The customer development process involves stepping outside the building to test the understanding of the customer's problem or need. Initially, the [[business model hypothesis|hypotheses]] about the pain and gain for hypothetical customer segments are implicit. To make them explicit involves taking the hypotheses and engaging directly with potential customers, not just through emails or surveys, but through meaningful interactions that yield insights. With these insights, the business model canvas can be adjusted, marking changes based on new information about who the customers are and what features they need. One of the intriguing aspects of customer development is the concept of the [[pivot]], a term coined by Eric Ries. A pivot refers to the strategic shift a startup makes when its initial hypotheses don't align with reality. Instead of firing executives when a business model fails to match real-world conditions, startups now "fire" the model itself. This approach allows for iterative and incremental product development while maintaining a low [[burn rate]]. A pivot involves making substantial changes to one or more components of the business model, such as redefining the customer segment, altering the revenue model, or changing distribution channels. In contrast, an iteration is a minor adjustment, like changing a product's price point. The essence of a pivot is its ability to facilitate necessary changes, typically driven by the founders, making customer development distinct from traditional methods. Pivots should be executed with a constant speed and tempo, ensuring the entire company operates like a metronome—consistent and relentless in decision-making. This approach allows startups to adapt quickly and effectively, maintaining momentum and responsiveness to market feedback. ## Activity - Watch the video [Hypothesis Testing](https://www.youtube.com/watch?v=iUrrwxOG9uU) ([[Udacity - How to Build a Startup]], Lesson 4.5) - Watch the video [Pivot](https://www.youtube.com/watch?v=p9AuCQTzbgo) ([[Udacity - How to Build a Startup]], Lesson 4.7) Next: [[From Hypotheses to Decisions]] Back to: [[Testing Business Model Hypotheses]]