1. Why Product Managers Need Sneakers Steve Blank www.steveblank.com Twitter: sgblank

2. I Drew This CustomerDiscovery Company Building CustomerValidation Customer Creation Pivot

3. I Called It:Customer Development CustomerDiscovery Company Building CustomerValidation Customer Creation Pivot

4. I Wrote This

5. A Few People Read It

6. I Write a Blog www.steveblank.com

7. Five Short Stories

8. Not All Startups Are Equal

12. 99.7% of all companies

13. ~ 50% of total U.S. workershttp://www.sba.gov/advo/stats/sbfaq.pdf

16. New tech / Unknown product features

19. Total Available Market > $500m -$1B

20. Can grow to $100m/year

21. Focused on execution and processScalable Startup

23. Can grow to $100m/year

24. Business model found

25. Focused on execution and process

27. Typically needs risk capital

30. Professional Mgmt

31. Process

33. Needs Several Pairs of Sneakers Scalable Startup Transition Large Company Search Is very different here Product Management here

34. Why Product Managers Wear Sneakers

36. Repeatable sales model- Managers hired

38. Product/Market fit- Repeatable sales model - Managers hired

40. Cash Flow Statement

42. Viral coefficient

43. Customer Lifetime Value

44. Average Selling Price/Order Size

45. Monthly burn rate

47. Cash Flow Statement

49. Scalable

50. Price List/Data Sheets

52. Pricing/Feature unstable

53. Not yet repeatable

54. “One-off’s”

56. Scalable

57. Price List/Data Sheets

59. Feature Spec’s

60. Competitive Analysis

62. Feature Spec’s

64. Minimum Feature Set

65. Pivots

67. Waterfall Development

68. QA

70. Waterfall Development

71. QA

73. Continuous Learning

74. Self Organizing Teams

75. Minimum Feature Set

77. Known features for line extensions

78. Known customers/markets

80. Unknown feature set

81. Unknown business model

82. Model found by iteration

83. Plan describes “knowns”

84. Known features for line extensions

85. Known customers/markets

87. Always looking at something different

89. Finds your next market

90. Pains in the butt

91. Always looking at something different

93. Product/Market fit- Repeatable sales model - Managers hired You failif you remain a startup!

94. Plan versus Model

96. Customers

97. Channel

98. Demand Creation

99. Revenue/Expenses/ProfitThe template to look like everyone else when you present to VC’s/Management

100. No Business Plan survives first contact with customers

101. So Search for a Business Model

102. What Is a Business Model? Diagram of flows between company and customers Scorecard of hypotheses testing Rapid change with each iteration and pivot Product Management-driven * Alex Osterwalder

103. Business Model = Keeping Score in a Startup CUSTOMER RELATIONSHIP PARTNER NETWORK INFRASTRUCTURE CUSTOMER OFFER TARGET CUSTOMER CORE CAPABILITIES portrays the network of cooperative agreements with other companies explains the relationships a company establishes with its customers VALUE PROPOSITION describes the customers a company wants to offer value to outlines the capabilities required to run a company's business model gives an overall view of a company's bundle of products and services DISTRIBUTION CHANNEL VALUE CONFIGURATION describes the channels to communicate and get in touch with customers describes the arrangement of activities and resources sums up the monetary consequences to run a business model describes the revenue streams through which money is earned COST STRUCTURE REVENUE STREAMS FINANCE

104. Business Model Generation Book

107. Who Does This Search? The Founders Not Employees How?

108. Customer Development

109. Solving For Customer and Product Unknowns:Customer Development

110. Customer Development The founders Get the Hell Out of the Building ^

111. More startups fail from a lack of customers than from a failure of product development

112. Then why do we have: process to manage product development?

113. Then why do we have: Process to manage product development? None to manage customer development?

114. Startup - Back of the Napkin Model Concept/Seed Round Product Dev. Alpha/Beta Test Launch/ 1st Ship

117. Hire Sales VP

118. Hire 1st Sales StaffSales

120. Hire Sales VP

123. Hire Sales VP

126. Waterfall

127. Q/A

129. Customer Discovery CustomerDiscovery CustomerValidation Company Building CustomerCreation Stop selling, start listening Test your hypotheses Continuous Discovery Done by founders

130. Customer Discovery Phase 3 Test ProductHypothesis Phase 4Verify, Iterate & Expand CustomerDiscovery To Validation Phase 1Author Hypothesis Phase 2Test ProblemHypothesis

131. Customer Discovery Hypotheses Customer& ProblemHypothesis Distribution & PricingHypothesis Demand CreationHypothesis Market Type Hypothesis Product Hypothesis Competitive Hypothesis Test “Problem” Hypothesis “Problem”Presentation CustomerUnderstanding MarketKnowledge FriendlyFirst Contacts Test “Product” Hypothesis “Product”Presentation Yet MoreCustomerVisits SecondReality Check First RealityCheck Verify Verify theBusiness Model Iterate orExit Verify theProblem Verify the Product

132. Customer Development in the High-Tech Enterprise Fall 2009 Customer Discovery Customer& ProblemHypothesis Distribution & PricingHypothesis Demand CreationHypothesis Market Type Hypothesis Product Hypothesis Competitive Hypothesis “Problem”Presentation CustomerUnderstanding MarketKnowledge FriendlyFirst Contacts “Product”Presentation Yet MoreCustomerVisits SecondReality Check First RealityCheck Verify theProblem Verify theBusiness Model Iterate orExit Verify the Product Inside the Building Hypotheses Test “Problem” Hypothesis Outside the Building Test “Product” Hypothesis Verify

133. Hypothesis Product Customer/Problem Distribution/Pricing Demand Creation Market Type Competition Customer& ProblemHypothesis Distribution & PricingHypothesis Demand CreationHypothesis Market Type Hypothesis Product Hypothesis Competitive Hypothesis

135. PassionateEarlyvangelists?

137. Customer Validation Get Ready to Sell Prelim Sales & Collateral Materials Prelim Distribution Channel Plan Articulate a Value Proposition Prelim SalesRoadmap Hire a “Sales Closer” Align YourExecutives Sell to “EarlyVangelists” Formalize Advisory Board Refine Channel Roadmap Contact VisionaryCustomers Sell to Channel Partners Sell to EarlyCustomers Refine SalesRoadmap Develop Positioning Present toAnalysts &Influencers CompanyPositioning ProductPositioning Verify Verify theSales Roadmap Verify the Channel Roadmap Iterate or Exit Verify theBusiness Model Verify the Product

139. Iteration without crisis

141. Minimum feature set speeds up cycle time

143. New Product Conundrum Product introductions aren’t predictable Why? Is it the people that are different? Is it the product that are different? Are there different “types” of startups?

144. Three Markets Types Market Type changes everything Sales, marketing and business development differ radically by market type

145. Three Types of Markets Existing Market Faster/Better = High end Resegmented Market Niche = marketing/branding driven Cheaper = low end New Market Cheaper/good enough = creates a new class of product/customer Innovative/never existed before

149. Waterfall / Product ManagementExecution on Two “Knowns” Requirements Product Features: known Design Implementation Verification Customer Problem: known Maintenance Source: Eric Rieshttp://startuplessonslearned.blogspot.com

150. Agile - Customer Problem is KnownExisting Company/Market “Product Owner” or in-house customer Unit of progress: a line of working code Problem: Known Solution: Unknown Source: Eric Rieshttp://startuplessonslearned.blogspot.com

151. Lean StartupCustomer Problem + Product Features are Unknown Problem: Unknown Solution: Unknown Source: Eric Rieshttp://startuplessonslearned.blogspot.com

153. $’s for scale

156. Thanks www.steveblank.com