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Unfortunately in early stage startups the drive for financing hijacks the corporate DNA and becomes the raison d’etre of the company. Chasing funding versus chasing customers and a repeatable and scalable business model, is one reason startups fail. The goal of their startup in this stage becomes “getting funded.”
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. However the CustomerDevelopment Model and the Lean Startup work equally well for startups on the web.
Finally, I’ll write about 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. Three to six months after first customer ship, if Sales starts missing its numbers, the board gets concerned.
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.
CustomerDevelopment is all about gathering a list of what features customers want by talking to them, surveying them, or running “focus groups.” Gathering feature requests from customers is not what marketing should be doing in a startup. And it’s certainly not CustomerDevelopment.
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. Over its lifetime a Lean Startup may spend less money than a traditional startup. Lets see why.
Posted on December 7, 2009 by steveblank In my 21 years of startups, I had my ideas “stolen” twice. 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.
And he recognized it was making his startup feel and act like a big ponderous company. Most decisions in a startup must be made in the face of uncertainty. Since every situation is unique, there is no perfect solution to any engineering, customer or competitor problem, and you shouldn’t agonize over trying to find one.
Some really great stuff in 2010 that aims to help startups around product, technology, business models, etc. 500 Hats , February 1, 2010 When to Use Facebook Connect – Twitter Oauth – Google Friend Connect for Authentication? 500 Hats , February 1, 2010 When to Use Facebook Connect – Twitter Oauth – Google Friend Connect for Authentication?
Berkeley Haas Business School was courageous enough to give me a forum teach the CustomerDevelopment Methodology. This wave of 1950′s/’60′s startups (Watkins-Johnson, Varian, Huggins Labs, MEC, Stewart Engineering, etc.) After I retired, Jerry Engel , director of the Lester Center on Entrepreneurship , at U.C.
But in a startup, it is very important to be surrounded by efficient people. 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).
Steve Blanks 30 years of Silicon Valley startup advice. The relevant part starts about 4:30 into the video (wait for it to download.) luck… and as one of Steve Blank’s posts today mentioned, you can’t test hypotheses from within your building. Now In Print!
Technical Marketing Years later in my career I would realize I had simply reinvented what the early pioneers in Silicon Valley knew and did – hiring engineers who were domain experts who could talk as peers to customers and communicate effectively with their own company’s engineers.
Five Quarters of Profitability During the 1980’s and through the mid 1990’s startups going public had to do something that most companies today never heard of – they had to show a track record of increasing revenue and consistent profitability. They taught you about customers, markets and profits.
Their presentation looked like this: Market/Opportunity Lessons Learned Slide 1 Lessons Learned Slide 2 Lessons Learned Slide 3 Why We’re Here Telling the Cafepress Customer Discovery and Customer Validation story allowed Fred and Maheesh to take the VC’s on their journey year by year. Your results may vary.
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. I had thrown myself into a startup because work was an exciting technical challenge with a fixed set of end points and rewards.
The Search for the Black Swan What keeps founders and their investors going is the the dream/belief that your startup will be the Black Swan – a company that breaks all the obvious rules, ignores tradition and does something unique and spectacular and with a result that is unpredicted and financial returns that are breathtaking.
Filed under: SuperMac | Tagged: Early Stage Startup , Steve Blank « There’s a Pattern Here SuperMac War Story 2: Facts Exist Outside the Building, Opinions Reside Within – So Get the Hell Outside the Building » Leave a Reply Click here to cancel reply. Steve Blanks 30 years of Silicon Valley startup advice.
Posted on June 11, 2009 by steveblank When my students ask me about whether they should be a founder or cofounder of a startup I ask them to take a walk around the block and ask themselves: Are you comfortable with: Chaos – startups are disorganized Uncertainty – startups never go per plan Are you: Resilient – at times you will fail – badly.
If these sound like reasonable answers to you, and you are in a startup/small company, update your resume. Most startups put together a corporate mission statement because the CEO remembered seeing one at their last job, or the investors said they needed one. What I was actually hearing was a failure of management.
Agile Opportunism – Entrepreneurial DNA « Steve Blank (tags: startup) [.] Steve Blanks 30 years of Silicon Valley startup advice. Lessons Learned Trust your instincts Showing up a lot increases your odds Trust that the dots in your career will connect Have a passion for Doing something rather than Being a title on a business card.
It took me 8 startups and 21 years to get it right, (and one can argue success was due to the Internet bubble rather then any brilliance.) No internet, no blogs, no books on startups, no entrepreneurship departments in universities, etc. It took lots of trial and error, learning by experience and resilience through multiple failures.
This tendency is a two edged sword: by iterating strategy a startup can dramatically improve the size and trajectory of the company, but at times this process can be the bane of venture investors (and why they have prematurely grey hair.)
Customers The irony is that Zilog had no idea who would eventually become its largest customers. Steve Blanks 30 years of Silicon Valley startup advice. Keep in mind this is still several years before the IBM PC and DOS. You created it and own it. Now In Print!
It’s why all of you operated so well in the unpredictable environment that all startups face.” What makes an individual a great startup founder (versus an employee) has been something I had been thinking about since I retired. Therefore, I’ll posit one possible path for a startup founder – the dysfunctional family theory.
Does anyone know where the registration cards that the customers sent back are?” As a company with a past history, the company had a massive advantage over a typical startup – it had customers. Normally in a startup you spend an inordinate amount of time and energy in Customer Discovery and Customer Validation.
Filed under: CustomerDevelopment , Marketing , SuperMac , Technology | Tagged: Steve Blank , SuperMac « Love/Hate Business Plan Competitions Gravity Will be Turned Off » 17 Responses EricS , on May 11, 2009 at 11:05 am Said: I loved my Spigot. Steve Blanks 30 years of Silicon Valley startup advice.
Lessons Learned by Eric Ries Tuesday, September 30, 2008 What does a startup CTO actually do? When Ive asked mentors of mine who have worked in big companies about the role of the CTO, they usually talk about the importance of being the external face of the companys technology platform; an evangelist to developers, customers, and employees.
The best entrepreneurship textbooks and blogs assume that advice to startups is generalizable. But as I learned from my students this “one-size-fits-all” approach does not work for all startups. Different market opportunities present radically different startup risks and costs.
Startups and Sales If you read this post you can come away with the impression that every startup with a direct salesforce needs a consultative sales team. The answer depends on your answer to two questions: which step in the CustomerDevelopment process are you on? what Market Type is your startup?
If you’re a startup raising money or just want to see your name online, there’s not a better blog on the web. He prefers to interact directly with the founders of a startup. It’s his job to introduce new startups to the world. Discovering that your worldview is wrong or mistaken can be a life-changing event.
I had last been in Chapel Hill on a winter’s day in 1986, traveling with the VP of Sales of our new supercomputer startup, Ardent. We were on the University of North Carolina campus to meet with Fred Brooks and Henry Fuchs. We were sitting in our cheap hotel room when the phone rang.
But then, because there might be entrenched competitors and your concept is radically new, you still need to invest in the customerdevelopment process to learn how to get design wins from companies who may be happy with their existing vendors. In contrast, customer acquisition, brand, reputation, etc.
So no post today on entrepreneurship, Secret History of Silicon Valley, CustomerDevelopment, Lean Startups, etc. This post was mentioned on Twitter by Brendan McManus, [Startup Digest]. Startup Digest] said: Thanksgiving Day [link] [via @sgblank] [.] Steve Blanks 30 years of Silicon Valley startup advice.
If you are a practitioner of CustomerDevelopment, ESL was doing it before most us were born. BTW, when the customers were “three-letter” intelligence agencies, contractors used an oblique way of talking about who they were working for: they were all referred to as simply the “customer.”)
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. I was consulting for the two venture capital firms who between them put $12 million into my last failed startup. It was a long way from Ellis Island.)
Well yes, I understand that, but this is a startup, what else do you want to do? “I The “strategy” of learning who SuperMac’s customers were, what solutions they needed and what our repositioning would be was a three month effort. Stay out of startups. I just want to do strategy.” Those were very short interviews.
Reply steveblank , on March 28, 2009 at 7:27 am Said: Denis, Over time the blogs tagged under the “customerdevelopment&# category will build up a narrative of illustrative stories of how customerdevelopment evolved in practice. What part of this blog should I read if I am also reading the book?
And now am leading a startup of my own ( [link] ) where we’re students of you and Eric Ries’ lean startup principles. Steve Blanks 30 years of Silicon Valley startup advice. invention of electronic warfare, part I and [.] My first business trip to the valley was to visit California Microwave. Now In Print!
Facts are the rock on which you build your strategy and tactics In a startup second-hand facts are almost as useless as opinions. Reply bjorn , on March 23, 2009 at 5:18 pm Said: these stories really livened up the whole concept of “customer discovery&# for me. Steve Blanks 30 years of Silicon Valley startup advice.
Reply Mark Essel , on July 2, 2009 at 9:14 am Said: Reality distortion field isn’t the basic technique covered in startups 101? Rocket Science 2: Drinking the Kool-Aid « Steve Blank (tags: vc startup) [.] Reply Wyatt ODay , on July 2, 2009 at 8:18 am Said: Great post, Steve. I love all these war stories.
Your Customers are Not Who You Think For years I thought this “million unit chip sale by accident&# was a “one-off&# funny story. That is until I saw that in startup after startupcustomers come from places you don’t plan on. What happened?
Over scrambled eggs and diet coke, I listened to this seasoned startup veteran describe the excitement of his students who came to the U.S. Win, lose or draw, these students have a life changing experience where they can network and get smarter as they see what good startup thinking looks like. to compete.
Perhaps if you have a union job based on seniority, but not in any startup I’ve ever seen. I’ve built my company using the CustomerDevelopment Model from Day One. I recently completed the Validation step (less the industry analyst presentations) and am ready to move on to Customer Creation.
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