Startup strategy | Product & service with structure from the customer's perspective

October 04, 2018

Dr Reinhard Ematinger


An increasingly dynamic playing field opens up sensational new opportunities for us almost every day - and also brings with it serious new risks, especially in a start-up or scale-up phase: the opportunity to rethink inspiring customer benefits from scratch, design them cleanly and put them into practice. The risk of being left behind right from the start, because new competitors with greater tangible benefits for our customers can and will enter the playing field in no time at all.


Digital offerings have been changing the market for years, and they are changing our customers' expectations with increasing speed. You know that better than I do. If we fail to take advantage of the new rules of the game, we will lose customers and, sooner or later, possibly our entire business. If we succeed in rewriting the rules of the game for ourselves and our valued competitors, we will be almost invulnerable. If we don't take previous rules for granted, but redefine them, we will be rewarded with attention and revenue. "Keep rewriting the rules of the game until you win," says an entrepreneur friend from Berlin. And every day, products from the Far East, among other things, remind us that we can smear the arbitrary definitions of 'addressable market', 'niche', 'customer segment' or 'premium product' neatly into our hair.

Hence my polite invitation to focus less on rather ephemeral technical benefits of products and details of services that are hardly relevant to our customers and more on how we create real benefits for our customers and increase the perceived value for them.


In his speech "Rendanheyi 2.0: Building an Ecosystem to Co-create and Win Together", Zhang Ruimin, CEO of Haier, pointed out that his managers and employees often find it very difficult to answer seemingly simple questions such as "Who is your customer?" and "What is the value you create for your customer?". This should give us pause for thought - especially when we are working on new business ideas and want to implement them with speed and structure.



What is my point? With this mini-series, I want to invite you to think 'from the customer's perspective' again with speed and structure and to look at your good ideas for products and services less from the point of view of their functions and features and more from the point of view of potential customers. By taking a structured approach, you will avoid designing offers that nobody needs sooner rather than later.

And, I invite you to put aside the vague terms 'innovation', 'design', 'customer need', 'niche' and 'customer focus' until the end of this series and join me in focussing on what customers 'want to have done': On what their tasks to be solved are and on what they perceive as better answers to their questions and problems. Regardless of functions and features. Tools such as the Customer Jobs Canvas help you to create products and services that customers want to buy. This gives you more pleasure in sketching, discussing and testing new offers, makes your future results more predictable and your products and services more profitable.



There is useful support for the aforementioned 'turning' of the view of your offer from that of the manufacturer or service provider - against which there is nothing to say, especially in a start-up phase - to that of the customer, which can accelerate your first steps. I have summarised three points for this:


Firstly, you are not alone - the idea of thinking in a structured way 'from the customer's perspective' is neither particularly new nor an adventurous theoretical concept.

Depending on how you look at it, the roots of 'customer-centred' thinking go back more than 70 years to Joseph Schumpeter. His work "Capitalism, Socialism and Democracy", published in 1942, introduces creative destruction and describes how new innovations first steal customers from established companies and potentially drive them out of the market and replace them. What is perhaps less well known is that Schumpeter realised back in the 1940s that innovation can come from almost anywhere, not just from products and services similar to one's own.

Companies that seriously assume that they are alone in the market they dominate will sooner or later be confronted with events whose signals they have not recognised; with new competitors that they have not even remotely identified as such; and with products and services that had not yet been invented at the time of market observation.

Clayton Christensen gave the phenomenon a name in 1995 in the Harvard Business Review article "Disruptive Technologies: Catching the Wave" and with the books "The Innovator's Dilemma" and "The Innovator's Solution" published a few years later, he brought the idea of 'thinking from the customer's perspective' to a common denominator for the first time and coined the term Jobs to be Done. Richard Foster and Sarah Kaplan took up Schumpeter's theory in their 2001 book "Creative Destruction" and established that the lifespan of companies is determined, among other things, by how well they are able to meet the needs of their customers. You are in good company!


Secondly: We fill gaps in our perception - why design thinking and 'thinking from the customer's perspective' need each other.

In our opinion, why does a combination of tools from design thinking not fully answer the important question of why customers buy? We call psychologist and Nobel Prize winner Daniel Kahneman to the stand. He coined the acronym WYSIATI: What you see is all there is.

This describes the fact that our subconscious constructs a plausible story from a small amount of information and presents it to our conscious mind. This 'what you see is all there is' simultaneously keeps us going and leads us down the slippery slope. We construct a story as 'meaningful' as possible at lightning speed and use small snippets of information and experiences to do so. Facts and plausibility do not play a major role here - which means that we present ourselves with a story and our conscious mind believes this story without being asked. It is much more pleasant for the subconscious mind if as little information as possible is available.

In addition, we cannot process information that is not available in one way or another. This is why personas have a negative effect on work in teams and organisations in addition to many advantages: We read the persona's information and fill in the gaps with our own personal assumptions about our customers' behaviour. If you use well-structured tools to try to think 'from the customer's perspective', you fill these gaps with meaningful information.


Thirdly, one plus one equals three - thinking 'from the customer's perspective' and systematically working on your own business model are not mutually exclusive.

If you are already familiar with thinking in terms of business models and have developed initial robust drafts or reality-tested descriptions of your future business model, this is the perfect basis for the next steps. The focus on what tasks our customers 'want to have done' ties in seamlessly with the most important fields "Customer Segments" and "Value Propositions" of Alexander Osterwalder's Business Model Canvas. We go into depth with each customer segment identified as important in the Business Model Canvas. More in part 2.

In my opinion, a list of value propositions does not really answer the question of why customers buy sufficiently - and above all not so clearly that you can derive useful actionable steps from it. I would therefore like to take the liberty of asking more detailed questions: in addition to the observable tasks, we look at the emotional and social tasks of customers in detail. We ask what attracts customers to a possible new solution and what keeps them away from a new solution.

We ask which alternative products and services customers have chosen in the past and why they have deselected them. The positive side-effect of this work is that you will be outlining a template for communicating the benefits of your offer to a clearly defined target group.



Why should you concern yourself with your customers' tasks - in other words, with what your customers 'want to have done'? Because solutions - whether technical or organisational, whether by app or service, whether delivered by people or drones, whether from the cloud or from a laptop - come and go. But the tasks of our customers and users remain the same: we can assume that both Egyptians and Romans were already asking themselves how documents could get from A to B quickly and securely. This is the task: documents should get from A to B reliably and quickly.


That is not the solution, not the implementation, and not the activity. That is the question. And the question is the same today as it was thousands of years ago: how do documents get from A to B safely and quickly? The solution back then: a messenger on horseback. The somewhat more modern solutions are insured dispatch by post or courier service, fax transmission with a PIN code (the older ones remember, yes?), secure e-mail connection with a signature, or a download with double encryption. Solutions are changing faster than you can finish reading this article - but your customers' tasks remain the same.

In order to be able to offer customers something they are willing to invest money and attention in, it is enormously helpful not to reflexively formulate an answer before you are sure you have really understood the question behind it. With ideation methods such as design thinking, you learn and experience precisely this skill: you take a step back and ask yourself again whether you have even formulated the right questions before you collect, condense and filter your good ideas.

How do you describe a task for your customers - as opposed to an activity, the functionality of a product or a component of a service? I think that the following criteria should apply in order to arrive at a result that actually benefits you and your customers, and I offer the following three points:


Firstly, tasks do not describe detailed activities

The usefulness of this approach does not lie in the detailed description of our customers' activities in five-minute steps. These are not always related to the task at hand and are of little help in discovering the 'question behind the question' and developing suitable answers.


For example, "travelling to Duisburg by train" is a description of an activity that says nothing about the question behind it and nothing about the actual task that someone wants to solve. At the moment, we know nothing about why this person is travelling by train, the context in which they made their decision and which alternatives they did not choose and for what reason. "I would like to travel from Heidelberg to Duisburg in a relaxed manner", on the other hand, is a task. No solution has been found yet, only the task formulated.


Secondly, tasks do not describe the solution found to a problem

You are wasting good approaches in structured brainstorming for products and services conceived 'from the customer's perspective' if you don't keep the question and answer clearly separate. What sounds like a simple country saying from my home country is actually a popular shortcut in reality. The only problem is that this shortcut does not lead to the goal, but rather to unpleasant endless loops.

taxi car sign

"First take the train and then a taxi to travel to Duisburg" is the solution, i.e. the answer. The question behind this still remains unclear, as does the context: for example, what are the time and financial constraints?


Thirdly: Think tasks from the end - and not from the beginning

My experience from projects with start-ups with very different ideas, goals and offers shows that the effort to find a kind of target image is worthwhile. What is better afterwards than before? And why?

What positive image emerges in your minds when your customers have completed their tasks? There is a good reason why the original term is Job to be Done. Clayton Christensen recalled this term in his 2007 article "Finding the Right Job for Your Product" published in the MIT Sloan Management Review.

What is better afterwards than before - regardless of the product or service chosen? Design thinking professionals call this the customer journey: There is a task that a person wants to solve. And there are hurdles that stand in the way at the beginning. There are supporting and hindering factors in between. And the solution at the end supports the person's task in the best possible way.

How does the person want to see themselves at the end of their trip to Duisburg? Relaxed, bored, well prepared for an upcoming workshop, hectic, or ready to take off? With the target image in mind, you can develop much more suitable solutions for the person's task.


To summarise: solutions come and go ...

... but your customers' tasks remain the same. If you find answers to their questions, your range of products or services will be perceived as useful and valuable. However, if you provide answers to something that no one has asked for, you are at best creating me-too offers and from the start you are moving in a downward price spiral in which there are rarely any winners.

More in Part 2: How to work with the Customer Jobs Canvas



innoWerft guest article by Dr Reinhard Ematinger

Expert for business model innovation

Reinhard invites managers to "think" their products and services from the perspective of their customers. More than 100 semesters of lectures, several books and more than 20 years of experience in consulting, business development and corporate universities ensure the relevance of his work.