Burn Rate and Customer Development

Driving Corporate Innovation: Design Thinking vs. Customer Development

Steve Blank

JULY 30, 2014

Two methods, Design Thinking and Customer Development (the core of the Lean Startup) provide the tactical day-to-day process of how to turn ideas into products. . While they both emphasize getting out of the building and taking to customers, they’re not the same. .

Customer Development

Customer Development Design Developer Customer

Customer Development for Web Startups

Steve Blank

FEBRUARY 25, 2010

Customer Development is a technique startups use to quickly iterate and test each part of their business model. How you execute Customer Development varies, depending on your type of business. Ash Maurya , the CEO of WiredReach, has extended my work by building a model of Customer Development for Web Startups.

Customer Development

Customer Development Web Developer Customer

The Customer Development Manifesto: The Startup Death Spiral (part.

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

Customer Development Developer Customer Silicon Valley

Is the Lean Startup Dead?

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

Lean Burn Rate Startup IPO

Why Founders Should Know How to Code

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

Cofounder Founder Technical Cofounder Coder

It Must Be A Marketing Problem

Steve Blank

FEBRUARY 11, 2010

The Customer Development process is the way startups quickly iterate and test each element of their business model , reducing customer and market risk. The first step of Customer Development is called Customer Discovery. outside the building and test them in front of customers.

Burn Rate

Burn Rate Silicon Valley Marketing Boston

Is the Lean Startup concept of MVP dead?

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

Lean Seed Capital Startup Burn Rate

Which Fundraising Round Should You Skip?

View from Seed

OCTOBER 24, 2019

As a first time founder, having a few million dollars in the bank after a successful seed raise may seem like a huge amount of capital, and it’s easy to lose discipline around your burn rate.

Dilution

Dilution B2B Burn Rate Early Stage

Lean Startups aren't Cheap Startups

Steve Blank

NOVEMBER 2, 2009

For those of you who have been following the discussion, a Lean Startup is Eric Ries ’s description of the intersection of Customer Development , Agile Development and if available, open platforms and open source. The Customer Development process (and the Lean Startup) is one way to do that.

Lean

Lean Silicon Valley Startup RSS

6 Cost-Cutting Recommendations For New Entrepreneurs

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

Cost Entrepreneur Burn Rate Social Media

Customer Development Manifesto: The Path of Warriors and Winners.

Steve Blank

SEPTEMBER 17, 2009

This post describes a solution – the Customer Development Model. In future posts I’ll describe how Eric Ries and the Lean Startup concept provide the equivalent model for product development activities inside the building and neatly integrates customer and agile development.

Customer Development

Customer Development Developer Customer Silicon Valley

Create Structure out of the Gate and You’ll Thank Yourself Later

Feld Thoughts

NOVEMBER 18, 2013

Early customer development talks are going great which keeps the team really excited. Three months in, the burn is now at $70k/month. This is all a part of the normal product and customer development process,” the CEO tells the team. The plan would have to get way tighter, way faster.

Burn Rate

Burn Rate Equity Software Review Early Stage

Apple Vision Pro – Tech in the Search of a Market

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

Search Marketing Forecast Burn Rate

Are Business Plans Still Necessary?

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

Business Plan AJAX Venture Capital Technical Review

Crisis Management by Firing Executives – There’s A Better Way

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

Burn Rate Management Business Model Customer Development

The Secret History of Silicon Valley Part V: Happy 100th Birthday.

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

Silicon Valley RSS San Francisco Technical Review

No Accounting For Startups

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

Balance Sheet Startup Burn Rate Metrics

Vision versus Hallucination – Founders and Pivots

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

Founder Cofounder Advisory Board Burn Rate

Entrepreneurs Today Don’t Need A Big Budget To Start

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

Entrepreneur Burn Rate Social Media LLC

Death By Revenue Plan

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

Revenue Balance Sheet Hockey Stick Burn Rate

Lessons Learned: Cash is not king

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

San Francisco Lean Continuous Deployment DC

The Curse of a New Building « Steve Blank

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

Silicon Valley RSS Lean Agile

Reinventing the Board Meeting – Part 1 of 2

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

Silicon Valley Business Model Venture Capital Balance Sheet

Why Board Meetings Suck – Part 1 of 2

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

Silicon Valley Business Model Venture Capital Balance Sheet

What's Wrong With Today's Board Meetings: Part 1

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

Silicon Valley Balance Sheet Metrics Early Stage

Lessons Learned: Don't launch

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

San Francisco PR Lean Early Stage

And then you flip the big red switch

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

Burn Rate PR Campaign Advertising

Lessons Learned: Achieving a failure

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

San Francisco Lean Agile Continuous Deployment

StartUpRoar

Driving Corporate Innovation: Design Thinking vs. Customer Development

Customer Development for Web Startups

Trending Sources

The Customer Development Manifesto: The Startup Death Spiral (part.

Is the Lean Startup Dead?

Why Founders Should Know How to Code

It Must Be A Marketing Problem

Is the Lean Startup concept of MVP dead?

Which Fundraising Round Should You Skip?

Lean Startups aren't Cheap Startups

6 Cost-Cutting Recommendations For New Entrepreneurs

Customer Development Manifesto: The Path of Warriors and Winners.

Create Structure out of the Gate and You’ll Thank Yourself Later

Apple Vision Pro – Tech in the Search of a Market

Are Business Plans Still Necessary?

Crisis Management by Firing Executives – There’s A Better Way

The Secret History of Silicon Valley Part V: Happy 100th Birthday.

No Accounting For Startups

Vision versus Hallucination – Founders and Pivots

Entrepreneurs Today Don’t Need A Big Budget To Start

Death By Revenue Plan

Lessons Learned: Cash is not king

The Curse of a New Building « Steve Blank

Reinventing the Board Meeting – Part 1 of 2

Why Board Meetings Suck – Part 1 of 2

What's Wrong With Today's Board Meetings: Part 1

Lessons Learned: Don't launch

And then you flip the big red switch

Lessons Learned: Achieving a failure

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