Analyzing Customer Development Data With a Critical Eye

The lean startup method has emphasized on the importance of emergent business models over the traditional big design up fronts or business plans. Its focus is on customer development and discovery as the most vital parts of the early success of startups.

Customer development is the process of getting out of the building and engaging customers and other stakeholders to systematically test your assumptions. The process enables business founders and entrepreneurs to collect data that could eventually be used in shaping the business to achieve the right product and market fit for the business venture.

However, data gathering isn’t about just counting the figures and adding the columns. While customer development without collecting data is a sin, collecting data without investigating it thoroughly could be fatal. In order to fully maximize the benefits of customer development, one must look past through the figures and generate an insight from it.

But how does one generate insight and see through the feedback and numbers gathered from customer discovery activities?

A group of entrepreneurs talked to the customers and asked if they are willing to buy their product at 10$. To their delight, 89 out of the 100 surveyed said yes and gave meaningful feedback. Most beginners in startup ventures might jump the gun into fully implementing the business model and making the product available in the market for 10$.

A wise and careful startup entrepreneur, however, would look at the data and equally examine the feedback from the 11 who said otherwise. It turns out, this segment of the surveyed percentage said that they are willing to pay for more than 10$. This is indeed an opportunity that those who already jumped the gun missed.

If there are 11 people who are willing to pay for more than $10 for the product, there might be more people who think alike. And this is the insight that could be very crucial in developing the product and the business model. This opening must be further exploited and studied in order to fully understand the market and position the product.

The illustration above is just one example of using a critical eye to examine data gathered from the customer development process. Insight is driven from testing hypotheses and scrutinizing the data collected from the process. While numbers are a big help, they are not enough. There is a need to be sensitive to behavioral data that could further improve the business model.

One must not just be looking at aggregate data. There is a need track every interaction and engagement with customers and stakeholders because there will always be useful insight you could derive from it. It is also an imperative to look at patterns because insight could be generated from it.

Also take note that data collected could be very tricky to interpret because consumers will not always say what they do. This is where you have to add judgment and intuition to read between the lines.

Being sensitive and being able to read body language is an added value. This could be done by deeply understanding the context and the agendas that drive the consumers. Try to do away with existing stereotypes and biases. Use human connections and fair judgment during the interviews and the analysis of the data gathered.