It's a big idea.

What we now know is that the founders need to run what's called the customer development team.

The thing to remember that the goal is not to draw on the canvas.

So now they're looking at industrial enzyme manufacturers, their key activities are R amp D, and production support is their next change.

And in this class, we're going to be talking about the first two steps, customer discovery, customer validation, the pivots that connect them, and then a few that are lucky.

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

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.

The customer development process is actually a 4 step process.

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.

We will take it to the potential customers.

One of the really interesting developments about this class is this whole customer development process.

If in fact, your conversion rate between acquisition activation could be increased.

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

Now, one word of caution.

So let's follow our Jersey Square team and see what they did with customer segments.

The answer is is having a customer archetyping might is really important for all of these

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

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

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?

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

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.

So let's follow our Jersey Square team down and see what they've done for customer relationships.

And what Christensen said is, What functional or social jobs are getting done?

look happened.

Well, he went to prison to protect a client.

Pricing is kind of the tactics.

How do you know which one to use?

Of course, my work turned ugly, but another thing happened.

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

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

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

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

Let's just take a look at quickly a web example in getting customers, you're going to be o worrying about how do I acquire them that is how do I get them even to my website, how do I activate them that is how do I make them do something, and then later on we'll see after I got them how do I keep them around that is how do I not lose them through attrition and churn and then what can I do once I have customers to make them spend more money or use my product even more.

The Net Bank is an extreme example and illustrates a particular development.

Even though on day 1 you're not thinking about keeping customers because you're desperately worried about getting them, just understand the next thing you're going to be doing is worrying about how to keep your most valuable customer.

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.

We have recently accepted a client who is VampireAmerican.

Again, your CAC declines. The idea is what can you do to make this very efficient?

We still have earned and paid media driving customers into the funnel.

I leave this room, and it's over.

Earlier we looked at the 4 phases of the entire customer development process, but now let's take a look at the customer discovery process itself and order its phases.

What are the costs of jerseys and warehousing and shipping and cleaning,

And we found after much research that actually not much research, quite simple research that the counterfeit customer was not our customer.

We talked about value proposition, we talked about customer segments, we talked about channels, but today we're going to focus on customer relationships.

When I got there, we had zero happy customers.