1. New Business Opportunities and Customer’s Discovery
May 2013

2. Objectives
• Understand the origin of new business
opportunities: the problems and needs they
address.
• Understand the importance of exploring the
needs and context of the customer. Acquire
methodologies that allow you to do
exploratory work.

3. Subjects to be Covered
• Social contract.
• Foundations of the Lean
Startup method.
• What is a relevant problem?
• Intensity of the Problem.
• Customer’s pain and the limits
of market research.
• Ethnography.
• Types of customers.
• Who experiences the problem.
• Customer’s Context.
• Empathy Map.
• Importance of the context.
• Storytelling.
• What to do with fieldwork
results.
• Next steps.

4. Social Contract
• Listen, be opened to criticism and feedback from clients, facilitators
and consultants.
• Cooperate with your peers (ask for advice and provide it, support the
access to social networks, etc.). Give without expecting anything in
return in the short run.
• Do the required work.
• Dont hide information, be open, transparent and trustworthy.
• Mistakes are possible, be willing to change your route if there is
enough evidence to support that move. Participar en las
comunidades de aprendizaje.
• Dare to ask for help (use the learning community).
• Dare to fail.

5. FOUNDATIONS OF
THE WORK
PROGRAM

6. 1
There are no
facts inside the
building, so get
out..

7. 2
Use customer
development
paired with Lean
development.

8. 3 Failure is a
necessary part
of the journey.

9. 4 Do iterations
and pivot
repetidely.

10. 5
No business plan
survives the first
contact with the
customer.

11. 6
Design
experiments and
tests to validate
your hipothesis.

12. 7
Define the
market type: it
changes
everything.

13. 8
Startup metrics
differ from
those of existing
companies.

14. 9
Decission
making should
be quick, speed
matters

15. 10 First of all, it
comes passion.

16. 11
The roles in a
startup differ
from a big
company.

17. 12
Save all the
capital until you
really need it.
Only then you
can spend.

18. 13 Communicate
and share the
learnings.

19. The success of
customer
development
starts with
build-in support.
14

20. Startup Definition
“A startup is an organization formed to search
for a repeatable and scalable business model.”
(Steve Blank)
“A human institution designed to create
something new products and services under
conditions of extreme uncertainty”.
(Eric Ries)

21. Validated Learning
Is the proccess in which you learn by testing an initial idea and
measure if it achieves the expected results (sales, customer
satisfaction, positive evaluation of the concept, etc.).

22. Innovation Accountability
Fuente: “Lean Analytics” (Croll
& Yoskovitz)

23. Minimum Viable Product
“Is that version of a new product which allows a
team to collect the maximum amount of
validated learning about the customers with the
least effort”.
(Eric Ries)

24. Be aware of the traps in which the
entrepreneur could fell…
The double trap of the interaction with the
customer: not interacting with the customers early
enough, and not approaching their needs. On the
other side, is not in the role of the customer to
innovate for you.

25. Be aware of the traps in which the
entrepreneur could fell…
Confirmation bias: see what you believe to be true,
and just looking for evidence that supports your
initial beliefs, disregarding opposite evidence.

26. Be aware of the traps in which the
entrepreneur could fell…
The trap of motivation (falling in love of your
product): not being impartial, just supporting the
fans.

27. Be aware of the traps in which the
entrepreneur could fell…
The trap of overconfidence: Chernobyl case.

28. Be aware of the traps in which the
entrepreneur could fell…
The trap of familiarity: doing things the same
way over and over again.

29. How startups are born
“The Lean Startup”, Eric Ries

30. Business Opportunities have
Multiple Origins: Problem

31. Business Opportunities have Multiple
Origins: Customer Segment

32. Business Opportunities have
Multiple Origins: Product

33. Business Opportunities have
Multiple Origins: Technology

34. "People don't want to buy a
quarter-inch drill. They want a
quarter-inch hole!”(Theodore
Levitt).
Its not about the product, its
about the jobs they are trying
to get done…

35. Outstanding companies build upon
great problems
• The biggest problems are those the humanity
should face and that affect millions of people:
food provision, access to water, infectious
diseases, climate change, clean energy, scarcity
of natural resources, education, etc.

36. Ramez Naam “The Infiine Resourse: The
power of ideas on a finite planet”
Optimist approach on
how to expand the
limits and solve the
problems that affect
the world: food, water
and energy.

37. John Doerr: The problem with
sustainability
A venture capital with a broad
trajectory, who looks to address
the problem of sustainability.

38. Shark Bite vs. Mosquito Bite
Its better to solve a life or death problem to just
one person, than to solve a very small problem
that affects millions.

39. Vinod Khosla and thinking big
The venture capitalist
Vinod Khosla, founder of
Khosla Ventures, states
that “any big problem is a
big opportunity. No
p r o b l e m i s n o
opportunity.”

40. Examples of companies that solve
important problems
• Tesla Motors: oil dependancy.
• Zip Car: Savings and transport.
• Kickstarter: funding of creative projects. Kiva:
access to microfinance.
• Angel List: Access to angel investment.
• Khan Academy: Learning from distant
places.
• Airbnb: Lodging.

41. DESCRIPTION OF
THE PROBLEM
• Activity 1 (15 min)
1. Individually, identify
and describe the
problem you address
or that you are trying
to solve with your
company or business
idea.
2. Then, comment in
groups of 4 people.
Provide feedback and
listen to the advice
given to you.

42. INTENSITY OF
THE PROBLEM
• Activity Nº2 (15 min)
1. Individually, answer the
following questions: In
which other ways are
people solving this
p r o b l e m ? W h a t
alternative solutions are
available? Are this
a l te r n a t i v e s g o o d
enough? What is the
i n t e n s i t y o f t h i s
problem? (Shark or
mosquito bite)
2. Then, each group should
comment.

43. Not every need can make for a
business
• A need can be like a
tourniquet, a matter
of life or death. Or it
can be something
irrelevant.
• It can affect many or
few people.

44. Not all customers are the same – Cycle of the
Adoption of New Technologies

45. WHO IS YOUR
CUSTOMER
Activity 3 (15 min)
Individually, list who your
main customers are and
identify which ones are
“early adopters”, those
who experience their
need or problem with a
h i g h e r d e g r e e o f
intensity. Comment.

46. Empathy Map

48. How to build it
1. Define your customer
– Name
– Age
– Personality
– Other
2. Build the Map

49. Cosmetofood
Drinks for skin health and
beauty based on molecules
extracted from berries and
grapes..

50. 1. Profile definition
• Name:
Margarita M.
• Age:
35
• Additional information:
Mother of one child.
Married.
Works during the day.
Worried about the well
being of her family.
Definición de
Perfil
Mujer
30 a 60 años
Profesional
Nivel socio-económico medio / medio
alto
Con familia
Jornada laboral demandante

51. 2. Construction of the map
A polluted
planet
Have little
time for
myself
I have little
time for me
My family
comes first
I feel
overwhelmed
My husband
doesnt
support me
Recommenda
tions from my
friends
Advertiseme
nts that get
my attention
You are
getting older
No time for
exercising
ón de
mico medio / medio
mandante
Have time for
herself
My family
well beign
Feeling young
Looking for
bauty
products at
the
supermarket.
Growing old
Not finding
natural
beauty
products.
Not having
enough time
for herself.
Not any
natural
products
available.

52. 5
2

54. EMPATHY MAP • Activity 4 (20 min)
1. Individually, complete the
empathy map of your main
customer segment.
2. Visualize him or her as an
individual person: what would
her name be, how old she is,
what is her activity and main
features.
3. If your customer is a
company, think about the
decision maker, the buyer or
the user of the solution
inside the company.
4. Then present the canvas to
the rest of the group.
Comment and receive
feedback.

55. Empathy Map

56. There are no customers without a
pain to address
The main cause for failure in new
companies is the lack of a real problem
faced by customers willing to pay.

57. Customer’s pains are the business
hipothesis
• Each problem or need is a business hypothesis.
The value proposition, to be consistent, should
address this problems or needs.
• The only way to know if our assumptions are
real, is to get out to the street and meet them.

58. How to explore and understand
the customer’s needs?

59. "It's really hard to design
products by focus groups. A
lot of times, people don't
know what they want until
you show it to them.”.
(Steve Jobs)

60. Traditional Market Research
A big number of products and services that are launched
every yeart fail, even if they invest heavily in market
research, because they dont consider the customer`s
perspective.
The evidence indicates that entrepreneurs that
understand customers needs have higher chances of
success than those that start just with a technology or
product.

61. People are not going to ask for something
they don’t know it is tecnically feasible.
Flaws in traditional market
resarch
1
...However, there might be problems without
a current solution

62. “If
I
had
asked
people
what
they
wanted,
they
would
have
said
faster
horses.”
Henry Ford

63. People usually fail at explaining
their own behaviour.
Flaws in traditional market
research
2

64. At the supermarket

65. 3. People tend to give answers that they think are expected or that
would please the interviewer.
4. People when interviewed dont remember emotions or feelings they
experience while using products or services.
5. The imagination and desires of people respond to their experience, so
they accept the imperfections of the world as normal.
6. Questions are usually skewed and reflect the assumptions of the
researcher.
Other flaws...
*Fuente: "Taking and Expanded View of Costumers Needs" (María Flores, Charles Spinosa y Bobby Calder; Marketing Research, Winter 2000)

66. Some key issues…
• Avoid doing focus groups or surveys:
– The surveys assume you already know the questions to
ask: one interview allows to explore subjects that go
beyond your initial understanding.
– Even worse, the surveys assume that you already know
the right answers.
– You cannot see a customer during an interview (non
verbal language is important).
– The focus groups lead to wrong answers: group
thinking.

67. “Carefully watch how people live, get an intuitive
sense as to what they might want and then go
with it. Don’t do market research.”
Akio Morita

68. Ethnography

70. Movie: “What Women Want”
(2145,
3845)

71. Importance of the Context

72. Video BBC

73. African Mongoose and the rats in Hawaii:
• Importance of the context.
• In Hawaii there was a problem with a plague of
rats.
• A predator was brought to the island, the
African Mongoose.
• As a result: there were two plagues in Hawaii.
Why this happened?

74. They never met!

75. Seaweed skin cream

76. Fast dry floor cleaning wax

77. Detergent with higher
cleaning power

78. STORYTELLING
Activity 5 (25 min)
Individually, explain the
problem that the customer
faces: what happens before,
during and after the problem
arises. Present the problem as
the script of a movie.
U s e t h e fo r m a t o f a
storyboard (look at the next
slide).
Then, choose two cases in
each group and present the
story in no more than 5
minutes to the rest of the
group.
Provide and receive feedback.

79. Example of a Storyboard

80. Guide for Observation Field Work
• Field work consists of looking for graphic evidence of
the existence of situations of the need or problem to be
addressed by the solution.
• Register the situation with videos or pictures.
• Answer the following questions:
– What are people doing? Who participates? Where this
situation happens?
– How they do what they do?
– Why? What are their motivations? What objectives they try
to achieve?

82. Why interviewing?
• To understand the motivations, thoughts and
emotions of the costumer or user. When we
understand their decisions, atittudes and the
reasones they give for what they do, we can
design based on their needs.

83. How to prepare an interview with
customers – Steps to Follow
1. Identify customer segments to interview.
2. Create at least 3 hypothesis of problems that each
segment faces.
3. Define “how many” and “where”. This is, the number of
the sample and the setting of the interview (we
recommend at last 10 interviews).
4. Define how you are going to get them.
5. Make an interview guideline.
6. Develop the intervies.
7. Analyze the results.

84. How to prepare an interview with customers–
Identifying segments and building hypothesis
• Look for “eary adopters” or “extreme users”,
those customers that confront the problem or
need with bigger intensity.
• Point out the three main problems that the
customer faces (the hypothesis).

85. Not all customers are the same–
Hierarchy of customers(S. Blank)
They have a problem.
They are aware of the problem.
They are actively looking for a solution.
They improvised a solution.
They have budget to
adquire a solution.
“Early
Adopters”!

86. How to prepare an interview with customers
- How many do we interview?
• At least 10 interviews.
• Your not looking for statistical significance,
instead you apply a saturation criteria: you
interview until the results repeat each other.

87. How to prepare an interview with
customers – Stablish contact
• Try to find people you don’t know or that are not your
direct relatives or friends.
• Once you make the first interview, ask the person
interviewed if he can introduce you to other persons
that belong to the customer segment.
• You can also make calls or write emails to people you
don´t know, introducing yourself, explaining the
purpose of the interview and asking for time.

88. How to prepare an interview with
customers – The guideline
• Brainstorm ideas of possible questions.
• Identify and order the questions in subjects. The
order of the questions should help with the flow of
the interview.
• Make sure you provide enough space for “Why?”
and follow up questions. Also, have many
questions like “Tell me about the last time that
you _____”, and questions about their feelings
regarding the problem.

89. How to interview
• One person at a time.
• Questions and objectives have to be
prepared beforehand.
• Separate behavior from feedback on the
product in the discussion (research
actions, not just opinions, and get deep in
the problem.
• Prepare to listen things that you may not
like (it is not a sale).
• Ask for total honesty.
• Make open ended questions (avoid yes/
no questions).
• Listen, don’t talk too much (follow up on
the subjects that may interest the
customer; short and unskewed questions,
don’t fill up silence).
• Get deeper (ask “why?” many times).
• Repeat to confirm (in any important
subject, repeat what the person just
said to confirm or allowing him to
clarify the idea). Agradecer.
• Ask him to introduce you to more
people for the next interviews.
• Take notes as soon as possible.

90. Development of the Interview
Fuente:
Stanford
D.
School
h<p://dschool.stanford.edu/wp-­‐content/themes/dschool/method-­‐cards/interview-­‐for-­‐
empathy.pdf

91. For an interview guideline
• Have an hipothesis about:
– The problem.
– How the costumer addresses the problem.
– The context.
• Make questions:
– Do you have this problem?
– How do you take care of this problem? Have you find
any solution? Are you satisfied with them?
– When this problem happens? How does it develop?

92. ROLE PLAYING • Activity 6 (20 min)
1. Individually, elaborate the
guideline for an interview,
with questions that follow
the hipothesis to explore
f o r e a c h c u s t o m e r
segment (remember the
previous advice).
2. Work in groups of 3 people,
where each one is A, B or C.
3. A should interview B (the
customer). C observes the
interview from outside.
4. Then, C gives feedback and
they change roles.

93. Next Steps
• Do activities of observation of the context were the customer faces
the problem.
• Expected results: pictures or videos that show the existence of a
problem or need.
• Do at least 10 interviews with customers.
– List problem hypothesis for each customer segment.
– Elaborate a guideline for the interview.
– Keep record of the interviews and presente results (the hypothesis were
present, not present, or new problems emerge).
• For the next video pitch you should present:
– Problem hypothesis for each segment.
– Results with evidence of the observations and interviews (pictures,
videos and quotes).

94. What could happen
• The problem is real and has a huge importance.
• The problem is not so important to the customer or it
doesnt exist.
• The problem is seen in other customer segments.
• Other problems emerge that are bigger to the customer.
You have to verify, not guess, if the customer problem is
real.