This is an oft-repeated subject. I've reviewed 4 decks in the last week, however, so I'm going to give you my perspective while it's all fresh on my mind.
First, even if you are not seeking funding, go through the exercise of creating a pitch and presenting it to others. The process of creating a good pitch forces you into highly focused, critical thinking that can only serve you and your business well. At the very least, it's the beginning of a sales pitch, or a partner pitch, etc., In fact, it's not a bad 1st exercise for gut check #1. Read More »
Through the evolution of their start-ups, entrepreneurs will face many inflection points, at which decisions made or not made will determine their future. The painful truth is that a wrong turn may lead to its demise, whereas a right turn leads to another inflection point.
Relevant to ongoing discussions about Blank's "Customer Development," I wish to highlight a few of these "inflection points."
Concise - Use the minimum number of words required to describe an idea. Precise - Don't be wishy-washy. Know your strategy, know your customers. Your numbers should add up. State assumptions and be prepared to defend them. Entice - Short and sweet leave the audience wanting more. Your goal is to get a second meeting.
Lewis Mumford (1895-1990) was an American Architecture and Literary critic, as well as Sociologist and Philosopher. I often attribute a particular quote to Mumford, though I can't seem to locate the source. When asked where to put a sidewalk, Mumford responds:
See where the people walk and then pave their path.
How many times have you seen two sidewalks intersecting at 90 degree angles, with worn grass cutting the corners?
There's a fine line between executing on your vision and listening to your customers. Consider Mumford's quote, thinking of the sidewalk as the "vision" and the path as "customer needs."
I am sensing marked uptake on the concept of conducting serious customer research in order to jump start high tech start-ups. It's about time. There's definitely buzz building around Steve Blank'scustomer development methodology. Ego dictates that whatever you're thinking about must be what the world is thinking about and to that, I plead guilty.
"Lean Start-up" is a phrase, I believe, coined by Eric Ries of Lessons Learned. This is a great blog and well worth you spending time with it. In a nutshell, a Lean Start-up is one that combines fast-release, iterative development methodologies (e.g., Agile) with Steve Blank's"Customer Development" concepts. The objective is to efficiently create customer-driven products quickly and with a low burn rate.
Though I believe these principles are likely to fare well for software and even hardware products, it appears that most of those implementing the Lean Start-up are Internet-based products. Without getting too deep into the specific practices, Internet products offer several advantages: Read More »
identified 100+ potential users -- primarily through personal networks;
created interview process, objectives, and questions;
MRD is now in the hands of Engineering who is preparing wireframes. Part of our completed assumptions include the features we believe are required to secure memberships, subscriptions, and advertisers.
We have chosen our temporary blogging platform. I now need to get the "visionary" comfortable blogging.
We have discussed metrics. We have a couple of phases defined, similar to phases of customer and product development. Our primary objective at this point is to get more funding. To do so, we must go as far as we can to prove the business model. It is interesting, that even at this juncture in company development, there is difference in opinion about how to define progress. Some would like to measure progress by deliverables, which is a classic project management approach. And there's nothing wrong with that.
But how do deliverables tie to our objectives? If our objective is to earn additional funding, the "deliverable" is not "a functional web site," but rather proof of the business model. So while proof requires a functional web site, what we actually need to achieve with existing funds is much greater.
As I mentioned before, non-marketing people tend to view marketing as this expensive, monolithic necessary evil, dominated by wasteful "Madison Ave" style marketing, i.e., advertisements, logos and slogans.
In a nutshell, Marketing=PR=Ads=Marcom=Branding.
This is far from the truth. Understanding the basics of marketing and whom to hire for marketing help, is critical for CEOs and technologists to understand.
The key thing to understand is that the type of marketing is highly dependent on Who you are, Who your customers are, and What stage your business is in. Here's a quick and dirty primer: Read More »
I won't name the company until the time is right, but I'll tell you a little about it:
- Company is self-funded. This is a good thing. Not only is it a bad time to seek funding, it's a great time to prove the business model prior to funding.
- Product is barely started. This is a good thing, as well. This should enable us to run customer development principles in parallel with development. The days of figuring out who your customers are after product completion (often after funding) hopefully will soon be over.
- Team of 3: vision guy, domain expert and business development (CEO); developer; marketing guy (me, FWIW).
- Business plan assumes a Freemium model, with additional revenue from highly targeted advertising, lead selling, and a la carte purchases.
Week 1 Tasks:
Document Business Hypotheses - market segment, customers, pain, acquisition methods, etc.
As with most marketing terms, the phrase "market segment" is often tossed about carelessly by entrepreneurs, technologists, and yes, even by some marketers. To my mind, however, segments are a cornerstone of market-driven business plans. Market segments are fundamental to a process-oriented view of taking technology to market and building business plans from the "bottom up."
In 1991, Geoffrey Moore in Crossing the Chasm defined a market segment as:
a set of actual or potential customers
for a given set of products or services
who have a common set of needs or wants, and
who reference each other when making a buying decision.
Most of this is pretty intuitive. In a nutshell, a market segment is comprised of like buyers who share the same pain. But there's more to it. The reference part trips some people up. The key point to understand is that the customers and potential buyers must be willing AND able to reference each other.