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G93 Customer Development (3)

George Morgan
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Page no: G93

Customer Development

Analyze your customer feedback

Date: Apr 14, 2021
Starts at: 06:30 PM (Europe/Zurich)

In this Feedback Session, Founders will present any customer development progress to the Mentors to examine if they are pursuing a scalable business with a clear and actionable customer problem. The Mentors will also provide tips on how to validate your key assumptions, interview potential customers effectively, and best interpret the feedback you receive.



Below are just a few of the 10-15 deliverables you’ll complete through Working Groups and Office Hours:


Launch Track Deliverables

  1. Customer Interviews – Develop a longer series of customer interview questions based on your initial interviews and key assumptions, with at least ten open-ended customer interview questions for each customer problem.
  2. Customer Archetype – Use our guidelines to develop or improve an initial customer archetype for your ideal target customer.
  3. Landing Pages – For each remaining customer problem, develop or improve a professional landing page targeted to your initial customer archetype, and quickly build up a mailing list to receive customer feedback.


Growth Track Deliverables

  1. Customer Archetype – Use our guidelines to create or update a detailed customer archetype of your target customer, based on either your existing customers or improved research.
  2. Revenue Interviews – Interview customers about the pricing of your revenue model, using three different revenue models/ pricing schemes. Confirm your existing model or select a new one based off these interviews.
  3. Interview Competitor Customers – Identify customers of competing products or solutions and encourage them to switch to your solution, ideally securing a letter of intent (“LOI”), or developing an ongoing relationship for feedback.

Customer Development: Company Building Work


#1 (One Customer Problem)

Identify One Customer Problem that you will focus on with your startup. Write one paragraph about the chosen Customer Problem with as much detail as possible based on the validation work that you have done to date. Ensure that the One Customer Problem is a real pain or need to be faced by your target customers. Also write one paragraph about other Alternative Customer Problems that you examined and why you will not pursue them. If you are not sure and want to continue to test out multiple Customer Problems, email your Local Leaders and ask to be switched over to the Launch Track curriculum. (1 Hour)

Customer for EasyBacklinks
Problem: Customer’s website is too small and unknown. Final aim: to have more sales
Sub-problem 1: He is not ranked sufficiently well with Google as keywords related to ONYX.
Sub-problem 2: ONYX as material for lamps is not known.

This is a typical for any smaller SEO client.
We are still following two customer segments (implicitly problems).
On the other one “PromoteAuthor”, we are on the growth track,
While on this one, EasyBacklinks, I am rather on the launch track.

#2 (Customer Archetype)

Develop a Customer Archetype that describes your ideal target customers, following the example of this guide (http://fndri.com/2wsTXc0). Write a detailed five paragraph Customer Archetype of the hypothetical individual that is your target customer, based on either your existing customers or your research work. The first paragraph should describe their demographic information. The second paragraph should describe their work and professional life. The third paragraph should describe their hobbies and interests. The fourth paragraph should describe why they need your solution. The fifth paragraph should describe how they will learn about and adopt your solution, as well as any steps that are needed to adopt your solution. Be as detailed and precise as possible with all of the above, and include sample photos and any other research. (2 Hours)

Customer for EasyBacklinks
  1. The customer is a 40 years old person that is likes new technology.
  2. He has a small websites in different languages, where he sells some products. ideally he does it in his second job
  3. He likes IT, uses the computer regularly.
  4. He sells a very particular type of products, a niche.
    He is convinced by this product. He faces the following problems:
    Main Issue: he does not sell enough, one reason is SEO
    a) Search engine optimisation is very expensive. A typical SEO campaign costs about 700 € per month. Usually one must run this campaign for many months, ideally forever.
    b) Moreover people do not know his product well. So he wants to show his product also to customers that usually would buy similar products.
    c) He has done very little SEO effort until now.
  5. How does he learn about our solution: we are aiming to use our solution ourselves to create a blog of blogs and videos about SEO for smaller budgets with landing pages on our website. Our solution allows to generate this blog of blogs nearly automatically.

    How we will adopt our solution:
    We assume the following product: Lamps made of ONYX
    Step 1: He finds websites, blogs and Youtube channels that are about his product.
    Step 2: He defines his core keywords, these are the normal keywords that focus on ONYX like ONYX Lamps.
    Step 3: He defines the customer keywords that are not directly related to ONYX.
    Examples: Table lamp, Floor Lamp
    Step 4: We will build a blog of blogs on a new website, using so-called spinning and/or automatic translation that create unique content.
    Step 5: The customer or one of our team does some proof-reading for the articles, given that spinning and auto-translation is not always perfect.
    Beware that proof-reading of 100 articles requires the same time as writing 3 original articles.
    Step 6: We add some additional text and images about ONYX lamps to the existing articles and videos.
    Step 7: We add the relevant links to the customer key articles and landing pages.

#3 (Financial Progress)

Share any work that you have done to date on financials. Provide links to monthly accounting, financial models, estimates, conversion analysis, research or any other work that you have done to estimate revenues and expenses. (1 Hour)

Link to Original Forecast based on 5 revenue models
  1. Initial SEO Implementation
  2. Recurring SEO Fees
  3. Custom Development(not SEO)
  4. Consultancy for additional SEO work not inside licence costs
  5. Satellite Site Affiliation income (Google ads, etc.): Our smart content engine will obtain income like Google ads or via affiliations.
FY 2021: 34 (May 2021-April 2022)
FY 2022: 57 (May 2022-April 2023)
then 70, 80, 100 for following years.
based on 5 revenue models:
  1. Initial SEO Implementation: First 250$ (2021) up to 600$ (2026)
  2. Recurring SEO Fees: First 100$ (2021) up to 200$ (2026)
  3.  Custom Development (not SEO).
  4.  Consultancy for additional SEO, measured in billable hours; prices will rise by time.
  5. Affiliation income (Google ads, etc.)
Competitor Analysis:
I obtained several offers for SEO improvements for one of our existing websites.
Example:  Cost is  $599.00 USD per month plus a one time $50.00 setup fee (provided by pagetraffic.com)

Pricing as compared to competitors:
As opposed to competitors, we offer Offsite SEO improvements for a far lower price.  It is $100 dollars per month that will rise to $200 in 2026. Customers will have to some smaller effort, which is publishing new content in the smart content engine and do some proof-reading.

As opposed to competitors, our content is loaded automatically.
Therefore our monthly support costs are only 20% of the revenue, while for competitors it is easily 40-50%.

As visible in the calculation, we will be profitable in the third year, despite this challenging low price.

#4 (One Revenue Model)

Select One Revenue Model to pursue. Write the name of each revenue model that you have considered for your solution, and write a few sentences for each revenue model on the work that you have done to validate the model with customers, including why you think each model is attractive or unattractive to customers. Calculate the number of customers that you can realistically acquire over the next 18 months and write a few sentences on your strategy to obtain those customers. Determine what price you would need to charge those customers to earn USD $1 million in total revenue over the next 18 months from today under each revenue model. Assume that the number of customers will ramp up over time towards the end of the 18 months, and assume that you may discount your pricing for initial customers. Use the customer feedback and revenue analysis to select your One Revenue Model, and write a couple of last sentences on why you have chosen this revenue model to pursue. (2 Hours)

Link to Forecast with 1 Million over next 18 months  with all details.
5 revenue models:
  1. Initial SEO Implementation. This is the initial setup of the smart content engine, as visible on this page.
  2. Recurring SEO Fees. SEO improvement is a continuous effort. Therefore all competitors take a monthly fee for continuous work. In the Offsite SEO, the companies write new articles that “backlink” to the customer site.
  3.  Consultancy/upgrade for SEO. This is consultancy not covered inside the agreed licence costs. Examples are an upgrade of keywords and input sites for the smart content engine.
  4. Custom Development (not SEO). These are custom software developments that solve additional customer problems. They become apparent in the initial or continuing SEO consultancy.
  5. Satellite Site Affiliation income (Google ads, etc.): Our smart content engine will obtain income like Google ads or via affiliations.
Clients, same as in question #3.
2022: 34 (May 2021-April 2022)
2023: 57 (May 2022-April 2023)
then 70, 80, 100 for following years
based on 5 revenue models. Significant difference in prices as opposed to #3.
  1. Initial SEO Implementation: First  3000$ (2021) up to 5000$ (end 2022).
  2. Recurring SEO  Fees: First 500$ , up to 600$
  3.  Consultancy/upgrade for SEO.  For achieving one million in revenue, we
  4.  Custom Development (not SEO). Rising from 45K to 81K, in the second year.
  5. Affiliation income (Google ads, etc.)
Prices are going up with time, when our quality and reputation is increasing.
Why models are chosen: The models are based on the Standard SEO pricing based on monthly models. It is important to see that our main effort is the initial work, namely the establishment of the smart content engine, while for our competitors have regular work each month.

Customer Feedback:
In order to achieve 1 million, prices must be significantly higher. According to interviews with potential customers, this would be achievable if they are convinced that we really deliver higher quality thanks to more and always renewed content. For one customer, we might be better because Standard SEO has difficulties in breaking into competitors’ markets / keywords. Using our “competitor keywords”, we could deliver this higher quality that allows for higher prices.

#5 (Customer List)

Create a bulleted list of target customers based on your One Customer Archetype. Your Customer List can include any existing users or customers. If you are focusing on a business to business (B2B) Customer Problem, the list should include at least 3 names. If you are focusing on a consumer (B2C) Customer Problem, the Customer List should include at least 9 names. For each customer, ensure that you have their full contact details including their phone number and a couple of sentences describing their demographic information. (1 Hour)

B2B Model:
  1. Keith Weiner, Owner of Monetary Metals, SEO Client
    Product: Gold Leases: Borrow and Lend Gold,
    Monetary Metals acts as market and storage place for both borrower and lenders
    Phone: +1 6044789275
    Mail[email protected]
    Why Archetype: Has not done any SEO effort yet, IT Tech
  2. Rene Irniger, Owner of ONYX Art Shop SEO Client
    Phone: +41 79 883 9322
    Mail: [email protected]
    Why archetype: Age, done very little SEO effort yet, IT Tech
  3. Dominik Bamberger, Owner of idomix.de
    Mail: [email protected]
    Why archetype: 2nd job little SEO effort yet, IT Tech

#6 (Revenue Interviews)

Interview customers about the pricing of your One Revenue Model. List three alternative prices for your solution, including a low price, a medium price and a high price. The medium price should be the price you need to charge to earn USD $1 million in 18 months. The low and high price should be at least two times lower and higher than the medium price. Describe the offering for each price point. For the low price, offer fewer features than you are currently planning to build. For the middle price, offer what you are planning to release. For the highest price, offer incremental value, such as customized support. For B2C revenue models, secure a brief call with at least 5 customers from your Customer List. For B2B revenue models, secure a brief call with at least 2 customers from your Customer List. Before discussing the pricing, ask the customer how they would solve the Customer Problem, how much time they dedicate to the solution and how much money they spend on the solution. Then, describe the One Revenue Model that you are considering. Outline the three price points you are evaluating and get their feedback. Write the name of each target customer and a bulleted list of their feedback and include the amount that you anticipate they will actually pay over the lifetime of their commitment. Write a few sentences on how their feedback changed your pricing model. (6 Hours)

Within this assignment, I have realized that I must choose only one customer problem/segment.
Therefore I have switched from
Customer Segment#2, PromoteAuthor (Growth track), where authors contribute their content into a blog of blogs.
to Customer Segment#1: EasyBacklinks (rather Launch Track, see questions above)
The impression is that revenue is far higher for EasyBacklinks.

The products for both customer segments are based on same existing and working core system.

For PromoteAuthor, we will be continuing revenue interviews and surveys that clarifies in particular

  1. What is your problem?
  2. What are you ready to pay for solving your problem?
We have already interviewed 3 customers/authors

All of them are not ready to pay for our services. Be aware that we still possess 3000+ more authors (aka potentially paying customers) on our websites.

We have developed a revenue model with 4 price ranges for  PromoteAuthor as visible here.
For EasyBacklinks, the pricing models could look similar, based on the number feeds and Youtube channels.
Prices however must be higher, given that customers most probably will pay more and our manual effort is higher, e.g. proof reading (see in the deck)
First customer see #7.

I have just started the customer interviews on pricing for a 2nd customer. The customer is not ready to pay a monthly 700€ , which is the normal price for good SEO services that improve his Google ranking for his product. He gave hints that he is ready to pay about half of it.

#7 (Interview Competitor Customers)

Identify customers of competing or similar products or alternative solutions and encourage them to switch to your solution. If you are focusing on a business to business (B2B) Customer Problem, identify 1 customer of an alternative solutions, and use email or a phone call to encourage them to switch. The ideal scenario would be to get them to actually pay you money for the solution now, or, if that is not possible, try to secure a letter of intent or LOI. NOTE: an LOI normally includes (1) the name of the customer, (2) a statement of intent to buy, (3) with a contingency such as ‘if we are happy with the prototype’ or other words to make the statement non-binding and (4) possibly with a price and other terms. If you are focusing on a consumer (B2C) Customer Problem, identify 3 customers of alternative solutions, and use email or a phone call to get them to sign up for your solution. The ideal would be to have them agree to use the current minimum viable product (MVP), or, if that is not possible, have them agree to join a user group for feedback on product development. Write a paragraph on what you learned through trying to encourage the customers to switch, including an analysis of your success rate. Provide a bulleted list of any LOIs, user groups, contracts or payments that you have been able to secure. (3 Hours)

Customer: Rene Irniger, ONYX Lamps was using an alternative SEO provider/competitor, that tried to improve his Amazon conversion ratios.

We have  now obtained the following agreement.
(1) Rene Irniger, OnyxArt
(2) has the intent to buy our SEO services “EasyBacklinks”
(3) no contingency
(4) Price terms:
EasyBacklinks obtains a percentage of 8.5% of each additional sales realized by OnyxArt.
Standard Price: 300 CHF per lamp  (Profit 150 CHF for OnyxArt)
EasyBacklinks obtains: 25 CHF

Definition of “additional sales”:
Additional Sales are items that are sold in addition to current status quo (average Jan 2021 to April 2021).
Data will be based on his official book keeping.

The client is aware that the selection and publishing of the blog entries  and proof reading is his job.
Our software only provides the technical framework and the working keyword-based feeds from the source sites.

Without having a good reputation and well recognized product, it is very difficult to convince customers of our revenue model. Instead we agreed on a model that is based on the clients’ sales. We will have to trust in the client that he delivers accurate data about his sales.

#8 (Switching Costs)

Based on your work to Interview Competitor Customers, write a few sentences about your thoughts on the amount of time and any related costs that a target customer might incur by switching to your solution from alternative solutions. Write another few sentences on how your solution will be multiple times better, faster or cheaper than alternative solutions. (1 Hour)

Customer 1: does Offsite SEO by distributing his own articles to various websites.
Customer 2: Offsite SEO with a professional SEO company longer time ago, but not refreshed due to high prices.
Is not able to break into his competitors markets given that traditional SEO has extremely high costs when moving into new markets / creating a bigger market for hist product.
Detail: Lamps made of ONYX are currently an extreme niche market. For competitor keywords like “table lamp” or “floor lamp”, he will not be ranked at all.
Customer 3: Never done Offsite SEO, due to knowledge or price issues.
We are better because

  1. We tell him that his content will be continuously republished, but we also can publish similar content to his one – and this with a lot less work than he has today.
  2. We are able to build content based on the keywords of his competitors (e.g. table lamp and floor lamp), but we still link to his products (e.g. ONYX Lamps).
  3. We try to teach such kind of clients that Offsite SEO is important and not so expensive as he thought.
Acquisition / Switching Effort:
Our customer archetype does not have ongoing SEO efforts. They have started some SEO, but stopped doing it. Given a reasonable price, we are able to penetrate into this market without considerable switching costs.
Given that we want to use sales agents, we incur certainly some switching costs. We estimated costs for sales agents to 20% of recurrent revenue.

#9 (Extend Validation)

Copy and refine the bulleted list of Validation items that you developed during the Vision and Validation session based on your work to date. Prioritize the bulleted list based on the items that you have the least empirical evidence and that pose the greatest risk to your long-term success. Pick at least two of the top items, and develop an approach to empirically test them to gain defensible evidence over the next two weeks. Write one paragraph on each of the tests, and include a description of your strategy and timetable to complete each test. Start the tests. (4 Hours)

A) Are customers ready to pay for the service?
(1) Yes, because they reduce monthly costs for over 50%
(2) Yes, because they are able to break into other markets more easily using the functionality of competitor keywords – something which is more difficult with Standard SEO.

B) Do customers trust this new way of doing SEO “empirically” ?
Not yet, we still must prove that it really improves Google ranking. To be frank, there is no way for obtaining “defensible empirical evidence” over the next two weeks. SEO improvements take at least 4-6 months.
Yes, we will obtain defensible empirical evidence: We are creating a prototype for the first client and we will follow our step by step approach.

C) Do customers trust this new way of doing SEO “logically” ?
We are able to build a theoretical/logical framework, that can be developed in two weeks.
This logical framework is used to convince potential clients that the final empirical evidence (see B) will lead to success.

Criteria are:
  1. Do the domain(s) back-linking to the client pages possess a high domain-authority?
    –> The newly created smart content engine will obtain high domain authority over time (expect 4-6 months).
  2. Do the sites back-linking to the client pages possess high-quality content?
    –> The smart content engine sources high-quality content from existing high-quality sites and from Youtube.
    Therefore the content is high-quality.
  3. Does this content duplication harm the SEO?
    –> The content passes automatically through an Artificial Intelligence algorithm called “Spinning”.
    This AI is getting better and better. Microsoft’s MSN for example, has replaced journalists by robots. They use comparable AI algorithms.
    For now, Google has not punished MSN for duplicate content. MSN has maintained its domain authority of 95.
  4. Does spinning require manual intervention?
    –> The customer is able to decide which articles shall be published. We suggest a quick proof-read on the articles to be published.
    Beware that proof-reading is about 30-50 times quicker than the writing new unique articles.
  5. How many new articles can be published per month?
    –> The Smart Content Engine is able to publish 30 times more articles than conventional SEO providers would publish.
    The exact number of articles depends on the customers’ subscription model.
We have validated “model C” together with one customer already. The plan is to validate it with a second one until Wednesday.

D) is there a short-cut for obtaining real empirical evidence (item B)
Are there work-around for jumping ahead with item 1: domain-authority, so that empirical evidence can be provided earlier?

–> We might integrate the Smart Content Engine in one of our existing websites,that have domain-authority of 46.

However they are focused on investing and Economics; therefore we fear a “content-clash” that would harm the domain authority.
We will validate this with experts, some of them are potential clients.

#10 (Emotional Rollercoaster)

Develop healthy tactics to deal with the emotional rollercoaster of entrepreneurship. Being a Founder is a known profession with high stress, heavy workloads and extreme highs or lows, referred to as the emotional rollercoaster, which you may already be experiencing in the program. Write a few bullet points on any healthy tactics that you have used in the past to effectively deal with stress. Find and interview one experienced Founder for a few Minutes, who may be a Mentor, about the emotional rollercoaster. Ask them to tell you about some of the most difficult and the best times they have faced as a Founder, how frequently things go from great to horrible, how they deal with the ups and downs and who they turn to for support. Present to your Working Group for feedback on the most healthy Tactic that you discovered to deal with stress and the emotional rollercoaster. Write a couple of sentences on the Tactic, including a description of how you will implement this Tactic when needed. (1 Hour)

Own Tactics:
  1. Keep the main job inside a bank. If anything fails, then this keeps feeding you.
  2. Choose possibilities to reduce the work-load inside the bank, without losing the security.

    a) Time Flex Model: Special model, where can reduce down to 60%.
    b) Short-term: Takes 2 days off each week, for FI only.
    c) Take holidays
  3. Do sports regularly. Biking helps me not only to get fresh air, but also fresh thoughts.
  4. Keep family life OK: This is maybe the most difficult challenge. Having a full-time job, plus doing a business reduces the time. Aim is to have meals together and watch movies together every 2nd day.
  5. Plan your day. I am a using  calendar that blocks time for all things, in particular:
    • Time for the main job
    • Time for Founders Institute / my own business
    • Time for sports (average 1.5 hours per day).
    • Time for family
    • Time for telling my team what to do
    • Time for other things like cleanup, data backups, fixing the computer.

      At the same time, I also do reviews for what I really invested my time.

  6. If anything does not fit into the schedule, then skip it, ask for more time or re-plan. This might also include FI.
I had an interview with the founder of farmtasy
He similar issues as I had with integrating the main job with a second business.

His advices:

  1. Find out co-founder
  2. Find a sales agent
  3. Balance your life with sports, holidays and family.
Also interesting resource
Dale Stephens (team of Peter Thiel), source
UnCollege, a startup aimed at fixing what he felt was wrong with higher education,

  • Own schedule
  • Lives in city he loves
  • Raised more than 100 million
  • Quickly obtained access to investors
  • herculean energy to start a company
  • Failure to reach the goals –> belief that you are unworthy
  • morphed quickly into crippling anxiety that left him unable to leave his home
  • 2015, Ran out of cash, had to fire two employees
  • Obtained burnout
  • He was replaced by new CEO in December 2015, in his own company!
  • In may 2016, he did not manage to get out of bed any more
  • I felt shame that I wasn’t “successful.” which morved into a “trauma”.
  • “UnCollege was a failure I could be proud of, not to mention a learning experience I could bring to my next project:
  • Helping others learn to love themselves, and as a result, build wildly successful companies.”

#11 (First Weekly Update)

Provide an update on your weekly business progress. Provide a bulleted list of what you want to accomplish over the next week in the following categories: Team, Product, Traction and Program. For the Program, review the upcoming assignment and outline a strategy to complete the work, and include any specific items that you will need help on, called an “Ask.” The items that you want to accomplish should be prioritized, and the goal will be to complete as many of them as possible before the next update. (1 Hour)

ProductEasyBacklinks Prototype, plan for next week.

  1. Define keywords that are specific the client’s site, i.e. ONYX Lamps. Complete the list
  2. Define keywords that are specific for the competitors site, i.e. floor lamps, Table lamps, stone lamps. Complete the list.
  3. Find Blogs and videos that are good as input, e.g. a blogs about interior design.
  4. Define the filtering keywords for these blogs and Youtube videos.
  5. Create a first Satellite Site with 2 sample feeds
Sales agent:
A key item is to get a sales agent that ideally has a list of SEO prospects already at hand. This would help to solve item (5), the sales for next week’s assignment.

Rest of Team continues to work on the Customer segment #2: Authors
but slowing down the effort, so that they can focus more on EasyBacklinks.


  1. Fill author data incl their site, twitter, linked, home page, sales page, about 800 authors.
  2. Continue with a few client interviews for the customers that show the biggest interactions in Twitter.
  3. Prepare surveys, if time remains.
The team task on filling author data (1 above)  is a typical traction task. Once we have filled the data, we increasing the client/author base with whom we are interacting with.

Outstanding questions for Revenue 

A) Are we on Launch Track or Growth Track ?
One must be aware that Easybacklinks is in the prototyping phase, while PromoteAuthors has already an MVP.
Both are based on the same core engine.

The Growth Track assignments appear to be doable except one single item:

B) #5, Sales: “Obtain a full sale, that includes an initial down payment or LoI”
Given we have already one customer (see #7 above), with a LOI, do we now need a second one?
Or is the same question as #7 in Customer Development above?

Moreover, time is an issue, if we want to finish the program tasks; but I assume it is the same issue in the Launch Track.

#12 (First Mailing)

Expand The List to include at least 10 more people, potentially including the customers that you interviewed. Then, send your first mailing to The List that includes: a description of your entrepreneurial and business journey to date, including your decision to enroll in the Founder Institute, and some or all of the content from your Weekly Update, including the Asks. Provide a link to or copy of your email. (1 Hour)

#Customer Segment1:  EasyBacklinks

#CustomerSegment2: PromoteAuthorModel
we are currently in the process of addressing a far larger list of list with the story about our website (see plan above).

#13 (Hotseat Pitch)

Update your one minute Hotseat pitch from last week. Take all of the learning from the week and revise your Hotseat Pitch. Include the updated Ask(s) from your Weekly Update. Practice the pitch alone and with your Working Group at least five times. Refine the pitch based on the practice and write a couple of sentences on the key improvements. Video yourself giving your best Hotseat pitch, and upload the video online as unlisted and accessible. Paste the link to the unlisted video in the assignment here and also paste the link in the field on your homepage under Weekly Pitch. (30 Minutes)

Director Feedback

Hey George

I’m marking your assignment as incomplete, because… well, it’s incomplete 🙂 Please complete the missing tasks as soon as possible, and let us know when you are done. Going forward, make sure you submit your work on time to not fall behind.

It is great to see that you are staying flexible and pivoting to more interesting business ideas. In case you’d like to switch to the launch track, please let us know!









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