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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?
Chasing funding versus chasing customers and a repeatable and scalable business model, is one reason startups fail. ProductDevelopment – Getting Funded as The Goal In a traditional productdevelopment model, entrepreneurs come up with an idea or concept, write a business plan and try to get funding to bring that idea to fruition.
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. Part 4 of the CustomerDevelopment Manifesto to follow.
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.
HR processes, legal processes, financial processes, acquisition and contracting processes, security processes, productdevelopment and management processes, and types of organizational forms etc. In government agencies process versus product has gone further. Instead, most organizations look to create even more process.
New strategic direction in companies with loyal customers have different consequences then when you had no customers Acquiring new customers are a lot more expensive that converting existing ones.
Own the development methodology - in a traditional productdevelopment setup, the VP Engineering or some other full-time manager would be responsible for making sure the engineers wrote adequate specs, interfaced well with QA, and also run the scheduling "trains" for releases. Labels: productdevelopment 15comments: mukund said.
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 productdevelopment activities inside the building and neatly integrates customer and agile development.
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.
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. The answer depends on your answer to two questions: which step in the CustomerDevelopment process are you on?
I was between my 7th and 8th and final startup; licking my wounds from Rocket Science, the company I had cratered as my first and last attempt as a startup CEO. We’ve managed startups like this forever; there is no other way to manage them.”
This post describes how the traditional productdevelopment model distorts startup sales, marketing and business development. The meaning of alpha test , beta test, and first customer ship are pretty obvious to most engineers. Here’s what the productdevelopment diagram looks like from a sales perspective.
by Bill Lee, author of “ The Hidden Wealth of Customers: Realizing the Untapped Value of Your Most Important Asset “ The old paradigm works like this: Your company produces goods and services that help customers get a job done. In return, the customers pay you money. Close the sale.
Market Risk vs. Invention Risk - Click to Enlarge For companies building web-based products, productdevelopment may be difficult, but with enough time and iteration engineering will eventually converge on a solution and ship a functional product - i t’s engineering, not invention.
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. As a result, the standard productdevelopment model is not only useless, it is dangerous.
In 2007, BusinessWeek named Ries one of the Best Young Entrepreneurs of Tech and in 2009 he was honored with a TechFellow award in the category of Engineering Leadership. I help lead the Engineering Leadership SIG at SDForum and wonder if you would be interested in speaking to our group about lean starups. hope to hear from you.
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Also SJ's obsession with better taste (positively) contributes to the overall productdevelopment process. There are some good anecdotes about Chief Engineers in the Toyota ProductDevelopment Book. Some of these reaffirm that they do indeed validate assumptions through interaction with customers.
Talented productdevelopers. Customer content and engagement built rapid growth in the success of Intel ’s social media and Web-based marketing efforts, increasing “customer contacts” by a factor of tenfold and overall page views by 100x. If so, the business world is full of specialists who are all too eager to help.
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 CustomerDevelopment you should be.
And other startups are in a New Market — creating a market from scratch (like Apple with the iPhone, or iPod/iTunes.) (“Market Type&# radically changes how you sell and market at each step in CustomerDevelopment. It’s one of the subtle distinctions that at times gets lost in the process.
What lies ahead, however, is a different set of challenges: finding the new set of mainstream customers on the other side of the chasm and managing the sales growth curve. These new challenges require a different set of management and leadership skills. The Scalable Startup stage called for opportunistic and agile leadership.
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.
Do they have better sales, marketing, or productdevelopment groups? What the winners start with is the realization that in a world of continuous disruption, they have only a few years to develop new capabilities or be pushed over the brink. Is it that some CEOs are better than others? Are their people smarter?
Even if they become part of the founding team, it’s not a given that the founder, having come up with the idea has a “guaranteed” leadership role (CEO or VP) in the new company. They deal with the daily crisis of productdevelopment and acquiring early customers. CustomerDevelopment Family/Career/Culture'
Without requiring a lot of meetings, it changes the perspective of the team (and its leadership) from fire-fighting to prevention. Sometimes, a great hacker has the potential to grow into the CTO of a company, and in those cases all you need is an outside mentor who can work with them to develop those skills. Does this sound familiar?
I want to especially recognize Vivek Wadhwa and Brad Feld for their leadership.) I want to especially recognize Vivek Wadhwa and Brad Feld for their leadership.) The Entrepreneur’s Guide to CustomerDevelopment ► June (3) What is a startup? This is a good thing. (I We have a lot of introspection to do.
This series of posts is a brief explanation of how we’ve evolved from ProductDevelopment to CustomerDevelopment 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.
We also learned that law is code , and that leadership was needed to build thriving communities in a digital age. The Entrepreneur’s Guide to CustomerDevelopment ► June (3) What is a startup? You can find the origins of many successful companies in these early lessons.
The leadership art is to balance the needs of the present with the needs of the future. The Entrepreneur’s Guide to CustomerDevelopment ► June (3) What is a startup? Thoughts on scientific productdevelopment Lo, my 5 subscribers, who are you? Seth Godin: How often should you publish?
This meeting was a biannual gathering of all the leadership involved in the corporate-wide initiatives to out-innovate their new disruptors. It was a testament to John and Avika’s leadership that even off duty people were passionately debating how to solve these problems. It was an amazing display of organizational esprit de corps.
Business and Financial Knowledge (7) - Does the product owner understand the economics and financial dynamics of his product? Process Skills: Customer Discovery Process (7) - Customer discovery includes customer interviewing skills, opportunity assessments and understanding of customerdevelopment programs.
Here in Tampa, our biggest challenge is convincing the regions technology "leadership" that grassroots economic development is a good thing. The Entrepreneur’s Guide to CustomerDevelopment ► June (3) What is a startup? I just emailed your article to him and recommended that he take your advice to heart.
The good news for the country is that the leadership of the National Geospatial Intelligence Agency has decided to turn the ship now. The process starts by collecting agency-wide ideas and/or customer problems, collecting a group insight, and sorts which problems are important enough to pursue.
The good news for the country is that the leadership of the National Geospatial Intelligence Agency has decided to turn the ship now. The process starts by collecting agency-wide ideas and/or customer problems, collecting a group insight, and sorts which problems are important enough to pursue.
corporation, and by extension Sloan laid the foundation for America’s economic leadership in the 20th century. CustomerDevelopment Manifesto: Market Type (part 4) + The CustomerDevelopment… (Read more)+ CustomerDevelopment Manifesto: The Path of Warriors and Winners (part 5) + Can You Trust Any VC’s Under 40?
Unintended Lessons « Steve Blank steveblank.com/2009/09/28/unintended-lessons – view page – cached + CustomerDevelopment Manifesto: The Path of Warriors and Winners (part 5) + Can You Trust Any VC’s Under 40?
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.
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.
I was fortunate to get some thoughtful input from the leadership of DarwinApps , Casual Corp , Coventure , HappyFunCorp , OAB Studies , and World Accelerator. Customerdevelopment would be reduced to a single person exercise that could be repeated in parallel dozens of times over, ultimately yielding 30+ companies a year.
Through trial and error, hiring and firing, successful startups all invented a parallel process to productdevelopment. In particular, the winners invent and live by a process of customer learning and discovery. It’s a process that doesn’t exist in large companies with existing customers and markets.
PayPal, under the leadership of David Marcus and Bill Scott, re-defining and re-engineering itself by embracing Lean Startup to improve the product experience. We stand on the shoulders of giants: customerdevelopment, the theory of disruptive innovation, the technology life-cycle adoption theory, and agile development.
In an early stage startup, instead of sales being up front, the point departments are likely to be productdevelopment and customerdevelopment. 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?
While both Stanford and MIT encouraged commercially oriented research and courted federal research contracts in the postwar years, MITs leadership focused on building relations with government agencies and seeking financial support from established electronics producers. What is customerdevelopment?
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