41 min read

Lean B2B: Build Products Businesses Want

Customer Development & Lean Startup in B2B

I smashed through Lean B2B: Build Products Businesses Want. Below are my notes.


Takeaways

  1. Identify two to three problems that matter. How? Conduct problem interviews, know what to look for, and prioritize problems and opportunities.

Budget displacement grid

budget.jpg

Solution impact grid

solution.jpg
  1. Validate the existence of a well-defined market that repeatedly benefits from our solution. Learn the value that our solution provides and its place in our prospects' technology mix while depending our relationship with them to learn how to repeat sales. We emerge from this once we have five lighthouse customers, or five customer successes.
  2. Assess whether we have found Product-Market Fit. Do we have P-M fit? Does that mean we can do more of the same and our business will grow?

Summary / Outline

1-Introduction

2-Where I’m coming from

3-The nature of the B2B world

People

4-Where it starts

5-Choosing a market

6-Finding early adopters

  • Study the concepts of Crossing the Chasm
  • Create a list of the early adopters in your professional network
  • Explore the professional networks of your contacts and service providers. List all potential early adopters
  • Find early adopters on social networks, at events and directly in companies that you wish to do business with
  • Prioritize your list of early adopters by their personal influence level and their company’s influence on the market
  • Create an ideal customer profile for your early adopters
  • Sort out the best ways to contact these prospects
  • Keep in mind that there’s an off chance that the early adopters in your market don’t exist

7-Leveraging domain credibility & visibility

Not an expert? Start here.

  • Secondary research
  • Leveraging the team
  • Personal network
  • Building on previous successes

What you can do today

  • Make a list of the industry and functional expertise you have
  • Make a list of your most interesting accomplishments and the solution expertise you developed over the years
  • Write your personal bio in a way that makes your personal credibility stand out
  • Read all secondary research available. Subscribe to blogs, newsletters and news alerts.
  • Look at the make-up of your professional networks. Seek out domain advisors.
  • Mark down the prospects connected to people in your network or the network of your co-founders. Find their influencers.
  • Remember: Personal Credibility, Commitment, Reliability, Passion, and References.

8-Contacting early adopters

  • Choose the appropriate offers your startup can make to early adopters
  • Test your elevator pitch. Understand the essence of your value proposition
  • Draft a script for cold calls and cold emails. Create a three-second pitch
  • Thoroughly research prospects. Make sure the messaging reflects their view of the world
  • Keep track of successes and failures. Adapt your messaging along the way

Problems

9-Finding problems

  1. Discovery - Problem interview (divergent). The starting point of the problem interview phase can be as little as a market insight around which you try to explore and discover problems and opportunities. Whether you have a good hunch for a problem or not, it's best to start with a divergent interview to explore as widely as possible and learn about your prospects, their business, and their problems.
  2. Drilldown - Problem interview (convergent). The second problem interview helps the entrepreneur hone in on problems and dig deep to understand the root causes and the impact that solving this problem would have.
  3. Exploration - Solution interview (divergent). The solution interview phase begins after you create a solution to your prospect’s problem. This stage is about exploring, iterating, and testing the solution to maximize its impact and relevance with prospects.
  4. Confirmation - Solution interview (convergent). The final phase of the solution interview is about confirming that the solution provides enough value for money to change hands. The outcome of the confirmation stage is a solution that has been validated or invalidated by prospects.

10-Conducting problem interviews

As a rule of thumb — and this depends on how talkative your prospects are — you can squeeze as few as three to five questions in a divergent interview and as many as 15-20 in a convergent interview.

Questions around

  • the business drivers,
  • the problems,
  • the intensity of the pain,
  • the problem ownership,
  • the decision-making units (the jury) and
  • the buying processes

Help you understand which problems matter most; they’re deal breakers and should be addressed first.

Sample questions

  • What are your objectives this year?
  • What keeps you up at night? Why?
  • What are your top three challenges?
  • Do you expect these objectives to be different next year?
  • How are you currently solving this problem?
  • How do you typically work around this problem?
  • ​What was the last technology purchase you were involved in?
  • If you identify the need for a new product in your department, how does your team typically goes about purchasing the tool?

What you can do today

  • Brush up on interview biases. Be aware of the patterns you need to avoid.
  • Determine whether you’re going at it alone or in pair, in an office, or in a coffee shop and in one or two takes.
  • Identify your objective for the interview. Do you want another interview, references, or an opportunity to pitch?
  • Select your questions and write a script to support your objectives.
  • Get out of the building and interview early adopters keeping an eye out for indicators of interest, office walls, and body language (yours and theirs)
  • Take a step back, assess your performance, make the appropriate adjustments and go tot he next meeting

Chapter 11 - Analyzing the Results

Five ways to score (prioritize) problems:

  • By frequency - is that pain shared by a lot of early adopters?
  • By intensity of pain - is this a painful problem? Are prospects actively trying to solve it?
  • By budget availability - is this the pain of a buyer? Have budgets already been assigned?
  • By impact - what kind of ROI can you expect if you solve this problem? What impact will it have on the organization?
  • By market education - is there competition? Would you need to create a completely new paradigm?

Solutions

12-Finding a solution

Since you know that you're talking about a real problem, what you need to figure out is whether you are solving this problem the right way and whether you can get paid for it. The only way to do this is by trying to close prospects on a sale or a pilot project.

For your first few customers, you might decide to ask for an amount that does not trigger the need for budget escalation or complex negotiations instead of asking for fair value.

There are three approaches to selling your first pilot to prospects

  • Giving it for free -- Warning: In corporations, budget size often dictates attention. When the solution is free, the problem seems less significant. In most cases, free pilots never get activated.)
  • Signing a letter of intent — Don’t ask for them; they’re a clear path to false validation
  • Asking for money upfront

Asking for money upfront

Most successful B2B entrepreneurs ask to get paid up-front. They realize that they are providing value, and if that value won’t lead to revenues, it’s best to know sooner rather than later.

Asking for money is critical. It doesn’t matter that your price is lower for your first few customers, but (some) money has to change hands. When talking, prospects always want to buy. Promises are uplifting, but they also can’t be taken to the bank. The only true way to validate a revenue model is by asking a prospect to sign a contract and pay money for a solution. There is no alternative to getting paid.

13-Creating a minimum viable product

What you can do today

  • Go through the information you collected with your problem owners. Create the profile of your prospects.
  • Understand the competition and the alternatives. Find the value you can provide that no one else provides.
  • Brainstorm a solution with your team and partners. Separate facts from assumptions.
  • Rank assumptions by risk level. Identify your riskiest assumptions.
  • Identify the two or three features that would directly solve the problem.
  • Decide how much fidelity your team can afford with the MVP.
  • Create an MVP, keeping in mind the DOs and DONT’s of MVPs.

14-Preparing your pitch

What you can do today

  • Review your notes to understand which of your prospects are more ready to be sold on your solution
  • Categorize the prospects you met — were they economic or user buyers
  • Determine the best revenue model for your solution and come up with a simple pricing model
  • Verbalize the value that your solution will bring to your prospects
  • Estimate the delivery delay. If a client were to sign up today, when would the pilot be ready?
  • Determine what kind of carrots you could throw in to convince your prospects to sign on (optional)
  • Think of metrics that could help crystalize a conditional purchase agreement
  • Create a one-pager or a pitch deck for your solution
  • Re-work your messaging and launch an updated website
  • Reach back to your prospects seeking advice. Offer them market insights.

15-Conducting solution interviews

What you can do today

  • Put on your best suit and your friendliest smile and go out pitching
  • Quickly establish contact with your prospect. Be likeable.
  • Bridge the gap between the previous and current meetings. What have you been working on? Qualify the prospect with the pain you’re solving.
  • Tell a story around your startup and what makes your approach unique
  • Explore the solution with a demo or your MVP to understand the expectations and the features that drive the most value
  • Determine whether you’re ready to sell or whether you’ll need to close another meeting
  • Looking at the pricing model, close your prospect on a pilot project, or at least another meeting
  • Try to meet the other buying influencers if it hasn’t already been done
  • If you’re successful, define the basis for a working agreement

16-Product-Market Fit

You were able to make some sales, get a few case studies and learn about the value of your solution — does that mean you have P-M fit? Does that mean that if you do more of the same your business will grow?

P-M fit will be a mix of:

  • Revenue
  • Engagement
  • Growth
Calls are not P-M fit; forced sales are not P-M fit. You have P-M fit when the next thing to do is to scale the model. – Jason Cohen

Once you have found product-market fit, the challenges will become:

  • Getting the product into customers’ hands;
  • Improving product usage and engagement;
  • Increasing product (and perception of) value;
  • Increasing revenue and profitability;
  • Building for the pragmatist and early majority.

What you can do today

  • Take the time to define what P-M fit should be for your business
  • Sit with your customers to understand why they bought your solution
  • Ask yourself the hard questions. Do you have P-M fit?
  • Oil up your processes and adapt your collateral if you have P-M fit
  • Consider various types of pivots if you don’t
  • Iterate if you have partial P-M fit
  • Make sure you’re moving forward no matter what you decide to do

Speed

17-Common challenges

  1. Being everything
  2. Pet problems - working on solutions to pet problems never turn into revenue
  3. The curse of “interesting”
  4. Problem: Everyone thinks it’s “really interesting” but don’t buy the product.
  5. Solution: Look for honest validation. Prospects purchase the solution for the value it provides. There’s a reason why so many B2B solutions have large market shares in spite of terrible user experience. B2B buyers buy an ROI, not an interesting feature set.
  6. Postponed usage
  7. Have you been selling to the wrong people? Chances are, if they haven’t even got to it after a month they don’t have enough pain or don’t see enough value
  8. Is the Activation process not working? Perhaps IT can’t implement the solution before another month. Look for ways to handle the setup. Remove any friction with the activation process.
  9. Focus on core tasks through analytics. Dig deeper with usability testing sessions or call users and ask why they haven’t used the reporting functions, the search, or any of the core features of your solution. Iterate your way to adding more value, not more features.
  10. Long sales cycles
  11. Insufficient credibility
  12. Gatekeepers and saboteurs
  13. Soft value propositions
  14. Committed budgets
  15. Insufficient coaching influence
  16. Death by process

18-Speeding up product-market validation

What you can do today

  • Understand where your prospects spend time. Find the watering hole. Network heavily
  • Find ways to work form your customers’ office. Get a feel for the environment. Report back on culture and product fit.
  • Recruit passionate prospects. Test ideas with them every one or two weeks. Meet with the full panel every one or two months.
  • Connect with industry experts and analysts. Establish relationships. Leverage their credibility and testimonies.
  • Attend industry tradeshows. Build a network of sales people. Keep in touch.
  • Be on the lookout for talent and experienced advisors that can share industry expertise and contacts with your team
  • Create a free version of your product to gather as much feedback as possible
  • Multi-track the problem or solution interview processes if your team can manage multiple focuses

19-Conclusion

Top reasons businesses fail

  • Not really being in touch w customers through deep dialogue
  • No real differentiation in the market
  • Failure to communicate value proposition in clear, concise, and compelling fashion
  • Leadership breakdown at the top
  • Inability to nail a profitable business model with proven revenue streams

Highlights

Lean B2B: Build Products Businesses Want (Customer Development & Lean Startup in B2B)

Étienne Garbugli, François Maisonneuve, and Annemarie Vander Veen

David’s mission was to sell an unfinished product with an unproven technology to the CEO of the largest pharmaceutical company in the valley. The whole team depended on him for survival.

Lean B2B is not a business management or a product development book. It’s a book about discovering problems that matter to get from idea to product-market (P-M) fit as efficiently as possible.

Lean B2B is a Lean StartupTM approach, but where the Lean Startup can be viewed as the vision, Lean B2B is the cookbook.

In B2B, you seek to understand the market before finding a product or a solution; the entrepreneur’s vision is second to his ability to understand the needs of the customers. Customers are driving the show; entrepreneurs need to focus entirely on what the business wants.

The customer group or jury that you choose to listen to defines your solution. If you choose a jury that doesn’t have money, you can only expect failure or limited revenues.

Lean B2B shows you how to successfully leverage relationships to validate that you have found the real problems of your target market.

In the last few years, products like Dropbox, Yammer or Apple’s iPhones have been able to gain momentum in the enterprise by appealing directly to end users, bottom-up. This Bring Your Own Device approach challenges traditional corporate purchasing models — where lock-in and transition costs are still important concerns — and raises the bar for enterprise products by making the user experience a key concern.

These companies have shown that a critical mass of consumers can help get a product considered by the enterprise. However, consideration doesn’t mean adoption.

Even new-age startups like Yammer (recently acquired by Microsoft for $1.2 billion), which once spread the notion that big companies will embrace new technologies the same way that people do with consumer products, later hired a full enterprise sales and customer support team.

For example, Dropbox, a new entrant to the enterprise market, had to greatly modify its feature set and hire a senior sales executive to take on the enterprise market — a move that competitor Box, a company focused on the enterprise from the start, had already made

It’s a challenge for a company to target both consumers and businesses. By putting more resources in the enterprise market, Dropbox is taking focus away from the consumer market, where it’s strongest.

Enterprises don’t purchase products like consumers. Building relationships in the enterprise is a dramatic change of strategy for a mass market B2C company like Dropbox.

Finding out what businesses want requires deep relationships.

Lean B2B was not written for entrepreneurs hoping to quickly get validation out of the way. P-M validation is a time-consuming process that startups are ill advised to neglect.

LOCATION: 284

Entrepreneurs reading Lean B2B seeking an easy way to get their products adopted by enterprises will be disappointed; there is no easy way. Although P-M validation is explained simply in this book, it is not easy.

LOCATION: 288

Successful P-M validation takes time, energy and hard work. Lean B2B is not a magic solution.

LOCATION: 290

In large B2B, you seek more proximity with customers. The more proximity you have, the more likely you are to succeed. Although analytics will be part of the validation later, they play a lesser role in the early days of the startup. B2B validation is more relational.

LOCATION: 326

Clients should be perceived as coworkers and not just customers. They should have the same goals as your business. – Don Charlton, The Resumator Founder and CEO

LOCATION: 328

Sales cycles are long, products are complicated and many stakeholders need to get involved for a sale to happen. Business customers have their own resources, agenda, culture and approval processes. It’s crucial to learn how to build relationships.

LOCATION: 330

The Lean Startup, at its core, is about innovation, not relationships. It does not capture the intricacies of creating mutually beneficial partnerships with business stakeholders. There is a limited number of prospects for your business and an even smaller number of early adopters. If you don’t establish real mutually beneficial relationships with prospects, you run the risk of losing customers and reputation.

LOCATION: 332

With HireVoice, we burned a lot of contacts and early adopters by changing products too often.

LOCATION: 339

Customer development was born out of B2B enterprise selling; yet the body of knowledge available outside of The Four Steps to the Epiphany was small to non-existent

LOCATION: 347

We struggled to answer any questions that fell beyond the scope of Blank’s book. The small everyday questions were killing us. We burned contacts, lost face in meetings, got stuck in political dead ends and had prospects mistrust us for withholding key information — all mistakes that could have easily been avoided.

LOCATION: 348

what really helped us was receiving the mentorship of Claude Guay, a sales veteran and a two-time startup CEO (iPerceptions and Accovia). Claude didn’t change our validation process, but he answered all of the small questions we had: •Should you show prices in a pitch deck? •At what point should you start asking for money? •How should you re-engage prospects after the first meeting? •How can you get businesses to honestly tell you about their spend? •How can you reward interview candidates?

LOCATION: 352

While the enterprise can be boring as hell, the whole thing is paved with gold.8 – Alex Williams, TechCrunch Writer

LOCATION: 368

Enterprises can’t innovate like startups and that’s a major opportunity for entrepreneurs.

LOCATION: 369

There are plenty of opportunities at the edge of these large platform plates for startups to exploit. Your multi-million opportunities might not even be large enough to register on SAP or Microsoft’s radar.

LOCATION: 387

Entrepreneurs willing to dig deep into the value chain and the needs of the enterprise will find opportunities for breakout products. They just need the patience and dedication to find their opportunity to enter the market.

LOCATION: 391

There are three critical areas of differences between B2B and B2C customer development: •Return on Investment (ROI); •Client Relationship; •Decision-Making Process. Being unaware of these differences is a big reason why many B2B startups never seem to find their fit within the enterprise.

LOCATION: 398

A B2B transaction is, by definition, an investment; an investment in future profitability, cost reduction, timesaving, productivity or customer satisfaction.

LOCATION: 405

Unlike consumers, businesses never buy technology simply to look good, for fun or for the user experience. Expectations of ROI are always built into the purchase of new technology.

LOCATION: 407

Consumers love novelty; businesses just call it risk. – Ben Yoskovitz and Alistair Croll, Lean Analytics authors

LOCATION: 410

ROI estimation is an essential part of making any kind of sale in B2B. ROI is the native tongue of decision makers and one of the main ways in which products are compared and evaluated.

LOCATION: 411

To succeed in B2B, entrepreneurs need to build deep relationships with a relatively small number of companies. Relationship-building skills are critical to landing long-term agreements and growing existing relationships.

LOCATION: 415

Trust and stability are essential factors. To sign long-term maintenance, consulting or upgrade deals, clients must be convinced that your company will be around for the next two to five years.

LOCATION: 417

Your company can’t change product overnight. Transition must be planned for fear of alienating prospects. You’ll most likely validate your product with the same customers you will do business later on. You can’t just disappear if a product doesn’t work out.

LOCATION: 419

The relationship leading to and from a sale is much more critical in B2B. Starting off as a consulting firm is a strategy every B2B entrepreneur should consider.

LOCATION: 421

In their seminal book Strategic Selling, Robert Miller and Stephen Heiman talk about three types of buyers — Economic, Technical and End User.

LOCATION: 439

validation in B2B often requires winning over a group of buyers.

LOCATION: 441

The different types of buyers often have completely different — sometimes conflicting — motivations and worldviews. It is vital to develop positioning and support collateral that appeal to different stakeholders in the target organization, from the CEO to the budget operator.

LOCATION: 442

Examples of win results could be helping the COO secure larger budgets, helping the end users save an hour a day or, if the implementation is a success, helping the IT manager get a promotion.

LOCATION: 449

Entrepreneurs don’t know the market or the customers but they know the product vision. It feels easier to start there. – Steve Blank

LOCATION: 452

They choose to start up in B2C because of their personal interests or because it feels easier to scratch your own itch and build a solution you can use.

LOCATION: 456

Successful B2C founders are rock stars even non-techies can recognize (Steve Jobs, Mark Zuckerberg, Drew Houston, etc.), whereas equally successful B2B founders are often near unknowns (David Sacks, Aaron Levie, Martin Ouellet, Michael Wolfe, etc.).

LOCATION: 459

I’m a fan of B2B startups because the paths through success are clearer. They’re not easier, but they’re clearer: solve a very painful problem and charge people money to do so. In B2B, if you’re not solving a significant problem, you tend to know pretty quickly. – Ben Yoskovitz

LOCATION: 461

the tasks required of them: •Acquiring the Industry Context •Building a Relevant Professional Network •Understanding the Whole Product •Estimating the Return on Investment (ROI) •Reducing the Enterprise Risk

LOCATION: 465

It’s critical for entrepreneurs to be humble and honest about their starting point. They must be aware of what they know and don’t know about their target industry.

LOCATION: 469

Problems worth solving are typically invisible from the outside. Your task will be to get inside the enterprise, understand how the company thinks and find the real problems.

LOCATION: 477

B2C consumers are accustomed to ‘what you see is what you get.’ They can choose to use it or not. Businesses have higher expectations (customization, integration, security, etc.). Startups need to entirely focus on what the business wants. – Richard Aberman, WePay Co-Founder

LOCATION: 485

In enterprise, the bar is much higher for the product. There are a lot of things that must be put in place just so you can be considered a valid vendor by your prospects. The concept of that minimum set of requirements (features, certifications, partnerships, etc.) is what Bill Davidow, author of Marketing High Technology — a precursor to Crossing the Chasm — calls “the whole product.” FIGURE 3-1. PRODUCT EXPECTATIONS Building a whole product might mean adding a special security token, being compliant with an industry standard or building third-party integrations. It can be a lot of work, but it’s also a great barrier to entry for your product once everything is in place.

LOCATION: 488

There’s no luxury in B2B; there’s only profitability. It’s essential to know your ROI. Cost justification is a critical part of selling in B2B. – Martin Huard, Admetric Co-Founder and CEO

LOCATION: 500

When you’re starting up and you’re selling a vision (or vaporware), you’ll be faced with a mind-boggling chicken and egg problem: you need an ROI to make a sale, but if you don’t have clients you can’t calculate an ROI…

LOCATION: 504

There’s a fine line you’ll need to walk to convince your early adopters to make the jump and believe in your story. Your task will be to collect enough intelligence to estimate an ROI as early as possible.

LOCATION: 506

A big part of selling to the enterprise is being able to understand the perception of risk (migration, change, costs, etc.). If you’ve never worked in a mid- to large-sized business, you’ll have difficulty imagining the complexity that goes into purchasing new technology.

LOCATION: 510

Your task will be to understand the enterprise’s risks and establish processes to help diminish these risks and the perception of these risks.

LOCATION: 512

B2B is market-first. To succeed in B2B, you have to be a consultant regardless of what your previous occupation was. You need to solve a problem before creating a product or, like Thomas and Michael, you’ll end up creating a great portfolio piece, not a business. In the end, their product had more features than customers and Michael had to find another job. Please take this as a cautionary tale. Very few people really are visionary entrepreneurs.

LOCATION: 529

B2B and B2C startups don’t attract the same kind of profiles. B2B founders are generally more pragmatic and process-driven. They appreciate predictability and are usually more risk-averse than their B2C counterparts.

LOCATION: 537

B2C founders generally seek high-impact ventures. They want to build products they would love to use. Their businesses typically require a lot of users to scale and are high-risk, high-reward opportunities.

LOCATION: 539

The key to succeeding in B2B is to learn to think like your customers; to think like an insider. It’s only by looking at the problems through the eyes of your prospects that the bottlenecks in their business become painfully obvious.

LOCATION: 561

You need to understand how your customers work, what they try to accomplish, who they report to, what software they use, what problems they have, how they define success, what they eat, etc.

LOCATION: 563

In general, people tend to behave according to their key performance indicators (KPIs); what will get them a bonus at the end of the year.

LOCATION: 564

You’ll need to understand who has influence over the decision to purchase your technology in the enterprise and figure out what they care about, their problems and their reality.

LOCATION: 571

You’ll also need to find your voice as a company by taking a strong stand against the problems of the industry.

LOCATION: 572

Deep customer understanding is an incredible barrier to entry15. As a startup founder, your ability to understand the market gaps and react accordingly will be one of your strongest competitive advantages. Much like sales, P-M validation is a process that can be learned and improved; it is more science than art.

LOCATION: 580

Deadly B2B sins:

  • Implementing technology that requires too much change in the company
  • Implementing technology that changes too much the way people behave or work
  • Building technology that is too difficult to use
  • Building technology that doesn’t deliver on the promise
  • Building technology that should be a feature of an established product, not a solution of its own
  • Selling technology that doesn’t have clear benefits and value
  • Selling technology that can’t avoid comparison to established players the prospects already know very well

LOCATION: 584

These are the reasons why nine out of ten B2B startups still fail to find a profitable product niche.

LOCATION: 591

When you start up, customer development is the most crucial thing you can do.

LOCATION: 609

You can build a product, raise money, hire a team and incorporate your business, but if your product assumptions don’t match the market needs, you’ll eventually regret having done any of these things.

LOCATION: 610

Forget about vanity metrics and think small. P-M fit is when you have five passionate customers. The temptation will be strong to start optimizing and building sales channels before reaching P-M fit, but resist it. Don’t build a company before P-M fit. Keep you burn low.

LOCATION: 616

If you quit your day job, you will most likely fill your schedule with low-value activities to put in a regular workweek and feel the pressure to build or sell too early.

LOCATION: 625

Finding P-M fit in the enterprise is a lengthy process with many dependencies on busy people. Absolute focus on finding the right product for the right market is critical to your business success.

LOCATION: 627

There will be a time to quit your job, but until you find a problem worth solving, it really doesn’t make sense to go all in. Customer development can be done on the cheap with very little burn.

LOCATION: 628

In B2B, ideas come from gaps in the market. Entrepreneurs need the initial hunch to find the problems and the dedication to go and validate the pain; they don’t need a solution on startup.

LOCATION: 644

As you gain experience in your career, you typically build two types of expertise: functional expertise like development, sales management or merger and acquisition and industry expertise like knowledge of the aerospace or retail industries.

LOCATION: 650

Since the market is global, competitors are quick to copy features, ideas and products. Jason Cohen writes that the only real competitive advantage is that which cannot be copied and cannot be bought21

LOCATION: 693

This might mean: •Insider information; •Deep customer insights; •Endorsements from market experts or celebrities; •Personal authority; •Strong branding; •The dream team.

LOCATION: 695

understanding an industry but having never founded a startup is generally better than being an experienced startup founder with no industry knowledge. However, sometimes not being an industry expert can also help bring new innovation to a market.

LOCATION: 709

Although passionate entrepreneurs can succeed in any industry they’re willing to learn, it’s crucial to choose an industry that makes sense for you, the entrepreneur.

LOCATION: 745

Make sure you can ultimately love your customers, because if your P-M validation is successful, you may be working with those customers day in day out for the next five, ten or 20 years.

LOCATION: 746

Choose your clients as you would choose your employees. Don’t try to build a business selling to lawyers if you can’t spend your Saturday afternoons playing golf with them.

LOCATION: 748

As you can see with the pyramid, there are many things that need to be solidified and validated before even thinking about building a solution.

LOCATION: 773

A market or market segment is, by definition, a group of customers who share the same pain and will refer to one another for buying decisions.

LOCATION: 791

Some of the most interesting market opportunities for B2B entrepreneurs can be found in traditional industries. For example, in 2013 the global market size for the mining industry was $731B27, the domestic airline industry was $708B28, the corporate legal services industry was $650B29, the construction equipment industry was $143B30 and the oil and gas industry was more than $4,000B31. Businesses in these large industries have money to spend. Some of the most successful B2B entrepreneurs target slow-moving industries (see the Spotfire case study).

LOCATION: 813

The first hypotheses with the Lean B2B methodology are around the market and not the problem; we focus on people first. By starting with people, you are much less likely to invent a problem and start with false assumptions.

LOCATION: 820

Markets can be understood from the outside in three ways: 1.Reading up on secondary research (e.g., surveys, reports, etc.) 2.Understanding the competitive landscape (who does what) 3.Meeting with third-party analysts (Venture Capitalists and industry analysts)

LOCATION: 844

Read everything you can to understand what you can do better than the competition. Often, entrepreneurs are able to figure out what could be done better, but they don’t go and validate that what they’re doing is actually better. – Martin Huard

LOCATION: 849

Depending on the target market you chose, Forrester Research, Gartner, Forbes, Marketing Sherpa, Tower Watson or other independent analyst publications might have already done the heavy lifting and synthetized the industry for you.

LOCATION: 854

No matter what source you choose, your objective with secondary research will be to figure out where the industry is headed, identify the players in the space, understand the types of products currently being sold and their perceived value by customers (if any).

LOCATION: 855

The differentiation in B2B is market knowledge. If you don’t know anything about your market, you start with two strikes. – Simon Labbé, xD3 Solutions Founder and CEO

LOCATION: 861

Be sure to understand the buying reflexes of your target customers and adapt to that reality. For example, if customers in your industry are accustomed to purchasing software by check at tradeshows, starting with self-serve Software as a Service (SaaS) is adding extra hurdles to your product’s adoption.

LOCATION: 869

Entrepreneurs often underestimate the value and knowledge of the people that are successfully selling in an industry. There’s a lot of information that can be gathered just by speaking to salespeople and businesses already selling in a space.

LOCATION: 871

Through this process, you’ll also discover potential competitors — or partners — for your business. Take note of the other businesses selling in the space and figure out the types of overlaps and comparisons prospects might perceive.

LOCATION: 874

Visit VCs for fun, to find the influencers. These guys always know guys who compete in that space. VCs love giving their opinions. – Steve Smith, CakeMail Co-Founder

LOCATION: 877

With third-party analysts, you need to take note of the trends, the players in the space, the influencers, the opportunities and their assessment of the market potential.

LOCATION: 883

If the market seems interesting and your contact is knowledgeable, you can also start asking for introductions, networking opportunities and recommended reading to further your understanding.

LOCATION: 885

You need to have a vision and the willingness to change your direction. Don’t go at it without a vision and hoping to find a market. You need a base assumption. – Hiten Shah, KISSmetrics Co-Founder

LOCATION: 888

Although your target market, problem and opportunity hypotheses may ultimately prove to be wrong, they serve a purpose. Base assumptions, much like your vision, help you stay the course of your objectives. Assumptions are an entrepreneur’s compass.

LOCATION: 892

Entrepreneurs can talk to hundreds of people and learn everything about a market, but without driving assumptions, they’ll never get out of analysis paralysis. You must draw lines in the sand and make decisions.

LOCATION: 894

FIGURE 5-3. THE LEAN B2B CANVAS The canvas was designed to be a lightweight complement to the Lean Canvas. A printable version is available in Appendix 3.

LOCATION: 908

In B2B, there are three types of solutions that matter: 1.Solutions that can help increase revenues; 2.Solutions that can help reduce costs; 3.Solutions that can help increase customer satisfaction.

LOCATION: 915

There are two types of benefits that can usually be attributed to a value proposition:

LOCATION: 920

Soft benefits can’t be quantified. They’re harder to sell because customers must have experienced the pain before to realize how important it really is. Examples of soft benefits are ‘increasing employee happiness,’ ‘improving the user experience’ or ‘providing better service.’ If an entrepreneur can quantify a soft benefit, it can be turned into a hard benefit.

LOCATION: 922

Hard benefits can be quantified and lead to a clear ROI. They are the easiest to sell because there’s a built-in way to calculate the value (it’s predictable). Examples of hard benefits are ‘increased conversion,’ ‘increased sales’ and ‘cost reduction.’ Hard benefits are the most attractive to B2B buyers and thus are the focus of this book.

LOCATION: 925

Business departments typically get sign-off on a certain budget to achieve their annual objectives at the beginning of the year and they’re accountable for maximizing their investment. Budgets are rarely created. To sell in B2B typically means getting teams to reassign existing budgets.

LOCATION: 930

If you understand how money is currently being spent, you can understand your prospects’ priorities.

LOCATION: 932

Creating a money map To identify problems and opportunities that matter, you will conduct two side analyses. First, you will create a money map (a visual representation of a prospect’s expenditures) to track spend flow.

LOCATION: 933

Although this analysis has value, it only helps you identify the opportunities companies are already aware of. Unless your prospects are true innovators, they may not have thought of some of the innovations that your team will imagine.

LOCATION: 945

To explore the range of benefits that are possible, you’ll do a second side analysis by turning the motivations from the money map into problems and exploring opportunities around those problems.

LOCATION: 947

Creating value proposition hypotheses Since the Lean B2B methodology focuses on three main value propositions, you’ll look at how these value propositions could play out with the following exploration table:

LOCATION: 949

We now have all of the hypotheses needed to flesh out a first value proposition. For the example at hand, you can use the elevator pitch format from Crossing the Chasm (more in Chapter 6), which is very popular in high-tech marketing:

LOCATION: 957

For (target customers) who are dissatisfied with (the current market alternative). Our product is a (new product category) that provides (key problem-solving capability). Unlike (the product alternative), our product (describe the key product features).

LOCATION: 959

Our product is for marketing teams in small retail chains that are dissatisfied with newspaper advertising. Our product improves revenue through greater reach. Unlike newspaper advertising, our product allows marketers to reach highly targeted customers faster.

LOCATION: 962

Startups are often selling too low… they get to people who live the pain they solve, get lots of feedback, but the people they try to sell to don’t understand the needs of the whole department and don’t end up buying. Try to target top down or middle out. – Jeff Ernst

LOCATION: 974

The ideal customer is someone that: •Has a problem; •Is aware of the existence of the problem; •Has already tried to solve the problem; •Is unhappy with the current solution to the problem; •Has a budget to get the problem fixed.

LOCATION: 980

In 1991, Geoffrey Moore’s Crossing the Chasm introduced marketers to the five customer groups that are part of any market. Although Steve Jobs was right in saying that most customers won’t know what they want until it becomes popular, two of these groups will.

LOCATION: 988

Early adopters and innovators know what they’re looking for. They can see the value in an incomplete solution and have the potential to help you find product opportunities in the enterprise. This is why this group is your first target.

LOCATION: 990

As leaders, early adopters have a great understanding of the technology landscape both inside and outside of their company. They also have a higher tolerance for risk and a greater ability to see the potential of new technology than most of their colleagues.

LOCATION: 992

We typically recognize early adopters by these signs: •They’re actively looking for a competitive edge; •They have the ability to find new uses for a technology; •They seek out and sign up for early trials and betas; •They like to be unique and share new products (it makes them feel good); •They exert some kind of technological leadership in their companies (although they may not be in a leadership position); •They will use a product that isn’t complete.

LOCATION: 996

Working with the right early advocates can substantially reduce the effort needed to sign your first customers, get case studies and convince other companies to follow.

LOCATION: 1006

Startups are often guilty of selling too low, but setting your aims too high — at difficult-to-reach stakeholders — is an equally poor strategy. It’s also unnecessary since managerial levels make the best early adopters.

LOCATION: 1042

People who have a previous understanding of customer development and startup life are ideal candidates to get the ball rolling.

LOCATION: 1044

In total, you’re looking for 50 potential customers you can test your ideas on.

LOCATION: 1045

The best way to find internal champions is through your network, no further than one link away (i.e., friends of friends). – Steve Blank

LOCATION: 1047

Start with the people you know. The best way to find early adopters is through your personal network at one degree of separation.

LOCATION: 1048

Draft a list of potential early adopters working in your target market.

LOCATION: 1052

Are there people your first-degree connections could introduce you to?

LOCATION: 1054

Using a tool like Twitter, spend time looking at the links and services shared by people in your target market. Did they recently get excited by new tools or concepts? Were these tools in your target market?

LOCATION: 1078

Start following these users and create a list of the people you suspect to be early adopters. Closely monitor the type of information they publish.

LOCATION: 1080

At this point, if you’ve been doing your research properly you should have 50, 100 or more early adopters on your list. This list should look a bit like this:

LOCATION: 1093

If you can’t find early adopters, you can’t build a business.38 – Trevor Owens, Lean Startup Machine CEO

LOCATION: 1119

Early adopters are a necessary step on the way to convincing the pragmatist customers your company needs to sign on. Your early adopter customers should be companies that help you get references to sell to your ultimate target market.

LOCATION: 1146

Be sure to use the right kind of customer success stories for your case studies when you start selling to pragmatist customers.

LOCATION: 1148

If you’re small, admit that you’re small. You look small by acting big. People can see straight through that. – Chris Savage, Wistia Co-Founder and CEO

LOCATION: 1250

Transparency is key in the beginning. It’s okay not to know everything. Pretending that you’re big is a huge mistake; prospects can see straight through that.

LOCATION: 1253

The first thing you can do to develop your credibility (and this one is a must do) is to sign up for all the newsletters, blogs and websites that your prospects read. You can find these publications by looking at the links they share on social networks like LinkedIn, Twitter, etc.

LOCATION: 1256

It’s important to know where you want to go and build a network in this direction. – Martin Huard

LOCATION: 1275

It’s not a wasted effort if they can’t help directly. The momentum you’ll create by telling everyone the type of profile you’re looking for will create new opportunities. People are generally willing to help.

LOCATION: 1289

Becoming one of them

You want to put yourself in a “thought leadership” position fairly quickly: blogging is a good way of doing that; white papers or e-books as well. – Ben Yoskovitz

Ultimately, your goal should be to become one of them. Being an outsider is only acceptable in the early days. To truly be successful, you have to be part of the community.

Prospects are your friends. Get to know them, spend time with them. You need to want to be with them, show that you care and demonstrate that you’re building for the long run.

Competitive edge: Early adopters actively seek ways to out-do the external (or internal) competition. They’re driven by the possibility of innovation, which is what they see in startups.

LOCATION: 1365

Visibility: Early adopters like to be the first to discover new products. Discovering the next trend can give them great personal visibility and help their self-image.

LOCATION: 1367

Discussions: They get to talk about their company and their everyday challenges. Early adopters enjoy the process of brainstorming solutions to their problems.

LOCATION: 1384

Intelligence: People don’t have a lot of ways to understand what’s standard in the industry. You can share insights from other parts of the industry and make them smarter.

LOCATION: 1391

Fun: Meeting with you might be the most fun thing they do during their day.

LOCATION: 1393

It’s not for them – You’re solving the problem for other members of the industry, not directly for them. It also has to be clear from the start that you’re not in the business of creating custom solutions.

LOCATION: 1420

A good value proposition is compelling, quantifiable, provable, referencable and easily explainable. Although your value proposition might not be all of this at this point, it is one thing you should always be working on.

LOCATION: 1436

Your value proposition messaging is all you need to begin testing.

LOCATION: 1438

Going through five people to connect with a prospect is better than selling directly to them.

LOCATION: 1484

people who focused on finding problems (problem-finders) were more successful in their creative endeavors than those who focused on solving problems (problem-solvers)

LOCATION: 1504

They found that the students that spent more of their time considering which objects to include in their drawing and how those objects were arranged — the problem-finders — had been ranked much higher in creativity than the students that focused on drawing first.

LOCATION: 1508

You should be looking for a big pain or a big gain that can be tied to a budget, a problem that will deliver a big ROI. You need to find the absolute biggest opportunity for your business, not just any opportunity.

LOCATION: 1518

PROBLEMS THAT MATTER There are an infinite number of problems that your startup could tackle, but they’re not all worth investing the next five years of your life.

LOCATION: 1520

There are three essential parts to a problem that matters: 1.The problem or the pain experienced — the pain; 2.The people to whom this problem matters — the jury; 3.The prize available for solving that pain — the reward.

LOCATION: 1522

Phil Fernandez, the company’s CEO, who self qualifies as insanely curious was always very concerned with the human side of business. They wanted to build a company that was ultra-easy to work with and transparent in its technology and dealings with customers.

LOCATION: 1538

For Marketo, real understanding of the pains of a buyer was worth investing a full year of research before building a solution.

LOCATION: 1543

There are problems you know you have and there are problems you don’t know you have.

LOCATION: 1548

Workarounds — like using a shared Excel spreadsheet for this task — are usually expressions of needs.

LOCATION: 1553

B2B sales experts Robert Miller and Stephen Heiman were the first to focus on the buying influences of the jury in their influential book Strategic Selling: 1.The Economic Buyer – concerned with the ROI; 2.The User Buyer – concerned with the user experience and day-today impact; 3.The Technical Buyer – concerned with the security and feasibility.

LOCATION: 1569

Problems that matter have owners who have budgets and a willingness to use those budgets to remove the pain.

LOCATION: 1581

With my previous venture, HireVoice, we had users with problems, but those problems were not business priorities. The Human Resources teams we met either didn’t have budgets or were not in control of their own budgets (a red flag).

LOCATION: 1582

The customer could have a dozen alternative uses for the money. Your goal will be to identify them all and follow the money much like Richard Aberman and Bill Clerico of WePay had to do.

LOCATION: 1591

Your goal will not be to convince prospects that the problem you envisioned matters; it will be to explore the problems that keep them up at night and be open to discoveries.

LOCATION: 1606

Interviews are about exploration. They help you understand people individually and explore alternatives. With interviews, the depth of the understanding is more important than the quantity.

LOCATION: 1616

Don’t shy away from face-to-face interviews. Relationships aren’t built through surveys.

LOCATION: 1618

FIGURE 9-1. THE DOUBLE DIAMOND DESIGN PROCESS The first part of the Double Diamond process helps entrepreneurs define the problem (customer discovery) while the second part is used to validate the solution (customer validation).

LOCATION: 1625

1.Discovery – Problem interview (divergent) The starting point of the problem interview phase can be as little as a market insight around which you try to explore and discover problems and opportunities. Whether you have a good hunch for a problem or not, it’s best to start with a divergent interview to explore as widely as possible and learn about your prospects, their business and their problems.

LOCATION: 1630

2.Drilldown – Problem interview (convergent) The second problem interview helps the entrepreneur hone in on problems and dig deep to understand the root causes and the impact that solving this problem would have.

LOCATION: 1633

3.Exploration – Solution interview (divergent) The solution interview phase begins after you create a solution to your prospect’s problem. This stage is about exploring, iterating and testing the solution to maximize its impact and relevance with prospects.

LOCATION: 1635

4.Confirmation – Solution interview (convergent) The final phase of the solution interview is about confirming that the solution provides enough value for money to change hands. The outcome of the confirmation stage is a solution that has been validated or invalidated by prospects.

LOCATION: 1637

To be successful, you have to shift the context to learning. In a learning context, the customer does most of the talking and you don’t have to know all the answers. You’re not trying to knock down the barriers; you’re trying to find out what they are in the first place.

LOCATION: 1657

The following interview pointers will help you organize valuable interviews48:

LOCATION: 1666

Have a plan: Create an interview script and stick to it. It’s okay to adjust the phrasing or add questions, but being able to compare interviews is critical.

LOCATION: 1668

Separate target groups: Focus on one sector or market vertical at a time to get a consistent data point. For example, if you are to test the dentist vertical, ask the same questions to every dentist you meet.

LOCATION: 1670

Meet one prospect at a time: Your goal is to make them talk about their personal pains, not their employer’s. Keep it one-on-one.

LOCATION: 1672

Ask open questions: Who, what, when, where, why, and how, not yes/no questions. Dig deep and avoid closed questions.

LOCATION: 1678

Follow emotion: Whenever you hear emotion in the person’s voice, prolong that line of conversation.

LOCATION: 1679

Record and take notes: You miss 50% of what’s being said during the interview if you’re taking notes. Record, take notes and re-listen to the interviews to gain new insights.

LOCATION: 1680

Don’t judge: Your goal is to get as much information as possible in a limited time. It’s better to have more data than less; don’t disqualify the prospect during the meeting.

LOCATION: 1682

Encourage complaints: Whenever the person starts complaining, listen. People are more specific with complaints than praise. Specific examples will really help you learn about the problems.

LOCATION: 1683

Focus on actual behavior: People are not very good at predicting their own actions, knowing what they want, or knowing their true goals. Avoid what ifs. Ask about recent experiences.

LOCATION: 1685

Bring a partner (sometimes): A two-person team can have one person leading the interview while the other takes notes. It might make your team appear more credible and will definitely accelerate share back with the team. Any more than two interviewers typically intimidate participants.

LOCATION: 1687

Parrot the answers: Repeat the answers back to your prospect for further clarifications and to validate your understanding. Do this by saying, “So what you’re saying is…”

LOCATION: 1689

Reference “other people”: Cindy Alvarez recommends challenging your pre-existing hypotheses by referencing “other people.” For example, “I’ve heard from other people that ______. Do you agree?” It’s easier for people to disagree with an anonymous third party than to disagree with you.

LOCATION: 1691

As a rule of thumb — and this depends on how talkative your prospects are — you can squeeze as few as three to five questions in a divergent interview and as many as 15-20 in a convergent interview.

LOCATION: 1710

Questions around the business drivers, the problems, the intensity of the pain, the problem ownership, the decision-making units (the jury) and the buying processes help you understand which problems matter most; they’re deal breakers and should be addressed first.

LOCATION: 1712

FIGURE 10-1. INTERVIEW QUESTIONS

LOCATION: 1719

Some founders choose to do single interviews while others elect to do many with the same prospects. In B2B, because of the amount of information to collect, it might be good to interview every prospect once before digging deeper with the most receptive ones.

LOCATION: 1731

You shouldn’t put a limit on the number of meetings you can have with prospects. As a general rule, it takes more in B2B.

LOCATION: 1733

It’s essential to have a script and an objective, while not being too strict — gems often come out when prospects go off track. This part is where the bulk of the learning happens; it’s important to dig deep.

LOCATION: 1778

A meeting wouldn’t be complete without asking for a follow up. Your objective is 1) to get another meeting to validate your understanding of the problem and 2) to grow your network of early adopters by asking for five contacts that share this problem. This is how you will get references moving forward.

LOCATION: 1812

At the end of the interview, if it’s gone well, ask them for another meeting to show them the solution. If they’re really excited, they might even ask to see it before you have to ask.

LOCATION: 1815

With problem interviews, you need to close the customer on another meeting to validate problems, show prototypes or to get them to join a pilot.

LOCATION: 1828

As you move forward, you should keep your early adopters in the loop; they can become customers or advocates for your business.

LOCATION: 1837

Note review Immediately after the interview, review your notes with your partners. What elements stood out? Were there any surprises? Take note of your impressions and ideas while they’re fresh and highlight the noteworthy themes that came out.

LOCATION: 1839

If you have to convince someone that they have a problem, you have a marketing problem. It takes millions of dollars to solve that. – Brant Cooper

LOCATION: 1868

Problem interviews are about emerging patterns, not numbers. You should go through problem interviews until opportunities start to appear and you stop learning, not until you’ve interviewed a certain number of prospects.

LOCATION: 1874

Sometimes, with a varied set of profiles it can take up to 40 interviews before seeing any patterns emerge. Other times, when the profiles are very similar, it takes only 12. In general, plan for 20 to 30 problem interviews.

LOCATION: 1876

The more people Jason spoke with, the clearer the opportunity became. It was night and day compared to the marketing analytics tool.

LOCATION: 1894

After 30 interviews, he could tell that many prospects had the same needs, the same reality and that there was agreement on the price.

LOCATION: 1896

As you share back the information collected with the members of your team, it’s normal to have the urge to jump to conclusions and start thinking about solutions. Resist the temptation and take a step back. Be sure to put time between data collection and data analysis.

LOCATION: 1901

You’re looking for the bigger picture and the underlying trends. This might mean only listening to some of your prospects.

LOCATION: 1903

Be sure to remove edge cases from your analysis to avoid building the wrong product. Looking at the data you collected, were some of your early adopters completely different from the majority? Were there early adopters that worked in completely different ways or had access to budgets or resources that others did not?

LOCATION: 1940

Chapter 11 - Analyzing the Results

Your objective is to solve a big pain and deliver a big gain. Although it is possible to succeed while working on a lesser problem, choosing a problem to solve is one of the most critical decisions in the life of a startup.

Solving a problem that causes pain to a lot of buyers in a way that has a big impact on the bottom-line will significantly reduce marketing and sales friction for your company. This point should not be understated.

The easiest, but also least effective way to score problems is by frequency. How many early adopters interviewed had this problem? Knowing that a problem is frequent is good information, but it is of limited value. It says nothing about whether people would buy a solution to the problem.

If the problem is real, people are dealing with it somehow. Maybe they’re doing something manually, because they don’t have a better way. The current solution, whatever it is, will be your biggest competitor at first, because it’s the path of least resistance for people.
– Ben Yoskovitz and Alistair Croll

We can tell that a problem is painful if:

  • The same person repeats it frequently with passion during the interview. Repetition is a sign that the problem is current and top-of-mind.
  • The company is actively trying to solve the problem or has assigned a budget to solve the problem. In that case, the company thinks it’s critical and they have a vision for the solution.
  • The problem is frequently listed in the top five of your early adopters. If it’s not part of the top five, it may be too far ahead of the market.

Perhaps the business has assigned budgets or resources to solve that problem or perhaps they have put a few Excel spreadsheets together for a quick fix. If you can’t beat the Excel solution, your solution will always be a “nice-to-have.”

Problems that are not mission-critical lead to nice-to-have solutions and are harder to buy into. To successfully sell nice-to-have solutions to an organization, you need to target organizations that are extremely profitable, have a tendency to try new products or you need to just get bloody lucky.

Avoid nice-to-haves by finding the real pain of a buyer.

When a problem really matters, companies are willing to spend to have that pain removed. As I mentioned earlier in the book, companies don’t spend on nice-to-haves, they invest with expectations of ROI.

For each problem identified, fill out a grid as follows:

Budget displacement grid

budget.jpg

By impact Businesses value new money above all else, but if solving a problem can help them save money or build stronger ties with their customers, they can also be willing to open their checkbook.

Put on your solution engineer hat for a moment and look at the remaining problems. How would the world change for these prospects if you could solve that problem? What kind of ROI could be expected? Who would benefit from this solution? Who would look good in the process?

Solutions that can generate a high ROI have the most impact, and solutions that can make an economic buyer or someone influential look good or reach their annual objectives are the easiest to sell.

You must understand the organizational impact of your solution. Will only one person be impacted? A whole department? The whole company? How much time can be saved? How much more value can be generated?

For each problem previously identified, fill out a grid as follows:

Solution impact grid

solution.jpg

It’s really important not to create a product without any competition. – Unknown

Solving a problem that requires market education can lead to great opportunities if it buys you first-mover advantage, but be aware that it greatly increases your risk and that markets are rarely dominated by first-movers.

The technology history books are dominated by successful second, third and fourth market entrants (think Google, Facebook and LinkedIn52). While the first-mover spends money on market education and creating a need, the emerging competitors learn, build, adapt and come in for the win.

It’s hard to get honest feedback. Hearing, “It’s interesting” is not really validating a product. There’s a scale of comments with or without value. Entrepreneurs need to judge if the feedback is valuable and stay skeptical.
– Pete Koomen, Optimizely Co-Founder and CEO

Beyond scoring problems, there is no magic formula to help you select the problems your company wishes to solve.

You will need to draw a line in the sand and decide which problems to address. Be mindful that intuition and passion should also play a role. Your team is a critical part of your business’s success.

Part IV - Solutions

This section covers how to build an MVP, prepare a pitch, conduct solution interviews, and assess whether you have found product-market fit.

Case studies are an essential currency in B2B. Being endorsed by a prominent customer in your target market can put your technology on the map almost overnight.

Case studies typically need to be worked into the deals. Convincing businesses to publically endorse your product is a big part of your uphill battle for credibility. Not only will you need case studies for every vertical you target, they will need to change as you make your way through the Chasm to start selling to the early majority.

LOCATION: 2140

Although the old adage in big business that nobody ever got fired for buying IBM was a creation of its marketing team53, it holds some truth. No prospect will ever want to vouch for your solution at the cost of a promotion or, worst, a job. Understand the strengths and weaknesses of your product and the implications of signing with you. The last thing you want to sell is a career risk.

LOCATION: 2159

In larger companies, often the people you deal with are constrained in what they can do publicly. Even the best-intentioned customers might have their hands tied by legal or marketing constraints.

LOCATION: 2166

These may include one or a combination of the following, and you should always push for the highest form of endorsement possible. 1.Using the company name and logo on collateral This is the most common form of endorsement. Simply displaying customer logos on a website helps create social proof — the positive influence created when someone finds out that others are doing the same thing. 2.Writing a testimony A personal endorsement from a prominent stakeholder can help establish likeness and increase social proof. Video testimonials typically have more impact than text testimonies and can be interesting to explore. 3.Publishing a press release about the deal Press releases help drive momentum for your business. A good PR agency can help get your article republished by other media groups for great exposure. 4.Writing a blog post or technical paper about the experience Working with a prospect to explain the reasons why they bought and decided to trust your company shows passion and is a great way to give visibility to your prospect. 5.Taking a call a month from other prospects This is the least public form of endorsement. Making a current customer available to answer prospects’ questions is a very effective way to build trust and counter hesitations. 6.Writing a case study As stated earlier, case studies are an essential currency in B2B. A well-researched case study can help explain why clients decided to buy and demonstrate the ROI of your solution. 7.Presenting at a conference or event about the partnership Presentations are the highest form of endorsement. Not only do they give your company a lot of credibility, they also demonstrate how passionate your customers are about the solution.

LOCATION: 2169

SOLUTION RULE Your solution must be at least two times faster, two times better and two times cheaper than the known alternatives.

LOCATION: 2542

Get back to Dave McClure’s Metrics for Pirates (Chapter 16) and ask yourself whether customer acquisition is not the problem. Have you been selling to the wrong people? Chances are, if they haven’t even got to it after a month they don’t have enough pain or don’t see enough value.

LOCATION: 3225

Maybe then the Activation process is not working. Perhaps IT can’t get to implement the solution before another month. Look for ways to handle the setup. Remove any friction with the activation process. Focus on core tasks through analytics. Dig deeper with usability testing sessions or call users and ask why they haven’t used the reporting functions, the search or any of the core features of your solution. Iterate your way to adding more value, not more features.

LOCATION: 3228

Next, recruit the five or six most passionate prospects and create a customer development panel. Although these prospects must share the same problem, they can have radically different visions. You can reward your panelists with free or discounted product usage, privileged access to the solution or even equity in your company if you can afford it. The objective is to make them understand that if you win, they win.

LOCATION: 3396

Enjoying these posts? Subscribe for more