A startup is not unlike a hero's journey; there's a vision or goal, and a journey filled with obstacles. Just as the hero's story has archetypal patterns, successful startups share the same outline. I.e., there is a true and repeatable path that eliminates or mitigates the most egregious risks and allows the company to grow into a large, successful enterprise. Not only that, but the successful path is nearly completely different from traditional "Product Development" processes and methodologies; Steve Blank calls this path "Customer Development". This book describes the "Customer Development" model.
Essentially, the criteria for success is simple: products developed with constant contact with customers win; products that aren't, lose.
The traditional product development model has four stages: concept/seed, product development, beta test, and launch. This chapter describes these four (seemingly) reasonable stages in detail, using the online grocery company, Webvan as a case study.
Steve then enumerates ten flaws with applying the product development model to startups. They basically boil down to:
- Customers were nowhere in that flow chart
- The flow chart was strictly linear
- Emphasis on execution over learning
- Lack of meaningful milestones for sales/marketing
- Treating all startups alike
Treating all startups alike needs a bit of elaboration. Startups basically fall into four categories:
- Bringing a new product into an existing market
- Bringing a new product into a new market
- Bringing a new product into an existing market and trying to resegment that market as a low-cost entrant
- Bringing a new product into an existing market and trying to resegment that market as a niche entract
Miso falls into the second category above. Startups that fall into the first category tend to have more success executing the more traditional product development model.
What's the alternative? Before we get to that, one final topic is the technology life cycle adoption curve (i.e., adoption happens in phases of early adopters (tech enthusiasts, visionaries), mainstream (pragmatists, conservatives), and skeptics). Between each category is a chasm, the largest is between the early adopters and the mainstream.
Crossing the chasm is a success problem. You're not there yet; "customer development" lives in the realm of the early adopter.
Most startups lack a process for discovering their markets, locating their first customers, validating their assumptions, and growing their business. The Customer Development Model creates a process for these goals. The Customer Development Model
The four stages are: customer discovery, customer validation, customer creation, and customer building.
- Customer discovery: understanding customer problems and needs
- Customer validation: developing a sales model that can be replicated
- Customer creation: creating and driving end user demand
- Customer building: transitioning from learning to executing