The sales strategy hidden in Four Steps. Part 1: looking for worthy problems

A practical guide to customer development: looking for problems

In 2005, renowned entrepreneur and academician Steve Blank published "The Four Steps to the Epiphany". Inspiring tons of new ideas for start-ups, the book advocates a renewed focus on customer development as a cornerstone to build a solid business. In this new series, we’ll crystallize Blank’s theory into a couple of tactical steps, cut to size for young companies.

 

At the core of The Four Steps is the fact that, in the early stages, every company follows two parallel tracks: product development and customer development. According to Blank, the latter is often neglected, resulting in a strategic imbalance. He proposes a step-by-step process to solve the issue; first, you have to become an expert in the specific problem of your (future) customers. Secondly, you have to convince your prospects that you hold the key to the solution. The information and feedback you gather along the way is the key to a successful take-off phase.

Gathering information

Blank’s first step centers around three tactical objectives:

  • Defining the problem of your prospects;
  • Gaining insight into the problem’s mechanism, magnitude, footprint, consequences and victims;
  • Sharing your knowledge to acquire expert status.

Start by assembling everything you know about the problem, the product or solution you intend to create, and the people, organizations and sectors you want to sell it to. During this research phase, you’ll formulate hypotheses that you’ll test on your audience at a later stage. This is also the moment where you’ll determine ‘the first circle’: a group of prospects to whom you are going to present your findings in the next phase.

Presenting your insights

With the thus collected information, you’ll create a presentation in which you’ll outline the problem from the point of view of your future customers. This ‘Problem Presentation’ helps you build your expert profile, but does not yet contain any promotional messages. The reason behind this is that, at this stage, you can’t be sure of the importance of the problem to your target audience.

The Problem Presentation’s main function is to determine whether your understanding of the problem matches that of your prospects. For this, you’ll need to present your findings to your ‘first circle’, in short, ten-minute sessions. The feedback you’ll receive will give you a clear indication of whether you’re on the right track. If you manage to arouse interest for a yet undefined solution—your product or service—then your Problem Presentation has hit the bull’s eye.

Next time, we’ll delve deeper into the Problem Presentation as a testing ground for your hypotheses and how to efficiently process feedback.