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In the next few posts that follow, I’ll describe more specifically how this model distorts startup sales, marketing and business development. Because it isn’t until after first customer ship that a startup discovers that their initial hypotheses were simply wrong (i.e. before you ship.
Berkeley Haas Business School was courageous enough to give me a forum teach the CustomerDevelopment Methodology. In contrast, spark gaps are broad-band radio “noise&# sources – the idea of discrete radio channels was impossible spark gaps because of this. I’ll stop channeling James Burke now.
For those of you who have been following the discussion, a Lean Startup is Eric Ries ’s description of the intersection of CustomerDevelopment , Agile Development and if available, open platforms and open source. The CustomerDevelopment process (and the Lean Startup) is one way to do that.
CustomerDevelopment We were starting Epiphany, my last company. I was out and about in Silicon Valley doing what I would now call Customer Discovery trying to understand how marketing departments in large corporations worked. This is more challengine than it appears, and method of insulation is supporting varied input channels.
They sold their product through the computer retail channel, something I knew nothing about. They sold to a set of customers I knew nothing about. They had an existing distribution channel and their dealers and customers thought they knew who the company was and what it stood for.
Five Easy Pieces – The Marketing Mission After a few months of talking to customers , talking to our channel and working with sales we defined the marketing Mission (our job) was to: Help Sales deliver $25 million in sales with a 45% gross margin. Two paragraphs, Five bullets. It didn’t take more.
I wanted to understand how customers bought our products. I knew we were selling through a multi-level indirect sales channel. That’s a mouthful to say that our sales people didn’t sell our products directly to a customer. Market messages to indirect sales channels are just like that. The result is usually hilarious.
Steve I have to tell you some bad news, I just showed our potential channel partners and customers a few completed pieces of the games we had. CustomerDevelopment There was nothing wrong about Rocket Science having a vision radically different than the conventional wisdom. They think the games stink.”
Since we had gotten out of the software business when we came out of Chapter 11 , and our sales channel didn’t know what to do with software, we licensed ReelTime to Adobe. But you probably never heard of ReelTime. You may know it by its final name. It was fun watching it happen.
And they have channeled all this into whatever activity they could find outside of their home – sports, business, or …entrepreneurship. But a small percentage, whose brain chemistry and wiring is set for resilience, come out of this with a compulsive, relentless and tenacious drive to succeed. Let me know what you think.
SuperMac sold our graphic boards for the Macintosh through multiple distribution channels: direct sales to major accounts, national chains, independent rep firms, etc. But the computer retail channel was a large part of our sales. Or blame my MarCom department who approved it.
Reply steveblank , on May 22, 2009 at 2:39 pm Said: Morteza, The comments about “ignore this post&# were meant that if your sales channel is the web you rarely go to trade shows. You are correct all channels, web or otherwise, need to generate awareness and leads. Go to trade shows like it matters.
This post describes a solution – the CustomerDevelopment 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.
press and use it to generate end user demand and then drive that demand into our sales channel. Getting B-52s through the Soviet Air Defense System Startup Ethics: Albatross or Essential? Reply SuperMac War Story 6: Building The Killer Team – Mission, Intent and Values « Steve Blank , on April 9, 2009 at 5:02 am Said: [.]
You can be an Independent studio or do “work for hire&# (either a revenue share or buy-out model) - If you’re an independent studio you have a set of choices for distribution channel and marketing models. - We understood none of this. More detail in future posts. steve Twitted by altgate , on July 2, 2009 at 5:22 pm Said: [.]
In future posts I’ll describe how Eric Ries and the Lean Startup concept provided the equivalent model for product development activities inside the building and neatly integrates customer and agile development. End result? If they had done this, there would have been zero dollars in sales. .
Not being able to hear negative customer input is an extremely bad idea. Out of the Ashes A few of the key tenets of CustomerDevelopment , came from the ashes. The Customer Validation lesson of, “no formal launch until you have early sales validating the product and sales process&# was also born here.
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 product development plan. I was simply confused about what a plan was for.
Mass blasts of information are ineffective, because the broadcast channels are suffering from information overload (even in social media). Test-marketing is now easier than ever before, thanks to leveraged distribution channels like AdWords and Facebook. There are too many products clamoring for attention.
Creating a vertically oriented regional ecosystem is a pretty amazing accomplishment for any country or industry. But other critical hypotheses such as activities, resources, partners, channels needed testing offshore. to understand distribution channel landscape, potential partners and rough cost of customer acquisition.
In the last three posts, we drew the relationship of market risk and invention risk with vertical markets and pointed out verticals where customerdevelopment would be useful. In contrast to simply executing your business plan, the CustomerDevelopment process is built on low-cost and continuous learning and iterating.
You make several first order approximations about your business model, distribution channels, demand creation, and customer acceptance. CustomerDevelopment This strategy of starting on faith, and quickly turning them into facts is the core of the CustomerDevelopment process. Employ customerdevelopment.
This series of posts is a brief explanation of how we’ve evolved from Product Development to CustomerDevelopment to the Lean Startup. The Product Development Diagram Emerging early in the twentieth century, this product-centric model described a process that evolved in manufacturing industries.
Resegmentation means these startups are trying to lure some of the current or potential customers away from incumbents by either offering a lower cost product, or by offering features that appealed to a specific niche or subset of the existing users. Me – “Have you used Company x’s product? Do you know have they distribute their product?
I remember after a month or two of talking to 14-22 year old male gamers (our potential target market,) I realized that for the first time in my career I had no emotional connection to my customers or channel partners. Don’t confuse your passion for your tools with why your customers will buy your product.
We were going to do that by turning marketing into a machine to generate end user demand, drive the that demand into our sales channels, and educate our sales channels. In an early stage startup, instead of sales being up front, the point departments are likely to be product development and customerdevelopment.
They will need to do tons of customerdevelopment. The sales and marketing channels will be complete guesses - trying lots of different things to see what works. Once the product / market fit is established and acquisition channels are better understood, the startup can enter the next phase. Where will you expand next?
One other basic metric I’d add is “Cost per channel&# (web, print, tradeshow, etc…) and tie in how many each channel is generating, so you get a ROI by channel as well. If you enjoyed that, you should subscribe! You can sign up for email updates, subscribe via RSS or follow me on Twitter. Rymatech Reply 13.
Intelligence As I leafed through the Cray sales material, a glossy magazine with the headline Cray Channels jumped out of the pile. The articles described the applications these users depended on and featured interviews with their most important customers. Cray Channels was describing my market, applications and customers for me.
Marketing is Heard From Engineering was discussing how sophisticated the graphics portion of our computer should be, debating cost and time-to-market tradeoffs of arcane details such as double-buffering, 24 versus 32-bits of color, alpha channels, etc. Customerdevelopment isn’t just for [.] Getting out of the building.
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