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Introduction to Customer Development at the Lean Startup Intensive at Web 2.0 Expo by Steve Blank

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Eric Ries
Eric Ries

Presentation by Steve Blank at the Lean Startup Intensive at the Web 2.0 Expo May 3, 2010 in SF

Business
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Customer Development Steve Blank Stanford - School of Engineering U.C. Berkeley - Haas School Of Business www.steveblank.com Twitter: sgblank Lean Startup Intensive at Web 2.0 Expo
I Wrote This
I Write a Blog www.steveblank.com
Early-Stage Ventures
What’s A Startup? Scalable Startup Large Company Transition ,[object Object],[object Object],[object Object],[object Object],A Startup is the organization used to search for a scalable business model
Startups Search and Pivot Scalable Startup Large Company Transition ,[object Object],[object Object],[object Object],[object Object],The Search for the Business Model
Startups Search, Companies Execute Scalable Startup Large Company Transition ,[object Object],[object Object],[object Object],[object Object],- Cash-flow breakeven - Profitable - Rapid scale - New Senior Mgmt ~ 150 people The Search for the Business Model The Execution of the Business Model
How Do Startups Search For A Business Model? ,[object Object],[object Object]
Customer Development
More startups Fail from a Lack of Customers than from a Failure of Product Development
[object Object],[object Object],[object Object]
Product Development Model Concept/ Seed Round Product Dev. Alpha/Beta Test Launch/ 1 st Ship
Tradition – Hire Marketing Concept/ Seed Round Product Dev. Alpha/Beta Test Launch/ 1 st Ship Product Development ,[object Object],[object Object],[object Object],- Hire PR Agency - Early Buzz - Create Demand - Launch Event - “Branding” Marketing
Tradition – Hire Sales Concept/ Seed Round Product Dev. Alpha/Beta Test Launch/ 1 st Ship Product Development ,[object Object],[object Object],[object Object],- Hire PR Agency - Early Buzz - Create Demand - Launch Event - “Branding” ,[object Object],Marketing Sales ,[object Object],[object Object]
Tradition – Hire Bus Development Concept Product Dev. Alpha/Beta Test Launch/ 1 st Ship Product Development ,[object Object],[object Object],[object Object],- Hire PR Agency - Early Buzz - Create Demand - Launch Event - “Branding” ,[object Object],[object Object],[object Object],Marketing Sales ,[object Object],[object Object],Business Development
Tradition – Hire Engineering Concept Product Dev. Alpha/Beta Test Launch/ 1 st Ship Product Development ,[object Object],[object Object],[object Object],- Hire PR Agency - Early Buzz - Create Demand - Launch Event - “Branding” ,[object Object],[object Object],[object Object],Marketing Sales ,[object Object],[object Object],Business Development Engineering ,[object Object],[object Object],[object Object],[object Object]
Two Startup Fallacies ,[object Object],[object Object]
Consequences ,[object Object],[object Object],[object Object],[object Object],[object Object]
Conundrum ,[object Object],[object Object]
An Inexpensive Fix ,[object Object],[object Object],[object Object]
Customer Development Concept/ Bus. Plan Product Dev. Alpha/Beta Test Launch/1st Ship Product Development Customer Development Company Building Customer Discovery Customer Validation Customer Creation +
Customer + Agile Development Agile Development + Customer Development Company Building Customer Discovery Customer Validation Customer Creation
Key Ideas ,[object Object],[object Object],[object Object],[object Object]
[object Object],[object Object],Customer Discovery Customer Discovery Customer Validation Company Building Customer Creation
Hypotheses ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]
Discovery: Exit Criteria ,[object Object],[object Object],[object Object],[object Object]
Customer Validation Customer Discovery Customer Validation Customer Creation Company Building ,[object Object],[object Object],[object Object],Pivot
Earlyvangelists Budget Put Together a Solution out of Piece Parts Actively Looking For a Solution You Know They Have A Problem They Know They Have a Problem
Customer Validation: Rules ,[object Object],[object Object],[object Object],[object Object]
Customer Development is a Search for a Business Model
The Search for a Business Model ,[object Object],[object Object],[object Object]
Emphasis On Hypotheses Testing
Startups Continually Pivot (Iterate)
Validation: Exit Criteria ,[object Object],[object Object],[object Object],[object Object]
Customer Creation ,[object Object],[object Object],[object Object],Customer Discovery Customer Validation Company Building Customer Creation
Customer Creation Big Ideas ,[object Object],[object Object],[object Object],[object Object],[object Object]
Sidebar Market Type
Product Introduction Conundrum ,[object Object],[object Object],[object Object],[object Object],[object Object]
Three Types of Markets ,[object Object],[object Object],Existing Market Resegmented Market New Market
Type of Market Changes Everything ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],Existing Market Resegmented Market New Market
Three Types of Markets ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],Existing Market Resegmented Market New Market
Company Building Customer Discovery Customer Validation Customer Creation Company Building ,[object Object],[object Object]
What VC’s Don’t Tell You: The Transition Scalable Startup Large Company Transition Search Build Grow
What VC’s Don’t Tell You: The Transition – Founders Leave Scalable Startup Large Company Transition ,[object Object],[object Object],[object Object],[object Object]
Thanks www.steveblank.com
Backup
So What Does Engineering Do?
Traditional Product Development Unit of progress: Advance to Next Stage Problem: known Solution: known Waterfall Requirements Design Implementation Verification Maintenance Source: Eric Ries http://startuplessonslearned.blogspot.com
Agile Unit of progress: a line of working code Problem: Known Solution: Unknown “ Product Owner” or in-house customer Source: Eric Ries http://startuplessonslearned.blogspot.com
Product Development at Lean Startup Unit of progress: validated learning about customers ($$$) Problem: Unknown Solution: Unknown Source: Eric Ries http://startuplessonslearned.blogspot.com

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Introduction to Customer Development at the Lean Startup Intensive at Web 2.0 Expo by Steve Blank

Notes de l'éditeur

  1. Steve Blank has an additional screen for opportunity – the “Type of Market” Three types of markets Each with a radically different set of needs Palm in 1995 created a “New Market” Handspring in 2000 with the exact same product, entered an “Existing Market Microsoft with the Pocket PC, is attempting to “Resegment” the Market Why does this matter in weighing and assessing opportunity?
  2. Each “type of market” is radically different Different ways to size the market opportunity Different sales costs Different demand creation costs Different time to liquidity Very different capital requirements And as we’ll see market type choices radically effect the Customer Development process.
  3. In looking at how companies succeed and fail, their success tends to be organized around groupings of customers and markets. More importantly it is how these groupings of customers view their needs and how your new product satisfies those needs
  4. IMVU started life as an “IM add-on” product. It sounded like a brilliant strategy – on a whiteboard.