Customer Development Methodology

The Customer Development Methodology Steve Blank [email_address]

Goals of This Presentation ,[object Object],[object Object],[object Object]

Product Development Model Concept/ Seed Round Product Dev. Alpha/Beta Test Launch/ 1 st Ship

What’s Wrong With This? Concept/ Seed Round Product Dev. Alpha/Beta Test Launch/ 1 st Ship Product Development ,[object Object],[object Object],[object Object],- Hire PR Agency - Early Buzz - Create Demand - Launch Event - “Branding” Marketing

What’s Wrong With This? Concept/ Seed Round Product Dev. Alpha/Beta Test Launch/ 1 st Ship Product Development ,[object Object],[object Object],[object Object],- Hire PR Agency - Early Buzz - Create Demand - Launch Event - “Branding” ,[object Object],Marketing Sales ,[object Object],[object Object]

What’s Wrong With This? Concept/ Seed Round Product Dev. Alpha/Beta Test Launch/ 1 st Ship Product Development ,[object Object],[object Object],[object Object],- Hire PR Agency - Early Buzz - Create Demand - Launch Event - “Branding” ,[object Object],[object Object],[object Object],Marketing Sales ,[object Object],[object Object],Business Development

Build It And They Will Come ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

Chasing The FCS Date ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

If Startups Fail from a Lack of customers not Product Development Failure ,[object Object],[object Object],[object Object]

An Inexpensive Fix ,[object Object],[object Object]

Build a Customer Development Process Customer Development ? ? ? ? Concept/ Seed Round Product Dev. Alpha/Beta Test Launch/ 1 st Ship Product Development

Customer Development is as important as Product Development Company Building Customer Development Customer Discovery Product Development Customer Validation Customer Creation Concept/ Bus. Plan Product Dev. Alpha/Beta Test Launch/ 1 st Ship

Customer Development: Big Ideas ,[object Object],[object Object],[object Object],[object Object],[object Object]

Customer Development Heuristics ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

[object Object],[object Object],[object Object],[object Object],Customer Discovery: Step 1 Customer Discovery Customer Validation Company Building Customer Creation

Customer Discovery: Exit Criteria ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

Sidebar How to Think About Opportunities

“Venture-Scale” Businesses ,[object Object],[object Object],[object Object],[object Object],[object Object]

Ideas ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

Facts Vs. Hypothesis ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],Fact or Hypothesis?

Customer Validation: Step 2 Customer Discovery Customer Validation Customer Creation Company Building ,[object Object],[object Object]

Customer Validation: Exit Criteria ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

Sidebar Customer Development Engineering And Agile Development Methodologies

Traditional Agile (XP) Tactics ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

Problem: known Waterfall Unit of progress: Advance to Next Stage

Problem: known Waterfall Unit of progress: Advance to Next Stage Solution: known

Problem: known Solution: known Waterfall Unit of progress: Advance to Next Stage

Agile Development ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

Problem: known Agile (XP) “ Product Owner” or in-house customer Unit of progress: Working Software, Features

Problem: known Solution: unknown Agile (XP) “ Product Owner” or in-house customer Unit of progress: Working Software, Features

Problem: unknown Customer Development Engineering Unit of progress: Learning about Customers Hypotheses, experiments, insights

Problem: unknown Solution: unknown Customer Development Engineering Unit of progress: Learning about Customers Hypotheses, experiments, insights

Problem: unknown Solution: unknown Customer Development Engineering Unit of progress: Learning about Customers Hypotheses, experiments, insights Data, feedback, insights

Problem: unknown Solution: unknown Customer Development Engineering Unit of progress: Learning about Customers Hypotheses, experiments, insights Data, feedback, insights Incremental, quick, minimum features, revenue/customer validation

[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],Customer Development Engineering Tactics

Five Why's ,[object Object],[object Object],[object Object],[object Object]

Five Why's Example ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

Customer Development Engineering ,[object Object],[object Object],[object Object]

Customer Creation Step 3 Customer Discovery Customer Validation Customer Creation Company Building ,[object Object],[object Object],[object Object]

Customer Creation Big Ideas ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

New Product Conundrum ,[object Object],[object Object],[object Object],[object Object],[object Object]

Three Types of Markets New Market Resegmented Market Existing Market

Three Types of Markets ,[object Object],[object Object],[object Object],[object Object],New Market Resegmented Market Existing Market

Type of Market Changes Everything ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],New Market Resegmented Market Existing Market

Definitions: Three Types of Markets ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],New Market Resegmented Market Existing Market

Existing Market Definition ,[object Object],[object Object],[object Object],[object Object],[object Object]

Resegmented Market Definition (1) Low End ,[object Object],[object Object],[object Object],[object Object],[object Object]

Resegmented Market Definition (2) Niche ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

New Market Definition ,[object Object],[object Object],[object Object],[object Object]

Hy br id Markets ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

Company Building: Step 4 Customer Discovery Customer Validation Customer Creation Company Building ,[object Object],[object Object]

Company Building : Big Ideas ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

Company Building: Exit Criteria ,[object Object],[object Object],[object Object],[object Object],[object Object]

Startup Checklist – 1 What Vertical Market am I In? ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

Market Risk vs. Invention Risk

Startup Checklist - 2 ,[object Object],[object Object],[object Object]

Execution: Lots to Worry About

Startup Checklist - 3 ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

Execution: Very Different by Vertical

Market Risk Reduction Strategy

Customer Development and the Business Plan

The Traditional Plan & Pitch ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],Since You Can’t Answer my real questions here’s the checklist Better

Business Plan Becomes the Funding Slides Fire Founders Concept Business Plan Seed or Series A Execute

Why Don’t VC’s Believe a Word You Say? ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

What Are Early Stage Investors Really Asking? ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

“Lessons Learned” Drives Funding Concept Business Plan Lessons Learned Series A Do this first instead of fund raising Test Hypotheses

Credibility Increases Valuation ,[object Object],[object Object],[object Object],[object Object],[object Object]

The Customer Development Presentation ,[object Object],[object Object],[object Object],[object Object]

Customer Development: Summary ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

Further Reading Course Text at: www.cafepress.com/kandsranch or www.amazon.com

Customer Development Methodology

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Customer Development Methodology