Steve Blank

AUGUST 29, 2011

93% of startups that scale prematurely never break the $100k revenue per month threshold. Filed under: Big Companies versus Startups: Durant versus Sloan , Business Model versus Business Plan , Customer Development , Market Types. Turns out his birthday is in a week, September 7th. Happy birthday Max.

Software Review 292

Software Review Early Stage Technical Review Startup 292

Steve Blank

APRIL 28, 2011

This week they were testing their hypotheses about Revenue Models: what are customers really willing to pay for? Are you generating transactional or recurring revenues? The team looked at the potential revenue and concluded that the outlook for this business with this customer segment was dismal. The Nine Teams Present.

Revenue 213

Revenue West Virginia Oklahoma Oklahoma City 213

Steve Blank

SEPTEMBER 22, 2011

Emphasis should be on the discovery done for that weeks assigned canvas component (channel, customer, revenue model) but include other things you learned about the business model. Filed under: Business Model versus Business Plan , Customer Development , Lean LaunchPad. Incorporate the company.

Lean 333

Lean Web Coder Business Model 333

Steve Blank

MARCH 8, 2011

We were positing that 20 years of teaching “how to write a business plan” might be obsolete. Startups, are not about executing a plan where the product, customers, channel are known. Startups are in fact only temporary organizations, organized to search –not execute–for a scalable and repeatable business model.

Lean 298

Lean Business Model Customer Development Guinea 298

Steve Blank

JANUARY 14, 2014

A pivot can change any of nine different things in your business model. A pivot may mean you changed your customer segment, your channel, revenue model/pricing, resources, activities, costs, partners, customer acquisition – lots of other things than just the product. Business Model versus Business Plan Customer Development'

Business Model 330

Business Model Lean Customer Development Channel 330

Steve Blank

APRIL 4, 2011

The Business Model Canvas is a great way to diagram it out. Each side of a market has it’s own Value Proposition, Customer Segment and Revenue Model.) Filed under: Business Model versus Business Plan , Customer Development , Lean LaunchPad , Teaching. Startups were actually happy with Amazon Web Services.

Customer 234

Customer Business Model Nebraska Cloud 234

Steve Blank

MARCH 4, 2014

HR Process Historically Human Resources was responsible for recruiting, retaining and removing employees to execute known business functions with known job spec’s. The incentive system for a company focused on execution is driven by the goal of meeting and exceeding “the (quarterly/yearly) plan.” What Does this Mean?

IRR 335

IRR Startup Business Model Agile 335

Steve Blank

MAY 6, 2015

revenue streams generated by the value proposition(s). activities necessary to implement the business model. cost structure resulting from the business model. Filed under: Big Companies versus Startups: Durant versus Sloan , Business Model versus Business Plan , Customer Development , Lean LaunchPad , Teaching.

Lean 120

Lean Agile Business Model Customer Development 120

Steve Blank

NOVEMBER 18, 2010

For decades startups were managed by pretending the company would follow a predictable path (revenue plan, scale, etc.) The Revenue Plan – The Third Fatal Assumption. Notice that the traditional product introduction model leads to a product launch and the execution of a revenue plan. Albert Einstein.

Burn Rate 247

Burn Rate Management Business Model Customer Development 247

Steve Blank

FEBRUARY 16, 2012

The idea of a Business Model competition first emerged when I realized that Business Plan writing ought to be taught in English Departments – as they’re the best example of creative writing entrepreneurs will ever do. The Business Plan ?- And your revenue plan is something more than a hallucination.

Business Model 263

Business Model Customer Development Utah Business Plan 263

Steve Blank

MAY 14, 2012

Therefore, focusing on execution and delivering a product or service based on those initial, untested hypotheses is a going-out-of-business strategy. Writing a business plan that doesn’t allow for trial and error. Here’s the real problem: No business plan survives first contact with customers.

Balance Sheet 335

Balance Sheet Business Model Customer Development Metrics 335

Steve Blank

OCTOBER 31, 2014

There’s nothing wrong with a business that supports you and perhaps an extended family. But if you want to build a scalable startup you need to be asking how you can you get enough customers/users/payers to build a business that can grow revenues past several $100M/year. With 317 million people the U.S.

Global 335

Global Australia Silicon Valley China 335

Steve Blank

OCTOBER 13, 2016

Bad Habit #3: Insisting on untested and detailed business plans. Most established companies require detailed business plans for new ideas. Business plans actually maximize the risk of failure because of the focus on executing an unproven idea rather than testing it. Don’t ask innovators for business plans.

Non-Compete 329

Non-Compete Agile Business Model San Francisco 329

Steve Blank

JANUARY 25, 2010

Business Plan Versus Business Model. Wait a minute, isn’t the Business Model the same thing as my Business Plan? A business plan is useful place for you to collect your hypotheses about your business, sales, marketing, customers, market size, etc. When revenue, users, traffic, etc.,

Agile 335

Agile Startup Silicon Valley Business Model 335

Steve Blank

FEBRUARY 23, 2016

As we prepared for the new Hacking for Defense class at Stanford, we had to stop and ask ourselves: How do we use the Business Model Canvas if the primary goal is not to earn money, but to fulfill a mission? In other words, how can we adapt the Business Model Canvas when the metrics of success for an organization is not revenue?

Business Model 120

Business Model Revenue Channel Community 120

Steve Blank

DECEMBER 7, 2010

Many entrepreneurship courses focus on teaching students “how to write a business plan.” are what make it a business, 2) business plans are fine for large companies where there is an existing market, existing product and existing customers. . This class is not about how to write a business plan.

Wiki 311

Wiki Lean Management Business Model 311

Steve Blank

JANUARY 22, 2013

And the academic community, while strong, still teaches traditional the business plan approach to startups, rather than Customer Development, so ideas have typically evolved far more slowly. . Amazingly by the end of the program’s eighth week, 8 of the 25 teams had customer revenue.

Colombia 321

Colombia Lean Silicon Valley Coder 321

Steve Blank

JANUARY 31, 2011

12 Year Olds Writing Business Plans. In this school every seventh-grade girl becomes part of a team of four or five that create and run their own business. It was amazing to read their plans talking about income, revenue, cost of goods, fixed and variable costs, profit and liquidity.

Silicon Valley 304

Silicon Valley Startup Community Business Plan 304

Steve Blank

MARCH 11, 2015

They’ve figured out the revenue model (subscription, license, direct sale, etc.) Therefore, in a large company, failure to meet a goal – revenue, product delivery, service, etc.– Filed under: Big Companies versus Startups: Durant versus Sloan , Business Model versus Business Plan , Customer Development.

Widget 120

Widget Lean Business Model Metrics 120

Steve Blank

AUGUST 31, 2009

The Focus on Execution Versus Learning and Discovery The product development model assumes that customers needs are known, the product features are known, and your business model is known. Given this certainty, it’s logical that a startup will hire a sales and marketing team to simply execute your business plan.

Customer Development 238

Customer Development Developer Customer Silicon Valley 238

Steve Blank

JANUARY 22, 2013

And the academic community, while strong, still teaches traditional the business plan approach to startups, rather than Customer Development, so ideas have typically evolved far more slowly. . Amazingly by the end of the program’s eighth week, 8 of the 25 teams had customer revenue.

Colombia 271

Colombia Lean Silicon Valley Coder 271

Steve Blank

MARCH 18, 2011

VC’s worked with entrepreneurs to build profitable and scalable businesses, with increasing revenue and consistent profitability – quarter after quarter. The Business Plan (Concept- Alpha-Beta - FCS ) became the playbook for startups. 1970 – 1995: The Golden Age. They taught you about customers, markets and profits.

Internet 334

Internet IPO Silicon Valley Agile 334

Steve Blank

MAY 3, 2011

Last week the teams tested their Revenue Models hypotheses: what are customers willing to pay for? Their initial customer segment were upwardly mobile professionals with $2-10K discretionary purchases/year (excluding travel,) and their revenue model was affiliate program fees. All the teams have crossed the Rubicon. .

South Dakota 217

South Dakota Business Model Lean United States 217

Steve Blank

DECEMBER 3, 2012

A business model for an existing company or division is not filled with hypotheses, it is filled with a series of facts. Operating divisions execute the known business model. Plans and processes are in place, and rules, job specifications, revenue, profit and margin goals have been set. We will propose some alternatives.

Business Model 333

Business Model Customer Development United States Operations 333

Steve Blank

OCTOBER 13, 2016

Bad Habit #3: Insisting on untested and detailed business plans. Most established companies require detailed business plans for new ideas. Business plans actually maximize the risk of failure because of the focus on executing an unproven idea rather than testing it. Don’t ask innovators for business plans.

Non-Compete 120

Non-Compete Agile Business Model San Francisco 120

Steve Blank

AUGUST 18, 2010

It made more sense than our 60 page business plan predicated on a B-school class and a supernatural ability to predict the future. Focus on revenue from day one. Temptation to focus on growth and worry about revenue later. It’s only a business if you make money. Make Money or Take Money? Fail Fast and Move On.

Customer Development 230

Customer Development Developer Customer California 230

Steve Blank

OCTOBER 25, 2010

Many entrepreneurs assume that the assumptions in their original business model (or business plan if they wrote one) will be correct. Confronting the reality that one of these hypotheses is wrong (finding out you have the wrong sales channel, revenue model, target market or customer) creates a crisis.

Customer Development 329

Customer Development Business Model Developer Customer 329

Steve Blank

JANUARY 10, 2011

The revenue plan had the new product baked into the numbers and it was clear that this division General Manager was going to crater his forecast (happens all the time, nothing new here.) They realized that conditions change so rapidly that the original business plan hypotheses becomes irrelevant.

Forecast 264

Forecast Agile Revenue Founder 264

Steve Blank

SEPTEMBER 3, 2009

Once the product begins to ship, startup sales execs use orders and revenue as its marker of progress in understanding customers. While these objectives provide an illusion of progress, in reality they do little to validate the business plan hypotheses about customers and what they will buy. What plan says that?

Customer Development 215

Customer Development Developer Customer Silicon Valley 215

Steve Blank

MARCH 25, 2011

However sellers in the Telecom industries were interested if there was some type of revenue split from selling their own excess capacity. We also described the differences between customers in Business-to-business sales versus business-to-consumer sales. If you can’t see the slide above, click here.

Cloud 228

Cloud Intellectual Property Lean Customer Development 228

Steve Blank

JULY 28, 2011

From the point of view of scientists and engineers in a university lab, too often entrepreneurship in all its VC-driven glory – income statements, balance sheets, business plans, revenue models, 5-year forecasts, etc. Yet this system isn’t perfect. – seems like another planet.

Engineer 278

Engineer Silicon Valley United States Intellectual Property 278

Steve Blank

NOVEMBER 1, 2010

With an out-of-this-world business plan. When it was spun out as a a separate company, Iridium’s 1990 business plan had assumptions about potential customers, their problems and the product needed to solve that problem. A Business Plan Frozen in Time. No Business Plan Survives First Contact With A Customer.

Business Plan 335

Business Plan Customer Business Model Customer Development 335

Steve Blank

OCTOBER 24, 2017

— Unremarked and unheralded, the balance of power between startup CEOs and their investors has radically changed: IPOs/M&A without a profit (or at times revenue) have become the norm. Typically, this caliber of bankers wouldn’t talk to you unless your company had five profitable quarters of increasing revenue.

Founder 245

Founder Technical Review CTO Hire IPO 245

Steve Blank

JULY 19, 2010

Investors are praying they’ve backed a founder who can think creatively and independently, because more often than not, conditions on the ground change so rapidly that the original well-thought-out business plan becomes irrelevant. If you don’t find this business model there is no company. I’ll posit that both views are wrong.

Vesting 251

Vesting Liquidity Event Venture Capital Founder Vesting 251

Steve Blank

JUNE 8, 2009

Customer Development by Vertical - Click to Enlarge (As a reminder, the Customer Development process says your business plan is just a series of untested hypothesis (unless you’re a domain expert.) Some of these are questions that would be addressed in a business plan. Others you need to know when you execute the plan.

Vertical 122

Vertical Silicon Valley RSS Marketing 122

Steve Blank

NOVEMBER 2, 2009

Sales people cost money, and when they’re not bringing in revenue, their wandering in the woods is time consuming, cash-draining and demoralizing. Scalable: The goal is not to get one customer but many – and to get those customers so each additional customer adds incremental revenue and profit. Lets see why. Something else?

Lean 244

Lean Silicon Valley Startup RSS 244

Steve Blank

FEBRUARY 12, 2015

We’re at 70 people, and we’ll do $40 million in revenue this year and should get to cash flow breakeven this quarter. ” Over breakfast he got me up to date on his life since school (two non-CEO roles in startups,) but he wanted to talk about his third startup – the one he and two co-founders had started.

Startup 120

Startup Lean Venture Capital Advisory Board 120