The customer development process is actually a 4 step process.

Pricing is kind of the tactics.

What's the sum of all the revenue from day 1 purchase, so you're keeping them through all the grow activities you're undertaking.

The only fallacy in this is that you assume that your first customers are going to be in the mainstream.

Defense department's largest contractor.

In customer relationships all the get keep grow metrics, some of which we talked about, some of which you'll discover, what were the customer acquistion costs?

And in value proposition, the goal of this is to find out that minimum viable product.

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As was simulated, the value proposition includes all the features of your product but also the pains and gains you're solving for the customer segment and that's where the market goes.

Remember we talked earlier about pains and gains for this customer segment.

This is what I called the you should be so lucky to have this problem part of the funnel, and that's how you grow the customers you have.

They could tell you that I want bigger, faster, cheaper status quo.

Done. Last page has Bowman's clients from the U.S.

So one of the interesting equations for every startup is that

That was the customer acquisition cost, CAC, here.

I mean how do they hear of our products, how do they know about you, and as we'll see later one of the interesting things is there are some customers that are users like in Google

So in our last lectures we talked about value proposition, customer segments, distribution channels, customer relationships get, keeping and growing customers.

So at first customership we could look like a large company for mainstream customers.

Now if you remember we started here on the left. We didn't earn and paid media.

By now, you're intimately familiar with the business model canvass.

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We have recently accepted a client who is VampireAmerican.

Why you're doing all this is to define the minimum viable product, or sometimes called the MVP for short.

So, while the goal in value prop is to figure out the MVP, yes, we il see later the goal in customer segments is to figure out who and what the archetype of the customer is.

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Now we finally come to the last part of the business model canvas.

Our first customer is a man named Vector.

And when you finally, finally think you do have something that matches customer needs, you get to the next step, which is customer validation.

Two, I've tried it. I've tried at Sciant.

We will take it to the potential customers.

Because if you think about it, you've been working hard on value prop, and you've been working hard on customer segments and customer acquisition and activation and channel.

For example, in SAS software, some investors think that number should be 3 gt 1.

It's exactly the same idea we might want to offer loyalty programs, contests and events, blogs, RSS and email, or social media all designed to engage customers.

Now let's go to month 3.

Well, hopefully it gets kind of fun because the real metric the way we kind of measure things, the language we use on the web is customer acquisition cost.

It assumes you will be going through this multiple times.

That is they were beginning with a series of hypothesis about their customer archetype.

One of the most important metrics to think about now that we have an end to end funnel is something called lifetime value and a lifetime value LTV is not your lifetime but your customer's lifetime.

The answer to the first question is given by a simple algorithm.

Apple is one of the few, truly cares.

So on day one, these were their initial hypothesis coming into the class.

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lot of fees for doing this, or maybe he just likes giving

The pivot was a term that my best student ever Eric Reese coined when he noticed the arrow between customer validation and customer discovery, and he actually gave it a name, which I think is incredibly accurate.

What's most important to us when we make a video is what the customer sees.