Customer development : Bob Dorf's slides for his conference in Paris. October 2013.


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Why customer development is the first thing to do when you want to build a great company.

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Customer development : Bob Dorf's slides for his conference in Paris. October 2013.

  1. 1. Sortez de votre bureau ! BOB DORF allegedly retired serial entrepreneur Twitter: @bobdorf Many slides © Steve Blank
  2. 2. 7=2+2-3
  3. 3. 27=7-6
  4. 4. why math matters:
  5. 5. 650,000!
  6. 6. 12? (or 2%?)
  7. 7. make your startup MATTER
  8. 8. The New Way, 2003: Steve Blank Launches CUSTOMER DEVELOPMENT
  9. 9. In Ten fast years: Stanford, Berkeley Columbia U, Skolkovo,100+ more Tech de Monterrey US National Science Foundation THOUSANDS of Startups APPS.CO/Colombian Government Incubators, Accelerators …more than we can count!
  10. 10. More startups fail from a lack of customers than from a failure to build product
  11. 11. Why Most Startups Fail Assume Customer Problem: Concept/ Seed Round Product Dev. known Alpha/Beta Test Assume Product Features: Launch/ 1st Ship known
  12. 12. We used to think:
  13. 13. All You Need to Do: Execute the Plan
  14. 14. No Business Plan survives first contact with customers! …ask Webvan! …or RIM …or Zynga …or many more
  15. 15. Don’t Spend 2 Months writing Fairy Tales… Spend that time SEARCHING for a Repeatable, Scalable, Profitable BUSINESS MODEL
  17. 17. The most important slide Steve Blank ever drew, circa 2003:
  18. 18. Customer Discovery Step 1: “Get Out of the Building!” 1. Does anybody care? 2. Do they grab it from you? 3. Become your own Customer! Key Warnings: DON’T talk to friends or family! FOUNDERS must do this themselves DO NOT SELL!!!
  19. 19. Customer Discovery Tool #1: Your Minimum Viable Product • • • • Google without ads Zappos without any shoes without diapers Non-Working Websites or Apps! …Fewest possible features to show what it does! …Something a customer can touch, feel, try …Delivers far more, richer customer feedback
  20. 20. Tool #2: The Pivot Search Customer Discovery Customer Validation Pivot • The heart of Customer Development • Iteration without crisis • Fast, agile and opportunistic
  21. 21. Just a few(of many) Historic Pivots • • • • • • Groupon: the $12billion pivot Steve Blank: “Page 6” Perimeter: “there are 9000 of us” Ning Zynga …and thousands more!
  22. 22. Pivot Cycle Time Matters Search Customer Discovery Customer Validation Execution Customer Creation Company Building Pivot • MVP speeds up cycle time •Speed of cycle minimizes cash needs • Customer feedback drives the product!
  23. 23. How do you know when Discovery is “done?” Key Partners Key Activities Value Proposition Customer Relationships Customer Segments Complete regional overview  Populate life cycle data for performance guarantees  key distinctive product features & benefits for the target customer segment  total cost of ownership for segment versus alternatives  why will segment buy Durathon versus alternatives (i.e. value proposition)  minimum feature set (i.e. our launch configuration) and ultimate feature set  opportunities to claim IP or trademark / is there freedom to practice  what regulatory/ certification/ transportation/ customs requirements should be met or could be differentiator  product positioning/elevator pitch for each segment  Prospect roadmap: how to get faceto-face with right person at prospects in each segment  key competitors in each segment and their market share  key competitors' characteristics & dynamics  What outbound marketing/ advertising/ promotion activities are needed  support tools required by segment (white papers, TCO calc., tradeshow)  pipeline of leads  identify key market segments (geography/application) and customer segments (e.g. operator versus owner)  how many customers in each segment and estimated potential volume for each customer  how do customers make money … key customer pain/gain points in each segment  how are buying decisions made in each segment - id process, hurdles, decision makers  what does an Earlyvangelist look like in each segment  who influences purchases in each segment (trade groups, key resellers, trend watchers) Who are our key partners/ suppliers Which key activities does the biz model require What value do we deliver to the customer  Educate market on metric: $/kWhday delivered over life of asset  Establish strong partnerships with channel partners 0 Key Resources Which key resources does the biz model require  Integrated power system engineering – compatibility for retrofit and optimized system solutions  Financing options for Power services operators What type of relationship does each segment require of us 25 Channels Through which channel does each segment want to be reached  which segments can only or best be reached through a channel partner  which channel partners are important to optimize sales in each segment  what are channel partners' requirements and cost to become a proactive sales channel  initial channel partner response to value proposition & customer segments 12 25 Cost Structure For whom are we creating value 4 50 Revenue Streams What are our cost drivers How much is each segment willing to pay and how would they like to pay us this amount  Launch reliability     What are price /performance characteristics of competing technology What is the 2013 price target for 1 MM cells What is the 2015 price target for 10 MM cells what is optimum sales method for each segment (asset sale, lease, pay for performance, etc.) 3 X = number of in depth customer data points / data sources used to validate hypothesis x x x red = low hypothesis confidence yellow = medium hypothesis confidence green = high hypothesis confidence 30 10/26/2013
  24. 24. Customer Validation Search Customer Discovery Customer Validation Pivot Customer Creation Company Building Execution • Repeatable, scalable profitable? • Passionate first paying customers? • Pivot back to Discovery if not!
  25. 25. When It Doesn’t Work (most of the time…)
  26. 26. Merci ! BOB DORF allegedly retired serial entrepreneur Twitter: @bobdorf