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CustomerDevelopment is a technique startups use to quickly iterate and test each part of their business model. How you execute CustomerDevelopment varies, depending on your type of business. In my book, “ The Four Steps to the Epiphany ” I use enterprise software as the business model example.
That died with waterfall softwaredevelopment. Do you really want to spent $100k building a product to discover through CustomerDevelopment that the market is too small? Ditto for enterprise software companies. It’s “lifetime value&# of a customer. Each quarter you should review your model.
Berkeley Haas Business School was courageous enough to give me a forum teach the CustomerDevelopment Methodology. Most of the ability to create a radio industry in the 1920s was due to the accident of ionospheric radio propagation. But in fact, most startups need to keep their burnrate low more [.] to do that.
His most recent company, Filtrbox, participated in the inaugural Techstars class (Techstars Boulder 2007) and was a win for all parties involved; Filtrbox was acquired in 2010 by Jive Software (NASDAQ: JIVE). For the first the months, the team meets often and strategizes on what they want to build while some code gets written.
The full formula works like this: runway = cash on hand / burnrate # 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). What counts as an iteration? Were talking PayPal -sized variations.
Without conscious process design, product development teams turn lines of code written into momentum in a certain direction. This is why agility is such a prized quality in product development. Worse was the large staff in departments appropriate to a mainstream-scale product, especially in customer service and QA.
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