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Making Sense of the Customer Development Model
 

Making Sense of the Customer Development Model

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

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

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    Making Sense of the Customer Development Model Making Sense of the Customer Development Model Presentation Transcript

    • 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  
    • What  do  you  need  to  create     successful  products?  
    • 90%  
    • hMp://inspiredmagz.com/infographic-­‐why-­‐startups-­‐fail/    
    • The  Difference…  
    • Google’s  Hall  of  Shame   Why  4.85  yrs  to  pull  out???   hMp://blog.priceonomics.com/post/46028291791/digging-­‐around-­‐in-­‐the-­‐google-­‐graveyard    
    • 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    
    • …and  in  ROTW  
    • …but…   2/3rd    who  succeed,  dras5cally  change   their  plans  along  the  way!    
    • Do  you  know  these  products?  
    • Remember…  
    • hMp://freeibone.net/wp-­‐content/uploads/2013/02/real-­‐freinds1.png     What do they do differently?
    • “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  
    • hMp://steveblank.files.wordpress.com/2010/11/two-­‐assump5ons.jpg     Guaranteed  90%  Failure!!!  
    • 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  
    • 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  
    • “A  startup  is  NOT  a  smaller  version  of   a  large  company”  –  Steve  Blank  
    • 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  
    • 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  
    • hMp://newentrepreneurship.nl/business-­‐model-­‐canvas/    
    • hMp://torgronsund.com/wordpress/wp-­‐content/uploads/2011/04/Slide1.jpg    
    • GET OUT OF THE BUILDING…
    • So,  what  is  your  product?   From:  Running  Lean  –  Ash  Maurya  
    • The  Customer  Development  Insight   Cycle  
    • 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    
    • 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.    
    • Build-­‐ Measure-­‐Learn   Loop  
    • Pivot  now,  Op5mize  later   From:  Running  Lean  –  Ash  Maurya  
    • Pivot  
    • Make  the  transi5on  only  aoer  you   have  a  ‘scalable  startup’  
    • How  to  op5mize?   From:  Running  Lean  –  Ash  Maurya  
    • When  to  raise  money?   From:  Running  Lean  –  Ash  Maurya  
    • Products  and  Services  that  have   benefited  from  Lean  Startup  
    • Case  Study:  Ash  Maurya’s  book   From:  Running  Lean  –  Ash  Maurya  
    • 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  
    • “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  
    • 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  
    • Q&A   •  hMp://managewell.net   •  hMp://slideshare.net/managewell