Customer Development at Startup2Startup

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  • + guest772b235 guest772b235 5 months ago
    I love this model. I think it’s a great 'how to' for both marketing and business plans.
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Customer Development at Startup2Startup - Presentation Transcript

  1. The Customer Development Model Steve Blank Stanford School of Engineering / UC Berkeley, Haas Business School www.steveblank.com Eric Ries The Lean Startup Startuplessonslearned.blogspot.com
  2. More startups Fail from a Lack of Customers than from a Failure of Product Development
  3. Conundrum
    • We have process to manage product development
    • We have no process to manage customer development
  4. An Inexpensive Fix
    • Focus on Customers and Markets from Day One
    • How?
  5. Build a Customer Development Process Concept/ Bus. Plan Product Dev. Alpha/Beta Test Launch/1st Ship Product Development Customer Development ? ? ? ?
  6. Customer Development and Product Development Concept/ Bus. Plan Product Dev. Alpha/Beta Test Launch/1st Ship Product Development Customer Development Company Building Customer Discovery Customer Validation Customer Creation
  7. Customer Development: Key Ideas
    • Parallel process to Product Development (agile)
    • Measurable Checkpoints
    • Not tied to FCS, but to customer milestones
    • Notion of Market Types to represent reality
    • Emphasis is on learning & discovery before execution
    • 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 Customer Discovery Customer Validation Company Building Customer Creation
  8. 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
  9. Customer Validation: Step 2 Customer Discovery Customer Validation Customer Creation Company Building
    • Develop a repeatable and scalable sales process
    • Only earlyvangelists are crazy enough to buy
  10. 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 the roadmap?
    • Does the financial model make sense?
  11. Sidebar Market Type
  12. New Product Conundrum
    • New Product Introductions sometimes work, yet sometimes fail
      • Why?
      • Is it the people that are different?
      • Is it the product that are different?
    • Perhaps there are different “types” of startups?
  13. Three Types of Markets
    • Who Cares?
    • Type of Market changes EVERYTHING
    • Sales, marketing and business development differ radically by market type
    • Details next week
    New Market Resegmented Market Existing Market
  14. Type of Market Changes Everything
    • Market
      • Market Size
      • Cost of Entry
      • Launch Type
      • Competitive Barriers
      • Positioning
    • Sales
      • Sales Model
      • Margins
      • Sales Cycle
      • Chasm Width
    • Finance
      • Ongoing Capital
      • Time to Profitability
    • Customers
      • Needs
      • Adoption
    New Market Resegmented Market Existing Market
  15. Definitions: Three Types of Markets
    • Existing Market
      • Faster/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
    New Market Resegmented Market Existing Market
  16. So What Does Engineering Do?
  17. Traditional Product Development Unit of progress: Advance to Next Stage Problem: known Solution: known Waterfall Requirements Design Implementation Verification Maintenance
  18. Agile Unit of progress: a line of working code Problem: Known Solution: Unknown “ Product Owner” or in-house customer
  19. Product Development at Lean Startup Unit of progress: validated learning about customers ($$$) Problem: Unknown Solution: Unknown
  20. Minimize TOTAL time through the loop IDEAS CODE DATA BUILD LEARN MEASURE
  21. So What Do I Do? Really
  22. 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
  23. 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
  24. General Principles
    • If you think entrepreneurship is about the money become a VC
    • If everyone else thinks it ’s 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 when the going gets tough
  25. Further Reading Course Text at : www.cafepress.com/kandsranch Blogs www.steveblank.com http://startuplessonslearned.blogspot.com/
  26. There’s much more… IDEAS CODE DATA BUILD LEARN MEASURE Code 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
  27. Thanks !
    • Startup Lessons Learned Blog
      • http://startuplessonslearned.blogspot.com/
    • Webcast: “How 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

+ sblanksblank, 6 months ago

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