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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 CustomerDevelopment Model – offering a new way to approach startup sales and marketing activities.
Lessons Learned by Eric Ries Sunday, September 7, 2008 CustomerDevelopment Engineering Yesterday, I had the opportunity to guest lecture again in Steve Blank s entrepreneurship class at the Berkeley-Columbia executive MBA program. Its a nice complement on the product engineering side to his customerdevelopment methodology.
Lessons Learned by Eric Ries Saturday, September 13, 2008 SEM on five dollars a day How do you build a new product with constant customer feedback while simultaneously staying under the radar? SEM is a simple idea. Since we were only paying per click, it didnt cost us anything to cast a wide net.
He took out an ad in the Yellow Pages (it was the early 80′s, pre Internet), which cost him $1,000 / month for a half-page ad. Not because they didn’t want to do Pay-per-click (they are huge buyers of SEM) but because they didn’t want other people to know what they paid for clicks!
We had endless arguments internally about what features it should include, how the avatars should look, and how much it should cost. Finally the day came, we unleashed the landing page, emailed our existing customers, and started advertising online. Dont worry about selecting particularly good keywords, if youre new to SEM.
The application of agile development methodologies which dramatically reduce waste and unlock creativity in product development. See CustomerDevelopment Engineering for my first stab at articulating the theory involved) Ferocious customer-centric rapid iteration, as exemplified by the CustomerDevelopment process.
If the CEO wants to completely change the product in order to serve a new customer segment, you need someone in the room who can digest the needs of the new (proposed) business, and lay out the costs of each possible approach. In my mind, theyre racking up costs (one month for that part, two months for that other part, uh oh).
We wanted an agile approach that would allow us to build our software architecture as we needed it, without downtime, but also without large amounts of up-front cost. After all, the worst kind of waste in software development is code to support a use case that never materializes. How to listen to customers, and not just the loud.
Automated testing dramatically reduces the cost of certifying changes, because it removes all of the grunt work QA traditionally does in software. The Entrepreneur’s Guide to CustomerDevelopment ► June (3) What is a startup? How to listen to customers, and not just the loud.
[link] And - of course - going through [link] and reading up on the various different approaches different companies have (successfully) taken towards getting scalability at reasonably low cost. The Entrepreneur’s Guide to CustomerDevelopment ► June (3) What is a startup? So, for reference, I am Adam, of [link].
Ive told the story of how this desperation turned us on to Google AdWords in SEM on five dollars a day. We used those five dollars to buy 100 clicks, every single day, in the hopes that some of those people would become paying customers. But code written that doesnt help the company succeed is a sunk cost.
Do some CustomerDevelopment instead. Dont chicken out and do a closed beta; get real customers in through real renewable channels. Start with a five-dollar-a-day SEM campaign. Slow progress, but has cost less than 150k aud so far. Help you raise money. But dont be too sure. Instead, do your product launch first.
We’ll build the class around the business model / customerdevelopment / agile development solution stack. Instead you will be getting your hands dirty talking to customers, partners, competitors, as you encounter the chaos and uncertainty of how a startup actually works. Get real costs from suppliers.
It cost us a few hundred thousand dollars to get our app up and running, but none of that was dollars spent on software licenses or professional services. We just had our app support a few tens of thousands of customers, and it did well. The Entrepreneur’s Guide to CustomerDevelopment ► June (3) What is a startup?
In an eyeballs business, you just cant seem to acquire or activate that next step-up of customers. Or your cost of customer acquisition just magically floats up to match your customer lifetime value. The Entrepreneur’s Guide to CustomerDevelopment ► June (3) What is a startup?
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