Blue Ocean Strategy & Customer Development – Making Products That Sell

Author: tracysigler | Posted: March 18th, 2011 | | Tags: Ash Maurya, Blue Ocean Strategy, customer development, strategy | No Comments »

The more we work on strategy at AVLM HQ the more I become aware of the overlap of Blue Ocean Strategy and Customer Development. Both are attempts to get at what customers really want so you can develop products they will really buy.

Customer Development interviews for us, so far, have followed Ash Maurya’s methodology of asking potential customers to react to, and rank order what we hypothesized as the main pain points for marketing their businesses. We also ask them if they have other challenges we haven’t listed. The process from there involves creating a “minimum viable product,” getting feedback, possibly through follow-up interviews, and then iterating over and over. That’s a major over-simplification, but good enough for now.

Blue Ocean Strategy is possibly less “greenfield” than Customer Development (as I understand it) in that it begins by looking at the typical “value curve” for a given business category and aims to diverge, significantly. The value curve is a simple chart created by plotting various customer buying criteria such as price, features, etc. on a high-to-low axis. In a nutshell, you want to approximate the industry norms, then create a value curve of your own that diverges by eliminating what customers don’t want and adding what they do.

You get to this new value curve by answering four questions. From the book Blue Ocean Strategy:

• Which of the factors that the industry takes for granted should be eliminated?
• Which factors should be reduced well below the industry’s standard?
• Which factors should be raised well above the industry’s standard?
• Which factors should be created that the industry has never offered?

This is where I think the Customer Development process of interviewing prospective customers can help. At least that’s how we’re approaching it. Real world prospects are telling us what they must have and will pay for, and what they don’t care about. That’s fantastic, but the “create” question is where I think the real value will be uncovered.

 

Customers may not be able to tell you what they really want because they haven’t even imagined it yet. As helpful and Customer Development and Blue Ocean Strategy are, I’m certain that creating any world-changing value innovation is going to take more than using the prescribed frameworks. Timing? Luck? Vision? Any of those will certainly help.

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