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Steve,&# he said, “you’re missing the most interesting part of vertical markets. Customer/Market Risk Versus Invention Risk One day I was having lunch with a VC sharing what I learned from my students. Customer/Market Risk Versus Invention Risk One day I was having lunch with a VC sharing what I learned from my students.
The Customer Development Model is designed to minimize the risk of launching a product for a market that does not exist. It encourages a startup to invest in customer discovery and validation in parallel with productdevelopment prior to product launch.
Home Books for Startups Secret History-Bibliography Steve Blank Startup Resources Steve Blank Entries RSS | Comments RSS Categories Air Force (9) Ardent (9) Big Companies versus Startups: Durant versus Sloan (29) California Coastal Commission (3) Conservation (2) Convergent Technologies (1) Customer Development (98) Customer Development Manifesto (..)
They couldn’t keep up with the fast productdevelopment times that were enabled by using standard microprocessors. So their management teams were insisting that they OEM (buy from someone else) these products. Convergent Technologies was one of those OEM suppliers.
Unfortunately most startups learn this by going through the “Fire the first Sales VP&# drill: You start your company with a list of potential customers reading like a “who’s who&# of whatever vertical market you’re in (or the Fortune 1000 list.) Your board nods sagely at your target customer list.
My two cents is that a business plan is the single place to collect your thinking about about your: business model, distribution channel, demand creation plan, financial assumptions, and customer and productdevelopment plan. If you’re text averse like i am, try to diagram these key items and then write-up the diagrams.
This productdevelopment diagram had become part of the DNA of Silicon Valley. That’s in stark contrast to the traditional ProductDevelopment Model where it’s expected a customer is already there and waiting and it’s simply a matter of [.] familiar with Customer Development you should be.
In the last three posts, we drew the relationship of market risk and invention risk with vertical markets and pointed out verticals where customer development would be useful. In contrast to simply executing your business plan, the Customer Development process is built on low-cost and continuous learning and iterating.
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 productdevelopment activities inside the building and neatly integrates customer and agile development. This post describes such a model.
Eighty some pages later I realized that a) I had some great war stories as a good marketeer and failed CEO, b) I’d have to pay my wife and kids to read them, c) the three of them were probably the entire total available market, and d) when I looked at what I had done and what other entrepreneurs had done at their startups, that there was a pattern.
After 20 years of working in startups, I decided to take a step back and look at the productdevelopment model I had been following and see why it usually failed to provide useful guidance in activities outside the building – sales, marketing and business development. So what’s wrong the productdevelopment model?
It should go without saying that this post is not advice, nor is it recommendation of what you should do, it’s simply my observation of how companies using Customer Development positioned themselves to successfully raise money from venture investors. Is there a profitable business model? Can it scale?” Great post!
Next, you have to deal with the daily crisis of productdevelopment and acquiring early customers. And here’s where life gets really interesting, as the reality of productdevelopment and customer input collide, the facts change so rapidly that the original well-thought-out business plan becomes irrelevant.
We’re at a strategic point where our core business is experiencing solid growth and we’re ready to invest in significantly more advanced breathomics sensing and analytics into our roadmap, so we can begin to focus on the specific disease verticals that our data, reach and technology can have the greatest impact for. I attended in 2007.
Finally, I’ll write about how Eric Ries and the Lean Startup concept provided the equivalent model for productdevelopment activities inside the building and neatly integrates customer and agile development. Without the revenue to match its expenses, the company is in now danger of running out of money.
Home Books for Startups Secret History-Bibliography Steve Blank Startup Resources Steve Blank Entries RSS | Comments RSS Categories Air Force (9) Ardent (9) Big Companies versus Startups: Durant versus Sloan (29) California Coastal Commission (3) Conservation (2) Convergent Technologies (1) Customer Development (98) Customer Development Manifesto (..)
The quintessential California couple, they stood out in our crowd as the engineer (in his late 20′s, respected by his peers and the customer) had hair down to his shoulders, sharply contrasting with the military crewcuts of the customers and most of the other contractors.
This post describes how the traditional productdevelopment model distorts startup sales, marketing and business development. The Use of a ProductDevelopment Model to Measure Sales Using the productdevelopment diagram for startup sales activities is like using a clock to tell the temperature.
In future posts I’ll describe how Eric Ries and the Lean Startup concept provided the equivalent model for productdevelopment activities inside the building and neatly integrates customer and agile development. Market Type also affects the market size as well as how you launch the product into the market.
This series of posts is a brief explanation of how we’ve evolved from ProductDevelopment to Customer Development to the Lean Startup. The ProductDevelopment Diagram Emerging early in the twentieth century, this product-centric model described a process that evolved in manufacturing industries.
Home Books for Startups Secret History-Bibliography Steve Blank Startup Resources Steve Blank Entries RSS | Comments RSS Categories Air Force (9) Ardent (9) Big Companies versus Startups: Durant versus Sloan (29) California Coastal Commission (3) Conservation (2) Convergent Technologies (1) Customer Development (98) Customer Development Manifesto (..)
Through trial and error, hiring and firing, successful startups all invented a parallel process to productdevelopment. I call this process “Customer Development,” a sibling to “ProductDevelopment,” and each and every startup that succeeds recapitulates it, knowingly or not.
In an early stage startup, instead of sales being up front, the point departments are likely to be productdevelopment and customer development. Later on in this same company’s life, sales will become the pointy end and productdevelopment moves to a supporting role. Who’s on the Sharp End?
Home Books for Startups Secret History-Bibliography Steve Blank Startup Resources Steve Blank Entries RSS | Comments RSS Categories Air Force (9) Ardent (9) Big Companies versus Startups: Durant versus Sloan (29) California Coastal Commission (3) Conservation (2) Convergent Technologies (1) Customer Development (98) Customer Development Manifesto (..)
AgileZen – project management visually see and interact with your work Kanbanery – Simple online team or personal kanban board LeanKit Kanban – Great for visualizing work of productdevelopment Kanban Pad – “Nice and lean” and free online Kanban tool Banana Scrum – A tool simple as Scrum itself.
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