Curious Jordy

My notes on Steve Blank’s “Customer Development Fireside Chat” with Ravi Belani

Review overview

Criteria 1 8
Criteria 2 6.7
Criteria 39.1
Criteria 46.7

Summary

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Steve Blank posted a link to a great video recently, where he outlines his customer development principles to entrepreneurs at Draper Fisher Jurvetson. For those who haven’t yet heard of Steve, he’s the author of The Four Steps to the Epiphany, which has been recommended by people I trust as a must-buy book for anyone starting a company. I bought a copy, and now I’m going to read it. 🙂
The video was produced and originally blogged by Ravi Belani of DFJ, whom I had the pleasure of meeting myself at the fbRev Lean Startups event a few weeks ago. Small world here, in the valley!
I was furiously scribbling down notes while watching the video, and thought I might as well post them on the internets for all to see.
Disclaimer: these are completely raw and unedited notes, so no guarantees that it all makes perfect sense. If you’re at all confused (and even if you’re not), I highly recommend taking a few minutes to watch at least part of the video. You won’t be bored – Steve is quite an engaging speaker.

*** My Notes ***

Every entrepreneur should at least read the Cliffs Notes version of Crossing the Chasm.

Biggest flaw for an entrepreneur: everything you have in your head is a hypothesis.

Unless you are a domain expert, there is very little fact in your plan on day one.Your plan is nothing more than a set of untested guesses.

You’re not building the product for you, but for your customers.
You have set of hypotheses about what problem you’re solving, for a set of people who are typically not part of your  founding team.
None of these things are answerable inside the building. Get out of the building!

Listen to customers from day one.

Don’t ignore customer feedback while working on vision!!

If someone comes up and tells you “your product sucks”, you respond “you just don’t get it”.

Customer development can’t be done by anyone other than the founder. When you hear it directly, you can’t dismiss it.

==> How to strike balance between internal vision/conviction and market reality:     Need to be a domain expert. Founder of company MUST become the customer.

Draw me 3 pictures, updated at every board meeting:

  • draw me the business model
  • draw me the distribution model
  • draw me the demand creation model

Companies don’t go out of business scaling too late. They go out scaling too early.
If your company is lucky enough to go viral like Facebook, Skype, etc. throw away copy of customer development book.

Customer development is a risk reduction process while you’re finding that hockey stick

Three types of startup

  • Technology risk: i.e. biotech startup
  • Customer risk: i.e. most web 2.0 companies, tech risk is relatively low. Majority of risk is customer and market adoption.
  • Technology + Customer risk: i.e. new tele-communications architecture

Sit down with board and lay out key hypotheses that need to be answered regarding Discovery + Validation.

What kind of market are you attacking?

  • Existing market, create better product: Palm in 1995 vs Handspring in 2000 “get 10% of the smartphone market”
  • Existing market, niche product (re-segmented market)
  • New market: you need to create the market

If you have to spend 20 minutes describing the market, you’re in a new market!

You could be in the flat part of the hockey stick that might stay flat for the entire duration of your company.

Proper definition of “Launch” = get out of the building, not do massive PR

35:00 Cuil launch: classic example of “Silicon Valley launch”

  • Founders were so convinced that they had nailed the market, and the product was so far from that. Vision was great but initial product couldn’t satisfy that vision.