As recently as 2023, market research firm Gartner, reported that a sobering 40-80% of new technology products fail. Ouch! And when the cause is attributed to a low perception of value among customers, our hearts hurt even more. đ In many cases, skilled software teams have built smartly engineered, beautiful, usable solutions yet fail to solve a problem people are willing to pay for.
It reminds us of the classic baseball movie âField of Dreamsâ, where desperate farmer Ray hears a voice whispering âIf you build it, they will comeâ â inspiring him to build a baseball diamond in the middle of his failing cornfield. In the film, Rayâs high-risk leap of faith is rewarded beyond expectation with a line of customers stretching to the horizon. Sadly, this all-too-common mindset among entrepreneurs has led countless product teams astrayâresulting in products that fail to score with customers.
Customer developmentâthe systematic process of validating product ideas through direct customer interaction before and during developmentâoffers a powerful alternative. Not to be confused with user research, customer development focuses on those who assess and purchase your product. Of course, we also care deeply about usersâthe ones who interact with your product daily. However, by understanding customer needs and existing behaviors before investing heavily in development, companies dramatically increase their chances of creating products that can gain early traction and generate business ROI.
Paul Graham, cofounder of Y Combinator coined the phrase, "Make something people want.â This simple directive encourages software teams to focus on customer needs. Doing so reduces wasted development resources by ensuring your product is grounded in real evidence and insight, not biased assumptions about customersâ pain or goals.
Products grounded by customer development methods prioritize solving real customer problems, leading to easier sales cycles and lower customer acquisition costs. These methods can also improve customer retention and customer lifetime value. Most importantly, deep customer understanding provides a competitive advantage in crowded markets where parity in technical features alone often fails to change customer behavior.
Companies that bypass customer validation often pay a steep price. Consider Quibi, which shut down after six months despite $1.75 billion in funding, and failed to validate its core assumption that consumers wanted premium short-form content enough to pay for it. Again⌠ouch!
The costs extend beyond financial investment. Teams waste months or years building features nobody wants, missing market opportunities, and demoralizing talented designers and developers. Technical excellence alone cannot save a product that doesn't solve a compelling problem. As entrepreneurship guru Steve Blank â a long-term advocate of customer development â notes, "No business plan survives first contact with a customer."
Some leaders resist customer development, arguing they "don't have time" or that "customers don't know what they want." Yet the time saved by building the right product the first time far outweighs the investment in customer development.
The basic steps of effective customer development process are to:
Start by keeping things lean. You don't need a Ph.D. to get valuable insights. Begin with 5-10 potential customers who fit your target profile. Reach out and arrange a brief conversation. The goal isn't statistically significant data but rich qualitative insights. As you review your findings, determine whether they confirm or invalidate your hypothesis. Are you solving the right problem? Do you have the target customer? Reflect on what youâre learning as a team to identify high-value insights that explain your findings and provoke creative thinking that leads to better solutions.
When conducting customer interviews, focus on their behaviors and uncovering problems rather than pitching solutions. Ask about what they currently do to solve a problem and pay attention to how they made their buying decision.
â(Your customer's) current behavior is your competition. It doesnât matter how effective or ineffective their current behavior seemsâitâs what they are accustomed to and it works (at least to some degree).â
Cindy Alvarez, Lean Customer Development
Recently, Truefit applied customer development to an enterprise-level cybersecurity readiness platform. Initial research confirmed the productâs value, but the conversations revealed a critical gapâenterprise buyers required aggregated reporting for C-suite decision-making. Prioritizing this planned feature not only improved adoption but also justified a higher price point.
Engineers and developers also benefit tremendously from customer insights. Understanding the "why" behind feature requests leads to more innovative and effective technical solutions. Customer development often bridges the gap between technical possibilities and business outcomes.
User stories derived from actual customer conversations have an authenticity that hypothetical ones lack. This allows developers to make better technical decisions and prioritize work that delivers real value. When you build technical flexibility into your architecture, your teams can accommodate customer feedback and learnings without excessive refactoring.
Tracking key metrics like customer acquisition cost, retention rates, and feature adoption helps teams measure the impact of your customer development efforts.
Pack Up & Go worked with Truefit to create a customer software travel planning platform for their trip planners. Informed by our early customer development efforts, we increased referral bookings from existing customers word-of-mouth by over 30% in the first year.
Customer development isn't just another processâit's the foundation of product success. By systematically testing assumptions and building based on validated customer needs, software product teams can dramatically improve outcomes.
"Success is not delivering a feature; it is learning how to solve the customer's problem."
Eric Ries, The Lean Startup
So letâs go! Grab your notebook, clear your calendar for a few hours next week, and talk to three potential customers. Ask them about how they solve a particular problem you are interested in today. Listen more than you speak. You might be surprised by what you learnâand how quickly those insights can transform your product roadmap.