How we got to our customer discovery-as-a-service

“In the early stages of a startup, focusing on execution will put you out of business. Instead, you need a learning and discovery process so you can get the company to the point where you know what to execute. - Steve Blank

I still remember the summer of 2012. d.labs has just acquired our 5th startup client in the UK, we were a small team, maybe twenty of us altogether, and we have moved into our very first offices, sharing an amazing building (a beautiful brick-made former candle factory) with Zemanta, which was the only USV investment in this part of Europe. At that time we considered ourselves still to be nothing but a passionate product shop, albeit with a penchant for working with startups.

One of the nicer things about being close to Zemanta was that Bostjan Spetic, then Zemanta’s CEO, and I have had frequent founder to founder discussions about the things that kept us awake at night. Do we believe in our respective visions enough to make hard decisions? Can we still be leading our businesses if we made a mistake? Are we providing enough value as leaders? Do we truly know what we’re building?

This last question was the toughest to crack for both of us. And I’ll never forget Bostjan, after patiently listening to me explain, for the n-th time, what d.labs is all about, saying, ‘maybe you should get your hands on the Startup Genome Report’.

That Report, which you can still find here, changed everything.

That short conversation became a pivotal learning moment.

What was so different about that report, contrasting it to every other text on tech companies, is that it used a scientific method to determine what is the common denominator of high-growth startups. Its implications were immense. It introduced the startup lifecycle, the company building stages, and it eventually led us to realise that we should insert entrepreneurial science at the core of what we must deliver to our customers.

We realized we need to become a knowledge company.

We went back to the drawing board and after two months we launched a Product Discovery service. The aim of that service was to create a sense of the product before we build the actual one. We would create product mock-ups, sometimes prototypes, or even just a one-pager. Anything that our clients could quickly test in front of our potential customer segment and see if our offering resonates.

We designed it to be low-cost enough - a cheap-failure, so to speak. Such that would allow us to iterate our ideas many times over before we actually write even a single line of code. The assumption was that we could start to use the early feedback we’d have gotten from those users to inform our actual product decisions.

To our clients and us, we thought, this discovery should provide with a shared sense of truth. It should tell us if there’s a real, discernible need for our product. Did we get the positioning right? Is there a channel that we can use and scale to generate initial traction?

Most of our clients since 2012 have benefited from this service. And we have been improving it ever since.

A surprising effect, that we haven’t thought of at the beginning, was that it forced both our founder-clients and us, to get out of the building. To start talking to prospective users even if we don’t have a clear sense of what the product will be.

We realized that as much as it takes us out of our comfort zone, the benefits of early listening to our future customers are significant. They de-risk our endeavours, make us a more authentic company builders and vastly improve our conversations with investors.

Today, at d.labs this product discovery service has evolved into full-fledged research, discovery and product-blueprint service we call Recon — short for Reconnaissance. Reconnaissance in a sense that a small team at d.labs scouts if there is a market for the product we have envisaged. We are bringing together the best of d.labs to engage with our new clients and their potential users. To get as much learning as we can, as quickly as we can, by using lean research method, rapid prototyping, and a feasible technology underpinning. Our clients use these learning to obtain investment, generate early traction and get a clear sense of direction.

If this makes sense to you, write to us here. We’ll be happy to connect you with founders that have experience working with us.

p.s. Bostjan sold his company to Outbrain and became one of the most formidable ecosystem builders in the region. If you’re looking for investment opportunities in central Europe, check them out here.