Steve Blank

MARCH 4, 2010

“ By knowing things that exist, you can know that which does not exist.&#. Book of Five Rings. I was having coffee with a former student who was complained that my idea of building a first product release with a minimum feature set was a bad idea. (One of the principles of Customer Development is to get out of the building and understand the smallest feature-set customers will pay for in the first release.).

Customer Development 304

Customer Development Business Model Developer Search 304

Steve Blank

FEBRUARY 25, 2010

Customer Development is a technique startups use to quickly iterate and test each part of their business model. How you execute Customer Development varies, depending on your type of business. In my book, “ The Four Steps to the Epiphany ” I use enterprise software as the business model example. Ash Maurya , the CEO of WiredReach, has extended my work by building a model of Customer Development for Web Startups.

Customer Development 266

Customer Development Web Developer Customer 266

Steve Blank

AUGUST 10, 2010

“I never have let my schooling interfere with my education.”. - Mark Twain. Every time I see my graduate students try to teach for the first time, it’s usually so painful I bite my lip. Then I remember the first day I stood up in front of a classroom. You Hired. My first job in Silicon Valley was at ESL (a supplier of intelligence and reconnaissance systems,) I had managed to talk myself into getting hired as a training instructor. ( Long back-story here.

Silicon Valley 258

Silicon Valley Technical Review Hiring Programming 258

Steve Blank

JUNE 3, 2010

It’s not the strongest of the species that survive, nor the most intelligent, but the one that is most responsive to change. Charles Darwin. Companies have a fairly predictable life cycle. They start with an innovation, search for a repeatable business model, build the infrastructure for a company, then grow by efficiently executing the model.

Search 242

Search Agile Customer Development Technical Review 242

Steve Blank

SEPTEMBER 23, 2010

It’s a paradox, but early sales success in a startup can kill its chances of becoming a large successful company. The cause is often sales and marketing execs who’ve become too comfortable with an initial sales model and panic at the first sign of a Pivot. As a result they block new iterations of the business model that might take the company to the next level.

Silicon Valley 239

Silicon Valley Technical Review Spain Engineer 239

Steve Blank

AUGUST 23, 2010

One of the ways I learn is to teach. My students ask questions I can’t answer and challenge me to solve problems I never considered. At times I’ll do what I consider an extension of teaching; a two-day Customer Discovery/Validation intensive session with a large corporation serious about Customer Development at my ranch on the California Coast.

Customer Development 235

Customer Development Developer Customer South America 235

Steve Blank

MARCH 29, 2010

Back from a family humanitarian trip/vacation to one of the last bastions of Communism where “marketing&# isn’t even a profession and entrepreneurship is a crime. The irony is that the “ Revolutionary Square &# in all these Communist countries will be the the first place the McDonald’s go when the system collapses. ——————-.

Business Model 226

Business Model Silicon Valley California Engineer 226

Steve Blank

APRIL 19, 2010

One of the best ways to get a debate going into the entrepreneurial world is to throw the “Nature versus Nurture” hand-grenade into a conversation. The question is whether you are born with innate entrepreneurial talent or whether you can be taught to operate like an entrepreneur. Taking Sides. Fred Wilson of Union Square Ventures, Jason Calacanis , founder of Mahlo.com, and Mark Suster of GRP Partners, have all weighed in on the nature side – you’re born being an entrepreneur or your not.

Silicon Valley 219

Silicon Valley Venture Capital China New York 219

Steve Blank

FEBRUARY 18, 2010

It’s been a year since I’ve been blogging. The 100 or so posts add up to about 300 pages of text. One of the downsides to a large number of blog posts is that older stories tend to get buried and hidden. Categories and indexes on the web pages aren’t quite the right metaphor or substitute for random access. So bowing to popular demand the 2009 blog posts are now available on Amazon on a portable device which provides instant and random access to any post and does not require power or a

Silicon Valley 202

Silicon Valley Customer Development IP Developer 202

Steve Blank

JANUARY 21, 2010

…I’ve been to the mountaintop and I’ve seen the Promised Land. And I might not get there with you… Martin Luther King. The startup founder who gets fired just as his/her company is growing into large company could be a cliché – if it wasn’t so true – and painful. Let’s take a look at why. Full disclosure: I’ve worn all the hats in this post.

Agile 120

Agile Development Team Review Leadership Merger 120

Steve Blank

NOVEMBER 1, 2010

At $5.2-billion Iridium was one of the largest, boldest and audacious startup bets ever made. Conceived in 1987 by Motorola and spun out in 1990 as a separate company, Iridium planned to build a mobile telephone system that would work anywhere on earth. It would cover every city, town and square inch of the earth from ships in the middle of the Arctic Ocean to the jungles of Africa to the remote mountain peaks of the Himalayas.

Business Plan 335

Business Plan Customer Business Model Customer Development 335

Steve Blank

JANUARY 25, 2010

Success consists of going from failure to failure without loss of enthusiasm. Winston Churchill. Everyone knows what a startup is for – don’t they? In this post we’re going to offer a new definition of why startups exist : a startup is an organization formed to search for a repeatable and scalable business model. A Business Model. Ok, but what is a business model ?

Agile 335

Agile Startup Silicon Valley Business Model 335

Steve Blank

AUGUST 30, 2010

My two daughters are now in college and have put their toes in the working-world with summer jobs. As they’ve grown older, they’ve heard their parent’s advice about women in the workforce. This post is not advice nor is it a recommendation of what you should do. It’s simply my interpretation of what I observed watching my daughters grow up. Our circumstances were unique, times have changed, and your conclusions and opinions will most certainly differ.

Public Relations 331

Public Relations Matching Leadership Cost 331

Steve Blank

OCTOBER 25, 2010

Over the last 50 years engineers have moved from building computers out of individual transistors to building with prepackaged logic gates. Then they adopted standard microprocessors (e.g. x86 , ARM.) At the same time every computer company was writing its own operating system. Soon standard operating systems (e.g. Windows, Linux ) emerged. In the last decade open source software (e.g LAMP ) emerged for building web servers.

Customer Development 329

Customer Development Business Model Developer Customer 329

Steve Blank

JUNE 10, 2010

Who is an entrepreneur really? It turns out that there are four distinct types of entrepreneurial organizations; s mall businesses , scalable startups , large companies and social entrepreneurs. They all engage in entrepreneurship. Yet entrepreneurs in one class think that the others aren’t the “real” entrepreneurs. This post looks at the differences and similarities and explains why there’s such confusion.

Silicon Valley 328

Silicon Valley Entrepreneur United States New York City 328

Steve Blank

OCTOBER 13, 2010

The young do not know enough to be prudent, and therefore they attempt the impossible – and achieve it, generation after generation. Pearl S. Buck. Ask people what makes entrepreneurs successful and you’ll hear a familiar list of adjectives; agile, tenacious, resilient, opportunistic, etc. What you don’t hear is that often they didn’t know any better.

Agile 328

Agile Engineer Distribution Technology 328

Steve Blank

APRIL 8, 2010

No campaign plan survives first contact with the enemy. Field Marshall Helmuth Graf von Moltke. I was catching up with an ex-graduate student at Café Borrone , my favorite coffee place in Menlo Park. This was the second of three “office hours” I was holding that morning for ex students. He and his co-founder were both PhD’s in applied math who believe they can make some serious inroads on next generation search.

Business Model 328

Business Model Business Plan Customer Cap Table 328

Steve Blank

OCTOBER 4, 2010

First-Mover Advantage is an idea that just won’t die. I hear it from every class of students, and each time I try to put a stake through its heart. Here’s one more attempt in trying to explain why confusing testosterone with strategy is a bad idea. First mover advantage – great bad idea. The phrase “first mover advantage” was first popularized in a 1988 paper by a Stanford Business School professor, David Montgomery, and his co-author, Marvin Lieberman. [1].

Silicon Valley 317

Silicon Valley Differentiation United States Customer Development 317

Steve Blank

SEPTEMBER 13, 2010

I had coffee with an ex student earlier in the week that reminded me yet again why startups burn through so many early VP’s. And after 30 years of Venture investing we still have a hard time articulating why. Here’s one possible explanation – Job titles in a startup mean something different than titles in a large company. You Can’t Always Get What You Want.

Startup 312

Startup Business Model Customer Development Bandwidth 312

Steve Blank

DECEMBER 7, 2010

I’ve introduced a new class at Stanford to teach engineers, scientists and other professionals how startups really get built. They are going to get out of the building, build a company and get orders in ten weeks. Jon Feiber of Mohr Davidow Ventures and Ann Miura-Ko of Floodgate are co-teaching the class with me (and Alexander Osterwalder is a guest lecturer.

Wiki 311

Wiki Lean Management Business Model 311

Steve Blank

OCTOBER 7, 2010

I had breakfast with two of my ex-students from Singapore who were building a really interesting startup. They were deep into Customer Discovery and presented a ton of customer data on the validity of their initial hypothesis – target customers, pricing, stickiness, etc. I was unprepared for what they said next. “We’re going to do a big launch of our product in three weeks.

Customer Development 307

Customer Development Singapore Channel PR 307

Steve Blank

FEBRUARY 22, 2010

Startups that are searching for a business model need to keep score differently than large companies that are executing a known business model. Yet most entrepreneurs and their VC’s make startups use financial models and spreadsheets that actually hinder their success. Here’s why. Managing the Business. When I ran my startups our venture investors scheduled board meetings each month for the first year or two, going to every six weeks a bit later, and then moving to quarterly after we found a pro

Balance Sheet 298

Balance Sheet Startup Burn Rate Metrics 298

Steve Blank

JULY 15, 2010

If you take funding from a venture capital firm or angel investor and want to build a large, enduring company (rather than sell it to the highest bidder), this isn’t the decade to do it. The collapse of the IPO market and dysfunctional math in the venture capital community has stacked the odds against you. Here’s why. The Golden Age for Entrepreneurs and VC’s.

Venture Capital 297

Venture Capital IPO Liquidity Event Entrepreneur 297

Steve Blank

MAY 10, 2010

I usually hear the “Should I get my MBA?” question at least once a month. If you’re an entrepreneur, the glib answer is “no.” It’s also the wrong answer. Should I Get My MBA? Last week I was having coffee with an ex engineering student of mine now on his second startup (and for a change it wasn’t a Web 2.0 startup) who wanted to chat about career choices.

Engineer 289

Engineer Business Model Programming Finance 289

Steve Blank

JULY 26, 2010

If you’ve had a great career what happens to all your knowledge and experience when you retire? Great Suit. My wife and I had dinner last night with a friend of hers from high school. Tom, her husband whom I had never met before joined us as well. I took one look at his suit and guessed “high-powered lawyer. “ (I was right, the suit probably added another $250 per billable hour.).

Framework 286

Framework Audience Engineer Hiring 286

Steve Blank

JANUARY 14, 2010

A journey of a thousand miles begins with a single step. Lao-tzu. If you read the academic literature or business press, you might believe that large companies and their business models are brought by the stork. This series of posts are going to offer a new three-stage model of how startups grow into large companies. And I’ll end with some thoughts about a new approach to entrepreneurial education using this model.

Laos 286

Laos Startup Business Model Early Stage 286

Steve Blank

JANUARY 4, 2010

Make no little plans. They have no magic to stir men’s blood …. Daniel Burnham. A lot of entrepreneurs think that their startup is the next big thing when in reality they’re just building a small business. How can you tell if your startup has the potential to be the next Google, Intel or Facebook? A first order filter is whether the founders are aiming for a scalable startup.

Hockey Stick 276

Hockey Stick Venture Capital Startup Cofounder 276

Steve Blank

MAY 20, 2010

At times VC’s forget who their business is built on. Nice Car. Last week in a car showroom of all places I ran into a VC who I hadn’t seen in ten years. He had sat on the board of my last company and we chatted and made small talk as he was admiring a new car. It was clear that he had no memory of a phone conversation my partner and I have never forgotten.

Founder 275

Founder Cofounder Salary Internet 275

Steve Blank

SEPTEMBER 20, 2010

One of the ironies of being a startup is that when you are small no one can put you out of business but you. Paradoxically, as your revenues and market share increase the risk of competitors damaging your company increases. Often the cause is the inability to grow the startup past the worldview of its founders. We’re Getting Our Butts Kicked. One of my ex-engineering students helped start a six-year old company headquartered in Los Angeles that sells to government agencies.

Washington 272

Washington Los Angeles Startup Cofounder 272

Steve Blank

NOVEMBER 8, 2010

Describing your product as “new and “never been done before” instead of “we’re just like those others guys, but better” could cost your company billions. RIM and TiVo are two examples of getting it right and wrong. Research in Motion (RIM). By 1992 Research in Motion (RIM) had been in business for eight years, had 16 employees, sales of about $500,000 a year, and three or four business lines.

Hockey Stick 271

Hockey Stick Customer Development Silicon Valley Networking 271

Steve Blank

JULY 22, 2010

Startup CEO’s can’t delegate sales and expect it to happen. Customer Validation needs to have the CEO actively involved. Here’s an example in a direct sales channel. Customer Development Diagnostics over Lunch. A VC asked me to have lunch with the CEO of a startup building cloud-based enterprise software. (Boy did I feel like Rip Van Winkle.) The board was getting nervous as the company was missing its revenue plan.

Forecast 270

Forecast Sales Customer Customer Development 270

Steve Blank

NOVEMBER 15, 2010

In previous posts I’ve talked about what the combination of Business Model Design, Customer Development and Agile Methodologies mean to startups and intrapreneurs in large companies; it’s the beginning of entrepreneurship as a science with its own rules and methodologies. Alexander Osterwalder, who authored the Business Model Generation book, put together a slidedeck on his thoughts of what happens when you combine the business model concept to shape and structure your business ideas with the C

Customer Development 270

Customer Development Business Model Developer Design 270

Steve Blank

JUNE 7, 2010

It is a rare company that realizes it is time to fire the CEO when the financials are good but the business is fundamentally heading for a cliff. For me, I learned this lesson first hand. I had joined the board of a $200million public company that 15 years earlier had single-handily created an industry. The company had innovated, found a business model, grown successfully but now even as revenues continued to grow, the company was slowly but surely dying.

Silicon Valley 267

Silicon Valley Cofounder Acquisition Kansas 267

Steve Blank

NOVEMBER 30, 2010

Too often we are so preoccupied with the destination, we forget the journey. Unknown. Entrepreneurs hear that VC pitches ought to be short, 10-20 slides. What most don’t know is that there is no way they can deliver a presentation that short by just “writing” the slide deck. You Got to be Kidding. An entrepreneur I’ve known for a long time came by the ranch over Thanksgiving break to show me the first pass of his new startup slide deck.

Venture Capital 263

Venture Capital Algorithm Business Plan Business Model 263

Steve Blank

SEPTEMBER 2, 2010

I gave a talk last night to the Silicon Valley Product Management Association. It’s a San Francisco Bay Area forum for networking, jobs and education for over 500 Product Management professionals. This is one of the Silicon Valley organizations that remind you why this is a company-town whose main industry is entrepreneurship, (and a great example of an industry cluster.).

Silicon Valley 261

Silicon Valley Management Product San Francisco 261

Steve Blank

AUGUST 5, 2010

Consumer Internet investing seems to have split off from traditional Venture Capital, and is creating a new category of VC’s: Lean VC’s. I think you can blame Customer and Agile Development for a small part of it. Here’s why. Electron-based Venture Capital. When I first came to Silicon Valley the world of Venture Capital looked pretty simple.

Lean 258

Lean Internet Silicon Valley Venture Capital 258

Steve Blank

MARCH 1, 2010

Trading emails with a startup CEO building an iPhone app, I asked him why potential customers would buy his product. In response he sent me a competitive analysis. It looked like every competitive analysis I had done for 20 years, (ok maybe better.). And it made me sad. Looking at the spreadsheet, I realized that competitive analysis tables are one of the ways professional marketers screw up startups from day one.

Customer Development 259

Customer Development Metrics Differentiation Engineer 259