1) Unlike established companies, startups are constrained by limited cash and must keep a low cash burn rate until validating their business model through paying customers. 2) To control costs, startups can use the OODA (Observe, Orient, Decide, Act) loop to regularly question assumptions and learn through iterative experimentation. 3) The customer development process focuses a startup on deeply understanding customer needs through stages of customer discovery, validation, creation and building to develop a repeatable sales process and transition to profitability.

1. WHATS’S THE KEY
DIFFERENCE
BETWEEN A
SCALEABLE START UP
AND A LARGER
ESTABLISHED
COMPANY?
PART FOUR

2. Unlike a large Start up’s need
to keep a low
profitable cash burn rate
company, until
start ups are the company
has validated its
constrained business model
by their by finding
available paying
customers
cash

3. To keep a low cash burn rate, use the
1. OBSERVE 2. ORIENT
3. DECIDE 4. ACT
OODA loop in a start up context

5. Its about questioning your core business assumptions
rather than assume your beliefs about your business to be true

6. There are 4 stages

7. Customer
Development
focuses on
understanding
customer
problems and
needs

8. Customer
Validation
focuses on
developing a
sales model that
can be
replicated

9. Customer
Creation
focuses on
creating and
driving end user
demand

10. focuses on
Customer transitioning the
Building organisation
from one
designed for
learning and
discovery to a
well-oiled
machine
engineered for
execution

11. The standard for testing business model
hypotheses
Buy this book

12. A start up should
Focus on reaching a deep understanding
of customers and their problems

13. A start up should
Focus on discovering a repeatable road
map of how they buy

14. A start up should
Focus on building a financial
model that results in profitability

15. How do you measure that?
By asking yourself the right questions

16. The appropriate milestones that
measure a start up’s progress
answers these questions:

17. How well do we understand
what problems customers have?

18. How much will they pay
to solve those problems?

19. Do our product features
solve these problems?

20. Do we understand
our customers’ business?

21. Do we understand
the hierarchy of customer needs?

22. Have we found visionary customers
ones who will buy our product early

23. Is our product a must-have
for these customers?

24. Do we understand the sales
road map well enough
to consistently sell the product?

25. Do we understand
what we need to be profitable?

26. Are the sales and business plans
realistic, scalable, and achievable?

27. What do we do
if our model turns out to be wrong?

28. The standard for testing business model hypotheses

29. Want to quickly find a profitable
and scalable business model?
See part five