SlideShare una empresa de Scribd logo
1 de 77
Descargar para leer sin conexión
Customer Development:

    The Second Decade
(aka Why Accountants Don’t Run Startups)



                    Bob Dorf
serial entrepreneur, startup advisor, partner, “supporting author”

                www.steveblank.com

                   ©2010 K+S Ranch Consulting Inc.
…Is there a roadmap?
What’s A Startup?


Scalable                          Large
                   Transition
Startup                         Company


    - Business  Model found
    - i.e. Product/Market fit
    - Repeatable sales model
    - Managers hired


A Startup is the temporary organization
           used to search for
      a scalable business model3     (c)2010 K+S Ranch
                                        Consulting Inc.
Venture Firms Invest in
             Scalable Startups

 Startup                       Small Business




Scalable                          Large
Startup                         Company




                               4           (c)2010 K+S Ranch
                                              Consulting Inc.
not quite the beginning of startups, but…

100 Years Ago in Detroit
Alfred P. Sloan:
         Inventor of the Modern Corporation




   Scalable                             Large
                        Transition
   Startup                            Company



General Motors, President/Chairman
• Cost Accounting
• MIT‘s Sloan School
• Sloan Kettering
• Kettering Institute

                                      6       (c)2010 K+S Ranch
                                                 Consulting Inc.
Billy Durant



Scalable                          Large
             Transition
Startup                         Company



            Leading horse-drawn buggy maker




                                7      (c)2010 K+S Ranch
                                          Consulting Inc.
Durant vs. Sloan



  • Dies, rich, honored and famous




                      8     (c)2010 K+S Ranch
                               Consulting Inc.
Durant vs. Sloan



                            • Dies, rich, honored and famous
• Dies penniless…
…managing a bowling alley




                                       9         (c)2010 K+S Ranch
                                                    Consulting Inc.
Durant vs. Sloan

                                    Accountant
• Dies managing a bowling alley   • Dies, rich, honored and famous




                                             10        (c)2010 K+S Ranch
                                                          Consulting Inc.
WE are here
Scalable                   Large
            Transition
Startup                  Company




                         11    (c)2010 K+S Ranch
                                  Consulting Inc.
50 years ago: Roger B. Smith



    Scalable                               Large
                        Transition
    Startup                              Company



 General Motors, President/Chairman
- GM >50% market share
- Knew what the customer wanted
- 5 years to bring a car to market
- Huge inventories eliminate stoppages
                                         12    (c)2010 K+S Ranch
                                                  Consulting Inc.
Toyoda and Ohno



Scalable                             Large
               Transition
Startup                            Company



                 • Taught by Americans post WWII
                 • Couldn‘t afford inventory like US
                   auto companies
                 • Toured GM plants and…
                 • Built Kaizen/lean manufacturing
                 • Toyota Lean Production System
                                   13      (c)2010 K+S Ranch
                                              Consulting Inc.
1960: Agile, Lean, Customer Centric



 Scalable                                      Large
              Transition
 Startup                                     Company



                •   Short runs vs. Long option lists
                •   Agile Product Development
                •   Lean Manufacturing
                •   Continuous Improvement
                •   Customer Development
                     … talk about ‖a day in the life‖
                                             14         (c)2010 K+S Ranch
                                                           Consulting Inc.
Toyoda/Ohno vs. Smith



• Integrate Customer Development vs. Options
• Agile Development plus Lean Manufacturing
• U.S. Market share goes from 0 to 20%




                                     15       (c)2010 K+S Ranch
                                                 Consulting Inc.
Toyoda/Ohno vs. Smith



    • Buys $35 billion of Japanese
      robots to ―fix‖ GM
    • Market share drops 50% to <25%




                         16     (c)2010 K+S Ranch
                                   Consulting Inc.
Toyoda/Ohno vs. Smith

               Accountant




                   17   (c)2010 K+S Ranch
                           Consulting Inc.
Toyoda/Ohno vs. Smith

     WE are here




                   18   (c)2010 K+S Ranch
                           Consulting Inc.
10 Years Ago in Silicon Valley…
More startups fail from
a lack of customers than from a
failure of product development
Traditional Product Introduction:
            Two Implicit Assumptions

Customer Problem: known

  Concept         Product     Alpha/Beta        Launch/
                   Dev.          Test           1st Ship




                   Product Features:   known




                                           21      (c)2010 K+S Ranch
                                                      Consulting Inc.
This Was A Plan For Failure
• Long-term “lockdown” of Product Development/Engineering
• Assumed we understood customer problem/product solution
   – But they are hypotheses
   – the facts were outside the building

• Sales & Marketing focused on execution to First Customer Ship
   – Costs and burn rate became front loaded
   – Execution & hiring predicated on business plan hypothesis
• Financial projections assume success
   – Heavy spending hit if product launch is wrong
   – Failure always a bad reflection on Management, Board, Investors
         You don’t know if you’re wrong until you’re
       out of business, out of money, or (usually) both!
8 Startups later,
                Steve Blank Drew This…


Customer            Customer     Customer   Company
Discovery           Validation   Creation    Building


            ―Do-Over‖
Which Turned Into A Model

            Product Introduction Model

Concept        Product      Alpha/Beta          Launch/
                Dev.           Test             1st Ship



                      became
            Customer Development

Customer      Customer      Customer          Company
Discovery     Validation    Creation          Building




                                         24         (c)2010 K+S Ranch
                                                       Consulting Inc.
Customer Development:
happy 10th birthday
…extensive ―real world‖ deployment
…morphed, tested, debated: CE0s, CM0s, VCs, MBAs
…start of a new ―entrepreneurial science‖ syllabus with its own library


   Customer              Customer          Customer            Company
   Discovery             Validation        Creation             Building


               Do-Over




                           …a very short Customer Development overview
Customer Discovery


    Customer          Customer     Customer        Company
    Discovery         Validation   Creation         Building


            Do-Over



•   Stop selling, start listening
•   Test your hypotheses
•   Continuous Discovery and Feedback
•   Done by founders…OUTSIDE the building!

                                              26         (c)2010 K+S Ranch
                                                            Consulting Inc.
Customer Validation



          Customer      Customer     Customer        Company
          Discovery     Validation   Creation         Building


                  Do-Over




•   Can I avoid the “land of the living dead?”
•   Repeatable and scalable business model?
•   Passionate Earlyvangelists who ―gotta have it?‖
•   Return to Discovery without passionate customers
                                                27          (c)2010 K+S Ranch
                                                               Consulting Inc.
The “Do Over” Loop




             Do-Over




• Iteration was at the heart of Customer Development
• Fast, agile and opportunistic
• (Almost) celebrate failure…whenever it‘s instructive
• But it didn‘t have a name ―Do over‖ is just so juvenile
Customer Creation


     Customer       Customer     Customer        Company
     Discovery      Validation   Creation         Building




• Creation comes after proof of sales
• Spend to scale based on FACTS, not Hypotheses
• Begins only with repeatable, scalable processes
  for sales, marketing, demand creation
                                            29         (c)2010 K+S Ranch
                                                          Consulting Inc.
Company Building


            Customer      Customer        Customer        Company
            Discovery     Validation      Creation        Building




•   (Re)build company, management, infrastructure
•   (Re)visit the mission
•   Go Global
•   Get a Porsche (or a Towncar)rganization & management

• Re look at your mission
                                                     30      (c)2010 K+S Ranch
                                                                Consulting Inc.
100 Startups:
          National Science Foundation

• Apply Customer Development principles to
  100 top funded NSF innovators—pay‘em!
• ―Short Course‖ at Stanford, midterm update
• Remote Mentoring for 25 teams/quarter
• Finals: VC ―bakeoff‖
So what’s new since 2003??
• Customer Development startups have surged

• Customer Development “Rules” emerged

• Key Customer Development approaches have converged

• Product Development cycle times submerged

• …and easy money has been purged
Eric Ries: Insight
   Engineering acts as if features are “known”



 Concept/   Product   Alpha/   Launch/
   Seed      Dev.      Beta      Ship


                                                                Waterfall

                                            Requirements


                                                           Design
                                                                                      Solution: known


• Eric observed the solution                                  Implementation

  was unknown in a startup               Problem: known                Verification

• Waterfall process could only                                                 Maintenance

  build known features
New #1:
Customer + Agile + Commodity = Lean

• Solving   customer + feature unknowns is the ―Lean Startup‖




      Problem: Unknown               Solution: Unknown
                                              34 Source: Eric RiesConsulting Ranch
                                                                (c)2010 K+S
                                                                             Inc.
#2: Cycle Times Speed Up




• Speed of cycle minimizes cash needs
• Minimum feature set speeds up cycle time
• Near instantaneous feedback drives feature set
                                        35     (c)2010 K+S Ranch
                                                  Consulting Inc.
New #3: Jon Feiber @ MDV
  Not all Startups Need Customer
  Development


• Market Risk vs. Technical Risk?
  – Web is about customers & markets
  – Biotech is about science & invention
  – Absolutely valid for .com, social…but differently
New #4: Dave McClure
    Different Metrics for (Web) Startups
                                      SEO         Campaigns,
                           SEM              PR    Contests        Biz Dev
          Social
          Networks
                           Blogs                    Affiliates
       Apps &                                                     Direct, Tel,
       Widgets                     Email                          TV
                                                                                           Viral
                  Domains
                                            ACQUISITION                                    Loops




         Emails & Alerts                                                                                 Emails &
                                                                                                         widgets


Blogs, RSS,                                                                                Affiliates,
News Feeds                                                                                 Contests




                                                 Ads, Lead Gen,                  Biz Dev
          System Events &                        Subscriptions,
          Time-based Features                    ECommerce

                                                 Website.com                                  From Dave McClure
                                                                                      37             (c)2010 K+S Ranch
                                                                                           http://500hats.typepad.com/
                                                                                                         Consulting Inc.
Startups Need the Right Metrics


The Search for the Business Model       The Execution of the Business Model



      Scalable                                            Large
                           Transition
      Startup                                           Company


 Startup Metrics
- Customer Acquisition Cost                     Traditional Accounting
                                               - Balance Sheet
- Viral/Unique/Session Growth                  - Cash Flow Statement
- Customer LTV change                          - Income Statement
- Average Selling Price/Order Size
- Monthly burn rate
                                                   38         (c)2010 K+S Ranch
                                                                 Consulting Inc.
New #5: Business Model, Not Plan
           a Front-end to Customer Development


• Business Plans are Rigid, Static
• “No Business Plan Survives First Contact with
  Customers” who don’t read them   --Steve Blank


• The Four Steps had:
  – Business model flow for Enterprise Software
  – Business model summary for each step
  – Checklists for Enterprise Software

• It said, “modify it to fit your business”
• Now we can

                                                   39   (c)2010 K+S Ranch
                                                           Consulting Inc.
Osterwalder’s Business Model - Insight
                  key    value            customer
            activities   proposition      relationships



     key                                             customer
partners                                             segments




     cost                                            revenue
structure         key                                streams
            resources                  channels
                                          40       (c)2010 K+S Ranch
                                                      Consulting Inc.
Business Model Canvas – Any Business
KEY          KEY          OFFER          CUSTOMER        CUSTOMER
PARTNERS     ACTIVITIES                  RELATIONSHIPS   SEGMENTS




             KEY                         CHANNELS
             RESOURCES




COST STRUCTURE                    REVENUE STREAMS




                                                    41     (c)2010 K+S Ranch
                                                                       41
                                                              Consulting Inc.
Turning Hypotheses to Facts



        Test
        Hypotheses:
        • Product
        • Market Type
        • Competition
Business Model Practice Session:
      Let‘s all be Steve Jobs for 15 minutes

•   “I’m thinking about Apple tv”
•   “Surely it’s not just another tv set”
•   “Is it an ecosystem somehow?”
•   “How will it help all of Apple grow?”
•   “What will make it as distinct as the iPhone?...
    or the iPod…or the iPad?
FOCUS ON THREE BOXES OF THE CANVAS:
VALUE PROPOSITION: features, benefits, competitive, price
CUSTOMER SEGMENTS: who will most want to buy it?
CHANNEL: where should I let them buy it?
                                                43          (c)2010 K+S Ranch
                                                               Consulting Inc.
9 Guesses


                            Guess
Guess    Guess
                                     Guess

                  Guess
        Guess               Guess



        Guess                Guess
A few rules from the “Blank Manifesto”

1. Align all parties upfront…prepare to lose termsheets

2. No VPs, no factories…MVP to the “champagne cork”

3. No more business plans!
4. Commit to Iterate and Pivot, “celebrate,” tolerate failure
   when it propels you forward
5. Integrate Customer Development with Agile Development

6. Agree to very different benchmarks and metrics

7. Faster Cycle Times say Run like hell*

                                                                45
OK, Bob, slow down for a minute….

QUESTIONS!!
A Deeper Look at
      Customer Discovery


Customer    Phase 3      Phase 4
Discovery   Test         Verify, Iterate &
            Product      Expand
            Hypothesis

                                             To Validation



                            Phase 1
            Phase 2         Author
            Test            Hypothesis
            Problem
            Hypothesis
Customer Discovery


      Customer       Customer     Customer   Company
      Discovery      Validation   Creation   Building




•   Stop selling, start listening
•   Develop your Key Hypotheses
•   Test ―Problem‖ Hypotheses with Customers
•   Then test the GEMx ―Solution
•   Confirm Discovery Completion
The Discovery Methodology

•   Remember: ―Search‖ vs. ―Execute‖ This is SEARCH!
•   Customer Discovery can take months or years
•   Each Vertical(some Geographies) have a set of phases
•   Each Discovery mission follows the same 4 steps
    –   Identify and Adjust the ―Variable Hypotheses‖
    –   Test/Validate the PROBLEM with customers
    –   Test/Validate the product SOLUTION with customers
    –   Determine How/When Discovery is complete
• Put the Plan in writing: who, what, when, ―success‖
• Be prepared for lots of wrong and left turns
Customer Discovery
                                       Hypotheses
Product
Hypothesis          Inside the Building
                    Customer
                    & Problem
                    Hypothesis
                                       Distribution
                                       & Pricing
                                       Hypothesis
                                                           Demand
                                                           Creation
                                                           Hypothesis
                                                                              Market Type
                                                                              Hypothesis
                                                                                            Competitive
                                                                                            Hypothesis




               Test “Problem” Hypothesis
   Friendly             ―Problem‖          Customer             Market
   First Contacts       Presentation       Understanding        Knowledge




                    Outside the “Product” Hypothesis
                             Test Building
                                         First Reality      ―Product‖            Yet More   Second
                                         Check              Presentation         Customer   Reality Check

   Verify                                                                        Visits




      Verify the          Verify the          Verify the         Iterate or
      Product             Problem             Business           Exit
                                              Model
Before You Start: #1

• Know your stuff:
  – Lots of casual, ―deep dive‖ conversations
  – You‘ll be ―trading knowledge,‖ so it‘s good to have some
  – Know the vertical to ask good questions, process
    answers
  – Bring technical experts to key technical conversations
• Do your Homework:
  – Market knowledge a key Discovery element
  – Customer sizes, current behavior is important
  – Start early to ―network‖ your way to the right folk
  – Keep detailed records on all interactions
Before You Start: #2

• Capture History/Learning from
  predecessors:
  – Industry knowledge among team members
  – Public, available information resources
  – Consolidate learning experience-to-date
• GET ORGANIZED to
  – Capture/organize/summarize findings
  – Which customers address which hypotheses
  – Find people willing to talk to you
Phase 1: Author Hypotheses


 Phase 3
 Product
                 Phase 4
                 Iterate &
                          • One-time writing
 Concept         Expand
 Testing                    exercise
                          • All other time spent in
               Phase 1      front of customers
Phase 2
Test           Author
Problem
Hypothesis     Hypotheses • Assumes you‘re smart
                            but guessing
Step 1:
Develop Your Hypotheses


•   What are Hypotheses?
•   Where do Hypotheses come from?
•   Why Test them?
•   How do you test them?
•   Why not test them all?
What’s a Hypothesis?

• My (well) educated “best GUESS”
• …in a one-page bullet point list
• Based on Knowledge:
   – …of the Vertical and/or Geography
   – …of similar Markets/Verticals/Countries
   – …that I’ll confirm with the RIGHT types/number of customers

• Goal: One Page of Bullets Per Hypothesis
   –   NO long-winded narratives
   –   NO jargon, simple to understand
   –   Use appendices for detailed product, other specs
   –   Be sure the team agrees
   –   Create a “matched set” of Hypotheses for the vertical/market
MBA295-F
Hypotheses to Focus on:
         5 Will Change Most Often

      1.     Product/Value Proposition
      2.     Customer/Problem
      3.     Distribution/Pricing
      4.     Competitive Hypothesis
      5.     Demand Creation
Product        Customer     Distribution   Competitive   Demand
Hypothesis     & Problem    & Pricing      Hypothesis    Creation
               Hypothesis   Hypothesis                   Hypothesis
1. Product Hypotheses aka Value Proposition

• Features we‘re trying to sell exactly what we‘re building
• Benefits vary widely by customer type, need, behavior
• Product Delivery Schedule flex for big
  opportunities
• Total Cost of Ownership differs by customer, for
  sure

• Other typical elements you can “ignore:”
  – Product Cost/Manufacturing
  – Long-term sales volume(at least for now)
  – Long-term product plan
  – Minimum Viable Product
2. Customer/Problem Hypotheses
• Define the Problem                      price vs performance vs power vs
  pretty?

• Magnitude of the problem                             how much does anybody
  care?

• Types of Customers/Archetypes                                     may questions
  here:
   –   Customer type: specifier/buyer/decisionmaker/saboteur types to watch for
   –   Distinct types: Earlyvangelist vs. mainstream; Direct vs. Indirect; Rent vs Buy
   –   Archetypes: draw me the profile of the ideal customer in this vertical
   –   ―Multi-sided:‖ engineers, architects, consultants, other referrers/validators

• Visionaries who are the Earlyvangelist candidates/why
• Who will grab me and say “I need this
  now.”
3. Distribution/Pricing Hypotheses

• Distribution Model who sells, services, delivers in vertical
• Distribution Diagram how it ―works,‖ who ―owns‖ what
• Channel strategy best approach for
  market/vertical/geography

• Sales Cycle/Ramp direct, referrals, viral growth
• Pricing and channel costs
4. Competitive Hypotheses
•   Key Product Benefits/Attributes
•   Variations on Benefits by customer type
•   Who is out there in this vertical or geography?
•   Why are they important? How do they sell?
•   Which customers use them today? How?
•   What are their weaknesses?
5. Demand Creation Hypotheses

•   Marketing: it‘s all about Sales Leads. Period.
•   How do competitors create demand?
•   How will you create demand in this vertical?
•   Who are influencers/recommenders?
•   Key trade shows? Industry groups/events?
•   Key trends where your product fits, leads?
Phase 2:
                 Test & Qualify Problem
                       Hypothesis
 Phase 3      Phase 4
 Test
 Product
              Iterate &
              Expand       •   Get out of the building
 Hypothesis
                           •   Test the problem
              Phase 1
                           •   Become the customer
Phase 2       Author
Test          Hypothesis   •   Solve a real problem
Problem
Hypothesis
Test & Qualify the Problem:
  1. Plan First Contacts            ALWAYS


Warning: this step may not be needed everywhere!
• ―Let‘s talk about your problems, not the product‖
• Build a Rolodex
• Research Industry Associations, Publications
• Other relationships with company/geographies
• Develop ―Innovators‖ list
• Create reference story/sales script
• Schedule Customer Visits
Test & Qualify the Problem:
2. Create Problem Presentation LIKELY

• Absolutely Not a Sales Pitch:
   – Tests your understanding of the customer‘s problem
   – Determine how serious a problem you‘re solving(demand)
   – Learn about customers: how they work, how they buy
• Learn to Listen, not to Talk or Present
   –   This is a discussion, not a pitch
   –   Avoid large group meetings where possible
   –   Begin to Validate Hypotheses: pain, gain, how they buy
   –   Probe for the customer‘s ‗win‘
• Talk about “possible” Problems/Solutions
• Capture missing market, competitive, marketing data
Test & Qualify the Problem:
3. Customer Understanding ALWAYS


 • Become a Domain Expert
 • Understand their ―Day-in-the Life‖
 • Understand their problems/pain
 • Get a feel of how this impacts their
   life/work
 • Who has similar products to solve this
   problem
 • How do customers learn about new
Test & Qualify the Problem:
       4. Market Knowledge ALWAYS

• Get a feel for the ―lay of the land‖
• Build a complete ―data set‖ on market,
  players
• Adjacent Market players
• Industry Influencers
• Key Analysts
• Attend Key Conferences/Tradeshows
Discovery: The PROBLEM


• What is the problem?
• Who has the problem?
• How important is solving the problem to
   this customer?
• Where do they turn for solutions?
• How valuable is the solution to this
  customer?
• Can I turn interest into an order before I
  retire?
Phase 3:
              Test Product Hypothesis

Phase 3         Phase 4      • First reality check
Test            Iterate &
Product         Expand         w/team
Hypothesis
                             • The product hits the
                Phase 1
                               street
 Phase 2        Hypothesis
 Test
 & Qualify
                             • Lots of customer visits
 Hypothesis
                             • More doses of reality

                             EVERYONE does this in
                             EVERY MARKET…but it
Test Product Hypothesis:
         1. First Reality Check

• How did ―Problem‖ Discovery change the Hypotheses?
• Do any changes yield Pivots? Pricing? Product?
• Build a Workflow Map of customer
    – First: preliminary sales roadmap
    – Second: life before and after the new product
•   Problem scale
•   Key insights
•   How did the product spec match needs?
•   Re-review product feature List
•   Re-review competitive analysis
Test Product Hypothesis:
2. Product Presentation

• Start with Problem Presentation
• Then describe the Product
• Demo if possible
Test Product Hypothesis:
3. More Customer Visits: SOLUTION
        •   Set up More Calls
        •   Validate Solution
        •   Validate Product
        •   Validate Positioning
        •   Understand Customer and Organizational Pain
        •   Validate Pricing and Budget
        •   Understand ―Whole Product‖ needs
        •   Understand Approval Process/sales cycle
TIME OUT: What‘s your Discovery Plan?

•   WHO do you need to talk to?
•   HOW will you find them?
•   WHAT “problem” questions do you have?
•   WHAT “solution” questions do you have?
•   WHEN will you be done?




                                    72       (c)2010 K+S Ranch
                                                Consulting Inc.
Phase 4: Where/When are we done
   with Customer Discovery?

   Customer    Phase 3      Phase 4
   Discovery   Test         Verify, Iterate &
               Product      Expand
               Hypothesis

                                                To Validation



                               Phase 1
               Phase 2         Author
               Test            Hypothesis
               Problem
               Hypothesis
Customer Discovery:
               Exit Criteria
• Consistent answers from “enough”
  people?
• What are the customers’ top problems?
  – How much will they pay to solve them
• Is there high demand for your solution?
  – Do customers agree?
  – How much will they pay? When?
• Draw a day-in-the-life of a customer
• Draw the org chart of users & buyers
• Enough feedback? How much is that?
When You’re Finished…
…do it all again: Validation!

Customer    Phase 3      Phase 4
Discovery   Test         Verify, Iterate &
            Product      Expand
            Hypothesis

                                             To Validation



                            Phase 1
            Phase 2         Author
            Test            Hypothesis
            Problem
            Hypothesis
Where to learn more:
        www.steveblank.com


                 Special Book
                  Offer Here




TONS
  of
INFO
 here
Thanks
 …Now Go PIVOT!



bob@kandsranch.com
www.steveblank.com

Más contenido relacionado

Similar a CBI-dagen Bob Dorf

Jl Creative 2010 Look Book
Jl Creative 2010 Look BookJl Creative 2010 Look Book
Jl Creative 2010 Look Bookjlcreative
 
William Rossbachs Chronological Resume
William Rossbachs Chronological ResumeWilliam Rossbachs Chronological Resume
William Rossbachs Chronological Resumewilliamrossbach
 
Org Design for Design Orgs
Org Design for Design OrgsOrg Design for Design Orgs
Org Design for Design OrgsKristin Skinner
 
120724 Mega Pres Read Only
120724 Mega Pres Read Only120724 Mega Pres Read Only
120724 Mega Pres Read Onlymichael_nagy
 
Innovation programs overview innov event sept 2010 v5.1
Innovation programs overview innov event sept 2010 v5.1Innovation programs overview innov event sept 2010 v5.1
Innovation programs overview innov event sept 2010 v5.1kkeeter
 
Venture talk at duke dogpatch labs juen 13 2012
Venture talk at duke dogpatch labs juen 13 2012Venture talk at duke dogpatch labs juen 13 2012
Venture talk at duke dogpatch labs juen 13 2012Jay Jamison
 
Corporate Overview
Corporate OverviewCorporate Overview
Corporate Overviewjimikemo
 
Course 1 - 2nd session
Course 1 - 2nd sessionCourse 1 - 2nd session
Course 1 - 2nd sessionde-pe
 
Week 5: Handout chris piccin lean - 040117 - day 1
Week 5: Handout   chris piccin   lean - 040117 - day 1Week 5: Handout   chris piccin   lean - 040117 - day 1
Week 5: Handout chris piccin lean - 040117 - day 1Talou Diallo
 
Week 6: chris piccin lean - 040117 - day 1
Week 6:  chris piccin   lean - 040117 - day 1Week 6:  chris piccin   lean - 040117 - day 1
Week 6: chris piccin lean - 040117 - day 1Talou Diallo
 
Social Storytelling: Creating and Curating Content Strategies That Work
Social Storytelling: Creating and Curating Content Strategies That WorkSocial Storytelling: Creating and Curating Content Strategies That Work
Social Storytelling: Creating and Curating Content Strategies That WorkCritical Mass
 
CB Insights Live: Startups And Accelerating Corporate Innovation
CB Insights Live: Startups And Accelerating Corporate InnovationCB Insights Live: Startups And Accelerating Corporate Innovation
CB Insights Live: Startups And Accelerating Corporate InnovationNikunj Sanghvi
 
Guiding Products to Greatness
Guiding Products to GreatnessGuiding Products to Greatness
Guiding Products to GreatnessSVPMA
 
Finergy Analytics Services Profile
Finergy Analytics Services ProfileFinergy Analytics Services Profile
Finergy Analytics Services ProfileRajiv Kumar
 

Similar a CBI-dagen Bob Dorf (20)

Jl Creative 2010 Look Book
Jl Creative 2010 Look BookJl Creative 2010 Look Book
Jl Creative 2010 Look Book
 
William Rossbachs Chronological Resume
William Rossbachs Chronological ResumeWilliam Rossbachs Chronological Resume
William Rossbachs Chronological Resume
 
Org Design for Design Orgs
Org Design for Design OrgsOrg Design for Design Orgs
Org Design for Design Orgs
 
120724 Mega Pres Read Only
120724 Mega Pres Read Only120724 Mega Pres Read Only
120724 Mega Pres Read Only
 
Innovation programs overview innov event sept 2010 v5.1
Innovation programs overview innov event sept 2010 v5.1Innovation programs overview innov event sept 2010 v5.1
Innovation programs overview innov event sept 2010 v5.1
 
Venture talk at duke dogpatch labs juen 13 2012
Venture talk at duke dogpatch labs juen 13 2012Venture talk at duke dogpatch labs juen 13 2012
Venture talk at duke dogpatch labs juen 13 2012
 
Ark Binder1 42611
Ark Binder1 42611Ark Binder1 42611
Ark Binder1 42611
 
Corporate Overview
Corporate OverviewCorporate Overview
Corporate Overview
 
Master shorter
Master shorterMaster shorter
Master shorter
 
Animesh (11-02-2016)
Animesh (11-02-2016)Animesh (11-02-2016)
Animesh (11-02-2016)
 
Killer Products Webinar 29 3 10
Killer Products Webinar 29 3 10Killer Products Webinar 29 3 10
Killer Products Webinar 29 3 10
 
Course 1 - 2nd session
Course 1 - 2nd sessionCourse 1 - 2nd session
Course 1 - 2nd session
 
Week 5: Handout chris piccin lean - 040117 - day 1
Week 5: Handout   chris piccin   lean - 040117 - day 1Week 5: Handout   chris piccin   lean - 040117 - day 1
Week 5: Handout chris piccin lean - 040117 - day 1
 
Week 6: chris piccin lean - 040117 - day 1
Week 6:  chris piccin   lean - 040117 - day 1Week 6:  chris piccin   lean - 040117 - day 1
Week 6: chris piccin lean - 040117 - day 1
 
Week 06_Handout day 1
Week 06_Handout day 1Week 06_Handout day 1
Week 06_Handout day 1
 
Week 05_Handout day 1
Week 05_Handout day 1Week 05_Handout day 1
Week 05_Handout day 1
 
Social Storytelling: Creating and Curating Content Strategies That Work
Social Storytelling: Creating and Curating Content Strategies That WorkSocial Storytelling: Creating and Curating Content Strategies That Work
Social Storytelling: Creating and Curating Content Strategies That Work
 
CB Insights Live: Startups And Accelerating Corporate Innovation
CB Insights Live: Startups And Accelerating Corporate InnovationCB Insights Live: Startups And Accelerating Corporate Innovation
CB Insights Live: Startups And Accelerating Corporate Innovation
 
Guiding Products to Greatness
Guiding Products to GreatnessGuiding Products to Greatness
Guiding Products to Greatness
 
Finergy Analytics Services Profile
Finergy Analytics Services ProfileFinergy Analytics Services Profile
Finergy Analytics Services Profile
 

Último

PDT 89 - $1.4M - Seed - Plantee Innovations.pdf
PDT 89 - $1.4M - Seed - Plantee Innovations.pdfPDT 89 - $1.4M - Seed - Plantee Innovations.pdf
PDT 89 - $1.4M - Seed - Plantee Innovations.pdfHajeJanKamps
 
Borderless Access - Global B2B Panel book-unlock 2024
Borderless Access - Global B2B Panel book-unlock 2024Borderless Access - Global B2B Panel book-unlock 2024
Borderless Access - Global B2B Panel book-unlock 2024Borderless Access
 
Borderless Access - Global B2B Panel book-unlock 2024
Borderless Access - Global B2B Panel book-unlock 2024Borderless Access - Global B2B Panel book-unlock 2024
Borderless Access - Global B2B Panel book-unlock 2024Borderless Access
 
NASA CoCEI Scaling Strategy - November 2023
NASA CoCEI Scaling Strategy - November 2023NASA CoCEI Scaling Strategy - November 2023
NASA CoCEI Scaling Strategy - November 2023Steve Rader
 
Chicago Medical Malpractice Lawyer Chicago Medical Malpractice Lawyer.pdf
Chicago Medical Malpractice Lawyer Chicago Medical Malpractice Lawyer.pdfChicago Medical Malpractice Lawyer Chicago Medical Malpractice Lawyer.pdf
Chicago Medical Malpractice Lawyer Chicago Medical Malpractice Lawyer.pdfSourav Sikder
 
AMAZON SELLER VIRTUAL ASSISTANT PRODUCT RESEARCH .pdf
AMAZON SELLER VIRTUAL ASSISTANT PRODUCT RESEARCH .pdfAMAZON SELLER VIRTUAL ASSISTANT PRODUCT RESEARCH .pdf
AMAZON SELLER VIRTUAL ASSISTANT PRODUCT RESEARCH .pdfJohnCarloValencia4
 
NewBase 25 March 2024 Energy News issue - 1710 by Khaled Al Awadi_compress...
NewBase  25 March  2024  Energy News issue - 1710 by Khaled Al Awadi_compress...NewBase  25 March  2024  Energy News issue - 1710 by Khaled Al Awadi_compress...
NewBase 25 March 2024 Energy News issue - 1710 by Khaled Al Awadi_compress...Khaled Al Awadi
 
Project Brief & Information Architecture Report
Project Brief & Information Architecture ReportProject Brief & Information Architecture Report
Project Brief & Information Architecture Reportamberjiles31
 
IIBA® Melbourne - Navigating Business Analysis - Excellence for Career Growth...
IIBA® Melbourne - Navigating Business Analysis - Excellence for Career Growth...IIBA® Melbourne - Navigating Business Analysis - Excellence for Career Growth...
IIBA® Melbourne - Navigating Business Analysis - Excellence for Career Growth...AustraliaChapterIIBA
 
Graham and Doddsville - Issue 1 - Winter 2006 (1).pdf
Graham and Doddsville - Issue 1 - Winter 2006 (1).pdfGraham and Doddsville - Issue 1 - Winter 2006 (1).pdf
Graham and Doddsville - Issue 1 - Winter 2006 (1).pdfAnhNguyen97152
 
Entrepreneurship & organisations: influences and organizations
Entrepreneurship & organisations: influences and organizationsEntrepreneurship & organisations: influences and organizations
Entrepreneurship & organisations: influences and organizationsP&CO
 
Lecture_6.pptx English speaking easyb to
Lecture_6.pptx English speaking easyb toLecture_6.pptx English speaking easyb to
Lecture_6.pptx English speaking easyb toumarfarooquejamali32
 
Borderless Access - Global Panel book-unlock 2024
Borderless Access - Global Panel book-unlock 2024Borderless Access - Global Panel book-unlock 2024
Borderless Access - Global Panel book-unlock 2024Borderless Access
 
Anyhr.io | Presentation HR&Recruiting agency
Anyhr.io | Presentation HR&Recruiting agencyAnyhr.io | Presentation HR&Recruiting agency
Anyhr.io | Presentation HR&Recruiting agencyHanna Klim
 
Slicing Work on Business Agility Meetup Berlin
Slicing Work on Business Agility Meetup BerlinSlicing Work on Business Agility Meetup Berlin
Slicing Work on Business Agility Meetup BerlinAnton Skornyakov
 
Ethical stalking by Mark Williams. UpliftLive 2024
Ethical stalking by Mark Williams. UpliftLive 2024Ethical stalking by Mark Williams. UpliftLive 2024
Ethical stalking by Mark Williams. UpliftLive 2024Winbusinessin
 
Borderless Access - Global Panel book-unlock 2024
Borderless Access - Global Panel book-unlock 2024Borderless Access - Global Panel book-unlock 2024
Borderless Access - Global Panel book-unlock 2024Borderless Access
 
Fabric RFID Wristbands in Ireland for Events and Festivals
Fabric RFID Wristbands in Ireland for Events and FestivalsFabric RFID Wristbands in Ireland for Events and Festivals
Fabric RFID Wristbands in Ireland for Events and FestivalsWristbands Ireland
 
BCE24 | Virtual Brand Ambassadors: Making Brands Personal - John Meulemans
BCE24 | Virtual Brand Ambassadors: Making Brands Personal - John MeulemansBCE24 | Virtual Brand Ambassadors: Making Brands Personal - John Meulemans
BCE24 | Virtual Brand Ambassadors: Making Brands Personal - John MeulemansBBPMedia1
 
To Create Your Own Wig Online To Create Your Own Wig Online
To Create Your Own Wig Online  To Create Your Own Wig OnlineTo Create Your Own Wig Online  To Create Your Own Wig Online
To Create Your Own Wig Online To Create Your Own Wig Onlinelng ths
 

Último (20)

PDT 89 - $1.4M - Seed - Plantee Innovations.pdf
PDT 89 - $1.4M - Seed - Plantee Innovations.pdfPDT 89 - $1.4M - Seed - Plantee Innovations.pdf
PDT 89 - $1.4M - Seed - Plantee Innovations.pdf
 
Borderless Access - Global B2B Panel book-unlock 2024
Borderless Access - Global B2B Panel book-unlock 2024Borderless Access - Global B2B Panel book-unlock 2024
Borderless Access - Global B2B Panel book-unlock 2024
 
Borderless Access - Global B2B Panel book-unlock 2024
Borderless Access - Global B2B Panel book-unlock 2024Borderless Access - Global B2B Panel book-unlock 2024
Borderless Access - Global B2B Panel book-unlock 2024
 
NASA CoCEI Scaling Strategy - November 2023
NASA CoCEI Scaling Strategy - November 2023NASA CoCEI Scaling Strategy - November 2023
NASA CoCEI Scaling Strategy - November 2023
 
Chicago Medical Malpractice Lawyer Chicago Medical Malpractice Lawyer.pdf
Chicago Medical Malpractice Lawyer Chicago Medical Malpractice Lawyer.pdfChicago Medical Malpractice Lawyer Chicago Medical Malpractice Lawyer.pdf
Chicago Medical Malpractice Lawyer Chicago Medical Malpractice Lawyer.pdf
 
AMAZON SELLER VIRTUAL ASSISTANT PRODUCT RESEARCH .pdf
AMAZON SELLER VIRTUAL ASSISTANT PRODUCT RESEARCH .pdfAMAZON SELLER VIRTUAL ASSISTANT PRODUCT RESEARCH .pdf
AMAZON SELLER VIRTUAL ASSISTANT PRODUCT RESEARCH .pdf
 
NewBase 25 March 2024 Energy News issue - 1710 by Khaled Al Awadi_compress...
NewBase  25 March  2024  Energy News issue - 1710 by Khaled Al Awadi_compress...NewBase  25 March  2024  Energy News issue - 1710 by Khaled Al Awadi_compress...
NewBase 25 March 2024 Energy News issue - 1710 by Khaled Al Awadi_compress...
 
Project Brief & Information Architecture Report
Project Brief & Information Architecture ReportProject Brief & Information Architecture Report
Project Brief & Information Architecture Report
 
IIBA® Melbourne - Navigating Business Analysis - Excellence for Career Growth...
IIBA® Melbourne - Navigating Business Analysis - Excellence for Career Growth...IIBA® Melbourne - Navigating Business Analysis - Excellence for Career Growth...
IIBA® Melbourne - Navigating Business Analysis - Excellence for Career Growth...
 
Graham and Doddsville - Issue 1 - Winter 2006 (1).pdf
Graham and Doddsville - Issue 1 - Winter 2006 (1).pdfGraham and Doddsville - Issue 1 - Winter 2006 (1).pdf
Graham and Doddsville - Issue 1 - Winter 2006 (1).pdf
 
Entrepreneurship & organisations: influences and organizations
Entrepreneurship & organisations: influences and organizationsEntrepreneurship & organisations: influences and organizations
Entrepreneurship & organisations: influences and organizations
 
Lecture_6.pptx English speaking easyb to
Lecture_6.pptx English speaking easyb toLecture_6.pptx English speaking easyb to
Lecture_6.pptx English speaking easyb to
 
Borderless Access - Global Panel book-unlock 2024
Borderless Access - Global Panel book-unlock 2024Borderless Access - Global Panel book-unlock 2024
Borderless Access - Global Panel book-unlock 2024
 
Anyhr.io | Presentation HR&Recruiting agency
Anyhr.io | Presentation HR&Recruiting agencyAnyhr.io | Presentation HR&Recruiting agency
Anyhr.io | Presentation HR&Recruiting agency
 
Slicing Work on Business Agility Meetup Berlin
Slicing Work on Business Agility Meetup BerlinSlicing Work on Business Agility Meetup Berlin
Slicing Work on Business Agility Meetup Berlin
 
Ethical stalking by Mark Williams. UpliftLive 2024
Ethical stalking by Mark Williams. UpliftLive 2024Ethical stalking by Mark Williams. UpliftLive 2024
Ethical stalking by Mark Williams. UpliftLive 2024
 
Borderless Access - Global Panel book-unlock 2024
Borderless Access - Global Panel book-unlock 2024Borderless Access - Global Panel book-unlock 2024
Borderless Access - Global Panel book-unlock 2024
 
Fabric RFID Wristbands in Ireland for Events and Festivals
Fabric RFID Wristbands in Ireland for Events and FestivalsFabric RFID Wristbands in Ireland for Events and Festivals
Fabric RFID Wristbands in Ireland for Events and Festivals
 
BCE24 | Virtual Brand Ambassadors: Making Brands Personal - John Meulemans
BCE24 | Virtual Brand Ambassadors: Making Brands Personal - John MeulemansBCE24 | Virtual Brand Ambassadors: Making Brands Personal - John Meulemans
BCE24 | Virtual Brand Ambassadors: Making Brands Personal - John Meulemans
 
To Create Your Own Wig Online To Create Your Own Wig Online
To Create Your Own Wig Online  To Create Your Own Wig OnlineTo Create Your Own Wig Online  To Create Your Own Wig Online
To Create Your Own Wig Online To Create Your Own Wig Online
 

CBI-dagen Bob Dorf

  • 1. Customer Development: The Second Decade (aka Why Accountants Don’t Run Startups) Bob Dorf serial entrepreneur, startup advisor, partner, “supporting author” www.steveblank.com ©2010 K+S Ranch Consulting Inc.
  • 2. …Is there a roadmap?
  • 3. What’s A Startup? Scalable Large Transition Startup Company - Business Model found - i.e. Product/Market fit - Repeatable sales model - Managers hired A Startup is the temporary organization used to search for a scalable business model3 (c)2010 K+S Ranch Consulting Inc.
  • 4. Venture Firms Invest in Scalable Startups Startup Small Business Scalable Large Startup Company 4 (c)2010 K+S Ranch Consulting Inc.
  • 5. not quite the beginning of startups, but… 100 Years Ago in Detroit
  • 6. Alfred P. Sloan: Inventor of the Modern Corporation Scalable Large Transition Startup Company General Motors, President/Chairman • Cost Accounting • MIT‘s Sloan School • Sloan Kettering • Kettering Institute 6 (c)2010 K+S Ranch Consulting Inc.
  • 7. Billy Durant Scalable Large Transition Startup Company Leading horse-drawn buggy maker 7 (c)2010 K+S Ranch Consulting Inc.
  • 8. Durant vs. Sloan • Dies, rich, honored and famous 8 (c)2010 K+S Ranch Consulting Inc.
  • 9. Durant vs. Sloan • Dies, rich, honored and famous • Dies penniless… …managing a bowling alley 9 (c)2010 K+S Ranch Consulting Inc.
  • 10. Durant vs. Sloan Accountant • Dies managing a bowling alley • Dies, rich, honored and famous 10 (c)2010 K+S Ranch Consulting Inc.
  • 11. WE are here Scalable Large Transition Startup Company 11 (c)2010 K+S Ranch Consulting Inc.
  • 12. 50 years ago: Roger B. Smith Scalable Large Transition Startup Company General Motors, President/Chairman - GM >50% market share - Knew what the customer wanted - 5 years to bring a car to market - Huge inventories eliminate stoppages 12 (c)2010 K+S Ranch Consulting Inc.
  • 13. Toyoda and Ohno Scalable Large Transition Startup Company • Taught by Americans post WWII • Couldn‘t afford inventory like US auto companies • Toured GM plants and… • Built Kaizen/lean manufacturing • Toyota Lean Production System 13 (c)2010 K+S Ranch Consulting Inc.
  • 14. 1960: Agile, Lean, Customer Centric Scalable Large Transition Startup Company • Short runs vs. Long option lists • Agile Product Development • Lean Manufacturing • Continuous Improvement • Customer Development … talk about ‖a day in the life‖ 14 (c)2010 K+S Ranch Consulting Inc.
  • 15. Toyoda/Ohno vs. Smith • Integrate Customer Development vs. Options • Agile Development plus Lean Manufacturing • U.S. Market share goes from 0 to 20% 15 (c)2010 K+S Ranch Consulting Inc.
  • 16. Toyoda/Ohno vs. Smith • Buys $35 billion of Japanese robots to ―fix‖ GM • Market share drops 50% to <25% 16 (c)2010 K+S Ranch Consulting Inc.
  • 17. Toyoda/Ohno vs. Smith Accountant 17 (c)2010 K+S Ranch Consulting Inc.
  • 18. Toyoda/Ohno vs. Smith WE are here 18 (c)2010 K+S Ranch Consulting Inc.
  • 19. 10 Years Ago in Silicon Valley…
  • 20. More startups fail from a lack of customers than from a failure of product development
  • 21. Traditional Product Introduction: Two Implicit Assumptions Customer Problem: known Concept Product Alpha/Beta Launch/ Dev. Test 1st Ship Product Features: known 21 (c)2010 K+S Ranch Consulting Inc.
  • 22. This Was A Plan For Failure • Long-term “lockdown” of Product Development/Engineering • Assumed we understood customer problem/product solution – But they are hypotheses – the facts were outside the building • Sales & Marketing focused on execution to First Customer Ship – Costs and burn rate became front loaded – Execution & hiring predicated on business plan hypothesis • Financial projections assume success – Heavy spending hit if product launch is wrong – Failure always a bad reflection on Management, Board, Investors You don’t know if you’re wrong until you’re out of business, out of money, or (usually) both!
  • 23. 8 Startups later, Steve Blank Drew This… Customer Customer Customer Company Discovery Validation Creation Building ―Do-Over‖
  • 24. Which Turned Into A Model Product Introduction Model Concept Product Alpha/Beta Launch/ Dev. Test 1st Ship became Customer Development Customer Customer Customer Company Discovery Validation Creation Building 24 (c)2010 K+S Ranch Consulting Inc.
  • 25. Customer Development: happy 10th birthday …extensive ―real world‖ deployment …morphed, tested, debated: CE0s, CM0s, VCs, MBAs …start of a new ―entrepreneurial science‖ syllabus with its own library Customer Customer Customer Company Discovery Validation Creation Building Do-Over …a very short Customer Development overview
  • 26. Customer Discovery Customer Customer Customer Company Discovery Validation Creation Building Do-Over • Stop selling, start listening • Test your hypotheses • Continuous Discovery and Feedback • Done by founders…OUTSIDE the building! 26 (c)2010 K+S Ranch Consulting Inc.
  • 27. Customer Validation Customer Customer Customer Company Discovery Validation Creation Building Do-Over • Can I avoid the “land of the living dead?” • Repeatable and scalable business model? • Passionate Earlyvangelists who ―gotta have it?‖ • Return to Discovery without passionate customers 27 (c)2010 K+S Ranch Consulting Inc.
  • 28. The “Do Over” Loop Do-Over • Iteration was at the heart of Customer Development • Fast, agile and opportunistic • (Almost) celebrate failure…whenever it‘s instructive • But it didn‘t have a name ―Do over‖ is just so juvenile
  • 29. Customer Creation Customer Customer Customer Company Discovery Validation Creation Building • Creation comes after proof of sales • Spend to scale based on FACTS, not Hypotheses • Begins only with repeatable, scalable processes for sales, marketing, demand creation 29 (c)2010 K+S Ranch Consulting Inc.
  • 30. Company Building Customer Customer Customer Company Discovery Validation Creation Building • (Re)build company, management, infrastructure • (Re)visit the mission • Go Global • Get a Porsche (or a Towncar)rganization & management • Re look at your mission 30 (c)2010 K+S Ranch Consulting Inc.
  • 31. 100 Startups: National Science Foundation • Apply Customer Development principles to 100 top funded NSF innovators—pay‘em! • ―Short Course‖ at Stanford, midterm update • Remote Mentoring for 25 teams/quarter • Finals: VC ―bakeoff‖
  • 32. So what’s new since 2003?? • Customer Development startups have surged • Customer Development “Rules” emerged • Key Customer Development approaches have converged • Product Development cycle times submerged • …and easy money has been purged
  • 33. Eric Ries: Insight Engineering acts as if features are “known” Concept/ Product Alpha/ Launch/ Seed Dev. Beta Ship Waterfall Requirements Design Solution: known • Eric observed the solution Implementation was unknown in a startup Problem: known Verification • Waterfall process could only Maintenance build known features
  • 34. New #1: Customer + Agile + Commodity = Lean • Solving customer + feature unknowns is the ―Lean Startup‖ Problem: Unknown Solution: Unknown 34 Source: Eric RiesConsulting Ranch (c)2010 K+S Inc.
  • 35. #2: Cycle Times Speed Up • Speed of cycle minimizes cash needs • Minimum feature set speeds up cycle time • Near instantaneous feedback drives feature set 35 (c)2010 K+S Ranch Consulting Inc.
  • 36. New #3: Jon Feiber @ MDV Not all Startups Need Customer Development • Market Risk vs. Technical Risk? – Web is about customers & markets – Biotech is about science & invention – Absolutely valid for .com, social…but differently
  • 37. New #4: Dave McClure Different Metrics for (Web) Startups SEO Campaigns, SEM PR Contests Biz Dev Social Networks Blogs Affiliates Apps & Direct, Tel, Widgets Email TV Viral Domains ACQUISITION Loops Emails & Alerts Emails & widgets Blogs, RSS, Affiliates, News Feeds Contests Ads, Lead Gen, Biz Dev System Events & Subscriptions, Time-based Features ECommerce Website.com From Dave McClure 37 (c)2010 K+S Ranch http://500hats.typepad.com/ Consulting Inc.
  • 38. Startups Need the Right Metrics The Search for the Business Model The Execution of the Business Model Scalable Large Transition Startup Company Startup Metrics - Customer Acquisition Cost Traditional Accounting - Balance Sheet - Viral/Unique/Session Growth - Cash Flow Statement - Customer LTV change - Income Statement - Average Selling Price/Order Size - Monthly burn rate 38 (c)2010 K+S Ranch Consulting Inc.
  • 39. New #5: Business Model, Not Plan a Front-end to Customer Development • Business Plans are Rigid, Static • “No Business Plan Survives First Contact with Customers” who don’t read them --Steve Blank • The Four Steps had: – Business model flow for Enterprise Software – Business model summary for each step – Checklists for Enterprise Software • It said, “modify it to fit your business” • Now we can 39 (c)2010 K+S Ranch Consulting Inc.
  • 40. Osterwalder’s Business Model - Insight key value customer activities proposition relationships key customer partners segments cost revenue structure key streams resources channels 40 (c)2010 K+S Ranch Consulting Inc.
  • 41. Business Model Canvas – Any Business KEY KEY OFFER CUSTOMER CUSTOMER PARTNERS ACTIVITIES RELATIONSHIPS SEGMENTS KEY CHANNELS RESOURCES COST STRUCTURE REVENUE STREAMS 41 (c)2010 K+S Ranch 41 Consulting Inc.
  • 42. Turning Hypotheses to Facts Test Hypotheses: • Product • Market Type • Competition
  • 43. Business Model Practice Session: Let‘s all be Steve Jobs for 15 minutes • “I’m thinking about Apple tv” • “Surely it’s not just another tv set” • “Is it an ecosystem somehow?” • “How will it help all of Apple grow?” • “What will make it as distinct as the iPhone?... or the iPod…or the iPad? FOCUS ON THREE BOXES OF THE CANVAS: VALUE PROPOSITION: features, benefits, competitive, price CUSTOMER SEGMENTS: who will most want to buy it? CHANNEL: where should I let them buy it? 43 (c)2010 K+S Ranch Consulting Inc.
  • 44. 9 Guesses Guess Guess Guess Guess Guess Guess Guess Guess Guess
  • 45. A few rules from the “Blank Manifesto” 1. Align all parties upfront…prepare to lose termsheets 2. No VPs, no factories…MVP to the “champagne cork” 3. No more business plans! 4. Commit to Iterate and Pivot, “celebrate,” tolerate failure when it propels you forward 5. Integrate Customer Development with Agile Development 6. Agree to very different benchmarks and metrics 7. Faster Cycle Times say Run like hell* 45
  • 46. OK, Bob, slow down for a minute…. QUESTIONS!!
  • 47. A Deeper Look at Customer Discovery Customer Phase 3 Phase 4 Discovery Test Verify, Iterate & Product Expand Hypothesis To Validation Phase 1 Phase 2 Author Test Hypothesis Problem Hypothesis
  • 48. Customer Discovery Customer Customer Customer Company Discovery Validation Creation Building • Stop selling, start listening • Develop your Key Hypotheses • Test ―Problem‖ Hypotheses with Customers • Then test the GEMx ―Solution • Confirm Discovery Completion
  • 49. The Discovery Methodology • Remember: ―Search‖ vs. ―Execute‖ This is SEARCH! • Customer Discovery can take months or years • Each Vertical(some Geographies) have a set of phases • Each Discovery mission follows the same 4 steps – Identify and Adjust the ―Variable Hypotheses‖ – Test/Validate the PROBLEM with customers – Test/Validate the product SOLUTION with customers – Determine How/When Discovery is complete • Put the Plan in writing: who, what, when, ―success‖ • Be prepared for lots of wrong and left turns
  • 50. Customer Discovery Hypotheses Product Hypothesis Inside the Building Customer & Problem Hypothesis Distribution & Pricing Hypothesis Demand Creation Hypothesis Market Type Hypothesis Competitive Hypothesis Test “Problem” Hypothesis Friendly ―Problem‖ Customer Market First Contacts Presentation Understanding Knowledge Outside the “Product” Hypothesis Test Building First Reality ―Product‖ Yet More Second Check Presentation Customer Reality Check Verify Visits Verify the Verify the Verify the Iterate or Product Problem Business Exit Model
  • 51. Before You Start: #1 • Know your stuff: – Lots of casual, ―deep dive‖ conversations – You‘ll be ―trading knowledge,‖ so it‘s good to have some – Know the vertical to ask good questions, process answers – Bring technical experts to key technical conversations • Do your Homework: – Market knowledge a key Discovery element – Customer sizes, current behavior is important – Start early to ―network‖ your way to the right folk – Keep detailed records on all interactions
  • 52. Before You Start: #2 • Capture History/Learning from predecessors: – Industry knowledge among team members – Public, available information resources – Consolidate learning experience-to-date • GET ORGANIZED to – Capture/organize/summarize findings – Which customers address which hypotheses – Find people willing to talk to you
  • 53. Phase 1: Author Hypotheses Phase 3 Product Phase 4 Iterate & • One-time writing Concept Expand Testing exercise • All other time spent in Phase 1 front of customers Phase 2 Test Author Problem Hypothesis Hypotheses • Assumes you‘re smart but guessing
  • 54. Step 1: Develop Your Hypotheses • What are Hypotheses? • Where do Hypotheses come from? • Why Test them? • How do you test them? • Why not test them all?
  • 55. What’s a Hypothesis? • My (well) educated “best GUESS” • …in a one-page bullet point list • Based on Knowledge: – …of the Vertical and/or Geography – …of similar Markets/Verticals/Countries – …that I’ll confirm with the RIGHT types/number of customers • Goal: One Page of Bullets Per Hypothesis – NO long-winded narratives – NO jargon, simple to understand – Use appendices for detailed product, other specs – Be sure the team agrees – Create a “matched set” of Hypotheses for the vertical/market MBA295-F
  • 56. Hypotheses to Focus on: 5 Will Change Most Often 1. Product/Value Proposition 2. Customer/Problem 3. Distribution/Pricing 4. Competitive Hypothesis 5. Demand Creation Product Customer Distribution Competitive Demand Hypothesis & Problem & Pricing Hypothesis Creation Hypothesis Hypothesis Hypothesis
  • 57. 1. Product Hypotheses aka Value Proposition • Features we‘re trying to sell exactly what we‘re building • Benefits vary widely by customer type, need, behavior • Product Delivery Schedule flex for big opportunities • Total Cost of Ownership differs by customer, for sure • Other typical elements you can “ignore:” – Product Cost/Manufacturing – Long-term sales volume(at least for now) – Long-term product plan – Minimum Viable Product
  • 58. 2. Customer/Problem Hypotheses • Define the Problem price vs performance vs power vs pretty? • Magnitude of the problem how much does anybody care? • Types of Customers/Archetypes may questions here: – Customer type: specifier/buyer/decisionmaker/saboteur types to watch for – Distinct types: Earlyvangelist vs. mainstream; Direct vs. Indirect; Rent vs Buy – Archetypes: draw me the profile of the ideal customer in this vertical – ―Multi-sided:‖ engineers, architects, consultants, other referrers/validators • Visionaries who are the Earlyvangelist candidates/why • Who will grab me and say “I need this now.”
  • 59. 3. Distribution/Pricing Hypotheses • Distribution Model who sells, services, delivers in vertical • Distribution Diagram how it ―works,‖ who ―owns‖ what • Channel strategy best approach for market/vertical/geography • Sales Cycle/Ramp direct, referrals, viral growth • Pricing and channel costs
  • 60. 4. Competitive Hypotheses • Key Product Benefits/Attributes • Variations on Benefits by customer type • Who is out there in this vertical or geography? • Why are they important? How do they sell? • Which customers use them today? How? • What are their weaknesses?
  • 61. 5. Demand Creation Hypotheses • Marketing: it‘s all about Sales Leads. Period. • How do competitors create demand? • How will you create demand in this vertical? • Who are influencers/recommenders? • Key trade shows? Industry groups/events? • Key trends where your product fits, leads?
  • 62. Phase 2: Test & Qualify Problem Hypothesis Phase 3 Phase 4 Test Product Iterate & Expand • Get out of the building Hypothesis • Test the problem Phase 1 • Become the customer Phase 2 Author Test Hypothesis • Solve a real problem Problem Hypothesis
  • 63. Test & Qualify the Problem: 1. Plan First Contacts ALWAYS Warning: this step may not be needed everywhere! • ―Let‘s talk about your problems, not the product‖ • Build a Rolodex • Research Industry Associations, Publications • Other relationships with company/geographies • Develop ―Innovators‖ list • Create reference story/sales script • Schedule Customer Visits
  • 64. Test & Qualify the Problem: 2. Create Problem Presentation LIKELY • Absolutely Not a Sales Pitch: – Tests your understanding of the customer‘s problem – Determine how serious a problem you‘re solving(demand) – Learn about customers: how they work, how they buy • Learn to Listen, not to Talk or Present – This is a discussion, not a pitch – Avoid large group meetings where possible – Begin to Validate Hypotheses: pain, gain, how they buy – Probe for the customer‘s ‗win‘ • Talk about “possible” Problems/Solutions • Capture missing market, competitive, marketing data
  • 65. Test & Qualify the Problem: 3. Customer Understanding ALWAYS • Become a Domain Expert • Understand their ―Day-in-the Life‖ • Understand their problems/pain • Get a feel of how this impacts their life/work • Who has similar products to solve this problem • How do customers learn about new
  • 66. Test & Qualify the Problem: 4. Market Knowledge ALWAYS • Get a feel for the ―lay of the land‖ • Build a complete ―data set‖ on market, players • Adjacent Market players • Industry Influencers • Key Analysts • Attend Key Conferences/Tradeshows
  • 67. Discovery: The PROBLEM • What is the problem? • Who has the problem? • How important is solving the problem to this customer? • Where do they turn for solutions? • How valuable is the solution to this customer? • Can I turn interest into an order before I retire?
  • 68. Phase 3: Test Product Hypothesis Phase 3 Phase 4 • First reality check Test Iterate & Product Expand w/team Hypothesis • The product hits the Phase 1 street Phase 2 Hypothesis Test & Qualify • Lots of customer visits Hypothesis • More doses of reality EVERYONE does this in EVERY MARKET…but it
  • 69. Test Product Hypothesis: 1. First Reality Check • How did ―Problem‖ Discovery change the Hypotheses? • Do any changes yield Pivots? Pricing? Product? • Build a Workflow Map of customer – First: preliminary sales roadmap – Second: life before and after the new product • Problem scale • Key insights • How did the product spec match needs? • Re-review product feature List • Re-review competitive analysis
  • 70. Test Product Hypothesis: 2. Product Presentation • Start with Problem Presentation • Then describe the Product • Demo if possible
  • 71. Test Product Hypothesis: 3. More Customer Visits: SOLUTION • Set up More Calls • Validate Solution • Validate Product • Validate Positioning • Understand Customer and Organizational Pain • Validate Pricing and Budget • Understand ―Whole Product‖ needs • Understand Approval Process/sales cycle
  • 72. TIME OUT: What‘s your Discovery Plan? • WHO do you need to talk to? • HOW will you find them? • WHAT “problem” questions do you have? • WHAT “solution” questions do you have? • WHEN will you be done? 72 (c)2010 K+S Ranch Consulting Inc.
  • 73. Phase 4: Where/When are we done with Customer Discovery? Customer Phase 3 Phase 4 Discovery Test Verify, Iterate & Product Expand Hypothesis To Validation Phase 1 Phase 2 Author Test Hypothesis Problem Hypothesis
  • 74. Customer Discovery: Exit Criteria • Consistent answers from “enough” people? • What are the customers’ top problems? – How much will they pay to solve them • Is there high demand for your solution? – Do customers agree? – How much will they pay? When? • Draw a day-in-the-life of a customer • Draw the org chart of users & buyers • Enough feedback? How much is that?
  • 75. When You’re Finished… …do it all again: Validation! Customer Phase 3 Phase 4 Discovery Test Verify, Iterate & Product Expand Hypothesis To Validation Phase 1 Phase 2 Author Test Hypothesis Problem Hypothesis
  • 76. Where to learn more: www.steveblank.com Special Book Offer Here TONS of INFO here
  • 77. Thanks …Now Go PIVOT! bob@kandsranch.com www.steveblank.com