Ref.

Ares(2018)4490502 - 31/08/2018

Customer Discovery and Interpreting the

Customer Content
D2.2 version 1.3
August 2018
MERLIN
Methodologies for Researcher Led Innovations
Nº780.460. ICT-32-2017. EU H2020

Confidentiality Level: PU

Document Type Contract Deliverable

Document & WP No. D2.2 WP2

Document Title “Customer Discovery and Interpreting the

Customer”

Release date Version 1.3 - 31/08/2018

Executive summary

This document, D2.7 — PPP webinars – is a deliverable of the MERLIN project, which is funded by
the European Union's Horizon 2020 under Grant Agreement #780460, and has been prepared by
taking into account the template of the "Guidelines on FAIR Data Management in Horizon 2020" and
the "Fact Sheet: Open Access in Horizon 2020".
Merlin aims to foster and accelerate the transfer of knowledge from the projects funded in FP7 and
H2020, be it on the form of license agreement, patent or ideally, spinoff or startup to directly exploit
them, by organising practical hands-on workshops; meet ups with potential partners, customers and
investors; and by attending scientific conferences to reach a wider public. The programme will equip
participants with knowledge, skills and a network to generate market-led business models to unlock
potential and accelerate this journey.
The purpose of this deliverable is to provide the content and teaching materials for the delivery of
the Customer Discovery and Interpreting the Customer workshops. The former aims to provide and
introduction to the concept of Customer Development and methods for interviewing customers
while the latter aims to support the researchers in shaping innovative products through a structured
identification of customers’ needs gathered through Customer Discovery or observations.

This project has received funding from the European

Union’s Horizon 2020 research and innovation
programme under grant agreement No 780.460

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https://merlin-ict.eu
CO. D2.2 Customer Discovery and Interpreting the Customer Content

Document Control Page

Title Customer Discovery and Interpreting the Customer Content

Creator BLU

Description Description of the content used in the

Review status Action Person/Partner Date

Completed by WP Leader Brendan Rowan/BLU 28/05/2018

Approved by Peer Panel

Approved by QA Diego Alonso / UPCT 31/08/2018

Distribution Confidential CO

Revision history

Version Date Modified by Comments

1.0 17/7/2018 Brendan Rowan First version of the deliverable Customer

Discovery.

1.1 25/7/2018 Brendan Rowan First version of the deliverable

Interpreting the Customer.

1.2 10/8/2018 Brendan Rowan Second version of Interpreting the

Customer

1.3 30/08/2018 Brendan Rowan Final version of Customer Discovery.

2.0 31/08/2018 Diego Alonso Final version of both webinars.

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CO. D2.2 Customer Discovery and Interpreting the Customer Content

Table of Contents
1. Introduction ........................................................................................................................... 5
1.1. Audience ...................................................................................................................... 5
1.2. Structure ...................................................................................................................... 5
2. General information about the workshops ............................................................................. 6
3. Customer Discovery Workshop .............................................................................................. 7
3.1. Agenda ......................................................................................................................... 7
3.2. Customer Development overview ................................................................................ 8
3.3. What is the problem? ................................................................................................. 14
3.4. Customer Discovery in a B2B vs B2C Context .............................................................. 14
3.5. Defining market type.................................................................................................. 16
3.6. Where to start – Inside the Building ........................................................................... 17
3.7. Performing the Interview ........................................................................................... 18
3.7.1 Role play exercise ...................................................................................................... 21
3.8. Moving on .................................................................................................................. 22
3.9. Personal Action Plans ................................................................................................. 24
3.10. Recommended reading .............................................................................................. 24
4. Interpreting the Customer Content ...................................................................................... 25
4.1. Agenda ....................................................................................................................... 25
4.2. Participant value proposition ..................................................................................... 25
4.3. Innovation and the Customer ..................................................................................... 26
4.4. Segmenting the market .............................................................................................. 27
4.4.1 Discussing personas – a Mailchimp example ............................................................ 29
4.4.2 An academic example of the different approaches to segmenting – Blackberry....... 30
4.5. Customer Discovery – collecting inputs ...................................................................... 31
4.6. Extracting needs ......................................................................................................... 31
4.7. Introduction to the Jobs-to-be-Done .......................................................................... 32
4.8. Completing our jobs map ........................................................................................... 38
4.9. Constraints and Criteria.............................................................................................. 40
4.10. Recommended reading .............................................................................................. 41

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CO. D2.2 Customer Discovery and Interpreting the Customer Content

1. Introduction
This document, D2.2 —Customer Discovery and Interpreting the Customer – is a deliverable of the MERLIN
project, which is funded by the European Union's Horizon 2020 under Grant Agreement #780460, and has
been prepared by taking into account the template of the "Guidelines on FAIR Data Management in Horizon
2020"1 and the "Fact Sheet: Open Access in Horizon 2020. The purpose of this deliverable is to provide the
content and teaching materials for the delivery of the Customer Discovery and Interpreting the Customer
workshops. The former aims to provide and introduction to the concept of Customer Development and
methods for interviewing customers while the latter aims to support the researchers in shaping innovative
products through a structured identification of customers’ needs gathered through Customer Discovery or
observations.

1.1. Audience
The main intended audience for this document is the MERLIN project consortium and the European
Commission. The audience of the webinars are researchers and startups from all backgrounds who require a
market focus to identify potential products, companies or routes to commercialization.

1.2. Structure
The structure of the document is as follows:

- Section 2 provides general information about the workshop structure

- Section 3 presents he content for Customer Discovery with notes
- Section 4 presents the content for Interpreting the Customer with notes

1
http://ec.europa.eu/research/participants/data/ref/h2020/grants_manual/hi/oa_pilot/h2020-hi-oa-data-mgt_en.pdf

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2. General information about the workshops

Duration of the workshops: 4 hours with a 20 minute coffee break.
Optimal number of participants: 15-30
Target groups: Junior and senior researchers, PhD students on their last years, researchers and professors
with research results
The main requirements for the venue: computer, projector, projector screen, able to seat 20-30 people
coffee and catering for 20-30 people
Requirements for supplies needed: Pens, markers, large sheets of paper, stopwatch or a phone with
stopwatch, flipchart or whiteboard, 30 print-outs of each templates, ice-breaker cards.

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3. Customer Discovery Workshop

This section describes the theory on PPP itself. This theory is explained during both webinars in order to get
the participants on the same level in terms on what PPPs actually are.

3.1. Agenda

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3.2. Customer Development overview

The origins of the Customer Development model comes from the Stanford Lecturer Steve Blank from his
observation of successful and unsuccessful businesses. The methodology relies upon the concept of the start-
up being a temporary organisation and that all activities are focused on hypotheses and experiments

This is laid out in the Four Steps to the Epiphany by Stanford Entrepreneurship Lecturer Steve Blank.

Through the nature of the Customer Development approach the cash burn rate is lower as proof is obtained
before execution and sales team and other cash heavy activities are delayed until the model is tested and
proven first. Many start-ups aim for growth ahead of margins and become dependent on venture capital with
each round becoming larger than the last. It is possible to succeed this way but is also possible to succeed.

• Caveat Nº 1 – Like Lean Startup it is designed for ’screen internet’ companies with ability to
rapidly deliver on each iteration
• Caveat Nº 2 – The resources surrounding it are very American, certain behaviours are not
acceptable in a European business context

With both those in mind it is still an invaluable process for structuring the approach to developing a product
and setting up a company, regardless of the market or tech, it just requires common sense adaptions – within
all of this, the customer discovery cycle is universal and will benefit all.

A verbal note should be made on the definition of the start-up provided. This is Steve Blank’s interpretation
but of course we have different definitions and within Europe it is often accepted to be a young, fast-growing
company often involved in technology.

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Customer Development and specifically Customer Discovery is important to address the main reasons as to
why start-ups do not succeed. The above slides are used to highlight how the main cause of mistakes or
failures is due to a lack of understanding of the market/user/customer.

The four steps to the epiphany refers to the complete Customer Development process. It is a method by
which an entrepreneur or can discover their market, locate first customers, validate ‘guesses’ and grow the
business – it starts with an entrepreneur’s vision or idea (most likely a technology) and begins to search for
its market The model assumes that the entrepreneur will at least cycle 2 times through the first two,
Customer Discovery and Customer Validation.

Customer Discovery answers the following questions:

• Who are my customers

• Is there a problem

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• What is the market
• Can we solve it
• Can we make money off it?

Within Customer Validation the proof of success is in the generation of revenue and the completion of sales.
The purpose of this cycle is to take the business model and optomise the sales process as well as exploring if
the business will be profitable. The final two cycles are concerned with execution of the sales and production
processes and subsequent company scaling and restructuring.

Customer validation is a key checkpoint in the process – for this reason it has a back arrow to Customer
Discovery (PIVOT) – If people aren’t buying you don’t have the right customers or your product is not the
right solution. NB for people in the room that believe they have already done this, if they are struggling to
figure out why they can’t sell or are stuck at a point, you can strongly suggest that perhaps a pivot and
reassessment of the Customer Discovery approach may be required.

Customer Discovery and Customer Validation have similar cycles to Lean Startup, with Lean Startup focused
on product development not customer i.e. these are complimentary models not mutually exclusive. In fact,
Lean Startup is inspired by Customer Development; Eric Ries was Steve Bank’s Student

Additionally Customer Development and Design Thinking are both customer discovery processes. Customer
Development starts with, “I have a technology/product, now who do I sell it to?” Design Thinking starts with,
“I need to understand customer needs and iterate prototypes until I find a technology and product that
satisfies this need”. Customer Development is optimized for speed and “good enough” decision makin while
Design Thinking is optimized for getting it right before we make big bets.

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We will continue to update the materials on the basis of feedback given by participants attending the MERLIN
ICT workshop programs to ensure that it remains relevant, up-to-date and tailored to the needs of
participants.

The open-source operating system Android is an example of a pivot. The startup had been founded in 2003,
with the intention of building an operating system for cameras. Its initial vision was to create an ecosystem
of smart cameras which connected to PCs and from there linked to Android-powered data centres to offer
cloud storage for photos. They saw that there was no market with the decline of the camera and pivoted to
a mobile phone OS – then they were bought by Google.

In terms of Customer Discovery, it is about answering the following questions:

• Should I build it?

• Who are my customers?
• What is my market?
• Does my problem exist?
Customers define success and the consumer is changing rapidly; we need to get away from stereotypes e.g.
highest amount of growth in tablet sales in the over 60s category. In addition, the market is more flexible
now and this needs to be considered when defining potential customers. Overall, it is about challenging
assumptions that we have about our customers, markets and model.

Customer Discovery is not a once-off activity – it should be seen as the first step in any new venture or project
within the company.

“Founders need to be honest in their self-assessment of whether they are in love with the problem or the
solution. We often see entrepreneurs who are in love with their solution focusing on the technological
feasibility of the product, but who ignore the user feedback that is critical to establishing whether the
customer wants their product at all.”

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If things aren’t working out as planned and there are no answers, maybe it’s worth going back to Customer
Discovery.

The four phases of the customer discovery step, through which founders are expected to through 2-4 times
are:

1. State your hypotheses: Write down your core business assumptions in a set of briefs. These
form the basis for subsequent testing.
2. Test your hypotheses: Seek validation for your hypotheses. Speak to those in and around your
target market, including potential customers, analysts and the media.
3. These should not be sales-oriented conversations.

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4. Test your product concept: Once you have a deeper understanding of the customer problem,
test your product idea to get a sense of the relevance and attractiveness of your product
solution and its features. Do this by engaging potential customers and sharing information
with your product development team.
a. For web or app = rough MVP, very-rough to survive first contact
b. For services or physical = product presentation or mock-up
5. Evaluate customer feedback and determine next steps: Reflect on the information obtained in
phases 2 and 3. Are you ready to move forward with what you have? If not, you may need to
conduct another iteration of problem/solution validation or halt the project.

The central thesis to the Customer Discovery process is: “What is the smallest or least complicated problem
that the customer will pay us to solve?” with the ultimate goal of reaching a single page feature list. The
business model developed in Customer Discovery is not the eventual model of the company, but will be
somewhat proven, however, business models should never be seen as static as the business grows or the
market changes.

The main outcomes of the process are:

• Reduced risk of market-failure

• A more efficient product development
• Constrained cash burn-rate – identify what is important or will work before investing the capital
• Improved investment potential – evidence of market demand and what won’t work and viable numbers
and capital requirements
• Initial customer pipeline – don’t confuse customer discovery with sales (customer validation) however
it is likely that you will be able to convert a chunk as they have invested in you journey along the way.
• A healthy dose of realism.

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An example of where the customer needs were clearly not well understood and an unnecessary product was
introduced was the Teforia. Teforia’s main product was an internet-connected tea infuser that could brew
the pre-packaged teas from the startup, which it called “Sips” which they placed in the infusor’s globe at the
cost of $2. With the device costing over $1000 and no benefit to using a kettle and mug, the company closed
in 2017.

3.3. What is the problem?

Participants in the workshop are asked to use the above template to provide a concise description of the
problem that they believe their technology can solve. The participants will work individually with a few
selected to present to the group.

3.4. Customer Discovery in a B2B vs B2C Context

It is first of all important to define what is B2B, B2C and B2B2C:

• B2B – Enterprise solutions (smaller market bigger value)

• B2C – Consumer products or services (bigger market smaller value)
• B2B2C – Difference between the user and the customer. You are solving a problem that a company
has in providing a service to their respective customer. A reseller relationship is a channel not a B2B2C
market, to be truly B2B2C, the consumer has to know that they are using your product and you have
a relationship with them as well. i.e. not white label

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In B2B2C – the main thing is that the Customer Development happens with the Business but obviously the
user is different, and a two-stage process will have to be conducted with a more UX process to follow with
the users. If in doubt as to who the customer is – then who pays?

With each type of customer, the process will be slightly different:

• B2B – focus on customer interviews and with fewer available number of subjects, also key in this
phase to understand who is the decision-maker and the surrounding activities and barriers that are
presented when dealing with an organisation.
o Around 30-50 interviews required
• B2C – customer interviews are still key but some of the work can be done through mass collection of
responses, different challenges and tests can be set up e.g. setting up a facebook group to gauge
interest, developing a product video to test response or even (the dangerous) crowdfunding route
o Around 100 interviews required
• B2B2C – Customer interviews with the company are complimented with UX methods for the end-
users. Figuring out the model with the company while ensuring a great experience for the user.

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3.5. Defining market type

Identifying your market defines your strategy and costs and brings with it, specific risks. As a start-up there
are really only four market options:

• Entering into an existing market – when your product offers a better performance than what’s out there
• Resegmenting an existing market – hybrid introducing a new product to segment the existing market
(common strategy but also trickiest)
o Niche – developing a specific product adapted to the needs a specific (and profitable) group
(really goes after the profitable chunk of the current companies activities)
o Low-cost – Are there enough customers at the low-end who will forego certain
features/performance to get a lower-price
• Generating a new market where there wasn’t one before – breakthrough innovation where it enables
a customer to do something that they haven’t done before, be careful as often entrepreneurs believe
they are here but are actually a resegmented market. If you can’t compare the functionalities or
outcomes to existing products or companies – congratulations but also you have a mountain to climb
to reach adoption.
• Clone – copycat but in a different geography – taking an idea already successful elsewhere and adapt
it to local preferences (language, culture, behaviour)
When deciding market founders must remember:

• Your customers’ view of your market type is more important than yours.
• You can choose your market type.
In terms of cost, if one doesn’t have a lot of money, one needs to act like they are re-segmenting a market.
Launching in a new market requires millions of marketing dollars to teach customers what the new product
does and why they need it. Launching in an existing market also requires millions of marketing dollars to
compete with the existing players who hope to squash you. If you don’t have millions of dollars to spend, you
must build your business or prove the traction to investors by dominating a specific niche market segment.
In the latter case, it is essentially in a “segmented new market” that acts in a similar way to a re-segmented
existing market.

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3.6. Where to start – Inside the Building

Founders should have a hypothesis for the target customer groups and apply prioritisation criteria. It is also
recommended that they do the interviews in clusters of customer groups. e.g. 8 Customer Group 1 then 8
Customer Group 2 then 8 Customer group 3.

Participants in the workshop are invited to discuss which of the channels above are appropriate for finding
B2B and/or B2C interviewees. Cold calling is a necessary part of the process, warm leads are of course always
preferable but cold calling does lead to successes.

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3.7. Performing the Interview

Interviews should be done in person, it helps to read the body language and to see their emotional response.
Best done in pairs, one asks questions, the other observes; useful to have another person to check your
doubts and ensure you understood a response correctly. Also frees up the interviewer to focus on the
responses rather than trying to mentally take notes of important points. Best advised to immediately after,
write down all the notes from the interview rather than during. It’s important to state that it is a founder job
not an employee – Think Donald Trump and a tweet about needing ID to buy groceries.

If you pitch you unbalance the nature of the meeting and increase the guard of the subject – you will not get
any answers that are valuable and you will have wasted the time. Same goes for mentioning any solutions
prematurely – if you mention a solution at the early stages you will put the person’s thinking onto a track
that sits around this solution from which it will be difficult to extract the causes and opportunities for the
problem behind - hinders breakthrough innovation. Also, never forget that this person has given up their
time and experience to help you, you want to maintain them in your network so always write an email to say
thank you, extract some of the things you found interesting and see if they would like to be kept up-to-date
with what you are doing.

When questioning, it is important to be aware of the types of questions being asked and to ask about past
behaviour as a predictor for future behaviour. When interviewees are asked a question about how they
would do something, they often respond with their ideal or imagined self, most people tend to think that
their lifestyle is healthy.

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The anatomy of the interview

The The
Intro Processes Outro
Person Problem

e.g. I’m looking to Tell me about How does that How does your Can I call you
develop a your role? process work company to follow-up on
solution for now? purchase some of the
Sales Teams software? topics?
What are the
top 3 issues you What do you Could I show
encounter? look for in a you a
solution? prototype?

H2020 GA #780460
39

There are some indicators as to whether or not the person was interested:

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3.7.1 Role play exercise

• Have the participants partner up in 3s.

• Person A is the interviewer, Person B is the interviewee, and Person C is the observer and note taker.
• Assign 1/3 of the trios to only ask closed questions, assign 1/3 trios to ask only open questions, assign
1/3 to start with open questions (e.g. 3) followed by closed questions (e.g. next 3)
• Person C should be on guard to call out a question for being either open or closed
• Leave them 10 minutes
• Draw out the information gathered from selected couples in each group, compare the results based
on completeness, number of new insights obtained, quality of data and discuss with the group their
experience.
• Results should be different among the groups with the open questions providing information that was
lost to the closed or funnel questions.

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3.8. Moving on

Similar to coding in qualitative data – the founders should abstract the key insights from their notes and put
them on a post-it (digital or real) using the same colour for each interviewee. Similar topics are clustered
together into group where it will be visually obvious the most important areas to attack.

Customer Validation is the real test against the market, when founders are trying to gain sales, identify
profitable channels and deliver on promises. Ideally it should be low-investment in terms of cash but high-
investment in time. It often takes 2-3 times longer than anticipated by entrepreneurs. As a rule, it is longer

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for B2B than for B2C due to the nature of the B2B sales process (often consultative) – although selling to
SMEs can be closer to B2C.

Product/Market fit is the time when

• customers are buying the product or service as fast as the startup can make it ;
• usage is growing as fast as you can scale up your technical infrastructure ;
• money through sales is piling up in your bank account;
• lots of sales and customer support staff are being hired;
• reporters and news publications are writing about your value proposition and growth;
• investors are interested to follow up or get in touch;
• the competition starts popping up all over the place (different regions, verticals).

MAINLY ONCE YOUR REVENUE IS GREATER THAN COSTS

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3.9. Personal Action Plans

Participants will complete the above template before leaving the workshop to ensure that there is sustained
activity and focus as the session comes to a close.

3.10. Recommended reading

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4. Interpreting the Customer Content

4.1. Agenda

4.2. Participant value proposition

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Participants will complete Geoffrey Moore’s value proposition statement with a selected few presentations.
The purpose of this two-fold; enable the facilitator to know what the ideas of the participants are for drawing
out examples later in the session and to focus the minds of the participants making the activities more
concrete.

4.3. Innovation and the Customer

Innovation has many faces and is a broad concept with varying definitions. In current lexicon innovation can
be truly ground-breaking combining the best of invention with a clear focus on the market to changing the
colour of razor. There are three main categories for innovation – incremental, disruptive and break-through.
In the above example, the Xiaomi phone is considered disruptive as it is offering a peer to the iPhone X at a
fraction of the cost, opening the market to a previously unserved segment. For the purpose of this workshop,
we will take the definition of innovation as “the successful implementation/adoption of creativity/invention”.

Innovation is often considered an iterative process that is more an art than a science with the associated low-
success rates. The whole concept of coming up with an idea and trying it out is pure random chance that it
will be a success, in fact, despite many studies and literature on the topic of ideation and successful product
development, many businesses and entrepreneurs still rely on coming up with an idea, building the product
and testing it with the market. There are two main issues here – 1st is that the investment of time and cash
is limited to those looking to commercialise or develop a product and it is risky to go the market at the end
of the process and 2nd it more than often leads to incremental innovation, combining or improving something
that already exists. The researchers among the participants will understand that they would never undergo
research nor design an experiment without first studying the state-of-the-art.

The truth is that the success rate of innovation can be increased by applying a more scientific process that
sets the parameters within which creativity and ideation can happen that actually address the customers
unmet needs.

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Caveat here: some participants might argue that creativity is more important – creativity is important but
this too requires boundries applied otherwise it is inefficient and results in incompatible solutions.. People
who have experienced success from an ideas-first point of view, are, in the authors humble opinion, fortunate
to intimately understand the problem and experience the need.

4.4. Segmenting the market

At its most basic, people segment their customers into similar groups to which a product or service is equally
appealing. This enables greater focus, easier differentiation of activities and analysis, and the development
of distinct marketing campaigns. However, the process with the development of new studies and technology
has evolved over the years and become more sophisticated. Above is a historical overview of the evolution.
In the beginning of the new paradigm of marketing and product development, the 1950s (think the TV series
Mad Men) what was available was a lot of demographic data.

As IT moved on and more sophisticated data could be harvested from transactions at point of sale, it was
possible to build up data on purchase behaviour while new techniques and knowledge led to looking at the
psychographic design. Then in the 80s and 90s the focus shifted to what the customers are saying and what
they ‘need’ which we will discuss later. Now we are in the era of new methods of going beyond what the
customer is saying and more what they are trying to achieve, which really focuses on the motivation rather
than the person or the object. However, old habits die hard and demographic data is easy to source and
personas are easy to conceive.

Previously, it was focused on the who and the what, it looked at the attributes of the person and/or the
product or service. The use of personas is a culmination of this which looks at the combination of the
traditional approach to help get inside the head of the customer, however it can be viewed as superficial.

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The use of personas can have its purpose and certainly helps with the marketing approach or sales but does
limit in terms of innovation potential as a whole host of potential customers can be lost and
competition/adjacent competition missed by focusing too much on the who.

For the purpose of innovation and development, these older methods are not conducive towards disruptive
or break-through innovation as they work with already established lines of thought and do not stimulate the
opportunity for lateral thinking or creative invention that addresses the needs of a less simplified and larger
market segment. We will discuss further what is a ‘need’ as this is quite a diffuse term and so will park this
for now, but the segmentation of customers should not restrict itself to superficial data points but rather a
more abstract look at the what surrounds the customer and their behaviour. It was observed that companies
who focus on this when developing new products have more predictable successes. It also allows a better
view of the competition, provides focus and reduces ‘feature creep’.

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4.4.1 Discussing personas – a Mailchimp example

We will enter into a short description of personas here and addressing how companies do use them. In this
example, Mailchimp, the mass email marketing platform performed an analysis to develop their customer
archetypes, note that the purpose of this was to redesign their platform, not rebuild it i.e. incremental
innovation.

Step 1: Interview MailChimp stakeholders to see who we assume our customers are

Interviews with decision makers at MailChimp were conducted asking “Who do you think uses MailChimp?”
This led to the modelling of an “ideal user,” who exposed their biases and assumptions.

Step 2: Rank their pool of active users by industry

Step 3: Identify subjects from popular industries and interview, interview, interview

They took several of the top industries and started contacting users for in-person interviews in North America
and Europe, focusing on Atlanta, Paris, London, and Madrid, where they also investigated the environment,
is the office quiet, or is there a lot of foot traffic? Is the computer a newer model or something outdated?
What terms or phrases did our customers use to describe their work, their situations, and their emotional
states?

Step 4: Analyze what they saw and heard

After visiting their offices, findings were tagged and patterns explored. They found a lot of similarities across
different roles or types of customers, e.g. they had initially thought of their advertising agency customers as
much different from communications consultant customers. But both sets of users manage multiple
campaigns for many clients simultaneously, and thus use MailChimp in similar capacities.

Step 5: Share their findings with the team

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The result was five archetypical MailChimp personas: Fred, their “ideal” user based on internal interviews;
Andre, developer persona; Eliza, PR manager; Ada, receptionist; and Mario, the studio consultant.

While a valid exercise and definitely supported their marketing and messaging, we can discuss with the
participants their opinion on the process:

• What do you think of the activities and results?

• Do you think the order of the steps can affect the outcomes? Starting from inside the company was
the first step, in the context of customer discovery, what do you think of this?
• How would you approach it?

4.4.2 An academic example of the different approaches to segmenting – Blackberry

In the mid to late 90s, there was much movement around the palm pilot and connected devices running in
parallel to the development of mobile phones. Research In Motion, with its experience in radio
communications and devices it launched a an ‘always connected’ email device that focused solely on
providing email. In the world of palm pilots it became a huge success while the others with their large screens,
various functions and large antennae failed.

The introduction of the Blackberry brought email out into the world, leading to the type of work
communications we exhibit now with emails being answered in boring meetings, in queues and other
settings. Here in the table we reassess the different routes RIM could have taken in their believed market of
‘Handheld Wireless Devices’ competing against the Palm Pilot, Sony’s Clié, Nokia, Motorola, Samsung mobiles
and Microsoft Pocket PC offerings, based upon the different segmentation approaches.

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4.5. Customer Discovery – collecting inputs

A quick revision of the Customer Discovery process and the top tips for conducting interviews is provided for
the benefit of participants who were not at the previous workshop.

4.6. Extracting needs

Innovation is often described as providing a product which meets a customers need – the customer ’need’ is
a term used frequently and liberally but how do we define a ‘need’ and more importantly how do we capture
it? If you Google, ‘what is a customer need?’, above is a selection of the answers you receive. It can be seen
that they are quite difficult to understand, even for a native speaker and don’t really provide a clear well-
structured and universal description of what a need is.

Participants are invited to provide their own definition of a need. A simple call out and flipchart note taking
should suffice. The concept of the customer ‘need’ really comes from the Voice of the Customer, where the
customer expresses a need as desire want and/or expected benefit expressed by the customer which leaves
very little room for creativity. As the room provides answers on the flipchart, we should question the
subjectivity and ambiguity of the provided definition – a person’s want could be expressed in various forms
and a desired benefit can be interpreted differently.

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4.7. Introduction to the Jobs-to-be-Done

The methodology described in this workshop centres around the core concept that a customer has a ‘job-to-
be-done’ and ‘hires’ a solution to complete that job. Some jobs are eternal and part of the human condition
while other jobs appear as society and technology evolves developing new contexts.

The ‘Jobs-to-be-Done’ approach is the combination of the independent work of Ulwick and Christenson –
each inspiring the other. Ulwick first published the ground-work for the outcome-driven innovation in 2002
in the Harvard Business Review with Christenson exploring the definition of the motivation behind the

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desired outcome into the units of the jobs that was published in his best seller ‘The Innovators Solution’
followed by the incorporation of the jobs-to-be-done into Ulwick’s subsequent book What Customers Want,
a guide and description of the modern innovation process which increases the hit-rate by clearly defining the
parameters, the customer and the market before ideation occurs. Both books combined are indispensable
reading but are, like all business books, highly readable.

Clayton Christensen

‘Clayton Christensen is the Kim B. Clark Professor of Business Administration at the Harvard Business School,
where he teaches one of the most popular elective classes for second year students, Building and Sustaining
a Successful Enterprise. He is regarded as one of the world’s top experts on innovation and growth and his
ideas have been widely used in industries and organizations throughout the world. A 2011 cover story in
Forbes magazine noted that ‘’Everyday business leaders call him or make the pilgrimage to his office in
Boston, Mass. to get advice or thank him for his ideas.’’ In 2011 in a poll of thousands of executives,
consultants and business school professors, Christensen was named as the most influential business thinker
in the world.’2

Antony Ulwick

He is the pioneer of Jobs-to-be-Done theory, the inventor of the Outcome-Driven Innovation® (ODI) process,
and the founder of the strategy and innovation consulting firm Strategyn. After an initial very public and very
humiliating market failure of a product called PCjr that cost IBM over a 1,000 million dollars he searched for
a way to make innovating more successful. After studying and applying well-known and state-of-the-art
methods such as Voice of the Customer, TRIZ and Sig Sigma with IBM teams and statisticians his breakthrough
was to apply Six Sigma to innovation and focus on the process that the customer was trying to achieve rather
than the product or service. After crafting the concept, it was applied to the development of medical devices,
after 18 months the Company introduced 19 new products with all of them reaching Nº 1 or 2 market
position. He refined the concept and methodology further in dozens of innovation initiatives over the next
several years, achieving similar results with companies such as Motorola, Pratt &
Whitney, Medtronic, AIG, Telectronics, and Allied Signal.

2
http://www.claytonchristensen.com/biography/

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Participants are introduced to the needs-first innovation process, empirically proven to increase success,
which incorporates the Jobs-to-be-Done methodology places iideation after a prioritisation process that
required an in-depth understanding of both what the customer is trying to achieve and the market.

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A job is stable over time, but additional jobs are possible as new knowledge is gained or new solutions are
created and society evolves. The customer is not loyal to the product, they are loyal to getting the job done
well. Surrounding each core job there are a series of other functional jobs that the executor is trying to
achieve. These are the related jobs. In addition to the related jobs, there are the emotional jobs that serve
other purposes. The different combination of the above is your customer segmentation. Different segments
will have similar related jobs while all customers have the same core job.

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Emotional jobs can be either personal or social, customers have social jobs when the product or service
defines their persona. While functional jobs often drive design, emotional jobs drive positioning and
communications. There are no emotional outcomes – only jobs. Apple products do a great job at the
functional but what sets them apart is how they address the emotional jobs of good design, achievement
and status. Emotional jobs are very important when deciding messaging for your product, they help with the
communication of the brand. Participants can be shown a clip from the show Mad Men which highlights the
emotional jobs a person using a slide show can have.

The structure of a job-to-be-done follows a rigid structure which helps the person conducting the jobs-to-be-
done study distil out the jobs from interviews, observations or experience. It is free from solution.

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To identify the job-to-be-done – it helps to employ the 5 Whys approach to understand the motivation behind
a statement. This can also be described as an outcome statement or a statement of desired outcome. The
structure and results are identical. Here the example is based upon an industry 4.0 technology developed by
a company that automatically tunes the variables in a production process (such as heat, humidity, ratios of
reactants, etc.).

This example is the core functional job, an example of related jobs would be to:

• ”reduce the consumption of raw materials in production”

• “prevent the number of defects occurring during production”
• “improve the refining process after production”
• “reduce the time spent on repairs”
• “reduce the number of maintenance required before production”
• “monitor the process when not in the office”
• “ensure the correct amount of supplies before production”

Context is important for setting the framework within which the jobs-to-be-done methodology is applied, it
is relevant for preventing the spiralling out to encompass the executors whole life. So when we talk about
context there is an overall context – in this case a factory production line that will become clearer in the
following jobs map that is established at the outset – often from the researcher’s/entrepreneur’s use case
confirmed in customer discovery, while the contextual clarifier is focused on the specific job and uses the
conjugations of when, before, during, after providing location or time.

Once we identify the core jobs of a customer we can begin to recognise our innovation strategy.

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Break-through innovation is about finding an unserved market as shown in the top right quadrant, often the
customer has their own homemade solution cobbled together without a specific product developed. This is
creating a new market. E.g. Dropbox

Disruptive innovation can be achieved in the bottom right quadrant, this is about targeting non-consumers –
people who are unable to access a product or service based on affordability, skills, knowledge or geography.
E.g. Ryanair

The bottom left quadrant addresses incremental innovation, it revolves around making something better,
faster, cheaper or more safely than before – think phone markets – bigger screens, better battery life, better
cameras, more storage, etc.

The final quadrant looks at creating products or services that allow a customer to do, in addition, related jobs
the introduction of the iPod was not the first mp3 player but through iTunes it addressed the customers
related jobs of buying and browsing new music.

4.8. Completing our jobs map

Mapping out the jobs map provides a visual structure within which opportunities for innovation can be seen
and fed into the design process. The first step is to identify what is the focal job, this is then followed by
related jobs and then subsequently by the emotional jobs. This will be the first task for the workshop
participants to carry out with post-its on the printed template. Facilitators will need to move around the
room as the participants search for what really is the focal job and ensure that the job is expressed using the
syntax provided. A reminder that the focal job is specific to a given scenario and customer/ecosystem
member.

From the customer interviews the researcher should have collected the constraints and criteria. This will be
covered later in the workshop but they are included here to provide the complete map. Once the participants
have defined their focal, related and emotional jobs, then it is time to move onto the job steps using the job

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steps template. The purpose of completing the job steps is to ensure that the researcher truly understand
the process that the customer goes through when trying to achieve a job. It will identify gaps in their
knowledge but may also surprise them. The description of the job steps will then highlight pain points for the
customer, areas for improvement on currently how the job is done and specific outcomes expected by the
user/customer.

After presentations from the participants on their jobs maps and jobs steps. The participants now complete
the jobs steps that the customer/ecosystem member will go through with their imagined product or service.

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4.9. Constraints and Criteria

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4.10. Recommended reading

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