Startup Lessons Learned

MARCH 27, 2009

The full formula works like this: runway = cash on hand / burn rate # iterations = runway / speed of each iteration Very few successful companies ended up in the same exact business that the founders thought theyd be in (see Founders at Work for dozens of examples). Were talking PayPal -sized variations.

San Francisco 117

San Francisco Lean Continuous Deployment DC 117

Steve Blank

NOVEMBER 18, 2010

Business Model Design and Customer Development Stack. The alternative to the traditional product introduction process is the Business Model Design and Customer Development Stack. The Customer Development process is then used to test each of the 9 building blocks of the business model. No one gets fired.

Burn Rate 252

Burn Rate Management Business Model Customer Development 252

Startup Professionals Musings

FEBRUARY 17, 2021

It wasn’t so many years ago that starting a new e-commerce business on the Internet was a complex custom development project, usually costing a million dollars or more. These steps alone can reduce your monthly burn rate by at least $10K. A programmer can build a new smartphone app for a few thousand dollars.

Cost 405

Cost Entrepreneur Burn Rate Social Media 405

Steve Blank

AUGUST 27, 2012

It was great to watch him embrace the spirit and practice of customer development. He was constantly in front of customers, listening, selling, installing and learning. Other weeks Yuri would be buffeted by the realities of his burn rate, declining bank account and depressing comments from customers.

Founder 323

Founder Cofounder Advisory Board Burn Rate 323

Startup Professionals Musings

JULY 27, 2014

It wasn’t so many years ago that starting a new e-commerce business on the Internet was a complex custom development project, usually costing a million dollars or more. These steps alone can reduce your monthly burn rate by at least $10K. A programmer can build a new smartphone app for a few thousand dollars.

Entrepreneur 260

Entrepreneur Burn Rate Social Media LLC 260

Steve Blank

JUNE 1, 2011

The only numbers in those documents that are important in the first year of a startup’s life are burn rate and cash balance. Traditional startup board meetings spend an insane amount of wasted time using Fortune 100 company metrics like income statements, cash flow, balance sheet, waterfall charts.

Silicon Valley 300

Silicon Valley Business Model Venture Capital Balance Sheet 300

Steve Blank

JUNE 1, 2011

The only numbers in those documents that are important in the first year of a startup’s life are burn rate and cash balance. Traditional startup board meetings spend an insane amount of wasted time using Fortune 100 company metrics like income statements, cash flow, balance sheet, waterfall charts.

Silicon Valley 273

Silicon Valley Business Model Venture Capital Balance Sheet 273

Steve Blank

FEBRUARY 13, 2024

The new product is burning a ton of cash Ignore/not understand adjacent niche markets that would have “pulled” the product out of their hands, if they had developed niche-specific demos and outreach Eventually pivot to the niche markets that are excited about the product The niche markets make great beachhead markets, but are too small to match the (..)

Search 302

Search Marketing Forecast Burn Rate 302

Steve Blank

SEPTEMBER 3, 2014

While he correctly understood how to frame his hypotheses with a business model canvas, and he was doing a good job in customer development – the third component of Lean is using Agile Development to rapidly and iteratively build incrementally better versions of the product – in the form of minimal viable products (MVP’s).

Cofounder 336

Cofounder Founder Technical Cofounder Coder 336

ReadWriteStart

JUNE 13, 2011

Steve Blank is a retired serial entrepreneur, educator, thought leader and creator of the rigorous "Customer Development" methodology that helps startups optimize their chances for success while reducing risk. The only numbers in those documents that are important in the first year of a startup's life are burn rate and cash balance.

Silicon Valley 117

Silicon Valley Balance Sheet Metrics Early Stage 117

Steve Blank

SEPTEMBER 7, 2009

This post describes how following the traditional product development can lead to a “startup death spiral.&# In the next posts that follow, I’ll describe how this model’s failures led to the Customer Development Model – offering a new way to approach startup sales and marketing activities.

Customer Development 233

Customer Development Developer Customer Silicon Valley 233

Steve Blank

APRIL 20, 2009

Berkeley Haas Business School was courageous enough to give me a forum teach the Customer Development Methodology. But in fact, most startups need to keep their burn rate low more [.] The Man Who Shot Liberty Valance I always had been curious about how Silicon Valley, a place I had lived and worked in, came to be.

Silicon Valley 302

Silicon Valley RSS San Francisco Technical Review 302

Both Sides of the Table

NOVEMBER 3, 2009

Do you really want to spent $100k building a product to discover through Customer Development that the market is too small? Let’s start with how much value you think you’ll create for your customer if they use your product in terms of hours saved, costs avoided, extra sales, better conversion rates or whatever.

Business Plan 334

Business Plan AJAX Venture Capital Technical Review 334

Steve Blank

SEPTEMBER 5, 2018

First Movers” didn’t understand customer problems or the product features that solved those problems (what we now call product-market fit). Startups with huge burn rates – building leases, staff, PR and advertising – ran out of money. Lean makes sense when capital is scarce and when you need to keep burn rates low.

Lean 335

Lean Burn Rate Startup IPO 335

Steve Blank

MAY 15, 2009

Paul Henderson , on May 15, 2009 at 10:37 pm Said: A boot-strapping startup I once worked with was actually doing some real customer development and making real money from real customers for their early, ugly product. Lessons Learned N ew buildings are a distraction. BUT, they moved into a nice office off of Sand Hill Road.

Silicon Valley 233

Silicon Valley RSS Lean Agile 233

VC Cafe

JULY 26, 2020

In fact, they were screaming at them to dramatically reduce their burn rates. Ditch the business plan and when assumptions are proven wrong, pivot Customer Development: Build a product your customers want (vs. Angel investment, which was small to start with, disappeared, and most corporate VCs shut down.

Lean 214

Lean Seed Capital Startup Burn Rate 214

Steve Blank

FEBRUARY 22, 2010

If you are following Customer Development , the answer is easy. Board meetings are about measuring progress measured against the hypotheses in Customer Discovery and Validation. Paying Customers (How many customers made $ purchases that month). Customer Acquisition. Retained 90+/Total Actives %. Financials.

Balance Sheet 307

Balance Sheet Startup Burn Rate Metrics 307

Startup Lessons Learned

MARCH 13, 2009

Do some Customer Development instead. The product didnt convert well enough, the mainstream customers we were driving werent ready for the concept, and the event fed expectations about how successful the product was going to be that turned out to be hyper-inflated. Help you raise money. But dont be too sure.

San Francisco 168

San Francisco PR Lean Early Stage 168

Steve Blank

FEBRUARY 16, 2010

raised their voices in a annoyed investor tone) that the headcount and its attendant burn rate combined with the lack of revenue meant the company would run out of money much sooner than anyone planned. Filed under: Customer Development , Market Types. Tags: Customer Development Market Types.

Revenue 232

Revenue Balance Sheet Hockey Stick Burn Rate 232

The Startup Toolkit

JUNE 27, 2012

Similarly, I think that working nights & weekends is an awesome way to start doing customer development and answering the big questions about your business. That’s because, historically, the default mistake was to do the opposite & over-commit too soon.

Burn Rate 35

Burn Rate PR Campaign Advertising 35

Startup Lessons Learned

JANUARY 30, 2009

Worse was the large staff in departments appropriate to a mainstream-scale product, especially in customer service and QA. The passionate early adopters who flocked to the product at its launch could not sustain this outsized burn rate. We can capitalize on new customers.

San Francisco 150

San Francisco Lean Agile Continuous Deployment 150