchasing decisions. 

At this point, there are a couple of things to keep in mind as you identify potential customer segments. First, I always advocate that startups consider a primary customer segment to focus on early in the process. Sometimes referred to as your “beachhead customer,” you will want to stay focused on a primary target as you engage early customers and test many of your BMC assumptions. Then, in later BMC iterations, you will refine the customer segments to reflect your primary target markets.

Secondly, you want to decide if your business model will include customers from two or more market sides. Sometimes referred to as two-sided or multi-sided markets, these business models require engagement with multiple types of customers. A typical scenario has your venture matching two customers, one who needs a solution (demand-side) with another who supplies an applicable product or service (supply-side). You should add both of these customers to your BMC. You will quickly discover that each side has its objectives, needs, and pain points. Your future offering will have to address the needs of both sides. As you will see shortly, the value proposition will inevitably be different for each side of the market, so you will need to identify and align both within these first two BMC elements.

Value Proposition. Once you have addressed your preliminary assumptions about the customer’s objective, context, and priority segment, you can turn your attention to the Value Proposition element of the BMC. The focus of this BMC element is to answer the following question: What value is your customer looking for from an effective solution?

As mentioned, the typical BMC application assumes you have an initial solution in mind. However, I advocate that founders focus on customer outcomes, including specific solution benefits and pain point relievers. As you will see, I leave an option at the end of the element box to add your initial solution concept.

As you consider the customer’s problem or the “job or task” they are doing, ask yourself, what outcomes are they hoping to achieve? For this BMC element, you should consider what outcomes your customers are looking for in an effective solution? At this point, you should be thinking about solutions in an open-minded manner. Whether it is your initial solution concept or some other option, it only matters to achieve the desired outcomes.

In an earlier post, I made the case that there are two levels of outcomes, one that addresses the customers’ deeper needs and the other based on what functional and emotional benefits come from an effective solution. Thus, an excellent working definition of value proposition is the degree that a solution achieves a customer’s deeper needs plus expected functional and emotional outcomes. To support the articulation of the value proposition, I suggest you expand on the differences between Functional and Emotional Outcomes.

For functional outcomes, you ask, what does the customer want to do differently if they could? For example, the customer tries to solve a problem or perform a task and wants improvement. How would the solution have to function to improve the customer’s situation? Make sure you express your functional outcomes in terms such as better performance, cost efficiencies, increased accessibility, or customization. Always keep in mind that these outcomes should be measurable.

For emotional outcomes, you are answering the question, how would the customer like to feel if they could do things differently? Similar to functional outcomes, you can measure emotions such as satisfaction, happiness, and joy through various methods.

As you consider all the potential outcomes and benefits the customer wants, you ascertain what the customer might expect from an improved solution. In other words, what benefits are expected from a better solution than what currently exists? This knowledge will be critical in future solution design efforts.

Another crucial area to address in the BMC value proposition element is how are the customer’s “pain points” relieved by an effective solution? Here you outline what obstacles or challenges the customer would like to see reduced or eliminated by your product offering? Again, this response should align with the actual “pain points” outlined under the customer segment section of your business model.

Finally, I suggest that you finish your value proposition with a brief description of your initial solution concept for the customer. For example, what is the collection of products and services you plan to offer to your customers? If you are submitting an early solution concept, be sure to outline your assumptions about how your offer is unique in the marketplace and provides outcomes and benefits they cannot derive elsewhere.

In the Value Proposition section, your goal is to clearly articulate the outcomes and benefits you expect the customer to derive from a compelling offering. You also want to clarify how the value offered aligns directly with the customer needs and pain points in the customer segment element.

Problem-Solution Fit

The alignment between the customer segment information and value proposition elements is typically considered the degree that the product offering meets the market’s needs, labeled as product-market fit. During the earliest stages of venture realization, I tend to articulate it as a problem-solution fit. While this might seem like semantics, I purposely say it this way because I want founders to keep their options open on how to solve the customer’s problems best and meet their needs. During the early business model formation, the focus should be on assumptions about the customer’s needs and what value they expect from an effective solution. Once you validate these early assumptions, you shift your focus to the whole business model and how all the components work together to provide value to the market, product-market fit.

Next Up

In my next post, I will continue to look at the BMC and provide definitions and thoughts about the two customer engagement elements.

For more on this subject and other entrepreneurship topics, get a copy of Patterns of Entrepreneurship Management, 6th Edition.

Is the Business Model Canvas still relevant for Start Ups?

At Columbia Business School, many of us have adopted Alexander Osterwalder and Yves Pigneur’s Business Model Canvas (BMC) as a template to guide students through the business model development process. Over the past few years, as we teach and discuss how best to apply the BMC to numerous new venture ideas, we have developed tools and approaches to support the testing and refinement of your business model. However, the application of the BMC in the startup environment is not without its detractors. Colleague criticisms range from the vagueness of the terminology to the absence of specific elements that they deem essential. I will explore these issues in this and future posts. 

Business Model Applications

To get started, let’s discuss the reasons for developing a business model for your new venture. Business models have been part of management best practices for many years, helping business leaders articulate how they provide value to the customer over a sustained period. Business models help define all the business activities and operations required to deliver products and services to customers. Modeling your business helps to ensure that all the elements of your business work together for the customer’s benefit. 
In large part due to the lean startup movement, the application of business models has become standard practice in the new venture realization process. I think there are several reasons for this increased application:

  1. One of the central tenets of lean startup methodology is that a new venture can be considered a temporary enterprise organized to search for a repeatable and scalable business model through continuous experimentation.
  2. Business models provide a structured framework for founders to design their new venture as an interrelated set of hypothesized business activities.
  3. You can view it as a continuous process by making assumptions about specific business activities and interrelationships with other elements in your model for future testing.
  4. Business model frameworks like the BMC provide a visual dashboard to articulate how the business works to all stakeholders.
  5. By embedding scientific methodology and hypothesis testing to the business model assumptions, founders create a team culture of experimentation, a critical element of sustained innovation.
  6. One identifies essential metrics to monitor as the venture develops by encouraging the quantification of various business model elements.
  7. Generating innovation across all business model elements creates opportunities for competitive advantage in the marketplace.

Business modeling helps the entrepreneur identify all the business elements required to bring value to the customer. Using a structured business model forces founders to take every aspect of the business into account. What quickly becomes apparent is that there are many ways for your venture to stand out in the marketplace beyond just unique product features. By looking at what is currently in the market through the lens of a structured business model, you can discover many ways to differentiate yourself from existing solutions. In addition, it opens up possibilities for innovation beyond the product, including unique marketing channels, customer engagement programs, revenue models, and strategic partnerships. As a result, I have seen plenty of ventures build sustained competitive advantage through business model innovations.  

Founders’ Tunnel Vision

Unfortunately, I see many aspiring entrepreneurs focusing on one or two aspects of the business, such as product development and marketing, with little thought into customer engagement, supply chain management, or strategic partnerships.

Many founders focus on one part of the business, usually the product offering itself. You can have the most unique and high-quality product in the market, but you don’t have a business if the customer does not see the value. Therefore, it is essential to focus on aligning your product offering and customer needs and value expectations early in the process. I will highlight this in later posts as a critical first step in the modeling process. Even with solid alignment between your product and the customer, your business will not succeed if you don’t have a strategy for distributing your product to the market or serving the customer with quality. Using a structured business model helps the entrepreneur to think holistically about the new enterprise.

One thing to consider as you decide on the relevance of BMC for your venture development is when to start fleshing out the model elements. Some argue, especially in the design thinking community, that creating an entire business model makes little sense until you have the customer problem and its context clearly defined. 

Is applying the BMC premature before problem identification? From my experience, there is always a tension between problem focus versus solution-driven approaches. How do you suspend judgment in early BMC iterations? It is helpful to look at the value proposition more generically, as the value from a practical solution and not a specific product idea. I give founders the option to add their initial solution concept at the end of the value proposition section. 

Next Up

From the perspective of lean startup practices, most experts agree that the main focus for the entrepreneur is to validate assumptions made throughout the business model, learning what optimal combination of elements is required to build a repeatable and sustainable business. In the next post, I will discuss each BMC element specifically and its relation to the others. Next, I will look at the definitions and add clarity for founders who want to apply the BMC to their venture realization process. Finally, I will introduce specific tools that founders can use as they develop their business models. 

For more on this subject and other entrepreneurship topics, get a copy of Patterns of Entrepreneurship Management, 6th Edition.

Is it Time for a Tech Co-Founder?

A few weeks ago, the director of the Columbia Business School’s Lang Center for Entrepreneurship mentioned to me that the most asked question by our MBA students is the following: When is the right time to bring on a tech co-founder? So let me outline a few considerations as a response to this question.

As a starting point, I consider this question a more significant concern about selecting the right human resources for your venture. While the above is a much broader concern, many considerations for choosing a tech co-founder or team member such as a chief technology officer will be the same for any key venture team member. Some of the forthcoming practices will be useful if you hire anyone with the needed domain expertise or relevant industrial experience.

You need to consider several issues associated with the current status of the venture. These issues include the customer discovery status, product development, testing status, and technical and position needs. See the worksheet below.

Worksheet: Considerations for Hiring a Tech Co-Founder

Problem/Solution Validation and Product Development Status

The central issue is deciding when is the right time to bring a vital team member on board. As a founder, determining when to add to the team is always an important albeit challenging decision. From your perspective, you want to bring in a person who aligns with your company’s vision. Additionally, the person needs to have the requisite skills and experience to provide value at this point of venture development and later stages. At the same time, you need to understand the person’s needs to determine whether the venture is the right fit for them. For example, are you offering the right degree of challenge? Will the person be able to apply their knowledge and skills to the venture in a satisfying way? Does the venue provide professional growth? What are their financial needs, and can the venture meet them?

These are just some of the concerns you should have as you begin to think about bringing on board a key person. So now, let’s look at this when looking to add technological expertise to the team.
To start, as a founder, you should be honest with yourself in terms of what you currently know about the marketplace and the needs of your target customer. As I have stated in earlier posts, you should not be focused on a specific solution until you have a deep understanding of the customer’s problem. Without this level of knowledge, you cannot determine what technology you need for an effective solution. If you had completed extensive customer discovery, you are not ready to add key team members.

Once you have a validated understanding of the problem and have started to hone into possible solutions, the next question is, what actions have you taken to prove that your solution solves the customer’s problem? What methods have you used to solicit feedback from your target customers on the solution in question?
At this stage, you are considering what is the best approach to show customers your proposed solution. If you are applying the lean product methodology, you should consider getting something into your customers’ hands quickly and inexpensively. You want to provide the customer with a sense of how the solution can work and solve some critical aspects of their problem. Under the vast majority of circumstances, these test versions are possible with minimal technical capabilities. With the emergence of no or low code design applications, many products can be illustrated to give the customer an early vision of the look and possible feel of the solution. These early solution designs do not require any significant technical skill.

My recommendation is that you will not need any significant technical knowledge and skills to solicit feedback from the customer at this minimal viable product stage and acquire a sufficient degree of learning about the problem-solution fit. As part of assessing when you may require specific technical skills, you should create an MVP roadmap. To the best of your ability, what do the successive MVP iterations look like at this point? When to expect to schedule them over the next few months?

Once you have tested early versions of your product with enough target customers to demonstrate that they cannot live without your product, you should consider what technical skills you need to develop higher functioning prototypes.

One final consideration has to do with funding. Do you have a reasonable estimation of the funds required to develop a full version of your solution in preparation for launch? Do you have access to the right type of funders for the amount needed? How much cash will be available for founders and key team members during this period, and is it enough to sustain the team? If the answer is no, I suggest that you are not ready to hire a technical co-founder.

Technical and Position Needs 

Once you ascertain that the timing is right to bring on a technical person, the next decision is how to best bring them on board. Unfortunately, many founders think that they must look for a technical co-founder. But you can take many other directions to acquire the required technical knowledge and skills needed during the early stages of new venture realization.

I would generate a job description for the technical position you want to fill as a starting point. This document is not just an exercise. It forces you to consider what knowledge and skills are needed and provides a roadmap for what to look for during recruitment and interviews. You must understand what technical knowledge and skills are required for short-term product development and at least a three-year timeframe. I find it helpful, and, most times, it is necessary to find an advisor who has the solid technical background to help. Whether it be someone in your network, a current or former professor, or staff at local small business development centers, have someone help you develop a clear description of what you are looking for in the right technical person.

Once you have the technical specifications for the position, the next decision is to decide whether you need the person to be a co-founder or key employee, your chief technology officer. There are other options that you may want to consider first. These options include hiring someone as a part-time employee or as an independent contractor.

One best practice is to hire someone temporarily or on a project basis. This temporary position provides an opportunity to test how they will fit with you and other team members. This practice allows you to see if they have the knowledge and skills needed to develop and execute your business model. This condition is especially true when hiring someone who says they have specific technical skills, such as software development. You can readily hire them on a project basis with clear goals and measurable outcomes. If they meet the specified goals and work well with the team, you will feel more comfortable about their fit in your team

Skills & Experience. There are several things to consider when considering hiring a co-founder or key team member. You can categorize these considerations into three areas: Personal, Domain Expertise, and Work Experience.

Personal considerations focus on characteristics required by anyone who is to be associated with your venture and its brand. It is easier to build an exciting, to trust, and supportive startup culture if the people you hire have personal values that match. In a small company, one wrong hire can do a lot of damage quickly. So it is vital to apply the best hiring practices to facilitate the recruitment, hiring, and retaining of the best team members for your venture.

Domain considerations include the knowledge, skills, and abilities (KSAs) required to do the task in question. This post will focus on the technical areas needed to develop the product and help grow your venture.

Work experience is another critical criterion. You are looking for someone who is the right fit for your venture and fellow team members. While there are several considerations, you should ensure that the individual in question has experience working with new venture teams and early growth companies. While it can work, bring someone on board that only has considerable company experience can create challenges. You will want to learn more about their new product experience and how they navigated the process in the past.

The Offer. Once you have reached a decision, make an offer. In a startup situation with limited resources, it is customary to keep salaries as low as possible and enroll critical employees in a stock-option program. Options provide the employee the right to purchase stock at an agreed-on price. It is crucial to have a legal agreement for these offers (I will address this in future posts). But for now, the options should be subject to a vesting schedule where the employee earns a certain percentage of the options each year, usually for a four-year period. A critical best practice is to offer the vesting schedule with a one-year cliff. This vesting policy means that the new employee does not earn the first year’s percentage of ownership until the end of the 12 months. This policy allows the founders to assess performance over the first year before allocating the agreed-upon equity share. As part of the employment and equity agreement, concrete goals and measurable outcomes are agreed upon this first year. This way, if the new employee does not meet the specified objectives, you can rightly terminate the employment before the end of the first year.

These plans, if managed correctly, can be an excellent way of building a solid team and organizational culture. In addition to equity plans, certain positions, such as marketing and sales, may have part of the compensation based on measurable revenue or new customer acquisition performance. Once you have agreed on compensation and role, you will execute the appropriate legal documents and set up a starting date.

Future Posts

I will review legal considerations for protecting the venture’s intellectual property and hiring key team members in upcoming posts.

For more on this subject and other entrepreneurship topics, get a copy of Patterns of Entrepreneurship Management, 6th Edition.

Early Solution Design and Testing (Part Two)

In the last post, I explained some initial thoughts on designing and testing early solutions with your target customer. As mentioned, I see the initial solution design as a continuation of early customer engagement. Once you have conducted enough customer interviews to define the problem and consider potential solutions confidently, you can begin early-stage product design and testing. Next, let us focus on specific practices and tools you can apply to your minimal viable solution efforts.

The Process

As a starting point, you should define the essential customer experience that your product needs to create to assess if the offering solves the problem in the way the customer values. From initial customer engagement, you should have a shared understanding of the problem, current solutions tested, and outcomes expected. Then, armed with this shared understanding, you need to identify the minimum product features required to provide the customer with the desired outcomes and benefits.

During this first part of the process, you have the opportunity to review your current assumptions about what outcomes the customer expects or desires from an effective solution. Articulate customer outcomes clearly and quantify them whenever possible. Along with the outcome review, you should also articulate any specific product benefits associated with the customer’s needs. Customer outcomes and product benefits are closely associated, and your assessment should reflect this relationship.

Once you have defined customer outcomes and associated product benefits, you can then prioritize them according to their needs. From your customer discovery activities and research on current market offerings, you will understand how the customer values specific outcomes. Additionally, you should identify existing solutions and where there are potential gaps in the marketplace. One approach to help with this prioritization is the importance satisfaction matrix. Here, you rank the importance of the outcome and the level of satisfaction that the customer has with current, existing solutions. If the outcome for the customer is significant and the level of satisfaction with existing products is relatively low, you should look to prioritize this need area.

Once you have prioritized the customer outcomes and associated product benefits, you can identify what product features need to be designed and tested. At this point, you determine what your new product has to do functionally to produce a specific outcome and benefit. With a minimum viable products or solutions (MVP/MVS) approach, you can identify the least amount of features required to demonstrate value to the customer. For the entrepreneur, this can be pretty challenging. It takes quite a bit of self-discipline to limit the features to be tested. Typically, by now, founders are motivated to get a product out into the marketplace, so it is easy to expand the offering, sometimes called feature creep.

Once you have identified the features to design and test, you decide on the best approach to illustrating your product’s ability to solve the customer’s problem. Early MVP/MVS versions can take many forms, such as sketches, graphic depictions or diagrams for physical products, web launch pages, screen mockups, and click-through samples for digital or software solutions. Later MVP iterations take more functional forms such as scaled models, simple hand-made or 3D printed constructions, or working prototypes.

One of the primary purposes of your MVP/MVS is to validate whether you are providing the customer with an effective solution to their problem. In other words, it is crucial to demonstrate to the customer what value your solution can offer to them. As always, emphasize to founders that they should always provide value to the customer in every interaction. Offering value is significant to demonstrate how the customer will benefit from your solution.

As you consider how to provide value at this stage, the “fidelity” of your MVP/MVS is critical. In this context, the fidelity of your MVP/MVS refers to the degree that the customer can experience the real solution. To what degree does the test product solve some element of the customer’s problem? Do they experience real value, even to a small degree? A low fidelity MVP/MVS provides a glimpse into the venture concept, the look without the feel. A critical missing element is an interaction with the product and some meaningful, minimal outcome.

Finally, you determine what measurements or metrics you will use to validate the learning in these early MVP/MVS iterations.  Again, asking customers to complete a short survey after reviewing and using the MVP is an excellent start.

The Steps

One of the challenges in designing your minimal viable product or solution is to decide which product features to focus on in early iterations. Here are suggested steps you can take to hone in on the best MVP approaches for your early product testing.

Step 1.Review/Refine Target Customer Assumptions. As a starting point, you should review results from your early customer discovery interviews. Are there any revisions regarding your understanding of the customer jobs/tasks, pain points, or desired value (gains)? What assumptions are still viable? Which ones require any pivots?

Step 2.Evaluate and Prioritize Desired Solution Benefits. Consider using importance and satisfaction scales to identify underserved or unmet customer needs (defined as high importance/low satisfaction). You should list benefits (based on customer interviews and specific desired “gains” and rate each benefit in terms of importance and current satisfaction.

Step 3.Compare Your Solution to Competitor Offerings. Based on the importance and satisfaction ratings generated in Step 2, you prioritize benefits, those that fall into the high importance, low satisfaction zone. Then, compare competitors’ product offerings for each prioritized benefit area. Here, you are looking for where your solution may be offering unique benefits to the customer, something that they cannot derive from competitor products.

Step 4.Identify Essential Solution Features. After step three, you should have a good sense of which benefits are critical value creators for your target customer. Additionally, you will know how to best position your product as compared to competing solutions. You will want to focus on the critical benefits that are not provided or underserved by your competitors. For these benefits, you should identify product top features for each proposed benefit. Consider each product feature regarding the importance of your capacity to provide the customer with the desired benefit. Additionally, project how much the development of the feature will cost in terms of development time and funds. You are looking for the features that provide the most customer value for the least development cost.

Step 5.Select MVP/MVS Approach for Early Tests. Select high value/low development features for possible testing with customers. Then, you can consider which MVP/MVS approach (see MVP/MVS Approaches figure) will demonstrate the look and feel of the solution to your customer. As always, you are looking to show the value of your solution to the customer, so select the approach with the highest fidelity you can build quickly and at a reasonable cost.

Early Iterations

After making these vital design decisions, you can begin to build the early versions of your solution. Depending on the selected MVP/MVS approach, it is crucial to keep in mind that each iteration has a specific purpose. You should pare down each version to the essential features required to test the solution for the customer. Early versions focus on the customers’ primary concern and show that the product can solve that core issue. In early solution iterations, eliminate any “nice-to-have” or non-essential features. As you receive customer feedback, you can add additional features to future solution tests. This focus is critical in the early product design stage. It reduces product development cycle time, eliminates distractions that might confound your testing results, and enables you to validate whether you have the right problem-solution for your customer before moving to the next iteration.

Next Up

I will provide descriptions and examples of specific MVP/MVS approaches to help you choose the best method to test the value of your solutions with customers in future posts.

For more on this subject and other entrepreneurship topics, get a copy of Patterns of Entrepreneurship Management, 6th Edition.

Early Solution Design and Testing (Part One)

For the next couple of posts, I will discuss ways to approach early product design and testing within the startup context. Let me say up front that many of the practices and tools highlighted can be applied in multiple settings, from early ventures to large corporations across many product categories, and applied to B2C, B2B, and multi-sided markets. I will look at how product realization and innovation play out in these varied environments in future posts.

Customer Discovery: From Problem to Solution

I want to set the stage for these discussions by stating that I see product design and testing as part of early customer engagement activities. I encourage startup founders to view the design and testing of customer solutions as part of the customer discovery process starting as they first engage early target customers. The moment you connect with your target customers to validate early assumptions about their needs, you create the opportunity to establish longer-term relationships with these early contacts. If you structure your customer interviews properly, you can establish a rapport that allows you to stay connected. During this period, you continue to learn about the customers’ problems and hone in on some solution ideas. After establishing a good working understanding of the customer experience and their needs, you can go back to these early contacts for feedback on solution concepts and early working versions.

From problem validation to solution testing, these two phases of customer discovery provide early data points about how your target customers move from awareness to interest to early adopters to advocates. If you structure the process carefully and choose your first customer segments wisely, your should be able to make many of these first contacts as your first paying customers, leading to early traction.

In past posts, I have spoken about essential elements of early customer discovery and problem validation. Now let’s turn our attention to solution design and testing.

Solution Development & Testing

Solution development efforts provide vital opportunities to test the underlying assumptions of your business model. As an entrepreneur, you continually refine your business model through customer interviews, market research, and discussions with competitors, suppliers, and distributors. You will have many customer and marketplace discussions as you craft your business model’s “first cut.” Once you have early validation that you have a solution to a customer problem of great value, you can begin to think about the best way to design and build your product.

The main goal of early solution design activities is to provide a tangible and measurable way to test your business model assumptions with customers. This phase of customer engagement helps to clarify any misunderstandings you have about the problem, desired solution, and what they are willing to pay for in a finished product. Engaging the customer early in the design process enables them to visualize and hopefully experience the value of your proposed solution. By engaging with early designs, the customer co-creates the solution. This early customer involvement ensures that you build a solution that truly addresses the problem in a way that the market values.
Involving the customer early in the design process is consistent with the current lean startup philosophy. Early solution iterations allow you to quickly test key business model assumptions about the customer problem, solution, and expected value. More importantly, it establishes an environment where the customer co-creates the solution ensuring that the finished offering meets or exceeds marketplace expectations. This co-creation process has the added benefit of helping you to transition early participants to paying customers and brand advocates. 

Minimum Viable Solutions

There is little debate that engaging the customer early in the design process is beneficial to the overall product development and launch process. Early customer involvement is a best practice for fledgling entrepreneurs and corporate product teams alike. However, as an entrepreneur, you will face many challenges in creating your product, including, but not limited to, lack of technical expertise or domain knowledge, time pressures, and funding constraints. With this in mind, you must plan your solution design steps carefully and execute them in small but focused incremental experiments.

Evolving from the lean product development movement, the Minimum Viable Product (MVP) or (as I like to label it Minimum Viable Solution (MVS) is considered an excellent approach to test your solution’s alignment with customer needs and expectations. The initial definition of this approach comes from Eric Reis, stating, “A Minimum Viable Product is that version of a new product which allows a team to collect the maximum amount of validated learning about customers with the least effort.” 

The MVP or MVS concept has evolved through practice. However, the significant tenets remain, especially the need to build a product version that focuses on a particular and limited part of a problem solution to validate the outcome with the customer. Early MVS versions do not have to be fully functional but designed to solicit customer feedback. Don’t strive for perfection, but ensure that the product version is “good enough” to illustrate core features required to solve the customer problem. I consider an essential criterion of an effective MVS is to provide some value to the customer. In order to provide value, it is vital for the customer to experience some portion of the solution and how it will impact their lives. 

Once you receive feedback from potential customers, you can make small incremental changes as needed and solicit input on the next version. Early solution design must be iterative to be successful.
Early solution design follows the same experimental testing approach applied to validating all aspects of your business model. You start with assumptions on how the product solves the customer’s problem and creates value. Then, you test these assumptions through customer engagement, make adjustments and repeat the process. As part of the testing process, you should generate outcome measures or metrics that support business model validation. Validating metrics include post-use surveys, web statistics, or specific criteria associated with problem solutions, sometimes referred to as quantifying customer value. Measuring customer value may include how product use has created cost savings, time efficiencies, performance enhancements, or error reductions.

Next Up

In my next post, I will focus on the steps and tools you can apply to make design decisions and test solution features benefits and outcomes.

For more on this subject and other entrepreneurship topics, get a copy of Patterns of Entrepreneurship Management, 6th Edition.

Starting with Customer Outcomes

As entrepreneurs, product developers, and innovators, we tend to get caught up in the technical functionality of our solutions. As I have stated before in this blog, founders tend to be enamored with their conception of the customer’s solution rather than the problem itself. Many innovators begin by thinking about the functionality of their proposed solution before profoundly understanding the problem at hand. This situation is common among innovators, from startup founders to corporate product developers. Known but rarely acknowledged.

When I first meet founders, I ask them to write a problem statement that addresses the problem to be solved, who experiences the problem the most, and what outcomes the customer hopes to achieve by an effective solution. In the majority of cases, they write about the solution they have in mind. Then, they pre-suppose their solution into the problem statement. Sometimes the solution reference is subtle, but most times, it is pretty explicit. Customers are looking for an “app” to make their job easier, as an example. Unfortunately, by pre-supposing the solution to the customer’s problem, you create a cognitive bias that may very well send you down the wrong path towards what the customer wants and needs. This condition will inevitably lead to poor problem-solution fit.

While there are many challenges to consider during the early identification of the customer’s problem and designing a solution that provides the desired value, a starting point to consider is how the innovator defines concepts as outcomes, benefits, and features. These terms are easily bantered about in the world of new venture realization. They are often used simultaneously to mean the same or similar concept, commonly lumped into the vague term – value proposition. However, I think it is vital to put a stake in the ground and define each one of these terms in a way that helps you to understand your customer’s problem. What are they hoping to accomplish? How will your solution meet their needs and provide the desired overall value (the value proposition)?

A clear definition for each of these terms is essential throughout the venture realization process, from the first iteration of your business model to the customer discovery phase to designing early iterations of your solution to creating the brand message for customer acquisition. In addition, the importance of understanding the differences between outcomes, benefits, and features is vital.

As a starting point, take a cue from my good colleague, Matt Wallaert, who wrote a wonderfully insightful book on how innovators need to start from behavioral outcomes they hope to achieve through the final product design. His model is highly beneficial as a starting point. However, I tend to view it from the perspective of the customer. What outcomes are the customers hoping to achieve by using your product or service? From either perspective, starting with outcomes is a wise choice. Let’s explore further.

Outcomes: The Customer’s Why (with a capital W).

Early in the venture realization process, as you begin to define the customer’s problem and its associated context, you want to discover why is it essential for the customer to solve this problem? Why this problem? Why now? Why do they want to change their behavior? Why do they want to change how they feel?

Let’s face it everyone wants to thrive and survive. Customers, at the deepest level, have needs associated with surviving and thriving. It is a continuum, and you need to ascertain where your customer and their problem resides between the two poles. Much of this determination will depend on the specific customer’s problem and the associated context. 

Once you determine where your customer fits within the survive-thrive continuum, you can explore what needs they are hoping to fulfill. Psychologist Rick Hansen suggests three core needs that every human being desires – Safety, Satisfaction, and Connection. From an evolutionary perspective, these have always been critical to survival and growth (thriving). For each of these core needs, you can identify associated behavioral, social, and emotional areas essential to the customer. Next, you can categorize the expanded list under these three core need areas and prioritize them based on the survive-thrive continuum. For example, we can think of a customer’s need to feel safe. Depending on the context, this might include feeling secure in one’s home or their job, providing a sense of stability in their current life circumstances. The context will help you to understand the degree of the customer’s motivation to change. Is it about basic survival or a higher level of aspiration?

When your customer feels a conscious and sometimes an unconscious concern about any of these need areas, they will be motivated to act and make a change. As you identify which need areas are your customer’s concern, you can begin to determine the level of perceived deprivation, degree of pain and suffering, and overall motivation to solve the problem and fulfill the needs in question.

Once you understand the customers’ deeper needs, you can consider what they would like to do differently in the current situation. For example, how will behavioral change help satisfy their needs? This line of thought will help you define what behavioral outcomes are essential to the customer. Similarly, you want to assess how the customer would like to feel if they could do things differently and satisfy their needs? I see these as the customer’s social-emotional outcomes.

Benefits: The Customer why (lower case w). 

Once you have the customer’s behavioral and emotional outcomes identified, you can consider how your solution will lead to these outcomes. You start by looking at how a potential solution can improve the customer’s current situation. Next, you focus on what the customer will do differently, enabled by your product. Benefits are not about what your product can do functionally but what the customer can do with it. Benefits are the reason that customers decide to purchase your solution over other options. The customer why at this point; Why they want to buy your solution?

At this point, you want to consider the relationship between the benefit to the customer and the resulting outcome. The product benefit enables the customer to change their behavior and fulfill their need areas. In a future post, I will discuss prioritizing and quantifying these benefits in the service of the product design specification.

By articulating the product’s benefits, the customer can see the relationship between the product feature and the need area. This understanding will become especially important when developing your marketing and branding strategies.

Solution Features

Once you understand what the customer wants to accomplish, you can begin designing a solution to facilitate the “job to be done.” The solution’s features are the functional elements of your product that deliver the benefit to your customer. What attributes does your product have to possess to work effectively for the customer? In a future post, I will explain how founders can prioritize benefits and link to associated product features.

A Simple Example

Outcomes: Customer wants the “freedom” to go on outdoor “adventures” whenever possible.

Benefits: The customer is looking for a vehicle the enables them to travel to remote locations for a month or more, carrying everything required for outdoor activities and camping.

Features: Vehicle includes extra internal cargo capacity, flip-down seats, wide rear door, four-wheel drive, etc.

Prioritizing and Quantifying Outcomes

As you collect information about the customer, it is crucial to gauge how important the identified behavioral outcomes and product benefits & features are to them. A simple starting point is to ask them to rank the importance of specific, measurable outcomes and associated benefits, from “essential” to “nice to have.” Another way to codify potential customer expectations of a solution’s outcomes and benefits is to cluster them into various types, such as expected, desired, unexpected.

One method I have founders apply is a matrix that looks at the relationship between the importance of specific solution benefits and how satisfied customers are with competitive alternatives. This approach is just one of many variations of an Importance-Satisfaction Matrix Analysis. This type of analysis helps founders prioritize which benefits to focus on and design associated features early in the product testing phase. Prioritizing the product benefits will help identify the essential features. In addition, there are many ways to solicit customer feedback on features. 

Next Up

The following post will discuss how understanding customer outcomes facilitates early solution design and testing efforts.

For more on this subject and other entrepreneurship topics, get a copy of Patterns of Entrepreneurship Management, 6th Edition.

Customer Experience Maps: A Holistic Approach

In the previous post, I highlighted the role that design thinking plays in problem identification and solution design. Within the design thinking approach, several tools and practices helpful to entrepreneurs as they seek an optimal solution for customers. These tools support the development, articulation, and documentation of your early assumptions about the customer’s experience with the problem they are grappling with or the job to be done. In addition, several design thinking tools incorporate graphical visualization to support your conceptualization of the customer experience.

One approach that can help you identify and articulate a customer’s problem and related context is called a customer experience map, sometimes labeled as a journey map. One way to differentiate between the two labels is to consider a journey map as the customer’s experience with your product solution (post-purchase). Journey maps focus on the customer’s engagement with your brand at each touchpoint, from initial awareness through purchase and post-purchase engagement. A customer experience map focuses on the customer’s thoughts and actions before having access to your solution (pre-purchase, typically pre-awareness). Experience maps look at how customers are engaging with other brands to find a solution to their problems. This information is invaluable to understand how the customer goes about looking for answers, what their decision process looks like, and what options currently exist in the marketplace. The focus is on the customer’s experience with the problem, emphasizing all the challenges throughout the process. Your solution has not yet entered the picture.

Mapping the customer experience is an excellent way to articulate your core assumptions about the customer’s problem, experience with current solutions, and what benefits they expect from a better solution. As you will see it, it allows you to visualize the steps and actions that the customer takes to solve the problem, the challenges they face, and their mindset throughout the process.

Supporting the Customer Discovery Process

Applying customer mapping as part of the discovery process helps you prepare and learn from interviews and surveys about the customer experience. Creating a visual map illustrates how the customer is experiencing the current problem allowing you to think about the best way to structure the interview and ask questions to elicit the customer’s perspective on the problem and their experience. One way to think about this is to outline what you perceive as the customer’s story about experiencing the problem you are hoping to solve. And like all stories, there is a beginning, middle, and end. You will be better prepared to listen to the customer’s story if you have anticipated the arc of the customer’s narrative before the interview. That said, you cannot let your assumptions get in the way of listening in an unbiased manner throughout each customer interview.
Additionally, this mapping activity helps in building your customer profile. Thinking about the customer’s story and experience helps to anticipate various challenges that they may be experiencing (pain points) as they attempt to solve the specific problem and identify special reasons why the customer is looking for solutions. You most likely will discover that different customer segments follow a different story arc. Thus, their solution needs may differ. Visualizing how each customer segment approaches the problem and attempts to solve facilitates more refined customer profiles and personas.

Visualizing the Customer Experience 

One of the optimal ways to create an empathetic understanding of what a person is trying to accomplish and how they are feeling along the way is to use tools that allow you to visualize the situation in context. In design thinking, visualization is a core approach to developing a deep understanding of your customer and experience. Let’s explore the use of a holistic mapping process. Taking a holistic approach allows you to consider what is going through an individual’s mind while moving through the steps of a specific job or task.
As a starting point, always begin with a simple template to help decide on the various components of the customer’s experience. Start by thinking about the customer experience as a story, beginning, middle, and end. As noted in an earlier post, an essential part of framing the customer’s problem is to decide on the timeframe. At what point do you see the story beginning? The answer to this question can be challenging. Commonly, we visualize the problem and attempts to solve it at an obvious point of occurrence. For example, if the customer has trouble getting to work in the morning on time, one might be tempted to begin learning about the customer’s morning routine. But maybe, the story starts the night before or earlier.

As you work on this basic map, you can begin to add more components to the customer story, more details about each phase of the story, along with specifics about what they are doing and how they are feeling at each stage. There is no limit to the number of phases you identify, and some problems can occur across several periods and contexts. I have had many entrepreneurs work on new health care ventures, always looking for ways to make the diagnostic and care process more seamless. In exploring the experience, the customer has moved from initial awareness of symptoms to going to the doctor and making an appointment. As you layout each phase, you can begin to isolate where potential challenges exist as the customer works their way through the steps. Maybe the customer tends to delay deciding to go to the doctor because of barriers to access (lack of insurance) or managing other responsibilities (challenging to take off from work). Each step in the experience may offer insight into the most significant pain points and where you can best provide value to the customer.

 Another approach to visualizing the customer’s experience is as a system – there are inputs, throughputs, and outputs. You can break up these system attributes in terms of functional and social-emotional elements. Functional elements often involve specific tasks and behaviors. Social-emotional components range from one’s manifest emotions to cognitive models applied to the task at hand. Later, as you listen to and observe individuals’ functional behaviors, you will identify patterns of behaviors and events. Additionally, you will define underlying structures and practices (external to the individual) that drive behavioral patterns. By expanding the way we look at the problem at hand and how individuals deal with various challenges, we will increase our solution choices and the long-term efficacy of selected solutions.
Combined, you can begin to visualize the functional tasks from the beginning to the end of the job in question. At the same time, you can consider what the person is thinking and feeling throughout each stage.  Finally, you can collect observations and data beyond behaviors and thoughts and consider contextual elements such as external structures, policies, and practices. 

An integral part of the customer’s experience in identifying and visualizing the customer’s mindset throughout the experience. One can define mindset as what the customer is thinking, saying, feeling, going for information, and looking for guidance. These elements are similar to what you can identify using what is called an empathy map. A standard empathy map template asks you to determine the customer’s experience in quadrants, what is the customer doing & saying, hearing, seeing, and feeling. There are plenty of variations, but it is another good way to approach the customer experience holistically. 

Creating Customer Experience Maps 

Here are the steps for creating your first map. The first step is to select the customer segment or community you believe best represents those experiencing the problem in question and are interested in finding a solution. As mentioned earlier, the focus on a specific segment enhances your understanding of your customer profile.

With your target customer in mind, you should generate a step-by-step list of activities and behaviors manifested during the customer’s current attempts to accomplish a task or solve the problem. At this point, you should label the phases of the customer’s experience. Each phase should serve as a rational container for the customer’s activities and challenges at that point of the overall experience.

Once you have these steps outlined, go back, and add any challenges or obstacles that the customer experiences while doing the activity. These should correspond with your current assumptions about the customer’s pain points, discussed while framing the initial problem. I find the identification of customer pain points at each stage of the experience valuable when designing effective customer solutions. By pinpointing the exact time and location of the pain point, you can develop targeted solutions with measurable outcomes to support the overall solution. Please note that you should also record any steps or activities that are going well. Your future solution designs should incorporate what the customer sees as positive elements of their experience.

Then, continue to fine-tune the map by adding your assumptions about the customer’s thoughts and feelings throughout this specific experience. At this point of the map creation, you should consider all aspects of the customer’s mindset. Like an empathy map, document what the customer is feeling, what they are saying and hearing throughout each stage. Here, you can identify what channels they are using to research information about the problem and what solutions exist, and by whom. 

As a final step, you should add any necessary situational conditions that you think are important to understanding the customer’s experience in “context.” For example, is there anything about the environment to note? Is the experience always in a specific type of location? Indoors? Outdoors? Maybe it happens at a particular time of year or associated with special events? Are there any cultural areas to consider? Context is any condition or situation outside the individual but may influence their experience, either as an enabler or obstacle. I think it is essential to consider the goals of the customer throughout the experience. It is common to witness changes in what the customer wants to accomplish at different stages of the overall experience. Goals also vary across different customer segments. Changes in what the customer wants or needs can lead to potential innovative solutions leading to process improvements.

The good news is that designing a customer experience map does not have to be complicated. You don’t need any special tools, templates, or software. Many of the entrepreneurs I work with use graphics available in go-to presentation software. However, there are plenty of options ranging from general visualization applications like mind mapping tools to dedicated customer experience software supporting persona development and map design.

Mapping: An Iterative Approach

One of the best things about customer mapping is that you can build on it as you continue to engage customers and associated market research.  Through customer discovery, you learn more about their current experience. Then, you can work with your team to generate potential solutions and finally help document experience with early product experiments and prototypes. 
The early customer experience maps focus on articulating your assumptions about what the customer is doing and thinking. This first version focuses on recent experiences without any reference to your proposed solution. It is in this version that you establish the customer’s basic story. How do you see the story playing out? Where does it begin? What happens in the middle? How does it end? At each component of the story, you identify what the customer is doing, thinking, feeling, obstacles faced, solutions tried, and any contextual factors. 
The second iteration of customer experience maps comes after you have interviewed several customers, documented their experiences with the problem, and attempted to solve it. Here you are looking for patterns across stories and refining the customer experience map across all components. I label this version as the “validated” version, where customer discovery corroborates the customer’s experience. Now you possess a map representing the problem from the customer’s perspective and not based on your early assumptions.
The third version of your map aids in generating innovative solutions, focusing on minimizing customer pain points and creating desired value across the customer experience. You will begin to prioritize desired benefits and identify design criteria for an effective solution. The “innovative” version is where you start to identify and integrate your solution designs into the customer’s future experience.

From Customer (Problem) Experience to (Post Purchase) Journey Maps

Once your customer starts to use your solution, you can switch to customer journey mapping. You now focus on the customer’s experience with your solution, interactions across all product sales channels, and overall brand engagement. The mapping approach shifts from focusing on the customer’s experience with the problem and competitive solutions to your specific offer and business model. As opposed to the customer experience with the problem, the phases in this map typically correspond with your venture’s sales funnel – awareness, consideration, decision, and later advocacy. You can learn a great deal by mapping the customer’s experience with your venture and its offerings. This activity helps to increase brand interaction, engagement, and loyalty. Journey mapping provides insights into customer satisfaction, reasons for attrition, and opportunities for new products and innovations.

For more on this subject and other entrepreneurship topics, get a copy of Patterns of Entrepreneurship Management, 6th Edition.

Design Thinking: From Empathy to Insight

Over the next couple of posts, I want to elaborate on ways to prepare for designing an effective solution for your customer. Starting with a design thinking approach, you will learn how to develop a deeper understanding of the customer’s experience as they try to solve a specific problem or complete a job to be done. I will discuss how to take this foundational learning and apply minimal viable product design and testing to support solution development and business model validation in later posts. Let’s start with some foundational information about design thinking and its relation to problem understanding and solution development.

The Importance of Empathy

One of the core skills required for successful problem solving is the capacity for empathy. Design thinking processes are structured to develop and enhance your understanding of the customer and their experience. From the start of the design process, you are laser-focused on understanding the customers’ experience with what they are trying to accomplish and the obstacles that present themselves along the way. Like an anthropologist, you investigate each step of the customer experience, attempt to learn what they are doing and what is going on with them emotionally. As part of this investigation, you are also hoping to learn how they currently work through the problem or task in question, including any solutions used to eliminate or minimize obstacles. By probing these current solutions, you begin to gain insight into how they would like to see things work functionally and emotionally. This empathetic work leads to insight into what would make their life better in this situation. 

What is Design Thinking?

As a starting point, we start with a simple definition. Design thinking is a systematic approach to solving significant problems. It begins with a “human-centered” discovery process, followed by experimental and iterative cycles of solution design, testing, and refinement. From a cognitive science perspective, the structured nature of design thinking allows problem solvers to investigate an effective solution without being thwarted by their own biases and behaviors that impede innovation. Design thinking emphasizes deep empathetic customer engagement to facilitate the co-creation of optional solutions. It starts with the person who is experiencing the problem and focuses on making their life better. Creating value for this person is the absolute goal. View value from both a functional and social-emotional perspective. One without the other leads to an incomplete solution. An essential part of engaging those individuals experiencing the problem is to immerse themselves in understanding who they are and fully understand their experience. This intensive engagement allows you to expand how you perceive the problem leading to more solution options.

Additionally, by actively engaging these individuals, it allows for their input throughout the process. This co-creation process leads to an effective solution but can go along the way of soliciting their buy-in to the changes that new solutions will require. Innovative solutions almost always require some behavior change which habits and other counterproductive factors may impede. 

Cognitive Processes and Behaviors

I take a holistic approach to design thinking, looking at the process itself and common tools associated with innovative problem-solving. I also take a hard look at cognitive processes and resulting behaviors and how self-awareness of these results in productive solutions. I highlight the importance of cognitive-behavioral attributes like attention, pattern recognition, empathy, integrative thinking, flexibility, focus, and emotional regulation. Additionally, we will look at behaviors that support creativity and innovation, such as experimentation, iteration, risk-taking, dealing with ambiguity and uncertainty, advocacy, collaboration, and prioritization. Understanding the cognitive science behind design thinking and innovation will enable your ability to create valuable solutions for your customers and stakeholders.  

Design Thinking Stages

I look at how design thinking frames the problem, gathers customer discovery & market data, designs & tests potential solutions, and finally, test launches the solution to determine how the solution works in the natural customer environment. The approach focuses on a deep understanding of a problem that our customer or stakeholder is trying to solve. The best solutions come from a deep understanding of what the customer is trying to accomplish and what frustrations exist along the way. By diving into their everyday experience and challenges, you will begin to see ways to add value to their current situation. Sometimes, you will see the issues even when they don’t. 

Framing the problem. During the first “Frame” stage, you identify a problem area important enough for you and others to work towards an effective solution. In the early stages, you will spend time articulating the problem into a concise statement that specifies who experiences this problem, in what context, and what would be a desirable outcome from an effective solution. It is important to note that you are not looking for a solution, but what benefits and outcomes would occur if the problem is effectively solved. This approach is a difficult concept for many innovators to grasp. Most people start this process with a solution in mind. Starting here is a treacherous way to begin this process. 

There are many ways to frame a customer problem. Understanding the context within which the problem occurs is critical to understanding the issues that the customer faces. Ensure you consider the who, what, where, when, with whom, and why as you begin to frame the problem. The problem might occur under various circumstances, but you will want to define each contextual element clearly. Variation in circumstances may lead to categorizing target customers differently, an essential consideration for your business model. 

One framing issue to keep in mind is understanding the time frame by which the customer’s experience of the problem occurs. What you can readily observe may narrowly define your immediate perspective on the problem. When you think about the customer story, you begin at the point when the problem starts to manifest itself. However, the problem may have a much earlier starting point. Think of it as symptoms of a health challenge. The patient decides to go to the doctor when they experience some discomfort. To them, the starting point is the moment they experience some pain. But the actual start of the problem most likely has an earlier origin. It is essential to consider a wider time frame when defining the customer’s experience with the problem. 

Many entrepreneurs decide to tackle a specific customer problem because they have experienced it. Your experience creates another framing challenge. Your experience with the problem influences your initial conception. You are a sample size of one, so don’t place too much weight on your sole expertise. Stay open to learning from many other people who have experienced the problem before closing in on a helpful definition. 

Finally, as you consider the frame of the problem, look for outside influences on the customer’s experience. You should always take some time to brainstorm ideas regarding aspects of the customer’s situation that may be non-obvious. This process aligns with any diagnostic method. It is worth taking some time to look at things differently. Don’t be afraid to have some wild ideas. These brainstorming activities may lead to an innovative solution. 

In this first stage, you want to apply early screening criteria to solve a problem that people want to solve. During this pre-screening activity, you want to conduct some early investigations about the current status of the problem, who is currently trying to solve it, and how knowledgeable you and your team are about the problem and existing solutions. Posit the answers to these questions before engaging your target customer in the next stage.

Discovering the Customer Experience. In the “Discover” stage, you begin a deep dive into the problem and the most affected people. Your goal is to engage people who are suffering from the problem and are actively looking for solutions. Of course, sometimes they may experience the pain of the problem but don’t believe that a solution is possible. Or they are dealing with many challenges and don’t know where to start or what they want. In either case, with proper preparation, you will be able to solicit vital information to incorporate into new, innovative solutions.  As a starting point, you will spend time documenting your early assumptions about how people experience the problem and how they currently deal with the challenges created. Articulate step by step, what they are trying to accomplish, what roadblocks get in their way, and how they now try to mitigate or diminish these challenges. Empathy plays an essential role in this process and helps you to understand what individuals are going through. With this preparation, you begin to build a profile of people who most experience the problem and how important a solution is to them.

Once you create a profile, you can prepare interviews and surveys to solicit first-hand information about their experience. This preliminary information will help you better understand the people’s experience with the problem and what they want from a solution. Additionally, you and your team will conduct secondary research to enhance your understanding of who is out there trying to solve the problem. These solution providers and experts will demonstrate current solutions. 

Through the customer discovery process, you learn a great deal about the customer’s current experience. Focus not just on what they are trying to accomplish but where they are frustrated and how they currently try to minimize or eliminate these frustrations. These are critical aspects of their everyday experience. But don’t stop there. Probe to understand how they see a better experience. What would that look like both functionally and emotionally? 

Design & Test Solution Elements. As we move towards generating potential solutions for testing, the customers’ perspective on a better experience will provide crucial insights. With several possible solutions in mind, you start to consider the most important benefits articulated by the customer and outline how to design real experiments to test these benefits. Now we move to the testing phase with minimal viable product designs and tests. This testing phase will typically be comprised of multiple iterations, learning from customer feedback along the way. These rapid iterations start as low fidelity tests of certain benefits and associated features. These early minimal viable products should be designed with just enough effort and resources to generate useful feedback from the user. As you iterate, future versions increase in fidelity, providing a closer experience of the solution and its benefits.

In the “design” stage, you begin to identify potential solutions to the problem. At this point, you are taking all the information that you have received and begin to consider various solutions. As a first step, you should review all your assumptions about customer requirements, wants, and needs. Make sure that you revise your early beliefs based on information gathered during the discovery phase. Once you refine assumptions about the customer experience, you will prioritize the most important benefits that the customer is looking for in an effective solution. You will look at these prioritized benefits to drive your initial design and testing efforts. You and your team begin to brainstorm solutions, eventually coming up with options to explore further through the design and test process. With designs selected, you will take the chosen solutions and start an iterative process of demonstrating the benefits of your solution to people looking for relief from the current challenges. Early tests will focus on illustrating in a low fidelity manner how the solution will work and what results from the product the customer should expect. As customers provide feedback, you will continue to build upon the early solutions creating a version that demonstrates the actual value of the solution in limited ways. These may still be low-fidelity designs, but hopefully, the customer is experiencing some benefit and value in these later iterations. 

Launching in Context. Once we have tested our potential solutions with customers and received feedback, we move to the next phase of design thinking, which is to test more broadly in the marketplace. Sometimes you can think about this as pilot testing your product in a targeted manner to see whether things work as envisioned in the natural environment. Even after you have received a great deal of positive feedback from individual customers or stakeholders, there are still many factors to consider to ensure that you can expand the use of your solution to a broader audience.

In the final “Launch” stage, you begin to test your solution to a broader base of people within the actual context that they experience the problem. Here you begin to test all aspects of providing the solution, more than the product itself, but looking at how the solution is delivered, what additional services are required to support the person’s use of the solution, and the like. This stage is an integral part of the overall design process. You begin to create a repeatable transaction that can scale to reach all people who have been grappling with the problem. In this phase, you go beyond the specific problem-solution fit question and move towards product-market fit in scalability and financial feasibility. 

Next Up

In future posts, I will provide details on designing minimal viable products to test with early customers for feedback on solution efficacy and market readiness.

For more on this subject and other entrepreneurship topics, get a copy of Patterns of Entrepreneurship Management, 6th Edition.