Customer Development Posts

Customer Development: How to develop your customers like you develop your product

Nivi · November 5th, 2008

“In a startup no facts exist inside the building, only opinions.”

– Steve Blank

Summary: In Four Steps to the Epiphany, Steve Blank lays out a customer development process that complements a startup’s product development process. This post includes video and slides where Steve explains the ideas in his book.

About a year and a half ago, Marc Andreessen described The Four Steps to the Epiphany by Steve Blank as the “best book for tech entrepreneurs this year.” Marc wrote:

“Steve Blank is a super-experienced Silicon Valley technology entrepreneur… a dude with serious street cred…

“In a nutshell, Steve proposes that companies need a Customer Development process that complements their Product Development Process. And he lays out exactly what he thinks that Customer Development process should be. This goes directly to the theory of Product/Market Fit that I have discussed on this blog before—in this book, Steve provides a roadmap for how to get to Product/Market Fit.

“Buy it, read it, keep it under your pillow and absorb it via osmosis.”

I bought it, read it, couldn’t absorb it, put it on the shelf, and ignored it.

Fortunately, I’ve recently found a great talk and slides from Steve Blank that provide a more gentle introduction to customer development. Be gentle Steve…

The talk

How Alan Michaels took Convergent Technologies from zero sales to a $400M exit in four years by discovering his customers:

Why most startups don’t need VPs:


Why most startups fail:


(Videos: Acting on Customer Discovery, No VP’s in a Start-up, Assessing Customer and Market Risks)

Go to Stanford’s Entrepreneurship Corner to see the rest of the videos from Steve’s talk. Or listen to audio of the talk, which includes segments you won’t see in the videos.

The Slides

Here are the slides from another talk by Steve. They roughly complement the videos above.

(Slides: The Customer Development Methodology (pdf))

Back to the book

I’m going to take another stab at reading The Four Steps to the Epiphany and I hope you join me. I’ll let you know how it goes—please do likewise!

Update: Also read Eric Ries’ excellent What is customer development?.

Randy Komisar on the Rocket Ship investment model

Nivi · June 24th, 2008

Randy KomisarI’m reading Randy Komisar‘s book, The Monk and the Riddle.

He wrote it before he became a partner at Kleiner Perkins and I like his description of the Rocket Ship model of investing (emphasis added):

“Over the last several years… a new investment model has taken hold. Fill each startup with rocket fuel as fast as possible and blast it into space. The ones that fly, fly, and if the rest of them blow up, c’est la vie.

“In fact, the Rocket Ship Model of startup investment has recently produced many of the most prominent Valley successes. But for every one of them, there are many potentially viable companies that might have eventually prospered if they had been incubated longer.

When too much money is pumped too fast into a startup, there’s no room for mistakes. The initial product and the initial fix on the market have to be right. There’s no way these companies can stop and reconsider what they’re doing with out a great deal of pain.

“You have to be able to survive mistakes in order to learn, and you have to learn in order to create sustainable success. Once the market is understood and the product is fully developed, then move fast and hard.”

Some more snippets from the book:

“[Angels] pay for the privilege of helping the company.”

“If I invest, I am prone to think like an investor, favoring my return over what’s best for the team and often its long-term business.”

“In a privately held startup I don’t favor the investors over the founders. This is probably the crucial way my thinking differs from a VC’s.”

“Business is one of the last remaining social institutions to help us manage and cope with change.”

“The rules of business are like the laws of physics, neither inherently good nor evil, to be applied as you may. You decide whether your business is constructive or destructive.”