1. This presentation is made possible by the support of the American People through the United
States Agency for International Development (USAID). The contents of this presentation are the sole
responsibility of Rick Rasmussen and do not necessarily reflect the views of USAID or the United
States Government.
Customer Validation

2. Customer Validation - The Second Step
• Validation comes after discovery
• Pivots are expected
• Make early sales
• Constrain spending
Customer
Discovery
Customer
Validation
Customer
Creation
Company
Building

3. Ideas behind Customer Validation
• Can the business scale?
• Is the sales funnel predictable?
• Is there a repeatable and scalable
sales roadmap?

4. The Process
Customer
Validation
Customer
Discovery
Customer
Creation
• Type of startup
• Distribution model
• Articulate problem &
product concept
• Understand customer
view of competitors
• Day in the life
• Attend conferences
• Estimate mkt. size
• Press, analysts,
influencers list
• How do customers make
buying decisions?

5. The Process
5
Customer
Discovery
Customer
Creation
Customer
Validation
• Revenue model
• Channel model
• Initial company &
product positioning
• Test w/early adopters
• Company & product
launch strategy
• Test with early
adopters
• How do customers
purchase?
• Understand analysts/
influencers view

6. Customer Validation Details
6
To Customer
Creation
Phase 1
Get Ready to SellPhase 2
Get Out of the
Building and Sell
Phase 4
Verify/Metrics
that Matter
Phase 3
Developing
Positioning

7. Phase 1: Get Ready to Sell
• Craft positioning
statement
– Develop collateral
• Develop acquisition plan
• Activate plan and tools
• Hire a sales closer
(gladiator)
• Sales channel roadmap
• Formalize advisory board
Phase 1
Get Ready to SellPhase 2
Get Out of the
Building and Sell
Phase 4
Verify/Metrics
that Matter
Phase 3
Developing
Positioning

8. Phase 2: Get out of the
Building and Sell • Find Early-Vangelists
• Prepare Optimization
Plans
• Get out of the building and
sell
• Optimize getting more
customers
• Refine the sales roadmap
• “Keep” and “Grow”
Phase 1
Get Ready to SellPhase 2
Get Out of the
Building and Sell
Phase 4
Verify/Metrics
that Matter
Phase 3
Developing
Positioning

9. Get out of the Building
• B2C
– Surveys
– Friends
– Experts
• B2B
– Real customers
– Primary leads
– Lean on friends for introductions

10. Four Types of Customers
Early
Evaluators
Early-
Vangelists
Scalable
Customers
Mainstream
Customers
Motivation Technology
Evaluation
Vision-match Practicality Need the
“whole product”
delivered
Pricing Free Give them
a hefty
discount
Published
list price and
hard
negotiating
Published list
price and
harder
negotiating
Decision
Power
Can OK a
free purchase
Internal
cheerleader for
a sale
Standard
sales
process
Competitive
“bake-off”
and/or RFP

11. Phase 3: Develop Positioning
• Company
Positioning
• Product Positioning
• Validate Positioning
Phase 1
Get Ready to SellPhase 2
Get Out of the
Building and Sell
Phase 4
Verify/Metrics
that Matter
Phase 3
Developing
Positioning

12. Moore’s Automatic Positioning Generator
• For <target customer>
• Who <compelling reason to buy>
• Our product is a.. <product category>
• That <key benefit>
• Unlike <main competitor>
• Our product <key differentiation>

13. Customer Validation Positioning
Year 1
Objectives
Positioning
Existing Market •Market share •Differentiation & credibility
•Product differentiation
Re-Segmenting
Existing Market
•Market
resegmenting
& new market
share
•Segmentation & innovation
•Redefining existing market &
product differentiation
New
Market
•Market
adoption
•Vision & innovation in new
market
•Defining the new market, the
need & the solution
•Early adopters

14. Company Positioning
• Market Type affects positioning
Existing
Market
Resegmented
Market
New Market
Company
Positioning
Statement
Compare
your
company to
competitors
Compare product
to competitors
Educate.
Describe problem, how you
solve and benefits derived

15. Phase 4: Verify
• Pivot or Proceed
• Assemble Data
Findings
• Validate your Business
Model
• Validate Financial
Model
• Find Metrics that Matter
Phase 1
Get Ready to SellPhase 2
Get Out of the
Building and Sell
Phase 4
Verify/Metrics
that Matter
Phase 3
Developing
Positioning

16. Customer Validation: Exit Criteria
• Which startup strategy are you executing?
-Existing
-Re-Segmenting
-New
• Positioning tested & complete
• Launch strategy match startup type
• Demand creation activities match startup type
• Customers standing in line yet?
– If not Kill the Project