Steve Blank

After my first month we knew a lot, we knew more about our customers than anyone in the company.  In this one month we had learned more about desktop publishing on the Mac than any one of our competitors.  Now the question was what to do with it.  First I need to make sure what we really learned was information we could base a company strategy on. 74HGZA3MZ6SV

Our first question was, did the total number of customers that had already bought products from our competitors and us represent a saturated market or the tip of the iceberg?  In other words what was the Total Available Market (TAM) and how much of the market had been already served?  Since our competitors were also small privately held companies, none of their data was readily available.

But we knew something they didn’t; the total available market for color graphics boards was measurable by looking at an adjacent market, the color desktop publishing software market.  As it happened there were quite a few industry analysts following software companies like Adobe, Aldus, and Quark, who happened to be the suppliers of the four key applications our customers said they used.  These analysts not only told us that the market had plenty of room to grow, they took an interest in us, since we were going to be a hardware company going after this growing market.

Since I was heading a marketing department, not acting as an individual contributor, I needed to teach all of marketing the importance of customer data.  First, I presented what I had learned.  You could sense the skepticism in my staff meeting as I described what I found.  But no one was prepared when I said, “These facts are now old, but since we are going to be changing customer perceptions we need to get new customer data weekly.  All of you are now part of the customer discovery collection team.”  Then I handed out the questionnaire to all of marketing and made two customer calls a week mandatory for everyone, including my secretary.  At first people couldn’t believe they were actually going to have to call a customer.  Some took cajoling to make the calls, other took me sitting by their elbow, but eventually everyone started dialing.  The first part of my weekly department staff meeting was dedicated to hearing everyone going around the room and talking about their customers.

Within a month the change inside the marketing department was palpable.  Customers were no longer some theoretical entities that existed only in data sheets, they were real people you talked to, understood, and connected with.  Soon marketing was talking about the needs of our customers with first-hand knowledge, passion, and conviction.  And without knowing it, the quality of marketing department’s work changed.  Instead of spec’s and technical features, our literature and interaction with customers shifted to how we could solve their problems.

Within a year we had called over 1,000 customers, and every year after that another 1,000.  Marketing, which had been unsure or unaware of what their jobs, were now had weekly reinforcement of who they were selling to and became a formidable force in the Macintosh graphics market.

Now we could execute a relentless come-from-behind strategy off of the information we had learned and discovered from our customers.  Now what was the strategy?

What did I learn so far?

• Facts are the rock on which you build your strategy and tactics
• In a startup second-hand facts are almost as useless as opinions.  Decision makers need to hear the facts first hand

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Filed under: Customer Development, Marketing, SuperMac | Tagged: Steve Blank |