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Transcript of Start Up Customer Development Process
8/8/2019 Start Up Customer Development Process
http://slidepdf.com/reader/full/start-up-customer-development-process 1/28
The Customer Development Model
Steve Blank
Stanford School of Engineering /
UC Berkeley, Haas Business Schoolwww.steveblank.com
Eric Ries
The Lean Startup
Startuplessonslearned.blogspot.com
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More startups Fail from
a Lack of Customers than froma Failure of Product
Development
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Conundrum
We have process to manageproduct development
We have no process to managecustomer development
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An Inexpensive Fix
Focus on Customers and Marketsfrom Day One
How?
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Build a Customer Development Process
Concept/Bus. Plan
ProductDev.
Alpha/BetaTest
Launch/1stShip
Product Development
Customer Development
? ? ? ?
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Customer Development and
Product Development
Concept/Bus. Plan
ProductDev.
Alpha/BetaTest
Launch/1stShip
Product Development
Customer Development
CompanyBuilding
CustomerDiscovery
Customer Validation
CustomerCreation
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Stop selling, start listening ± There are no facts inside your building, so get outside
Test your hypotheses ± Two are fundamental: problem and product concept
Customer Discovery: Step 1
CustomerDiscovery
Customer Validation
CompanyBuilding
CustomerCreation
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Customer Discovery: Exit Criteria
What are your customers top problems? ± How much will they pay to solve them
Does your product concept solve them?
± Do customers agree?
± How much will they pay?
Draw a day-in-the-life of a customer (archetypes) ± before & after your product
Draw the org chart of users & buyers
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Customer Validation: Step 2
CustomerDiscovery
Customer Validation
CustomerCreation
CompanyBuilding
Develop a repeatable and scalable sales process Only earlyvangelists are crazy enough to buy
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Customer Validation: Exit Criteria
Do you have a proven sales roadmap? ± Org chart? Influence map?
Do you understand the sales cycle? ± ASP, LTV, ROI, etc.
Do you have a set of orders ($¶s) validating theroadmap?
Does the financial model make sense?
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Sidebar
Market Type
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New Product Conundrum
New Product Introductions sometimeswork, yet sometimes fail
± Why?
± Is it the people that are different?
± Is it the product that are different?
Perhaps there are different ³types´ of startups?
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Three Types of Markets
Who Cares? Type of Market changes EVERYTHING
Sales, marketing and businessdevelopment differ radically by market type
Details next week
Existing Market Resegmented
Market
New Market
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Type of Market Changes Everything
M arket
± Market Size
± Cost of Entry
± Launch Type
± CompetitiveBarriers
± Positioning
Sales ± Sales Model
± Margins
± Sales Cycle
± Chasm Width
Existing Market Resegmented Market New Market
Finance
Ongoing Capital
Time to Profitability
Customers Needs
Adoption
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Definitions: Three Types of Markets
Existing Market
±F
aster/Better = High end Resegmented Market
± Niche = marketing/branding driven
± Cheaper = low end
New Market ± Cheaper/good enough can create a new class of
product/customer
± Innovative/never existed before
Existing Market ResegmentedMarket
New Market
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So What Does Engineering Do?
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Problem: known Solution: known
W
aterfall
Traditional Product Development
Unit of progress: Advance to Next Stage
Requirements
Design
Implementation
Verification
Maintenance
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Problem: Known Solution: Unknown
³Product Owner´ or in-house customer
AgileUnit of progress: a line of working code
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Problem: Unknown Solution: Unknown
Product Development at Lean StartupUnit of progress: validated learning about customers ($$$)
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Minimize TOTAL time through the loop
IDEAS
CODEDATA
BUILDLEARN
MEASURE
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So What Do I Do?
Really
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First Steps
Fact-based culture, built to learn
Decide on business model
± What are the "fundamental drivers of growth
Create a decision loop (build-measure-learn)
Write your hypotheses down (3 diagrams)
± Business model, distribution channel, demand creation
Prove it in micro-scale
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Execution
Relentless execution
Team needs to be true believers not employees
Focus on the few things that matter Don¶t confuse your hypothesis with facts
Continuous customer contact
Only you can put your company out of business
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General Principles
If you think entrepreneurship is about the money
become a VC
If everyone else thinks its a bad idea that may be a
good sign
The better your reality distortion field the more you
need to get outside the building
Ethics and values are about what you practice whenthe going gets tough
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Further Reading
Course Text at:www.cafepress.com/kandsranch
Blogswww.steveblank.com
http://startuplessonslearned.blogspot.com/
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There¶s much more«
IDEAS
CODEDATA
BUILDLEARN
MEASURE
C ode Faster
Unit Tests
Usability Tests
Continuous Integration
Incremental Deployment
Free & Open-Source Components
Cloud Computing
Cluster Immune System
Just-in-time Scalability
Refactoring
Developer Sandbox
Measure Faster Split Tests
Clear Product Owner
Continuous Deployment
Usability Tests
Real-time Monitoring
Customer Liaison
Learn Faster
Split Tests
Customer Interviews
Customer Development
Five Whys Root Cause Analysis
Customer Advisory Board
Falsifiable Hypotheses
Product Owner Accountability
Customer Archetypes
Cross-functional Teams
Semi-autonomous Teams
Smoke Tests
Funnel Analysis
Cohort Analysis
Net Promoter Score
Search Engine Marketing
Real-Time Alerting
Predictive Monitoring
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Thanks!
Startup Lessons Learned Blog ± http://startuplessonslearned.blogspot.com/
Webcast: ³How to Build a Lean Startup, step-by-step´
± May 1, 2009 at 10am PST
± http://www.oreillynet.com/pub/e/1294
The Lean Startup Workshop
± An all-day event for a select audience
± May 29, 2009 in San Francisco
± Sign up at: http://bit.ly/a5uw8