My presentation on Steve Blank's Customer Development Model at Agile Goa 2013, Sep 21-22

1. Making Sense
– of the –
Customer Development
Model
Tathagat
Varma
VP,
Strategic
Process
Innova5on,
[24]7
Innova5on
Labs,
Sr.
Member
ACM
and
IEEE,
CSP,
CSPO,
CSM,
PMP,
PRINCE2

2. What
do
you
need
to
create
successful
products?

4. 90%

5. hMp://inspiredmagz.com/infographic-­‐why-­‐startups-­‐fail/

7. The
Difference…

8. Google’s
Hall
of
Shame
Why
4.85
yrs
to
pull
out???
hMp://blog.priceonomics.com/post/46028291791/digging-­‐around-­‐in-­‐the-­‐google-­‐graveyard

9. Internet
Hall
of
Shame…
hMp://themyndset.com/2013/05/catch-­‐the-­‐wave-­‐right-­‐mindset-­‐digital-­‐iq/
hMp://www.cnet.com/1990-­‐11136_1-­‐6278387-­‐1.html

10. …and
in
ROTW

11. …but…
2/3rd
who
succeed,
dras5cally
change
their
plans
along
the
way!

12. Do
you
know
these
products?

13. Remember…

14. hMp://freeibone.net/wp-­‐content/uploads/2013/02/real-­‐freinds1.png
What do
they do
differently?

15. “So
what
is
it
that
makes
some
startups
successful
and
leaves
others
selling
off
their
furniture?
Simply
this:
startups
that
survive
the
first
few
tough
years
do
not
follow
the
tradi=onal
product-­‐centric
launch
model
espoused
by
product
managers
or
the
venture
capital
community.
Through
trial
and
error,
hiring
and
firing,
successful
startups
all
invent
a
parallel
process
to
Product
Development.
In
par=cular,
the
winners
invent
and
live
by
a
process
of
customer
learning
and
discovery.
I
call
this
process
"Customer
Development,”
a
sibling
to
"Product
Development”
and
each
and
every
startup
that
succeeds
recapitulates
it,
knowingly
or
not.”
–
Steve
Blank

16. hMp://steveblank.files.wordpress.com/2010/11/two-­‐assump5ons.jpg
Guaranteed
90%
Failure!!!

17. Problem
with
tradi5onal
product
development
model
From:
Running
Lean
–
Ash
Maurya
The
Startup
Owners
Manual
–
Steve
Blank
“In
large
companies,
the
mistakes
just
have
addi=onal
zeroes
in
them”
–
Steve
Blank

18. 9
Deadly
Sins
of
New
Product
Introduc5on
Assuming
“I
know
what
the
customer
wants”
The
“I
know
what
features
to
build”
flaw
Focus
on
launch
date
Emphasis
on
execu5on
instead
of
hypotheses,
tes5ng,
learning
and
itera5on
Tradi5on
business
plans
presume
no
trial
and
no
errors
Confusing
tradi5onal
job
5tles
with
what
a
startup
needs
to
accomplish
Sales
and
Marke5ng
execute
to
a
plan
Presump5on
of
success
leads
to
premature
scaling
Management
by
Crisis
leads
to
“Death
Spiral”
From:
Startup
Owner’s
Manual

19. “A
startup
is
NOT
a
smaller
version
of
a
large
company”
–
Steve
Blank

20. Are
all
Startups
the
same?
Lifestyle
Startups
Work
to
live
their
passion
Small
business
Startup
Work
to
fee
the
family
Funded
from
savings
Barely
profitable
Not
designed
for
scale
Scalable
Startup
Born
to
be
big
Founders
have
a
vision
Require
risk
capital
Buyable
startup
Acquisi5on
targets
Social
Startup
Driven
to
make
a
difference
Large-­‐
company
Startup
Innovate
or
Evaporate

21. 3
Stages
of
a
startup
“Do
I
have
a
problem
worth
solving?”
“Have
I
built
something
people
want?”
“How
do
I
accelerate
growth?”
From:
Running
Lean
–
Ash
Maurya

23. hMp://newentrepreneurship.nl/business-­‐model-­‐canvas/

24. hMp://torgronsund.com/wordpress/wp-­‐content/uploads/2011/04/Slide1.jpg

25. GET OUT OF THE BUILDING…

26. So,
what
is
your
product?
From:
Running
Lean
–
Ash
Maurya

27. The
Customer
Development
Insight
Cycle

28. A
Pivot
is
a
structural
course
correc5on
to
test
a
new
fundamental
hypothesis
about
the
product,
strategy
and
engine
of
growth.
It
is
not
a
failure!
hMp://steveblank.files.wordpress.com/2010/11/pivot-­‐the-­‐model.jpg

29. MVP
A
strategy
used
for
fast
and
quan5ta5ve
market
tes5ng
of
a
product
or
product
feature
A
Minimum
Viable
Product
has
just
those
features
that
allow
the
product
to
be
deployed,
and
no
more.
The
product
is
typically
deployed
to
a
subset
of
possible
customers,
such
as
early
adopters
that
are
thought
to
be
more
forgiving,
more
likely
to
give
feedback,
and
able
to
grasp
a
product
vision
from
an
early
prototype
or
marke5ng
informa5on.
It
is
a
strategy
targeted
at
avoiding
building
products
that
customers
do
not
want,
that
seeks
to
maximize
the
informa5on
learned
about
the
customer
per
dollar
spent.
"The
minimum
viable
product
is
that
version
of
a
new
product
which
allows
a
team
to
collect
the
maximum
amount
of
validated
learning
about
customers
with
the
least
effort."
The
defini5on's
use
of
the
words
maximum
and
minimum
means
it
is
decidedly
not
formulaic.
It
requires
judgment
to
figure
out,
for
any
given
context,
what
MVP
makes
sense.
An
MVP
is
not
a
minimal
product,[3]
it
is
a
strategy
and
process
directed
toward
making
and
selling
a
product
to
customers.
It
is
an
itera5ve
process
of
idea
genera5on,
prototyping,
presenta5on,
data
collec5on,
analysis
and
learning.
One
seeks
to
minimize
the
total
5me
spent
on
an
itera5on.
The
process
is
iterated
un5l
a
desirable
product-­‐market
fit
is
obtained,
or
un5l
the
product
is
deemed
to
be
non-­‐viable.

31. Build-­‐
Measure-­‐Learn
Loop

32. Pivot
now,
Op5mize
later
From:
Running
Lean
–
Ash
Maurya

33. Pivot

34. Make
the
transi5on
only
aoer
you
have
a
‘scalable
startup’

35. How
to
op5mize?
From:
Running
Lean
–
Ash
Maurya

36. When
to
raise
money?
From:
Running
Lean
–
Ash
Maurya

39. Products
and
Services
that
have
benefited
from
Lean
Startup

40. Case
Study:
Ash
Maurya’s
book
From:
Running
Lean
–
Ash
Maurya

41. Recap
• Don’t
build
something
no
one
wants!
Discover
customers
first
• Search
for
the
business
model
Validate
your
assump5ons
• Build,
measure
and
learn
itera5vely
Build
products
itera5vely
• Aggressively
execute
business
plan
and
op5mize
Scale-­‐up
for
execu5on

42. “I
never
perfected
an
inven=on
that
I
did
not
think
about
in
terms
of
the
service
it
might
give
others...
I
find
out
what
the
world
needs,
then
I
proceed
to
invent....”
Thomas
Edison

43. References
• www.steveblank.com
• hMp://blog.startupcompass.co/
• hMp://blogs.wsj.com/accelerators/2013/06/24/
steve-­‐blank-­‐the-­‐6-­‐types-­‐of-­‐startups-­‐2/
• Running
Lean
–
Ash
Maurya
• The
Startup
Owners
Manual
–
Steve
Blank
• Four
Steps
to
Ephphany
–
Steve
Blank
• The
Lean
Startup
–
Eric
Ries

44. Q&A
• hMp://managewell.net
• hMp://slideshare.net/managewell