This document discusses the importance of customer development and product/market fit for startups. It advises startups to focus on acquiring the right customers, optimizing their marketing efforts, and understanding user needs in the early stages. It emphasizes achieving product/market fit before focusing on growth, and outlines steps like testing channels, optimizing funnels, and improving customer lifetime value and retention to enable scalable and profitable growth. The goal is to help startups progress from the critical early stages through growth to a potential IPO.

1. Customer DevelopmentSean EllisBerkeley-Columbia Executive MBA Program (Steve Blank)October 16, 2009

2. Startup Risk & Upside = CustomersTraction is toughAcquiring at scale even tougherWhere do you start?Hundreds of things you “could do”Most early marketing effort wasted2startup-marketing.com

3. Road to IPOs: What Really Mattered?Apply engineering to marketingFocus on right metrics & optimizeUnderstand users and use casesEarly execution is most critical3startup-marketing.com

4. My Key Focus Now Critical ZoneCriticalZoneIPOsGrowth StageThen light advising in growth stage4startup-marketing.com

5. Customer Development Sequence5startup-marketing.com

6. Growth Starts with Right Product6startup-marketing.com

7. What is Product/Market Fit?People want/need your productAnd they represent large enough marketDifferentiated from alternativesUsers will pay for your productOr you are advertising supported7startup-marketing.com

8. “Life of any startup can be divided into two parts -before P/M fit and after P/M fit”Marc AndreessenFounder Netscape, Opsware, Ning8startup-marketing.com

9. PayPal’s Quest for P/M Fit$200K seed funding - cryptography“No one really needed it” Max Levchin$4.5M VC funding - PDA paymentsPeople preferred web demo (100X users)$1.5B sale to eBay – web payments9startup-marketing.com

10. Survey Your Product/Market FitFree template at Survey.io10startup-marketing.com

11. Key Product/Market Fit Question“How would you feel if you could no longer use Product?”11startup-marketing.com

12. Transition to Growth12startup-marketing.com

13. Transition to GrowthTrack/report right metricsPositioning (based on perceived value)Start recruiting head of marketingViable economics (business model)Scalable growth strategy13startup-marketing.com

14. Hiring/Managing VP MarketingHire marketer with founder DNACEO & VP Marketing form partnershipCEO shouldn’t abdicate startup’s fateGoal = Scalable, profitable channelsInsist on perfect execution 14startup-marketing.com

15. Optimize Before GrowingLanding pagesFunnel (acquisition through transaction)12%13%8%…15startup-marketing.com

16. Scalable Growth Now Possible17startup-marketing.com

17. Test from Free to Paid Channels18startup-marketing.com

18. Driving/Managing GrowthBudget to maximize positive ROI spend19startup-marketing.com

19. Improve Lifetime ValueCustomer retention is criticalCross/up sell additional productsThis expands profitable channels20startup-marketing.com

20. Complete Startup PyramidGrowthOptimizeEconomicsPositioningProduct/Market FitTwitter: @seanellisBlog: startup-marketing.com