How do Customer Development and Product Management fit together? (2014)

There’s still a lot of confusion around how to define and how to use customer development and product management.

“Isn’t customer development just product management?”

Customer development is a task that some product managers do. But customer development is not the secret to creating a great product. Let me repeat that, because I’ve heard many people claim this: Customer development does not create great products.

Also: having a user research or market research team does NOT necessarily mean that you are already doing customer development.

Customer development isn’t usability testing, or focus groups, or dutifully recording “voice of the customer” suggestions and putting them into a backlog. Those are all activities that people do to maintain the status quo. Customer development is a risk mitigation tool. A perfectly acceptable outcome of customer development is to decide not to build that product or decide not to sell to those customers.

“You don’t really need product management if you do customer development right.”

I’ve heard some Lean Startup adherents go so far as to make this claim. No, no, no. Product management has been a necessary discipline for decades, and it’s not going away now.

Customer development does not replace product vision. Talking to your customers does not mean asking them what they want and writing it all down. It also doesn’t mean that you can talk to customers and somehow, magically, from all of their words, a product will appear. That’s like thinking you can buy boards and drywall and a nailgun from Home Depot and end up with a freestanding house. Someone needs to draw up the blueprints, get the permits, and oversee the contractors. That’s what product managers do. They’re the ones with the discipline to take all of that information and decide which pieces to act on. It requires prioritization, or “saying no a lot”.

“Customer development is fine for startups with no product or customers, but we — Big Enterprise Company — can’t mess around like that.”

Oh, right! Big companies with street earnings expectations and million-dollar customer relationships — what you really can’t afford is to make decisions based on analyst reports and your aging domain expertise.

Customer development is primarily a risk mitigation tool. It replaces that uneasy guesswork of assuming there is a market for your idea based on:

  • analyst reports
  • what your competitor is doing
  • the opinions of the highest-paid executive in the room

No one needs customer development MORE than big enterprise companies.


Look, here’s the real scoop…

Customer development and product management are two complementary tools. Used together, they provide a competitive advantage to any products company. Customer development is not the secret to creating a great product.

You start customer development with a hypothesis, which you are trying your damnedest to disprove. If you go in trying to prove that you were right, guess what? That’s exactly what you’ll find. Instead, if you go in with a high degree of skepticism and a commitment to pushing beyond “yes/no” answers and vague “sounds like a good idea” statements, and still find that people are yelling/anguishing/laughing/cheering over your problem statement, then you’re safe to continue.

At this point, we move into what most of us have traditionally known as product management – envisioning requirements, prioritizing, identifying constraints, pricing, working with engineers to get the thing built. Of course, the product manager who is also a practitioner of customer development doesn’t stop getting feedback after that initial phase — they continue talking with prospects and customers to refine and to collect more detailed feedback as the product emerges.

Customer development is also an opportunity identification tool. If you’re a product manager in a more mature organization, you are less likely to be looking for a whole new problem to solve or a whole new product to create — your company already has customers and product lines. It’s easy to think,”these people are already our customers; we don’t have anything else to sell them: what’s the point?

The point is, even customers who are happily paying you may not be using the product the way you expected them to.

They may love your product — but also wish they could do X and Y.

They may not even realize that they’re doing something that is time-consuming or expensive or resource-intensive — where you could save them time, money, or people by introducing a new feature or way of using your product.

In traditional product organizations these opportunities usually come through VOC (voice of the customer) feedback. But customers are often unable to articulate what they need, especially if it’s something they don’t even realize is a problem.

The active “pull” of customer development interviews, as opposed to the passive “push” of VOC, gets richer feedback (and guarantees that you aren’t being unduly influenced by your “squeaky wheel” customers.