Long before there was the Lean Startup, Business Model Canvas or Customer Development there was a guy in Santa Barbara California who had already figured it out. Frank Robinson of SyncDev has been helping companies figure out their minimum viable product and pivots since 1984, long before I even knew what it meant. They’ve done it for more than 400 companies ranging in size from 200 hundred starts-ups, one of whom was Citrus Systems that became Citrix, to IBM.
Here’s a guest post from Frank.
I want to tell you a story about how a team pivoted and succeeded by synchronizing product and customer development. Though it’s about a large company, it’s applicable to teams in start-ups. It’s vivid with respect to method and outcome.
Massacre at IBM
Intel was angry at their supplier about a third-generation wafer-inspection system. “How dare you,” the fab manager said. “We shut down production to setup your machine.” He blocked new business for two years.
The supplier’s CEO directed his business unit general managers to take a SyncDev workshop. The inspection- system GM decided to use it for his fourth-generation system, an 18-month program.
Though development was already underway, I kicked-off SyncDev in early November. The core team — a cross-functional team who could make all the business and technical decisions within a set envelop ─ consisted of product manager, hardware-engineering manager, software-engineering manager, applications analyst, and software designer. We would travel throughout the US and Asia to test-sell a validation prototype, listening to each customer as a jury listens to each witness.
The first wave of meetings was with five US customers in mid-November. On Monday, in San Jose, near the factory, we met with UltraTech Stepper, a friendly account. We did a quick overview of the product. That earned us the right to ask questions of fact about their department’s mission, goals, operations, volumes, tools, methods, and success metrics. We asked, “Given all that, what problems are you having?” We followed that with an hour-long design review, including disclosure of product limitations. For 30 minutes we did trial closes: Who would use it, how often, how would you justify it, and where does it rank on a list of purchase and to-do priorities.
The customer asked, “Where’s off-line setup?” The product manager said, “It’s in the release after this.”
That night we flew to Boise. Tuesday, 17 people at Micron asked the same question. We responded the same way.
We took a red-eye to JFK and a commuter to Burlington, VT for a 9:00 AM Wednesday meeting at IBM. At noon the boss said, “You guys have no credibility. We’ve asked for off-line setup for years. No one listened!”
Leaving the parking lot, the engineering managers in the back row of the van argued. The product manager who was driving whispered, “For years that said no one needs off-line setup. Now they’re arguing about how to do it.”
Wednesday night we flew to Orlando for A&T. Thursday, off line set up was not an issue. The same thing happened on Friday in Austin. Off-line set up had disappeared into the team’s rearview mirror.
Thanksgiving had come early that year. We were on the road again by late November to meet IBM in Fishkill, NY. After a 15-minute overview, they asked about off-line set up. After we responded their boss said, “Gentlemen, this meeting is over. We don’t want to hear about your roadmap. Please leave!”
Humiliated and depressed, our ride to the hotel felt more like one in a hearse than a van. The customer’s wants the next day would be no different. The product manager described the metamorphosis:
We gathered that night at the hotel, but we were changed. Humility had crumbled the walls between marketing and engineering. We had heard the voice of the customer as a team and they were unhappy. Thank God the whole team was there so we could decide on the spot.
For appetizers we slashed requirements. For soup we compressed schedule. For the main course we sliced up the configuration into bite-size pieces. For dessert we integrated customers into our testing. For after-dinner drinks we polished the new presentation and said a short prayer.
The next day was sunny. Breakfast was actually jovial. We looked back at yesterday with humor, not to cover our humiliation but because we had pivoted.
The next meetings went far better. We took wounds, but none like those at Fishkill. We continued with three more meetings. We returned to the factory and presented our new path.
“Are you nuts?” our product board asked. “You can’t change direction midstream!”
Without missing a beat, Engineering quoted the customer. I explained how we’d manage technical risks. We were a team, convinced by a shared experience, that we knew what to do. Better yet, we had switched the burden of proof from us to our skeptics.
In December and January we met with ten customers in Korea, Japan, and China. Changes were minor. Instead of pivoting we built virtual backlog.
In February, we returned to Fishkill. “Congratulations, gentlemen,” IBM said, “We apologize for November. With the train heading our way, we’ll get on now. We’ll take two more old units (multi-million dollar) now and replace all seven with new ones when it ships.”
In 90 days the team pivoted the product, saved a major account, captured a large order, cut schedule from 18 months to nine months, and developed virtual backlog.
Two years after release, product market share was up by 30% to 70%. Twelve of 17 competitors were gone. The division was the dominant global player.
The team followed these rules:
Cardinal Rules of Synchronous Customer and Product Development
- Meet Customers as a Core, Cross-Functional Team authorized to act within a defined envelop.
- Report to a “Board,” to explain and defend your strategy and business case
- Meet Customers’ Decision Making Teams not just users
- Meet on Site in the customers’ habitat: Home, office, lab, factory, or playground. See what they do. Meet their colleagues, form relationships, help fix stuff now, and return as required
- Test Sell a Validation Prototype: Renderings, specs, and props. Don’t sell a vision! False positives result.
- Ask questions. Take Notes. Ask question of fact, not opinion and shut up. Take notes. Tag data and quotes.
- Disclose Limitations to surface objections. It enhances your credibility, too.
- Conduct Trial closes. There are thirty good ones starting on slide one.
- Meet in Waves to get bonked over the head by patterns, two customers per day, Tuesday to Thursday.
- Find and Fix Bad News. Bad news early is good news, if you find and fix it early.
Filed under: Customer Development