This document provides an overview of Steve Blank's talk on startups and customer development. The talk discusses the different types of startups, including lifestyle businesses, small businesses, scalable startups, buyable startups, and social enterprises. It emphasizes that startups are in a "search" mode to find a repeatable and scalable business model, while companies are in "execution" mode once a model is found. The customer development process of discovery, validation, and creation is presented as the methodology for searching for a viable business model through testing hypotheses with customers.

1. Customer Development Update

2. I Write a Blog www.steveblank.com

3. This Talk is Based OnBusiness Model GenerationFour Steps to the EpiphanyThe Lean Startup

4. This TalkWhat’s a Startup?Search versus ExecutionEntrepreneurship As a Mgmt ScienceB-Schools = Large company mgmtIncubators = the transitionE-School = the conclusion

5. First -What’s A Startup?Six Types of Startups

6. StartupLifestyle Startups Work to Live their PassionServe known customer with known product

7. Pay for their passionSmall BusinessStartupSmall Business StartupsWork to Feed the FamilyServe known customer with known product

8. Feed the familySmall BusinessStartupExit Criteria Business Model found- Profitable business Existing team< €100K in revenueSmall Business StartupsWork to Feed the Familyknown customer known product

9. Feed the familySmall BusinessStartup- Business Model found- Profitable business Existing team< $10M in revenueSmall Business Startups5.7 million small businesses in the U.S. <500 employees

10. 99.7% of all companies

11. ~ 50% of total U.S. workershttp://www.sba.gov/advo/stats/sbfaq.pdf

12. ScalableStartupLarge CompanyScalable StartupSearchGoal is to solve for: unknown customer and unknown features

13. ExecuteSearchScalableStartupLarge CompanyExit Criteria Business model found

14. Total Available Market > €300m

15. Can grow to €50/yearScalable StartupBorn to Be Big

16. ScalableStartupLarge Company Total Available Market > $500m

17. Company can grow to $100m/year

18. Business model found

19. Focused on execution and process

20. Typically requires “risk capital”Scalable StartupExecuteSearch In contrast a scalable startup is designed to grow big

21. Typically needs risk capital

22. What Silicon Valley means when they say “Startup”The Transition – Founders LeaveScalableStartupTransitionLarge CompanyBuildExecuteSearchFounders depart Operating executives

23. Professional Mgmt

24. Process

25. Beginning of scaleBuyable StartupBorn to Be BigSearchSellScalableStartup€3 to 30M AcquisitionGoal is to solve for: Internet, Mobile, Gaming Apps

26. Buyable StartupSearchSellScalableStartup€3 to e0M AcquisitionGoal is to solve for: Internet and Mobile AppsSell to larger company

27. ScalableStartupLarge CompanyBusiness Model found

28. i.e. Product/Market fit- Repeatable sales model- Managers hiredWhat’s A Startup?Search ExecuteA Startup is a temporary organization used to search for a repeatable and scalable business model

29. Large Company Sustaining InnovationInnovate or EvaporateSustaining InnovationTransitionScalableStartupLarge Company Existing Market / Known customer

30. Known product feature needsLarge Company Disruptive InnovationNew DivisionTransitionLarge CompanyDisruptive InnovationNew Market

31. New tech, customers, channelsLarge Company Disruptive InnovationNew DivisionTransitionLarge CompanyDisruptive InnovationBuild

32. Acquire - IP- Talent - Product - Customers - Business

33. Large Non-ProfitSocial StartupSocial Entrepreneurship StartupsSolve pressing social problems

34. Social Enterprise: Profitable

35. Social Innovation: New StrategiesEach of these startups require different skillsThey Can Not Be Taught the Same Way

36. Search Versus ExecutionWhy Accountants Don’t Run Startups

37. Startups Search and PivotThe Search for the Business ModelScalableStartupTransitionLarge Company Business Model found customer needs/product features found i.e. Product/Market fitFound by founders, not employees

38. Repeatable sales model- Managers hired

39. Startups Search, Companies ExecuteThe Execution of the Business ModelThe Search for the Business ModelScalableStartupTransitionLarge Company- Cash-flow breakeven- Profitable- Rapid scale- New Senior Mgmt~ 150 peopleBusiness Model found

40. Product/Market fit- Repeatable sales model- Managers hired

41. Metrics Versus AccountingThe Execution of the Business ModelScalableStartupTransitionLargeCompanyTraditional AccountingBalance Sheet

42. Cash Flow Statement

43. Income StatementMetrics Versus AccountingThe Search for the Business ModelThe Execution of the Business ModelScalableStartupTransitionLargeCompanyStartup Metrics Customer Acquisition Cost

44. Viral coefficient

45. Customer Lifetime Value

46. Average Selling Price/Order Size

47. Monthly burn rate

48. etc. Traditional Accounting Balance Sheet

49. Cash Flow Statement

50. Income StatementCustomer Validation Versus SalesThe Execution of the Business ModelScalableStartupTransitionLargeCompanySalesSales Organization

51. Scalable

52. Price List/Data Sheets

53. Revenue PlanCustomer Validation Versus SalesThe Search for the Business ModelThe Execution of the Business ModelScalableStartupTransitionLargeCompanyCustomer Validation Early Adopters

54. Pricing/Feature unstable

55. Not yet repeatable

56. “One-off’s”

57. Done by foundersSales Sales Organization

58. Scalable

59. Price List/Data Sheets

60. Revenue PlanCustomer Development VersusProduct ManagementThe Execution of the Business ModelScalableStartupTransitionLarge Company Product Management Delivers MRD’s

61. Feature Spec’s

62. Competitive Analysis

63. Prod Mgmt drivenCustomer Development Versus Product ManagementThe Search for the Business ModelThe Execution of the Business ModelScalableStartupTransitionLarge Company Product Management Delivers MRD’s

64. Feature Spec’s

65. Competitive AnalysisCustomer Development Hypothesis Testing

66. Minimum Feature Set

67. Pivots

68. Founder-drivenEngineering Versus Agile DevelopmentThe Execution of the Business ModelScalableStartupTransitionLarge CompanyEngineering Requirements Docs.

69. Waterfall Development

70. QA

71. Tech PubsEngineering Versus Agile DevelopmentThe Search for the Business ModelThe Execution of the Business ModelScalableStartupTransitionLarge CompanyEngineering Requirements Docs.

72. Waterfall Development

73. QA

74. Tech PubsAgile Development Continuous Deployment

75. Continuous Learning

76. Self Organizing Teams