Article

Amazon’s Half Baked Customer Development Approach

Bernhard Kappe

Published on: October 25th, 2010

This post was previously on the Pathfinder Software site. Pathfinder Software changed its name to Orthogonal in 2016. Read more.

This post from Ian McAllister prompted a lot of talk at my company. We’re a big proponent of Customer Development * as an approach to new product development, and this seems to be at least a step in that direction.

For new initiatives a product manager typically starts by writing an internal press release announcing the finished product. The target audience for the press release are the new/updated product’s customers, which can be retail customers or internal users of a tool or technology. Internal press releases are centered around the customer problem, how current solutions (internal or external) fail, and how the new product will blow away existing solutions.

If the benefits listed don’t sound very interesting or exciting to customers, then perhaps they’re not (and shouldn’t be built). Instead, the product manager should keep iterating on the press release until they’ve come up with benefits that actually sound like benefits. Iterating on a press release is a lot less expensive than iterating on the product itself (and quicker!).

That sounds pretty similar to the approach Ash Maurya describes for Web Startups, except using press releases rather than landing pages.

One thing I like about the Amazon approach is how it can be used to test the waters inside a large corporation, to see if the message resonates inside the organization enough to build momentum. Customer development is primarily focused on customers and users, which is essential for any new product, but this is an approach to get feedback from corporate stakeholders, essential in any large organization. It’s interesting that this approach works within Amazon. That says something about their culture. I’m not so sure it would work inside Microsoft or Oracle.

I also think Ian is missing the boat when it comes to product development though – perhaps there’s more to it, but it seems that the press release is looked at as a fixed requirement without the opportunity for additional lessons learned. That sounds like a classic product development mistake.

* Customer Development is a four-step framework developed by serial entrepreneur and business school Professor Steve Blank for discovering and validating the right market for your idea, building the right product features that solve customers’ needs, testing the correct model and tactics for acquiring and converting customers, and deploying the right organization and resources to scale the business.

Some of the early steps include: Startups begin with hypotheses about a customer problem or need. Founders talk to customers to discover and validate whether the total solution solves that problem or addresses that need. Many current startups extend that patterns with other tools for generating feedback before they do much, if any development.