Nail the Customer Development Manifesto to the Wall

Steve Blank

When Bob Dorf and I wrote the Startup Owners Manual we listed a series of Customer Development principles. for A Repeatable and Scalable Business Model. Pair Customer Development with Agile Development. Failure is an Integral Part of the Search for the Business Model. No Business Plan Survives First Contact with Customers. So by popular demand, here’s a poster of the Customer Development Manifesto.

How Customer Development Failed Us

Steve Blank

Here’s his story of when Customer Development failed. We were lucky to learn about Customer Development early on in the life of our startup. It made more sense than our 60 page business plan predicated on a B-school class and a supernatural ability to predict the future. More importantly, we’d witnessed Customer Development’s massive success at another local startup. So how did Customer Development fail us?

Insiders

Sign Up for our Newsletter

This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.

Creating Startup Success – Customer Development + Business Model Design

Steve Blank

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. Filed under: Business Model versus Business Plan , Customer Development.

No Business Plan Survives First Contact With Customers. 2 Minutes to See Why

Steve Blank

If you can’t see the video click here Filed under: Business Model versus Business Plan , Customer Development. Business Model versus Business Plan Customer Development

Entrepreneurship as a Science – The Business Model/Customer Development Stack

Steve Blank

It’s the combination of Business Model Design and Customer Development. Business Model Design. Today every business organization from startup to large company uses the words “business model.” Alexander Osterwalder and Yves Pigneur defined a business model as how an organization creates, delivers, and captures value. More importantly they showed how any company’s business model could be defined in 9 boxes. Business Model Canvas.

Raising Money Using Customer Development

Steve Blank

Chasing funding versus chasing customers and a repeatable and scalable business model, is one reason startups fail. This post describes how companies using the Customer Development model can increase their credibility, valuation and probability of getting a first round of funding by presenting their results in a “Lesson Learned&# venture pitch. If they’re not busy looking at their Blackberry’s/iPhone’s.) Are there customers for what you are building?

Blowing up the Business Plan at U.C. Berkeley Haas Business School

Steve Blank

Berkeley were heavily funded to develop Cold War weapon systems. Starting in the 1950’s, Stanford’s engineering department became “outward facing” and developed a culture of spinouts and active faculty support and participation in the first wave of Silicon Valley startups. At the same time Berkeley was also developing Cold War weapons systems. Berkeley Haas Business School is a leader in entrepreneurship education. We had multiple business plan competitions.

The Customer Development Manifesto: Reasons for the Revolution.

Steve Blank

This post describes how the traditional product development model distorts startup sales, marketing and business development. In the next few posts that follow, I’ll describe how thinking of a solution to this model’s failures led to the Customer Development Model – that offers a new way to approach startup sales and marketing activities. The meaning of alpha test , beta test, and first customer ship are pretty obvious to most engineers.

No Business Plan Survives First Contact With A Customer – The 5.2 billion dollar mistake.

Steve Blank

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. 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.

The Customer Development Manifesto: Reasons for the Revolution.

Steve Blank

After 20 years of working in startups, I decided to take a step back and look at the product development model I had been following and see why it usually failed to provide useful guidance in activities outside the building – sales, marketing and business development. Every startup has some methodology for product development, launch and life-cycle management. So what’s wrong the product development model? Product Development Diagram 1.

Are Business Plans Still Necessary?

Both Sides of the Table

Many of these businesses were what First Round Capital called FNACs (features, not companies – this acronym has always stuck with me). Someone remind me to do a future post on why I think the Ramen Profitable approach has actually hurt some businesses. In an era of “launch and learn&# is there a need for a business plan? I have seen really great product people espouse the death of the business plan.

Keep Calm and Test the Hypothesis. 2 Minutes to See Why

Steve Blank

Filed under: Business Model versus Business Plan , Customer Development , Teaching. Business Model versus Business Plan Customer Development Teaching

Pivot – Firing the Plan Not the People. 2 Minutes to See Why.

Steve Blank

If you can’t see the video click here Filed under: Business Model versus Business Plan , Customer Development. Business Model versus Business Plan Customer Development

Video 263

Love/Hate Business Plan Competitions

Steve Blank

I hate business plan competitions. I Love Business Plan Competitions I had a breakfast with a friend who has founded a few companies in Thailand and started the New Ventures Program at one of their universities. He was visiting Stanford and mentioned how proud he was that several of his Thai students were here in the States for a business plan competition. In the real world, most business plans don’t survive the first few months of customer contact.

Free Reprints of “Why the Lean Startup Changes Everything”

Steve Blank

The Harvard Business Review is offering free reprints of the May 2013 cover article, “ Why the Lean Startup Changes Everything “ Available here. Filed under: Big Companies versus Startups: Durant versus Sloan , Business Model versus Business Plan , Customer Development , Customer Development Manifesto , Lean LaunchPad , Teaching , Venture Capital.

Lean 263

Validation: Be Sure Your Startup Vision Isn’t a Hallucination. 2 Minutes to See Why

Steve Blank

If you can’t see the video click here Filed under: 2 Minute Lessons , Business Model versus Business Plan , Customer Development , Lean LaunchPad , Teaching. 2 Minute Lessons Business Model versus Business Plan Customer Development Lean LaunchPad Teaching

Video 263

Customer Discovery: The Search for Product/Market Fit. 2 Minutes to See Why

Steve Blank

If you can’t see the video click here Filed under: 2 Minute Lessons , Business Model versus Business Plan , Customer Development , Lean LaunchPad , Teaching. 2 Minute Lessons Business Model versus Business Plan Customer Development Lean LaunchPad Teaching

Search 263

A Quick Course on Lean

Steve Blank

No Business Plan Survives First Contact With Customers. The Business Model. An introduction to The Business Model Canvas. How to Get, Keep and Grow Customers ? How to Get Out of the Building and Test the Business Model. What is Customer Development.

Lean 278

Business Plans Are An Historical Artifact

Feld Thoughts

This article ( Business Plans Are An Historical Artifact ) first appeared last week in the Wall Street Journal The Accelerators Column , which I’m contributing to on a regular basis. . In 1987 when I started my first company (Feld Technologies), I wrote a business plan for a course at MIT that I was in called 15.375: New Enterprises. I went on to create a company, with my partner Dave Jilk, that bore very little resemblance to that business plan.

Lessons Learned: What is customer development?

Startup Lessons Learned

Lessons Learned by Eric Ries Saturday, November 8, 2008 What is customer development? But too often when its time to think about customers, marketing, positioning, or PR, we delegate it to "marketroids" or "suits." Many of us are not accustomed to thinking about markets or customers in a disciplined way. Steve Blank has devoted many years now to trying to answer that question, with a theory he calls Customer Development. for Harvard Business Revie.

Free Reprints of “Why the Lean Startup Changes Everything”

Steve Blank

The Harvard Business Review is offering free reprints of the May 2013 cover article, “ Why the Lean Startup Changes Everything “ Available here. Filed under: Big Companies versus Startups: Durant versus Sloan , Business Model versus Business Plan , Customer Development , Customer Development Manifesto , Lean LaunchPad , Teaching , Venture Capital.

Lean 192

10,000 Startups

Steve Blank

Filed under: Business Model versus Business Plan , Customer Development , Lean LaunchPad , Teaching. Business Model versus Business Plan Customer Development Lean LaunchPad TeachingIn 24 hours we’ll announce something revolutionary. Moving entrepreneurship forward.

When Hell Froze Over – in the Harvard Business Review

Steve Blank

In my 21 years as an entrepreneur, I would come up for air once a month to religiously read the Harvard Business Review. It was not only my secret weapon in thinking about new startup strategies, it also gave me a view of the management issues my customers were dealing with. For decades this revered business magazine described management techniques that were developed in and were for large corporations – offering more efficient and creative ways to execute existing business models.

Hacking 4 Recovery

Steve Blank

We’re holding a series of 5-day online classes at Stanford where teams will learn how to develop new business models for an economy that’s getting back to work and on the road to recovery. What new businesses and services will emerge? Customer Development

Business Model, Customer Development Celebration | USASBE LAUNCH! |

Campus Entrepreneurship

Received an email the other day about a celebration / competition focusing on business models and customer development. 1) design an impactful idea, 2) identify, test and validate business model hypotheses using customer development tools and. 3) show traction which measures how well a startup is delivering its business model and how well the target demographic is accepting that business model.

The Business Model Canvas Gets Even Better – Value Proposition Design

Steve Blank

It has three parts: a business model canvas to frame hypotheses, customer development to get out of the building to test those hypotheses and agile engineering to build minimum viable products. This week the author of the business model canvas, my friend Alexander Osterwalder, launched his new book Value Proposition Design , the sequel to his million copy best seller, Business Model Generation. Teaches you how to use Customer Development to test it.

I’m on the Air – On Sirius XM Channel 111

Steve Blank

Starting this Monday, March 9 th 4-6pm Pacific Time I’ll be on the radio hosting the Bay Area Ventures program on Sirius XM radio Channel 111 – the Wharton Business Radio Channel. On our first show, Monday March 9 th 4-6pm Pacific Time join me, as I chat with Alexander Osterwalder – inventor of the Business Model Canvas , and Oren Jacob, ex-CTO of Pixar and now CEO of ToyTalk on Sirius XM Radio Channel 111. Alex Osterwalder – Business Models.

Episode 1 on Sirius XM Channel 111: Alexander Osterwalder and Oren Jacob

Steve Blank

My guests on Bay Area Ventures on Wharton Business Radio on Sirius XM Channel 111 were: Alexander Osterwalder – inventor of the Business Model Canvas. —– The focus of our first segment was on Alexander Osterwalder’s Business Model Canvas – how and why he created it and how startups and large companies are using it to search for repeatable, scalable business models. What’s the Business Model Canvas? “It’s Why Understand Customers? “We

Why Build, Measure, Learn – isn’t just throwing things against the wall to see if they work

Steve Blank

Build a product, get it into the real world, measure customers’ reactions and behaviors, learn from this, and use what you’ve learned to build something better. Repeat, learning whether to iterate, pivot or restart until you have something that customers love. Waterfall Development. Back then, an entrepreneur used a serial product development process that proceeded step-by-step with little if any customer feedback. customer relationships to create demand.

Agile 264

When Hell Froze Over – in the Harvard Business Review

Steve Blank

In my 21 years as an entrepreneur, I would come up for air once a month to religiously read the Harvard Business Review. It was not only my secret weapon in thinking about new startup strategies, it also gave me a view of the management issues my customers were dealing with. For decades this revered business magazine described management techniques that were developed in and were for large corporations – offering more efficient and creative ways to execute existing business models.

Entrepreneurs Are Artists

Steve Blank

Filed under: Big Companies versus Startups: Durant versus Sloan , Business Model versus Business Plan , Customer Development , Family/Career. Big Companies versus Startups: Durant versus Sloan Business Model versus Business Plan Customer Development Family/CareerI wrote about entrepreneurs as artists in a previous post.

The Lean LaunchPad Online

Steve Blank

I wondered if business plans and 5-year forecasts were the right way to plan a startup. Experienced entrepreneurs kept finding that no business plan survived first contact with customers. It dawned on me that the plans were a symptom of a larger problem: we were executing business plans when we should first be searching for business models. We were putting the plan before the planning.

Lean 263

Fear of Failure and Lack of Speed In a Large Corporation

Steve Blank

And worse, even if someone does manage to start something new, our management structure has so many financial, legal and HR hurdles that every initiative needs to match our existing business financial metrics, processes and procedures. More agile competitors are starting to eat into our business. Therefore startups trade off certainty for speed, adopting “ good enough decision making ” and iterating and pivoting as they fail, learn, and discover their business model.

Widget 264

Born Global or Die Local – Building a Regional Startup Playbook

Steve Blank

Not all start ups want to go in that direction – some will opt instead to become a small business. 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. For example, many of the Australian sports tech business models shared common elements.

Global 263

Crisis Management by Firing Executives – There’s A Better Way

Steve Blank

For decades startups were managed by pretending the company would follow a predictable path (revenue plan, scale, etc.) In an existing company with existing customers you 1) understand the customers problem and 2) since you do, you can specify the entire feature set on day one. But startups aren’t large companies, but for decades VC’s insisted that startups organize and plan like they were. The Revenue Plan – The Third Fatal Assumption.

Do Pivots Matter?

Steve Blank

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. Definition: “A pivot is a substantive change to one or more of the 9 business model canvas components.”. Business Model. Ok, but what is a business model ?

Who Dares Wins – The 2nd Annual International Business Model Competition

Steve Blank

Alexander Osterwalder and I spent last week in Salt Lake City, Utah as judges at the 2 nd Annual International Business Model Competition , hosted by Professor Nathan Furr , and his team at the BYU Center for Entrepreneurship. 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 ?-

The Mission Model Canvas – An Adapted Business Model Canvas for Mission-Driven Organizations

Steve Blank

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? The Business Model Canvas has been a great invention for everyone from startups to large companies. Customer Segments is changed to Beneficiaries.

Search versus Execute

Steve Blank

One of the confusing things to entrepreneurs, investors and educators is the relationship between customer development and business model design and business planning and execution. When does a new venture focus on customer development and business models ? And when do business planning and execution come into play? However, I realize I’ve primarily written about business model design and customer development.

Search 263

10,000 Startups – Startup Weekend Next

Steve Blank

The class teaches founders how to dramatically reduce their failure rate through the combination of business model design, customer development and agile development using the Startup Owners Manual. More importantly, it makes no demands of you to stand and deliver your weekly customer development progress in front of your peers. And you’ll learn about how to build a minimal viable product to get feedback early and often from customers.

Two Giant Steps Forward For Entrepreneurs

Steve Blank

Two years in the making and literally ten years in development, I’m proud to announce that my new book, The Startup Owners Manual , goes onto the printing press next Tuesday. In fact, you could say that all that remains from my last book are the four steps of Customer Development. Integrates Alexander Osterwalders “Business Model Canvas” as the front-end and “scorecard” for the customer discovery process.

The Future of Corporate Innovation and Entrepreneurship

Steve Blank

So some or most of this post might be that I’ve overdosed on business books for the month.). If we’re right, it will give 21 st companies a way to deal with innovation – both sustaining and disruptive – as a normal course of business rather than by exception or crisis. While org charts provided the “who” of a business, companies were missing a way to visualize the “how” of a business. Enter the Business Model Canvas.

Designing a Corporate Entrepreneurship Program – A Qualcomm Case Study (part 1 of 2)

Steve Blank

The ideas were to be implemented by existing business or R&D units – i.e., no need to create new permanent infrastructures for innovation. In hindsight we were having our employees get out of the building to talk to customers, build prototypes and generate partner interest – essentially doing Customer Discovery years before Steve Blank taught his Lean LaunchPad class at Stanford and the National Science Foundation!).