The majority of product development is not “new” – and slow decline is a bigger risk than failure

i.e. Customer development is not just for startups!

From Chapter 1:

“Without customers willing to buy, it doesn’t matter how good or innovative or beautiful or reasonably priced a product is: it will fail.

It makes no sense, then, that we spend most of our time and effort optimizing our product development process. What about customer development? Shouldn’t we invest at least as much time in understanding our customers, their needs and pain points, and how to deliver solutions to them?”

– chapter 1, lean customer development

This is still true, and it doesn’t tell the whole story. 

When you work at a mature company – and by the numbers, most of us do – your day-to-day work will mostly be with products that already have customers.

It’s not a question of “will customers buy this?” They already have. 

What leaders of mature products must ask is:

  • What will motivate customers to expand their usage of our solutions? 
  • How are existing customers outgrowing parts of our solutions, and looking elsewhere to fill in those gaps? 
  • How have customer perceptions persisted even as our offerings have changed/improved/expanded?
  • How confident are our customers that our product vision will continue to solve the problems they need to solve?

You think you know your customers and their pain points?  That knowledge has an expiration date.

If you haven’t explicitly revisited customer goals, needs, and motivations in the past 12-18 months, your competitors may know them better than you.

Creeping attrition is your biggest risk

When I was at Yammer, there was an infamous bar chart* within the Office division at Microsoft – people referenced it in meetings left and right. It showed Office365 subscriptions – highlighting the growing difference between licenses sold and licenses used. 

People called it “the gray bar problem” (for the color of the “unused licenses” bar in the graph).

Every person represented in the gray bar was someone who had solved their word and number-crunching needs somewhere else.   What would stop an enterprise customer from saying “Why should I renew for 50,000 licenses when only 35,000 employees are using Office?” and perhaps later, “What’s keeping me from evaluating Google for Work or some other alternative?”

* This was ~8 years ago; I have no idea whether this is still a problem. Microsoft is a really big place and I work in a completely different part of it now!

Telling our customers what we can help them do is a constant process – and if your customers aren’t aware that you’ve added feature Y or improved capability Z, it’s not because your product marketing team isn’t doing their job! 

It’s this: you think about your product 40+ hours a week; even your most enthusiastic customers spend less than 5% of that time thinking about it. 

In fact “it works so well I don’t even have to think about it!” is often one of the highest compliments our customers can give us.   We hate friction.  That’s why we often keep using ‘good enough, but not great’ tools.  It’s why customers rarely reach out to complain or file bugs about a product or process that has gradually declined in effectiveness.

Once customers hit a snag, it’s just as easy to look at competitors as it is to figure out how to use existing tools differently

Until: they hit a snag.  Once customers have outgrown a previously-working process or tool, they can no longer avoid friction. And then, there’s no perceived difference between two options: figure out how to use their existing tool differently to continue to meet their needs; or look around for alternatives.  It’s an opportunity for our competitors.

In my experience, we tend to notice what our competitors are doing. We see new press releases; our customers ask when we’ll support that feature too.  

If anything, I think most companies overreact to this threat.  We rush to achieve feature parity – without asking why our competitors built it and how they realized it was an unmet need.  

When a competitor starts creating new value for customers, it’s not ✨magic✨:

It’s because they’re doing a better job of observing and anticipating customer needs.

It’s because they are looking at how changes in available technology or customer expectations are enabling different solutions.

It’s because they are identifying segments within your customer base with specific unsolved problems who are ready to try something simpler or faster or cheaper.

As product people, it’s our job to listen and observe and ask ourselves, “why should our customers stick with us?” 

Ideally, before they ask that of themselves.