Steve Blank

SEPTEMBER 7, 2009

This post describes how following the traditional product development can lead to a “startup death spiral.&# In the next posts that follow, I’ll describe how this model’s failures led to the Customer Development Model – offering a new way to approach startup sales and marketing activities. The board raises a collective eyebrow.

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Customer Development Developer Customer Silicon Valley 232

Steve Blank

AUGUST 31, 2009

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. So what’s wrong the product development model?

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Customer Development Developer Customer Silicon Valley 244

Steve Blank

FEBRUARY 23, 2009

I was consulting for the two venture capital firms who between them put $12 million into my last failed startup. (My I began to gain an appreciation of how world-class venture capitalists develop pattern recognition for these common types of problems. My mother kept asking if they were going to make me pay the money back.

Silicon Valley 131

Silicon Valley RSS Venture Capital Customer Development 131

Steve Blank

JUNE 8, 2009

In the last three posts, we drew the relationship of market risk and invention risk with vertical markets and pointed out verticals where customer development would be useful. would look in each of the verticals. For example, How does sales differ from one market to another? Sales – What Channel to reach the customer?

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Vertical Silicon Valley RSS Marketing 125

Version One Ventures

APRIL 8, 2014

Thus, it should come as no surprise that we are now seeing Venture Capital being disrupted by these forces as well. In his post The Disruption of Venture Capital , Albert Wenger described VC as “the club you had to be invited into.”. Enter Mattermark: where “Big Data Meets Venture Capital”.

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Venture Capital Vertical Curation SEC 160

Steve Blank

JUNE 25, 2009

Twenty eight years ago I was the bright, young, eager product marketing manager called out to the field to support sales by explaining the technical details of Convergent Technologies products to potential customers. They looked at their watches, gave our sales guy a quizzical look and left.

Technology 143

Technology Silicon Valley Fractional VPE Part-Time VPE 143

Steve Blank

OCTOBER 5, 2009

I had last been in Chapel Hill on a winter’s day in 1986, traveling with the VP of Sales of our new supercomputer startup, Ardent. My ex-boss was going to be the VP of Engineering and I would report to the CEO whose marketing acumen and sales instincts seemed at the time to be telepathic and sense of theater was legend.

North Carolina 131

North Carolina Silicon Valley Fractional VPE Part-Time VPE 131

Ben's Blog

MARCH 1, 2011

In my career, I have never seen a position in any industry with more varying criteria than General Partner at a venture capital firm. Some firms hire pure investors, some firms hire operators, some Wall Street analysts, some firms hire sales people, some firms hire lawyers, and others hire reporters.

Partner 71

Partner Technical Review Venture Capital Cofounder 71

Steve Blank

SEPTEMBER 24, 2009

The Founder’s New Insight Smart founders are never satisfied with simply executing their current business model, they are constantly observing, orienting and deciding whether their current business model can be made better. But the purpose of this post is what happens when a founder (or large company CEO) finds a better business model.

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Customer Silicon Valley RSS California 216

ReadWriteStart

JANUARY 6, 2011

This curriculum is based on the various questions entrepreneurs have asked me over these 64 sessions, spanning financing, positioning, customer acquisition, marketing, sales, channel, and various other early stage, startup-related issues. As usual, then, I worked with three entrepreneurs working on specific businesses. Mava Consulting.

Vertical 115

Vertical Web San Francisco Entrepreneur 115

Steve Blank

NOVEMBER 12, 2009

It was amazing to see the two founders, Fred Durham and Maheesh Jain, build a $100 million company from coffee cups and T-shirts. But Cafepress’s most memorable moment was when the founders used a “Lessons Learned” VC pitch to raise their second round of funding and got an 8-digit term sheet that same afternoon.

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Venture Capital Silicon Valley RSS Hockey Stick 239

Austin Startup

JUNE 22, 2020

Far too often, founders spend inordinate time talking to angels and VCs trying to convince them of their vision, commitment and results. They have a $600k sales backlog that they’ll complete this month, and about 50% or more of that will be recurring revenue. Find investors who share your “gospel” and understand what you’re doing.

Vertical 64

Vertical Early Stage Forecast Revenue 64

Steve Blank

NOVEMBER 16, 2009

Market Type affects your spending and sales ramp after you reach product/market fit. You say, “Market Type affects your spending and sales ramp after you reach product/market fit.&# Use the Lean Startup - When There's Market Risk The second question is : “What’s the “ Market Type ” of your startup? Does this help?

Customer Development 228

Customer Development Web Developer Customer 228

Steve Blank

JULY 27, 2009

Our small training department had been without a manager for months and finding a replacement didn’t seem to be high on the VP of Sales list. I walked into the VP of Sales’ office and with my knees trembling, I politely asked for the job. On a more serious note, any tips on attracting founders?

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Silicon Valley RSS Technical Review California 120

David Teten

JANUARY 21, 2021

This essay is part of a series on alternative VC: I: Revenue-Based Investing: a new option for founders who care about control. III: Why are Revenue-Based VCs investing in so many women and underrepresented founders? V: Should you raise venture capital from a traditional equity VC or a Revenue-Based Investing VC?

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Equity Revenue Cofounder Colorado 78

Steve Blank

MAY 11, 2009

We had seen the reactions of people playing with the prototypes in our lab and when we demo’d it to our sales force. Since we had gotten out of the software business when we came out of Chapter 11 , and our sales channel didn’t know what to do with software, we licensed ReelTime to Adobe. We knew something our CEO didn’t.

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Video Silicon Valley RSS California 184

Austin Startup

SEPTEMBER 19, 2017

For startup founders, it’s never too early to start thinking about putting together a target market advisory board. This is useful for a number of reasons, the most obvious of which is to help you navigate the right channels in your vertical and open doors to potential customers. Never discount the power of a warm intro.

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Advisory Board Sweat Equity Marketing Vertical 48

David Teten

DECEMBER 3, 2019

Private equity and venture capital investors are copying our sisters in the hedge fund world: we’re trying to automate more of our job. . 3) Raise capital. I previously posted a detailed presentation with sales technology tools useful for B2B sales. When I was single, I registered for (a lot of) dating websites.

Technical Review 78

Technical Review Software Review Analytics Private Equity 78

cdixon.org

SEPTEMBER 17, 2011

You’ll refine your sales and investor pitch. But it’s probably wise to be more secretive in some vertical markets: [link]. and an investor, has a great blog on entrepreneurship and venture capital. link] 10 Tips for Making your Startup More Attractive for Investors [Presentation] : Venture Capital Cafe. [.]

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Stealth Startup NDA Cofounder 68

Haystack

JULY 8, 2018

After reflecting on it for a day, I began to understand why — even though this topic has been written about many times, “technology” as a sector and industry now has gone from vertical to horizontal, entirely pervasive across industries, across sectors, across geographies and cultures.

Early Stage 95

Early Stage Dilution Private Equity Common Stock 95

Steve Blank

NOVEMBER 2, 2009

In times when venture capital is hard to get, investors extract high costs for failure (down-rounds, cram downs , new management teams, shut down the company.) In times when venture capital is hard to get, investors extract high costs for failure (down-rounds, cram downs , new management teams, shut down the company.)

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Lean Silicon Valley Startup RSS 260

Steve Blank

APRIL 29, 2009

As a founder you need to prepare yourself to think creatively and independently, because more often than not, conditions on the ground will change so rapidly that the original well-thought-out business plan becomes irrelevant. Every potential startup founder should think about their level of comfort operating in chaos and uncertainty.

Silicon Valley 185

Silicon Valley Iraq RSS Vietnam 185

Steve Blank

JUNE 22, 2009

Things Change In 1956 Hewlett Packard (HP) was a 17-year old company with $20 million in test equipment sales with 900 employees. And venture capital and entrepreneurship has made life even tougher for the modern corporation. At HP the founders were still at the company and still running the business.

Silicon Valley 186

Silicon Valley RSS California Agile 186

Steve Blank

OCTOBER 1, 2009

Top management was trying to coordinate all of the operating details (sales, manufacturing, distribution and marketing,) across all the divisions and the company almost went bankrupt that year when poor planning led to excess inventory (with unsold cars piling up at dealers and the company running out of cash.) What happened to him?

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Silicon Valley United States RSS Customer Development 179

Steve Blank

MAY 21, 2009

As the company gets larger and a large professional sales organization kicks in, its second priority is to generate qualified leads. Before you go to a trade show sales and marketing need to agree to measurable goals. Then offer those budget dollars to the VP of Sales.

Silicon Valley 203

Silicon Valley RSS California Customer Development 203

Steve Blank

SEPTEMBER 17, 2009

Market Type Integral to the Customer Development model is the notion that Market Type choices affect the way the company will deploy its sales, marketing and financial resources. In Customer Validation it is when you have enough early sales to declare that you have discovered a repeatable and scalable sales process.

Customer Development 253

Customer Development Developer Customer Silicon Valley 253

Steve Blank

AUGUST 27, 2009

Yet we used the product development model not only to manage product development, but as a road map for finding customers and to time our marketing launch and sales revenue plan. Marketing starts to build a sales demo, writes sales materials (presentations, data sheets), and hires a PR agency.

Silicon Valley 269

Silicon Valley Product Startup Product Development 269

Startup Lessons Learned

AUGUST 24, 2009

When I reviewed a recent product development book, it immediately shot up to Amazon sales rank 300. We faced this same problem in entrepreneurship and venture capital, but we are getting past it. Is that a lot? I have given more than two-dozen paid speeches this year – is that a lot? Is that good?

San Francisco 113

San Francisco Lean Technical Review Distribution 113

Cracking the Code

JANUARY 19, 2016

SaaS startups need to have a VC that understands the SaaS model, including market development strategies, upsell dynamics, sales incentive plan, etc. Today is a very interesting time for the SaaS industry: Europe has shown it was capable of creating successful SaaS businesses, and it’s only the beginning.

API 48

API Silicon Valley Europe Differentiation 48

Steve Blank

AUGUST 20, 2009

Rule 1: In an existing market Customer Development means not only understanding potential customers, but your competitors in detail – their product features, their sales channels, their demand creation strategy, their business model, etc. Me – “So what’s the problem?” We only have 20 customers, and Large Company x has millions.”

Silicon Valley 206

Silicon Valley Startup RSS Customer Development 206

Steve Blank

APRIL 22, 2009

I took a deep breath and asked, “Ok, if you were, what percentage of your sales do you think these markets would be in 5 years?” “I guess less than 5%,” was the answer. Even with information from all three views, founders need to remember there will never be enough information to make a perfect decision. [.] Order Here.

Silicon Valley 201

Silicon Valley RSS California Customer Development 201

Steve Blank

APRIL 2, 2009

If you are a founder of a startup ethics begin with you. It’s the decisions that you make that might cost you an order, a sale or a higher stock price. When your employees see that it’s “an anything goes” culture you’ll find unethical behavior occurring that you will regret. Think through if you want to win at any cost. (I

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Silicon Valley RSS Startup California 127

Austin Startup

AUGUST 7, 2017

Instead of arguing why Dallas might be better than Houston we should be talking about how we can work together to get our share of venture capital dollars more in line with our population size and startup activity by unlocking additional capital sources that have been previously inaccessible to tech.

Texas 97

Texas San Antonio Houston Dallas 97

Steve Blank

NOVEMBER 5, 2009

The first step in Customer Development was Customer Discovery ; extracting hypotheses from the business plan and getting the founders out of the building to test the hypotheses in front of customers. Your goal was to preserve your cash while you turned these guesses into facts and searched for a repeatable and scalable sales model.

Customer Development 267

Customer Development Developer Customer Silicon Valley 267

abovethecrowd.com

FEBRUARY 27, 2019

In many cases, a deeper focus on a particular category or vertical allows these marketplaces to distinguish themselves from broader marketplaces like eBay. In its most recent quarter, the company processed the exchange of $923 million of sales, which equates to a $3.6B In 2017, the company reported sales of over $500 million.

Internet 88

Internet Matching Vertical Hosting 88

Steve Blank

NOVEMBER 30, 2009

Little Indians and Big Indians At MIPS Computers , my second semiconductor company, I was the VP of Marketing and defacto head of Sales. Customer Development is about testing the founder’s hypothesis about what constitutes product/market fit with the minimum feature set. And it’s certainly not Customer Development.

Customer Development 284

Customer Development Developer Customer Silicon Valley 284

Steve Blank

JULY 13, 2009

The Customer Discovery lessons of “get outside the building and test your hypothesis with customers,&# and “the founders need to hear the results,&# came from this debacle. The Customer Validation lesson of, “no formal launch until you have early sales validating the product and sales process&# was also born here.

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Silicon Valley Product RSS California 122