The 5-Step Process For Making Products That Customers Use And Pay For

Share the knowledge

Most products fail. Not because we fail to build what we set out to build, but because we waste time, money, and effort building the wrong product. So, how do you build products that people use and pay for?

Many people have tried to answer this question in blogs, video blogs and even publications like FastCompany. It’s the billion dollar question. If you had the perfect answer to it, you’re probably a billionaire by now.

There’s no midas touch to magically turn products into revenue-generating machines. But, that doesn’t mean that you should throw enough new features at the wall and hope some of them will stick. With the right process in place, you can minimize the risk of product failure.

Most are familiar with the agile software development process. A lot of companies have adopted this process in hopes of building great products. But, in my opinion, agile software development is just half of the answer.

Agile development doesn’t mean you’ll build products that people use. You could just be building a terrible product really, really fast. (Click To Tweet This)

That’s why Agile development should go hand-in-hand with customer development and Lean Startup principles. In this Forbes article, Rally Software, a software vendor and agile method trainer, says that its customers get to market 50% faster and are 25% more productive when they employ a hybrid of Lean and Agile development methods

The customer development and Lean Startup process helps teams focus and find answers to key questions such as “should this product even be built?” and “Can we build a sustainable business with this product?” Here’s the customer development process your team should adopt to help you build products that people use and pay for:

1) Create a Hypothesis

The hypothesis is a falsifiable statement that can help frame and guide your experiment. The author of Lean UX and managing director at Neo (a leading lean software development consultancy), Jeff Gothelf, suggests the following format for a well-crafted hypothesis.

We believe that

[building this feature]

[for this people]

will achieve [this outcome].

We will know we are successful when we see [this signal from the market].

This hypothesis statement answer two really important questions:

  1. Who will use this feature
  2. What’s the metric or signal you’ll use to validate or invalidate your hypothesis

I’m a big proponent of the One Metric The Matters, that Ben Yoskovitz and Alistair Croll suggest in their book Lean Analytics. It’ll help you draw the line in the sand to validate or invalidate your hypothesis.

2) Find Potential Customers

The next step is to find potential customers of the new feature. Note that not all your current customers are potential users the new feature. For example, not all Facebook users use the messaging feature in Facebook. In the same way, don’t expect all your customers to use the new feature. Instead, sketch a persona.

Personas are fictional characters created to represent your potential customers. Define the demographics, behaviors and needs of your customers. Spike Morelli, a co-organizer at Lean Startup Circle, wrote a comprehensive guide to building personas in this blog post. See the image below for an example of a persona sketch.

ListenLoop sketch customer persona3) Ask Them The Right Questions And Observe What They Do

Once you’ve defined your potential customers, the next step is to ask them the right questions. in this step, you want to validate or invalidate the problems, needs and frustrations of your potential customers.

Justin Wilcox, customer development expert, suggests you ask them the following question in this video:

1. What’s the hardest part about problem context?
2. Can you tell me about the last time that happened?
3. Why was that hard?
4. What, if anything, have you done to solve that problem?
5. What don’t you love about the solutions you’ve tried?

ListenLoop, our agile customer communication application, makes it easy for you to ask these questions to a specific customer segment directly in your application. You can find out more about it here.

4) Build a Minimum Viable Product (MVP)

This is where agile software development process can help you development a Minimum Viable Product (MVP), a term coined by Eric Ries, author of the Lean Startup. The MVP is version of your “product” that maximizes validated learning for the least amount of effort. The key words here are “maximize validated learning” and “least amount of effort.” You want to minimize time and money spent while maximizing validated learning.

Some tactics you can use to build an MVP really fast are:

5) Decide If You Should Pivot Or Persevere

Once you’ve built your MVP, the next step is to gather data and, using the One Metric That Metrics in your hypothesis, determine if you should keep the feature, tweak it or abandon it all together.

Building Products Customers Use And Pay For

How do you build products that customers love and pay for

The five step process to help you build products that customers use and pay for are:

  1. Create a hypothesis
  2. Find potential customers
  3. Ask them the right questions and observe what they do
  4. Build a minimum viable product (MVP)
  5. Decide if you should pivot or persevere

As I previously mentioned, this process doesn’t guarantee that you’ll build a bad product. But, this customer development and Lean Startup process helps you quickly iterate until you do find one that customers love, use and pay for.

Photo credit: Simon MacEntee

For more tips on the customer development process, subscribe to the ListenLoop email list or follow us on Twitter (@ListenLoop).

Join Our Email List