How Startups Can Keep Product Development Lean

YoungUpstarts

by Steve Owens, Founder and CTO of Finish Line Product Development Services. In this article we explore the unique challenges of a lean start-up and how Outsourced Product Development (OPD) can be used to overcome them. Reducing product turn time. The primary focus of the management team is external – what does a customer think about this product/service? The idea is to develop a product, see how it fails, and then pivot based on this new learning.

10 Strategies To Cover New Product Development Costs

Startup Professionals Musings

The “valley of death” is a common term in the startup world, referring to the difficulty of covering the negative cash flow in the early stages of a startup, before their new product or service is bringing in revenue from real customers. The problem is that professional investors (angels and venture capitalists) want a proven business model before they invest, ready to scale, rather than the more risky research and development efforts.

Insiders

Sign Up for our Newsletter

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

[Interview] Robert Morton, Toronto Business Leader and Former Home Capital Executive On New Product Development

YoungUpstarts

New product development is an essential part of the entrepreneurial landscape. For companies of all sizes, from big corporations to small businesses, new product development is crucial. New products help companies continue to grow, thrive and generate revenue. Toronto executive Robert Morton , principal at RLM Consulting, is experienced in the area of new product development. Why would a company want to introduce a new product?

Revenue Development

K9 Ventures

SneakerLabs’ first product was a Java-based chat server and client. In fact, at the time (1996-1997) we offered both a downloadable product, that our customers could install on their own servers, and a “hosted-offering”, which came to be known as “On-Demand”, then the “ASP” (Application Service Provider) model, and today we call it “SaaS” (Software as a Service). We listened to their feedback and started adding features to the product accordingly. The product worked.

Why recurring revenues increase your company’s value

Berkonomics

The massive shift in revenue models in recent years. Application developers once considered their products as licensed in what would closely be allied to a single sale. Usually that amount exceeds 50% of total revenues and is often much more. Call it “predictable revenue”.

Who are the Major Revenue-Based Investing VCs?

David Teten

So you’re interested in raising capital from a Revenue-Based Investor VC. A new wave of Revenue-Based Investors (“RBI”) are emerging. RBI normally requires founders to pay back their investors with a fixed percentage of revenue until they have finished providing the investor with a fixed return on capital, which they agree upon in advance. For background, see Revenue-Based Investing: A New Option for Founders who Care About Control. Revenue-based Venture Capital

Find and build recurring revenues.

Berkonomics

Most every business can take advantage of continuing, recurring revenues from its customer base. Sometimes, products are designed to make all of their profit upon the recurring revenues from supplies or support. We immediately recall the razor and blade analogy to illustrate the point when planning product development and release. Usually that amount exceeds 50% of total revenues, and is often much more.

Boost Your SaaS Business Revenue With These 12 Strategies

Up and Running

I’ve talked before about the metrics you need to know and track when you are running a subscription business , but there are really only three things you can do to move the needle of growth: reduce cancellations (churn rate), increase average revenue per user (ARPU), and increase the number of people who signup. Engagement marketing is when you highlight the benefits of your product to your existing customers rather than to new customers. Increase Average Revenue per User (ARPU).

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. Yet at the end of the day even with all these processes 9 out of 10 of new products are failures.

Boost Your SaaS Business Revenue With These 12 Strategies

Up and Running

I’ve talked before about the metrics you need to know and track when you are running a subscription business, but there are really only three things you can do to move the needle of growth: reduce cancellations (churn rate), increase average revenue per user (ARPU), and increase the number of people who signup. Engagement marketing is when you market the benefits of your product to your existing customers rather than to new customers. Increase Average Revenue per User (ARPU).

Strategy Roundtable For Entrepreneurs: Non-dilutive Financing Through Revenue Sharing

ReadWriteStart

And, oh by the way, we also really like the idea of the 1M/1M entrepreneurs building valuation and negotiating leverage through these business development efforts, instead of signing off large chunks of their company in form of equity early on. I have discussed at length why revenue sharing channel deals may serve as perfectly fine alternatives to raising equity (or even complements) because of their non-dilutive nature. million in revenue.

5 Ways Startups Can Reduce Development Costs & Shorten Time To Market

YoungUpstarts

Two conditions that do matter to your startup’s out-year viability are the cost and length of its product development cycle. Longer, costlier cycles drain cash on hand while delaying the onset of crucial revenue streams. Startup founders counting the days until break-even or actively seeking outside capital must focus on streamlining their development cycles. Focus on Your Minimum Viable Product. A minimum viable product is market-ready, not a prototype.

Cost 100

Eight Ways Customer Analytics Can Give Your Company A Competitive Edge

YoungUpstarts

Once upon a time, your company may have been able to shake it off if you threw a marketing idea against the wall and found it didn’t stick, or developed a line of products customers didn’t seem to like. Develop products customers want. Figuring out what customers want and what they will purchase is one of the holy grails of product development. Conduct product usability tests. utility (Does your product offer essential features?),

How to Use Growth Hacking to Increase Revenue 20x in Just 12 Months

Up and Running

Between January 2015 and January 2016, we grew our platform Slidebean from $1K to $20K in monthly recurring revenue. Getting the first tracks of revenue is one of the toughest processes of building a startup. We call growth hacking the process of figuring out this extremely complex puzzle of selling a product better and faster than anyone else. Let’s face it, working on the product is awesome—seeing it evolve, figuring out new features, and witnessing them as they come alive.

Tax and accounting treatment for website development costs

The Startup Magazine

Not sure how to account or tax the website development costs? New product development business concept on device screen. Before you can start determining the tax treatment for your website development costs, you need to determine what you use your website for.

Cost 102

The Leading Cause of Startup Death – Part 1: The Product.

Steve Blank

This series of posts is a brief explanation of how we’ve evolved from Product Development to Customer Development to the Lean Startup. The Product Development Diagram Emerging early in the twentieth century, this product-centric model described a process that evolved in manufacturing industries. At first glance, the diagram, which illustrates the process of getting a new product into the hands of waiting customers, appears helpful and benign.

Of Birchbox and Bricks

Gust

OK, read the next two words slowly: generate revenue. Sorry, yes, I know how retro this sounds. The only folks who’ll be able to raise money will be those who have a rock solid, proven revenue model that they’re looking to grow. Worrying about revenues (or wolves) can slow you down. Now, to be clear, I have absolutely no doubt that some of the users-now-and-revenues-later companies will indeed succeed (some already have, if you consider an IPO as the measuring stick).

IPO 70

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. Once the product begins to ship, startup sales execs use orders and revenue as its marker of progress in understanding customers.

The Customer Development Manifesto: The Startup Death Spiral (part.

Steve Blank

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. To support sales, Marketing tries to “make up a better story,” and the web site and/or product presentation slides start changing (sometimes weekly or even daily).

Customer Development Manifesto: Market Type (part 4) « Steve Blank

Steve Blank

In future posts I’ll describe how Eric Ries and the Lean Startup concept provided the equivalent model for product development activities inside the building and neatly integrates customer and agile development. The product development model treats all startups like they are in an Existing Market – an established market with known customers. After twelve months Handspring’s revenue was $170 million. What’s a “new product&# ?

How to Keep Your "Maniacal Focus" on Generating Revenue

Small Business Force

Get your product or service in the hands of your customer I don't think I've ever heard one phrase more appropriate for start-up entrepreneurs, because beyond running out of money, I believe lack of clear, pinpoint focus is the reason many start-ups are doomed to fail. For me (and for you), "maniacal focus" for a start-up means getting your basic product or service into the hands of as many customers as possible in as short a time as possible with as much quality as possible.

Woulda-Coulda-Shoulda Innovation

Gregg Fraley

The top person chooses one or more of the pitched ideas to put into the product development pipeline for introduction. If you don’t have a pipeline, start one, and test the idea as cheaply as you can before you advance to the next stage of development (as in Lean Product Development ). Over time you can measure revenue from in play innovations. Time to Plan for 2016 Innovation Now.

Lessons Learned: Validated learning about customers

Startup Lessons Learned

Lessons Learned by Eric Ries Tuesday, April 14, 2009 Validated learning about customers Would you rather have $30,000 or $1 million in revenues for your startup? All things being equal, of course, you’d rather have more revenue rather than less. In an early-stage startup especially, revenue is not an important goal in and of itself. This may sound crazy, coming as it does from an advocate of c harging customers for your product from day one.

8 Advantages To Building Your Own Startup Prototypes

Startup Professionals Musings

Thus entrepreneurs were able to build prototypes and design new products without the traditional huge prototyping cost. In today’s fast moving market, the basic product development cost and time are critical to survival. These ideas can grow quickly into real products.

Airbnb S-1 (Part 1): So How Profitable Is This Thing Really?

View from Seed

You can read various articles out there which will give you the cursory facts about Airbnb like their overall revenue or profitability or how their business has faired here in 2020 in the COVID environment. Airbnb’s public S-1 dropped Monday afternoon.

10 Financing Alternatives For Your Next New Venture

Startup Professionals Musings

The “valley of death” is a common term in the startup world, referring to the difficulty of covering the negative cash flow in the early stages of a startup, before their new product or service is bringing in revenue from real customers.

Lessons Learned: Three freemium strategies

Startup Lessons Learned

These are companies that generate revenue by offering a free product with an upsell or premium version. Is it that they act as free advertising for our premium product? We're keeping ourselves free for the community that has helped us build our product; premium vs basic seems wrong to us. The Entrepreneur’s Guide to Customer Development ► June (3) What is a startup?

5 Ways To Conserve Investor Cash And Ensure Survival

Startup Professionals Musings

Deferred payments start with stretching the payables period but, more importantly, include giving employee equity in lieu of a higher salaries and negotiating vendor deferred payments out of future revenues. Cash flow is a basic survival metric for every startup.

8 Tips For Getting Your Startup Right The First Time

Startup Professionals Musings

Building a minimum viable product, with customer validation. Minimum viable products (MVPs) are recommended for validating the market, with iterative enhancement to quickly meet market feedback.

Why Companies and Government Do “Innovation Theater” Instead of Actual Innovation

Steve Blank

If they were a commercial company, they figured out product/market fit; or if a government organization, it focused on solution/mission fit. HR processes, legal processes, financial processes, acquisition and contracting processes, security processes, product development and management processes, and types of organizational forms etc. Process Versus Product. And by product, I mean the creation of new hardware, services, software, tools, operations, tradecraft, etc.

Tesla and Adobe: Why Continuous Deployment May Mean Continuous Customer Disappointment

Steve Blank

For the last 75 years products (both durable goods and software) were built via Waterfall development. This process forced companies to release and launch products by model years, and market new and “improved” versions. In the last few years Agile and “Continuous Deployment” has replaced Waterfall and transformed how companies big and small build products. The Old Days – Waterfall Product Development. Then validation ensures the product was built to spec.

6 Keys To Successfully Addressing Investor Questions

Startup Professionals Musings

That means they normally only invest in startups with a working product that has already been sold to at least one customer for full price (beta tests, giveaways and best friends don’t count). They are willing to cover marketing, inventory and scaling, but not product development.

Salary 271

Keep A Real Job Until Your New Venture Shows Traction

Startup Professionals Musings

Others wait until the new business starts to generate revenue and profit before making the move. In my experience as a startup advisor, I find the minimum time to revenue is at least a year. It pays to be able to fall back into a familiar mental role to recover, when the pressures of fund raising, new product development, and satisfying initial customers wears you down.

Salary 289

8 Keys To Scaling The Business After Initial Traction

Startup Professionals Musings

Resist the urge to delegate accounting decisions, under the assumption that incoming revenue takes the pressure off. Introduce new products and enhancements every month. Growth requires market innovation as well as product.

Viral 267

WHY ARE COMPANIES GRAPPLING FOR DATA

The Startup Magazine

Similarly, customers are more knowledgeable, aware, and conscious to choose from the variety out there, which slows down the company’s revenue and growth. Better Products: Improvement in your products or services is crucial, but the right question is what to improve.

How To Launch A Profitable Custom Software Development Startup

The Startup Magazine

There are several effective steps to launch a profitable custom software development startup. In today’s innovative digital ecosystem, you can establish a powerful software development company, even if you do not have a previous technical background. Hire A Team Of Software Developers.

How to get your mobile app discovered in 2021

VC Cafe

According to Statista, revenue generated from apps (paid downloads and in-app advertising) will reach $935 billion by 2023, and that doesn’t doesn’t include the many trillions of dollars transacted via apps in the last decade alone (think Amazon, Uber, games, etc).

Mobile 137

How To Survive The Loss Of A Main Customer

YoungUpstarts

When it occurs, the consequences can be swift and devastating, wreaking potential havoc on a once steady stream of revenue. sales to product development), the problems will continue to exist. by Zain Jaffer, serial entrepreneur and the Founder and CEO of Zain Ventures.

Is the Lean Startup Dead?

Steve Blank

Reading the NY Times article “ Jeffrey Katzenberg Raises $1 Billion for Short-Form Video Venture, ” I realized it was time for a new startup heuristic: the amount of customer discovery and product-market fit you need to find is inversely proportional to the amount and availability of risk capital. Tech IPO prices exploded and subsequent trading prices rose to dizzying heights as the stock prices became disconnected from the traditional metrics of revenue and profits.

Lean 259

Fear of Failure and Lack of Speed In a Large Corporation

Steve Blank

And when we do make bets, they’re small bets on incremental products or acquisitions that simply add to the bottom line.”. Startups have finite time and resources to find product/market fit before they run out of money. They’ve found product/market fit (what products customers want to buy). They’ve learned the best distribution channel to get the product from their company to the customer. and how to price the product.

Widget 248

4 Reasons Startups Fail And How To Avoid Them

YoungUpstarts

by Steve Owens, Founder and CTO of Finish Line Product Development Services. Poor Product – 17%. Product Mis-Timed – 13%. Rule #2: Revenue is your first priority. There is no product, processes or history to guide decisions. Rule #2: Revenue is your first priority. In this context, revenue can be an investment as well as sales. The technology you choose for your product will change your Go To Market strategy.

CTO 106

5 Keys To Minimizing The Burn Rate For Your Startup

Startup Professionals Musings

Deferred payments start with stretching the payables period but, more importantly, include giving employee equity in lieu of a higher salaries and negotiating vendor deferred payments out of future revenues. Hire a professional marketing and public relations agency once you have a good revenue stream but you don’t need them to start a free blog, establish Facebook and Twitter accounts with initial content and complete the basics of search engine optimization.

9 Deadliest Start-up Sins

Steve Blank

The excerpts, which appeared first at Inc.com , highlight the Customer Development process, best practices, tips and instructions contained in our book. ———– Whether your venture is a new pizza parlor or the hottest new software product, beware: These nine flawed assumptions are toxic. These founders specify, design, and build a fully featured product using classic product development methods without ever leaving their building.