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Chasing funding versus chasing customers and a repeatable and scalable business model, is one reason startups fail. Product Development – Getting Funded as The Goal In a traditional product development model, entrepreneurs come up with an idea or concept, write a business plan and try to get funding to bring that idea to fruition.
After 20 years of working in startups, I decided to take a step back and look at the product development 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. Read the preceding sentence again. It’s a big idea.)
I was in New York last week with my class at Columbia University and several events made me realize that the CustomerDevelopment model needs to better describe its fit with web-based businesses. And without revenue how do we know if we achieved product/market fit to exit Customer Validation?” It’s an impressive portfolio.
Other advisors provided marketing with industry-specific advice in our initial vertical markets (computational fluid dynamics, computational chemistry, finite element analysis, and petroleum engineering). Some of these advisors from the academic community would work with our of VP of Engineering and help us solve specific technical problems.
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.
Berkeley Haas Business School was courageous enough to give me a forum teach the CustomerDevelopment Methodology. The most extreme case (and my personal favorite) was by Armstrong who managed to create a full single conversion superheterodyne receiver all using a single vacuum tube! Who would have known? Armstrong was a god!
PS1- I run a small software startup in Brazil and just found out about CustomerDevelopment and your blog (I’ve been reading and listening to everything I can get my hands on online, like Venturehacks and Ries’ blog). What I thought would be a simple port is actually a major project I don’t have time to manage.
CustomerDevelopment ) to help you quickly recognize and reverse any incorrect decisions. CustomerDevelopment) to help you quickly recognize and reverse any incorrect decisions.&# Too often, CEOs and small business managers suffer from analysis paralysis. That’s why startups are agile.
The first step was to recruit a new management team. They sold to a set of customers I knew nothing about. Now with a new infusion of $8 million dollars of venture capital, SuperMac had been resurrected from the dead and was attempting to restart. Why they were looking to me to run marketing wasn’t clear.
However the VC’s are managing a portfolio while you, the entrepreneur are managing one company – yours. CustomerDevelopment There was nothing wrong about Rocket Science having a vision radically different than the conventional wisdom. The mistake isn’t having a vision and taking risks.
Filed under: CustomerDevelopment , Venture Capital | Tagged: Entrepreneurs « CustomerDevelopment Manifesto: Market Type (part 4) CustomerDevelopment Manifesto: The Path of Warriors and Winners (part 5) » 16 Responses Jon Ziskind , on September 14, 2009 at 9:19 am Said: Steve – Great post and really great advice.
I was met by a very apologetic manager who said, “We’ve been trying to get a hold of you for the last week. The manager of the training department who hired you wasn’t authorized to do so – and he’s been fired. With my offer letter in-hand I reported to ESL’s Human Resources (HR) department.
Twenty eight years ago I was the bright, young, eager product marketing manager called out to the field to support sales by explaining the technical details of Convergent Technologies products to potential customers. They couldn’t keep up with the fast product development times that were enabled by using standard microprocessors.
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. Let’s Fire Our Customers « Steve Blank (tags: product-management startup business) [.]
When I asked our trade show manager she looked at me like I was the house idiot and said, “Steve, don’t you know that my job is to set up our trade show booth?” But my favorite was when the public relations manager said, “we’re here to write press releases and answer the phone in case the press calls.” This is a big idea.
As an early employee I worked all hours of the day, never hesitated to jump on a “ red-eye ” plane to see a customer at the drop of a hat, and did what was necessary to make the company a winner. emotional rather than technical) and a lot harder to manage than a startup. Two of my role models for my career were in this company. (And
Just as I was getting settled into Zilog, the manager of the training department got fired. (I I was beginning to think that my hiring managers were related to red-shirted guys on Star Trek.) I quit a job as road manager, because it had meant that I was gone 9 months out of the year and my job was any waking minute.
That’s a mouthful to say that our sales people didn’t sell our products directly to a customer. Instead they managed rep firms (independent sales companies that carried multiple, non-competing products) that called on computer resellers that sold to the customers. I’m sure the CEO thought I was crazy.
The same issues arose time and again: big company management styles versus entrepreneurs wanting to shoot from the hip, founders versus professional managers, engineering versus marketing, marketing versus sales, missed schedule issues, sales missing the plan, running out of money, raising new money.
It’s our hood alignment station,” the plant manager said proudly. One day, I was at the Ford Wixom auto assembly plant training my replacement and I was at met at the door by an irate plant manager. the manager followed us still yelling. These damn models weren’t designed right so we’re fixing them on the line.”
All we had to do was tell customers they could get video into their computer – and not promise anything else. But the rest of the management team really skeptical. When we saw our salespeople actually trying to steal the early boards to take home and show their kids, we knew we had a winner. Little did we know.
So no post today on entrepreneurship, Secret History of Silicon Valley, CustomerDevelopment, Lean Startups, etc. I hope we managed to teach our children compassion and charity for others. Our friends who run the state park surrounding our ranch will join all of us for Thanksgiving dinner.
If you are a practitioner of CustomerDevelopment, ESL was doing it before most us were born. In 1964, Bill Perry, the head of the lab, frustrated with GTE’s management, quit (GTE, a phone company had bought Sylvania in 1959.) And in the tradition of great startups, on the way out Perry took 6 of his best managers with him.
I would learn a ton from Gordon for over a decade, not only about practical heuristics for managing complex engineering projects (i.e. Later he would leave for a few years to start the Computing Directorate at the National Science Foundation , help spec what became the Internet and then come back and run Ardent’s engineering.)
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.
When the panicked manager of the magazine test lab would call under a last minute deadline, we would apologize profusely as we sent the cables over – with beer, pizza, and our product manager to help them through any testing “issues”. Getting B-52s through the Soviet Air Defense System Startup Ethics: Albatross or Essential?
Somewhere in the midst of total chaos, human-kind managed to layer enough integrity into a system that had built a rather wonderful world. I think it is because in the end, customers count. No amount of paid publicity can achieve much if the product fails to make the customer happy.
As the (very junior) product marketing manager I got a call from our local salesman that someone at Apple wanted more technical information than just the spec sheets about our new (not yet shipping) chip. Your board nods sagely at your target customer list. I cover this in the Four Steps to the Epiphany.)
Our small training department had been without a manager for months and finding a replacement didn’t seem to be high on the VP of Sales list. Then it hit me – no one else wanted to be manager – what was the worst that could happen? I’ve built my company using the CustomerDevelopment Model from Day One.
And that most of the post on trade shows was describing how to prepare and manage a physical presence in a trade show booth. Write it down and keep it in a tradeshow handbook for those who will follow. Go to trade shows like it matters. You are correct all channels, web or otherwise, need to generate awareness and leads.
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. Is there some defining factor that easily distinguishes the difference? make-or-break. Sounds like handspring.
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. era&# , but really interested in your take on these “free&# models through the prism of CustomerDevelopment. We all know how that ends up.
Managing these situations is hard for any company, but potentially lethal for a startup. The theory is that there is some truth in both camps, and the right way to manage the disagreement is to sprinkle a little bit of both into our plans. To the people being managed that way, it feels like the boss is being capricious or arbitrary.
Because then you’d miss out on: Whether it’s better experience to build a complete, tiny startup or to do more in-depth customerdevelopment for a meatier problem. So that means stuff like thinking about what a business model might be, it does mean customerdevelopment. So I have a question for you, Jason.
For example, Friendster was famously vertically partitioned at one time in its growth curve. I normally recommend you just store this directory on your master database, but you could use a standalone vertical shard (or even a key-based partition!) This type of vertical partitioning sharding scheme wont work in most cases.
He had teamed up with a former product manager at P&G to deliver seminars on just this subject. It was a management problem. We had been outsourcing an important part of our demand creation strategy – packaging – to an outside agency without having the expertise to judge or manage the results.
Once you have assembled the right core team, I recommend prioritizing as follows: First, meet with your portfolio company management. Similarly, customer introductions are invaluable in the early days, but become less valuable once a company has a fully-formed go to market function.”. Organize events in your vertical.
Reducing Risk – Simulation versus CustomerDevelopment If you remember the first part of this discussion, startups face two types of risk; invention risk and/or customer/market risk. The CustomerDevelopment Process I teach and write about is designed to do just that. However, for the Web 2.0
In the old days, the brand manager of a consumer packaged goods product had to spend energy inferring the effectiveness of their television ads through a combination of trailing indicators (like market share) or time-consuming market research. The Entrepreneur’s Guide to CustomerDevelopment ► June (3) What is a startup?
Much like our digital PR offering, we started with a lean operation: We used Google Sheets to manage content operations across all accounts, along with dashboards that each client had access to. Choose to expand vertically or horizontally. To do this, you need to offer a specific service to a particular group of people (i.e.
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. None of mine did.)
From the king of customerdevelopment, Steve Blank: [.] When recruiting was hard the functional managers started looking at 2.8-9s. You don’t get grades for having resiliency, curiosity, agility, resourcefulness, pattern recognition and tenacity. You just get successful. Sometimes they just drop out and do their own thing.
This is not a new technique, but you may recognize it as the foundation of Customer Discovery and CustomerDevelopment. I''m talking about the power of a happy, reference customer. First, let''s be clear what it means to be a reference customer. Another is to expand geographically in this manner (e.g.
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. Do you know the archetype of their customers? Me – “Have you used Company x’s product?
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