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

1. Sortez de votre bureau !
www.diateino.com
BOB DORF
allegedly retired serial entrepreneur
Twitter: @bobdorf www.bobdorf.co
www.steveblank.com
Many slides © Steve Blank

2. 7=2+2-3

3. 27=7-6

4. why math matters:

5. 650,000!

6. 12?
(or 2%?)

7. make your
startup
MATTER

8. The New Way, 2003:
Steve Blank Launches
CUSTOMER DEVELOPMENT

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. More startups fail from
a lack of customers
than from a failure to
build product

11. Why Most Startups Fail
Assume Customer Problem:
Concept/
Seed Round
Product
Dev.
known
Alpha/Beta
Test
Assume Product Features:
Launch/
1st Ship
known

13. We used to think:

14. All You Need to Do: Execute the Plan

15. No Business Plan
survives first contact
with customers!
…ask Webvan!
…or RIM
…or Zynga
…or many more

16. Don’t Spend 2 Months
writing Fairy Tales…
Spend that time SEARCHING
for a Repeatable, Scalable,
Profitable BUSINESS MODEL

20. FULL STOP!
HAVE YOU PROVEN
PRODUCT/MARKET FIT

23. The most important slide Steve Blank ever drew, circa 2003:

25. 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!!!

26. Customer Discovery Tool #1:
Your Minimum Viable Product
•
•
•
•
Google without ads
Zappos without any shoes
Diapers.com 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

27. Tool #2: The Pivot
Search
Customer
Discovery
Customer
Validation
Pivot
• The heart of Customer Development
• Iteration without crisis
• Fast, agile and opportunistic

28. 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!

29. 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!

30. 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

31. 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!

32. When It
Doesn’t Work
(most of the time…)

33. Merci !
www.diateino.com
BOB DORF
allegedly retired serial entrepreneur
Twitter: @bobdorf www.bobdorf.co
www.steveblank.com