Posted tagged ‘customer development’

Lean startup mindmaps

June 11, 2009

I’m a big believer in the customer development and lean startup concepts championed by Steve Blank and Eric Ries. The concepts have definitely been the most valuable concepts I’ve learned while running Everyplay as they provide a much needed framework around the activities any startup faces, articulate the need to get to product/market fit thru making validated learning about customers the unit of progress and provide practical processes that you can apply immediately (e.g. the Five why’s approach).

Steve and Eric have recently given presentations and interviews on these concepts. As mindmaps are my preferred way of brainstorming, making notes and communicating complex ideas, I tried to capture the gist as well as the detail of these presentations in the mindmaps linked to below. Hope you find them useful!

Startup2Startup

Steve and Eric recently gave a a joint presentation at Startup2Startup

Picture 1

Lean startup on O’Reilly

Eric presented the lean startup concept on O’Reilly’s webcast.

Mixergy interview with Eric Ries

Mixergy is a great source of entrepreneurial insights with Andrew Warner interviewing serial entrepreneurs, tech guys, marketers and bizdev folks.

mixergy

P.S. Here’s a link to Eric Ries’ latest Lean Startup presentation given at Tokyo (Geeks on a Plane).

Starting a new (game) business

February 17, 2009

So, what have I learned during the five months Everyplay has been operational? What would I loved to have known before we founded the company? What would be helpful to would-be entrepreneurs? And how much could I cover in 40 minutes?

With those questions in mind I set out to share my thoughts and opinions on how to start a new game business for the good people at the Casual Connect Europe 2009 conference. I was given the prefix “Confessions” so I used Everyplay as an example case in the presentation. We are still in stealth mode, so for those of you looking to learn about what we are building, there are a few tidbits in the presentation ;-).

I had a great time giving the presentation and luckily quite a few people found it to be useful. My thanks to everybody who offered their kind words after the presentation!

confessions

I’ve included quite a few slide notes with the presentation for links to further information, interesting blogs and books. To access those, please download the presentation.

If you found the presentation useful, please share your thoughts in the comments!

P.S. Apologies for the crappy audio timings on the slidecast. After spending three hours battling with Slideshare’s buggy-beyond-belief slidecast tools, thus is the best that could be done.

Customer development or why 9/10 startups fail

November 13, 2008

/disapprove by striatic at Flickr

/disapprove by striatic at Flickr (CC)

Why do startups fail? Is it for the ambitious technology that simply couldn’t be built? Is it for the lack of capital? Or is it because nobody wanted to buy what the company was offering?

According to Steve Blank, a lecturer at Stanford and a serial entrepreneur, 9 out of 10 startups fail from the lack of customers. Put more simply, nobody wanted to buy what they were making. Or as Marc Andresseen puts it, the companies never got to product/market fit. The difference between a successful startup and a failed startup is that the successful ones get out of the office and talk to the customers, study them, the market, competitors and by doing so validate everyone of their guesses (product, customer, market, channel, pricing, competition, positioning and so on) until they know exactly what they are offering and how to turn it into a successful business.

Isn’t this common sense? Isn’t absolutely vital that the top management of the startup intuitively understands what the customers are willing to pay for?

So why don’t we all have a process for developing all that customer insight? Why don’t we all have that process running next to the product development process? I don’t know why, but luckily Steve Blank is helping us to correct this fatal mistake. He offers the Customer Development Process, an iterative process running side by side with the product development process.

customer-development-overviewFrom Steve Blank’s Customer Development presentation at Slideshare.

I found about Steve’s work thru Eric Ries (he is the former CTO of IMVU). I’ve been an avid follower of his blog Startup Lessons Learned. IMVU was one of the first companies to implement the Customer Development Process and you can say they did it with great success as IMVU now claims over 20 million registered users and over a million dollars sold each month in virtual goods trade. Eric has also been contributing to the development of Steve’s process, and his diagram shown below nicely highlights the symbiotic relationship of these two vital processes:

customer-development

From Eric Ries’ Customer Development Engineering presentation at Slideshare

I really like Eric’s diagram because he calls it like it is: in a startup, the problem we are trying to solve is unknown (we have a visions, which by definition are imaginary or even hallucinatory) and our solution is as well unknown. Until we have customers on a mass scale paying us with honest-to-god money, we simply do not know what those customers really want. Best confront this truth and do something about it. That is what Customer Development is really about.

I’m halfway thru Steve’s self-published book The Four Steps to the Epiphany, which is an excellent book if you give it the time and love it deserves. It is also a book sorely in need of a good publisher (it deserves to be re-published) and a great editor to turn it from a raw diamond into the jewel it really is. Personally the book and the Customer Development Process is a godsent as it directly applicable to the situation I and my company are at this very moment (early stage venture). I’m working thru the book, doing the exercises, applying the learnings and I feel confident that our business will be a lot better for it.

Eric Ries does a great job of distilling the essence of the book in his blog post What is customer development? Here’s a quick summary from Eric, slightly tweaked by me:

  1. Get out of the building. Very few startups fail for lack of technology. They almost always fail for lack of customers.
  2. Theory of market types. Existing market, re-segmented market, new market: a theory that helps explain why different startups face wildly different challenges and time horizons.
  3. Finding a market for the product as specified. Find the minimum feature set required to get early customers.
  4. Phases of product & company growth. The book takes its name from Steve’s theory of the four stages of growth any startup goes through: Customer Discovery, Customer Validation, Customer Creation and Scale the Company
  5. Learning and iterating vs. linear execution. Applying iterative & agile practices to the whole business, not just product development

steve-blank-video1

The next step after Eric’s blog is to grab a hot cup of a coffee and sit down to watch Steve’s presentation at Stanford University’s Entrepreneurship course.

As an entrepreneur finding something this profound and useful exactly at the time you need it is absolute, pure gold. I’m putting what I’m learning from this to practice and I strongly believe our startup will be a lot more successful if we are able to apply the customer development process. If you are running a startup or bringing products to market, you owe it to yourself and your company to give this some serious thought.

Further resources

Learn more (many of items listed are from SKMurphy’s blog):

If you find further resources for Customer Development, please let everybody know at the comments.