In fact, some early adopters of Lean Startups — those who have already bought into the framework to the extent that they’ve applied its practices into their high tech startup — might be a tad disappointed.  They might have to look a little deeper; there’s no vanity steps to success herein.

Why? In the end, this book is not written for them. But rather, like any good entrepreneur, Eric is aiming at the Mainstream market.  According to Geoffrey Moore in Crossing the Chasm, you can’t address the Mainstream market the same way you learned to do in the early adopter market.  (Hence the chasm.)

In my opinion, for example, early smartphone adopters diss’ the iphone, because Apple targeted the Mainstream, not them.

Eric’s intentions are easily discerned from his definition of Startup:

“A human institution designed to create new products and services under conditions of extreme uncertainty.”

This is clearly not intended to speak (only) to high technology startups, but rather to anywhere uncertainty exists. In my opinion, this is the strength of Ries’ book: it is a call to action to anyone inclined to take action to make things better despite facing severe uncertainty.  There is no boundaries to where you can exercise your entrepreneurship.  And though Eric doesn’t state so explicitly, true entrepreneurs are those willing to admit to the uncertainly within the institutions they inhabit AND to develop solutions that solve problems in the face of that uncertainty.

This definition applies to social entrepreneurship, non-profits, education, government, large successful businesses, and any business with technology risk or market risk, including yes, high tech startups.

Think about this for a second.  If true, the problem with the failure to innovate facing many hugely successful businesses is not that they don’t “act like a startup,” but rather that they don’t understand their own uncertainty.  Most people recognize that many governmental institutions face extreme inefficiencies and could benefit from new products and services designed and implemented in new ways.  The roadblock is, perhaps, that in a society overly dependent upon the advice of “experts,” we are unable to admit to the uncertainties we confront and therefore fail to unleash the creativity necessary to build new systems to solve big problems.

Conversely, those who claim to know everything, in other words face no uncertainty, are either not part of a “startup” or simply not truly entrepreneurial.  The arrogance of certainty leads to doing things the way they’ve always been done.

Make no mistake:  there is much here for high tech startups. Entrepreneurs who are still figuring out how to apply the principles to their businesses have much to learn here, but Eric describes less how to do it and more how to think about doing it. (Teach a man to fish and all that.) Personally, I have found that there are multiple layers of understanding to be had in the Lean Startup world and most of us are just scratching the surface. While some will look for more specific action items, Ries’ approach is honest, since there is no such thing as a startup blueprint.  While “Build, Measure, Learn” is easy to grok, the actual practices one has to put into place to create a learning environment that induces change, that produces products that people care about is hard.  No, It’s really hard.  And it’s one thing to do it in a high-tech startup of a couple of people and it’s another thing entirely do to it in a startup environment of 10 people and it’s another universe to do it in static, change-averse cultures that are in the most dire need of disruption.

Eric’s “stuffing the envelope” analogy, for example, is illuminating and one I hadn’t encountered before.  It turns out that stuffing envelopes one at a time is faster than differentiating the tasks and doing them in batch mode.

“What if it turns out that the customer doesn’t want the product we’re building? Working in small batches ensures that a startup can minimize the expenditure of time, money, and effort that ultimately turns out to be wasted.”

When in execution mode — i.e., when uncertainty has been eliminated — you can optimize processes for speed or cost.  When in learning mode, however, crippling inefficiencies can occur if you’ve optimized execution on the wrong parameters and then learn your assumptions were wrong.

Eric offers stories that run against the grain, which lead you to think differently about how to solve problems, such as increasing efficiency through less specialization and the fastidious elimination of metrics that enforce false certainty (vanity metrics).

There’s more to come. Eric briefly tackles the quest to bring disruptive innovation to the enterprise. At this point, I’m not sold on the methods prescribed.  Ries says he aims to “protect the parent organization from the startup” thereby turning the conventional model “on its head.” The premise seems to be that senior management “springs innovation” onto existing managers.

I’m not sure this is the case.  I think it more likely that senior managers are more distrustful of low margin, small market experiments run by kooky internal entrepreneurs then they are of managers who continue to execute on current products.  Futhermore, there is no real head flipping here since these are really two sides of the same coin. Maybe big company departments need protection from fast moving startup people, but startups need “protection” from the problem of being measured by the same criteria (e.g. profit margin) as existing product.  Big company R&D centers are rife with products that never see the light of day.

My take is that big companies are going to look more to startups to solve the problem of disruptive and even sustaining innovation.  An economy bustling with 1000s of Lean Startups is conducive to enterprises waiting for small entrepreneurs to prove the market before the big guys move in.  It will be interesting to see how this plays out.

The Dark Side The book is perhaps a bit heavy on the development side of the house, but for anyone envisioning innovation, this is the right place to start.  Eric’s discussion of applying the “5 Why’s” is instrumental to understanding the implementation of fail-safe processes.  It would be interesting to see  these principles applied to the dark art of sales and marketing.  Instead of traditional loss reports, what would a no-blame-game 5 Why’s look like to dissect a failed sale?  Poor Customer Support?

But this only means that new ideas of how to apply Lean Startup principles need to be tested, validated and shared.  When discussing my book, the Enterpreneur’s Guide to Customer Development, with Steve Blank, he remarked how the school of thought he pioneered “is what it preaches.” Eric’s book demonstrates that.  Not only because Customer Development is an important aspect of Lean Startups, but because Eric’s own vision and elucidation of Lean Startups has evolved tremendously from when I first heard him present his ideas in June of 2009 in China.

The Lean Startup movement is a framework entrepreneurs of all stripes can use to innovate in their industries. All those who adapt and practice it – who make it their own – will continue to advance the Lean Startup framework.

For some reason, it didn’t get chosen.  : )  Actually, it’s a just slide from my You are (not) a Visionary deck I presented at last week’s Wisconsin’s Forward Technology Conference.

As technologists working on new products and new markets, we tend to forget where we are on the technology adoption lifecycle curve.  That’s a mistake.  Here’s why:

1. Nobody cares

See all that white space under the middle of the curve?  Those are people using products that aren’t yours. They are inundated with new offers every day. They exist in a world of information overload. It doesn’t matter how great your technology is, nobody knows about you, nobody cares about your product.  See that white space under the line marked by the blue dot?  Yeah, me neither.  If, for example, you are building a new web app that demands people spend time on your site, whether you’re the new deal site du jour or a “disruptive” new Q&A site, you’re competing against limited attention, ie., limited time carved out for spending time online.  Never mind your actual competition. You have to either increase the amount of time people spend online, or steal time from Facebook, Twitter, Google, Microsoft, CNN et. al.

2. You have a long way to go

Inside our early adopter bubble, we think a TechCrunch mention is the end all, be all.  What % of the US population has never heard of TC, 97%?  See where the curve starts accelerating up?  That’s about where the chasm lives, waiting to swallow you up.  Of course As Steve Blank likes to point out, you’re lucky if you even get to the chasm. We are easily distracted by minor (albeit clever) improvements to infrequent activity on technology platforms that from a global perspective, are obscure.  Say, like posting photos that look like Polaroids to Twitter. Not only are we enamored with such minutiae, but are ready to declare such features “the winner.” Of what, who knows?  You can try Leapfrogging early adopters, but that requires millions and millions of dollars (see iPhone/iPad).

3. Your entire ecosystem is early

Have you noticed the resurgence of email newsletters? It’s as if technologists finally got the DMA memo that email is (still) the online communication tool of choice among consumers.  In other words, if you want to reach customers, email is better than Twitter, Facebook, SMS, etc.  Not that these aren’t effective, too, for some segments, but like it or not, email is king.  The point is that the distribution of users on the platforms your product depends on, determines your market potential.

If your strategy depends on early majority platforms, you will need patient investors and money to burn. If you aim to leverage established platforms, remember that users generally like them the way they are (that’s why they were successful).  It’s hard to alter user behavior within a platform, too.

Of course, your objective might be to overthrow entrenched players, or perhaps to re-segment their market.  But remember that the momentum achieved by established companies successfully converting the “early majority” crushes your “better” product.

Use your fellow “early adopter” denizens to help vet your product, determine what works to solve pain, reward passion, instigate sharing, but don’t assume your success here and infatuation with your wiz bang technology represents a real market.

The Innovator’s Dilemma not only forms the foundation of Lean Startups and Customer Development, but has brilliant analysis on the role of disruptive vs sustaining innovation in large successful businesses.  In a nutshell, big successful companies successfully adopt sustaining technologies that maintain a steady trajectory of performance/cost improvements.  These same companies, however, fail to adopt disruptive technologies that radically change performance/cost trajectories.  The success of the former dictates the level of success of that business as long as the adopted trajectory is dominant in the marketplace.   These businesses tend naturally to move “up market” to maintain or increase margins as the  (IMO) traverse into late majority adoption in the technology adoption curve.  If and when, however, the disruptive trajectories become dominant (for whatever reason) these same businesses fail, because they are unable to respond to the startups eating up their core business.

Christensen illustrates this dynamic with numerous examples, which I have no intention of going into. Read the book.  The key takeaway for this discussion is “disruptive” means new market and “sustaining” means improvements in existing markets.

Examples of recent disruptive innovation include:

• vaguely, teh Internets
• Google
• SaaS (salesforce.com)
• Facebook
• iPhone
• Twitter

In Christensen’s examples, existing companies develop their own sustaining innovation and startups tend to fail to unseat or even effectively compete against entrenched players.  (In my days at WildPackets, we developed far superior products than the dominant player (Sniffer) and offered them at a far superior price point, but the market share we won was pretty small compared to their overall dominance.  ”You don’t get fired for buying IBM” was definitely analogous in our market.)

Disruptive technologies ripple effect

Today, however, I think we’re seeing that startups are successfully growing businesses based on launching sustaining innovation.  These businesses help other businesses improve performance technologically, in their marketing, sales, customer support, etc.  They provide consumers new entertainment, better shopping experiences, and other quality of life improvements.  I don’t think most of these companies are doing anything terribly disruptive, but help other businesses continue their growth or lower costs, improve margins, etc.  I don’t think there’s anything particularly disruptive and so their market potentially simply doesn’t equate to the “big wins” much of the investment community obsesses over.

The other (related) development is the application of disruptive technology into different markets.  This is what I call “rippling innovation.”  For example, Facebook represents social networking disruption.  There are now hundreds of startups attempting to bring to niche markets similar capabilities.  There are hundreds more leveraging Facebook’s disruption to bring related or derivative products and services to market. Again, most of these will not result in the “big win,” but add real value to their customers.  The latter is a more persuasive reason to invest (terms dependent on size of niche) than presuming an arbitrary return.

These startups succeed not because they are doing anything radically new, but rather because they are using newly available technology to solve the specific needs of carefully-carved niche markets.   (Niche doesn’t necessarily mean small, but does mean smaller.)

What do big companies looks like?

What does it mean to the  big companies if they are no longer leading the way in developing sustaining or disruptive technology?  Lots of acquisitions, of course.  Singles and doubles.  In the past, big companies often folded their acquisitions into the main company.  Christensen argues that this rarely works for disruptive innovation, since the values of the acquiring company (rationally) are ill-suited to new markets.  I’m guessing we’ll see something similar in businesses that acquire sustaining and rippling technology.  Where innovation improves performance to existing customers, the acquired startup will be folded in.  Where innovation adds new market segments, the companies will stay relatively independent.

There used to be (perhaps still is) an ongoing battle in enterprise B2B software between “best of breed” vs “suite.”  In other words, is it best to solve problems ably across a spectrum or solve 1 problem really well, albeit barely addressing other problems, if at all.  There’s something analogous in company building.  Is it better to have a one size fits all solution (or technology carved up by segment) vs a tailored solution by market segment.  I think the latter will win out.

What’s your take?

I think it’s important to understand that there is a new startup reality, that this reality is not based on fads, but represents a fundamental shift — i.e., there is no going back.

First, startups are a global phenomenon. If you don’t believe me, hitch a ride on one of Dave McClure’s Geeks on a Plane trip or note the different languages used to tweet about Lean Startups.  Not only are entrepreneurs creating new startups around the world, but the ability to hire quality resources and manage remote teams improves every year.

Second, startups are cheaper to start. By now this is stating the obvious, but with open source platforms and tools, the relative ease of building product (including hardware) compared to a decade ago, the emergence of social media and marketing analytics, and again, inexpensive global resources, mean that founders can get up and running toward proving elements of their business model for thousands of dollars.

Third, startups are social. Back in the day, the sole purpose of networking events was to exchange business cards and exercise ego.  It was about “what can you do for me.”  Today, it’s about “what can I do for you.”  In my experience, entrepreneurs today embrace the ethos of “providing value,” with the belief that value will someday, somewhere be provided back.  There is a desire for real entrepreneurial community that creates an incredibly fertile environment.

Fourth, startups are data-intelligent. While there’s always the risk of drowning in data, the fact is that entrepreneurs have an incredible amount of intelligence about their customers.  From resources that today seem incredibly mundane like dead-simple survey tools, to narrow, but powerful apps to test and measure user experience and interface design, to sophisticated analytics around marketing funnels and product feature usage, startups are able to “build, test, measure” like never before.

Fifth, startups are savvy.  By this I mean, that they are a smarter about building startups.  Not because they are more intelligent, but because they have 1-4 above.  They are more worldly-wise, they are open, they share, they are eager to learn and they have access to incredible mentoring.

Barring some global catastrophe like, I don’t know, the ice caps melting or something, none of the above is reverting back to the way it was in the past anytime soon.  Unable to predict the future, I’ll leave open whether bigger trends emerge.  But so given the above, what can we discern?

The macro changes described above have created a perfect storm for disruption to the startup environment.  It has given rise of the “super angel.”  Is has resulted in an explosion of incubators, accelerators, co-working spaces and mentorship programs.  It has enabled the successful emergence of the Lean Startup methodology. While in the micro- sense, as individuals, Eric Ries and Steve Blank are changing how startups are build and Dave McClure is helping change the investor landscape, from a macro- point of view, they are the result of disruption, not the cause.

I point this out not to diminish their accomplishments, but on the contrary, to argue 1) criticisms of their activity largely miss the real point; and 2) we don’t know yet how the environment will look, only that it won’t be the way it was before.

So with that, I will go ahead and predict where I think we’re headed.

Already, college students worldwide graduate believing they will launch a startup.  Go to any Startup Weekend or Lean Startup Machine event and listen to interesting pitches being made by weekend warriors.  It’s incredible.  Hundreds of thousands of would be startup entrepreneurs emerging globally every year.  We are witnessing a fundamental shift in power from investors to entrepreneurs.  Local communities are forming everywhere with entrepreneurship as their focus.  These ecosystems are emerging to support “grassroots entrepreneurship.”

All these startups cannot be funded by institutional investors.  Friends and family investors is already an accepted first effort, though VCs were preaching otherwise as recent as a couple of years ago.  Perhaps some still do.  The rise of early stage (even 5-10K) investments through wealthy individuals, angels and incubators is already occurring.

No matter how much some bemoan “dipshit” companies, sorry brother, they are here to stay.

The fall of the “big win” is permanent.  Investors, find a new model.  You can’t just bet on the needle in the ever-growing haystack.

The role of M&A will increase.  Big companies will struggle to keep up with both sustaining and disruptive innovation.  Acquisition is their only hope.  Secondary equity markets to merge synergistic startups will rise in prominence.

On the entrepreneurs’ side, Founders will continue to need to prove business models to get funding, so the use of Lean Startup or Lean Startup-like methodologies will accelerate, as well bootstrapping and crowdsourcing.

While some of this may seem obvious and some wild speculation, the fundamental factors driving the disruption are pretty indisputable.  And it’s important to distinguish between what we can do and changes we can drive versus what is changing us.  Such a perspective can help us at the very least, to picture the forest if not actually see it.

What is being created, in my estimation, is an innovation machine.   High-powered Lean Startups — fast pivoting toward product-market fit and capital efficient — are like “Moore’s Law for Startups”: increasing output on decreasing input, over time.  Imagine an environment where we embrace dozens of startups attacking similar problems, but with different solutions and targeting different segments.  Large businesses are perhaps constructed from small wins.  Big businesses innovate through acquisition.  Such an environment can only lead to more and faster disruptive innovation.

The real question then becomes, perhaps, how does society handle an increasing rate of disruptive innovation?

Right or wrongly, Thomas Robert Malthus (1766-1834) is held out as a representative of inevitable doom and gloom scenarios involving human existence.  Critics often point to technological advances as examples of how humans continually postpone, if not vanquish, Malthus’ scenarios.  There will always be those ready to declare, The End is Near! But there’s no denying the world faces extraordinary problems.  And I can’t help but feel that when you have a powerful groundswell of entrepreneurship occurring on the one hand, and an absurd peak of celebrating ignorance in our society on the other, that we are perhaps reaching toward the next epoch of innovation and enlightenment.

The more one adopts these principles, the more one can find ways to adopt them in all areas of life — they become “meta,” as Patrick Vlaskovits would say — and this event was no exception.  It was Lean Startup Machine’s Minimum Viable Product.

By all accounts (that I’ve heard), the event was a rousing success.  Here are some more or less random thoughts about the weekend, some of which I hope to cover in more depth soon:

1) I’m blown away by the people who attended: smart, opinionated, creative, dedicated team-players with some really interesting ideas.  And they all want to be startup founders.  Many will scoff at whether this is a good thing or not, but I think it’s great.

2) Customer Development is a great conflict resolution tool.  When you reach a loggerhead, formulate opposing opinions as hypotheses and go test them.

3) While there was reluctance among some and a few Engineers stayed inside completely, whole teams hit the streets of NYC to engage customers.  It was awesome to see!  I can’t wait for the video.

4) Clearly enterprise B2B ideas are at a disadvantage when it comes to weekend customer development.  But B2C rocked it and B2SMB took advantage of New York’s vast number of local businesses.

5) Good team balance was essential.  Those teams with naturally social members kicked customer development butt.  People were making phone calls to business owners across the country, setting up Craigslist ads, conducting surveys, interviewing by telephone and pounding the pavement for person-to-person discussions.  There was more combined customer development in one weekend than most startups do in a year!

6) Customer Development is hard.  Several assumptions were crushed over the weekend and for the more brutal failings, there were no easy follow on steps.  It’s one thing for a market segment to fail, it’s another when a core idea is roundly  rejected.  But it happened.   It’s easy to become demoralized by negative validation, but the teams pressed on.

7) We saw some amazing pivots, product mockups that reflected the changes, and then customer validation of the pivots!  That’s pretty amazing for a weekend’s work.

8 ) Some people had a tough time understanding the difference between seeking evidence for their idea and testing their assumptions.

9) This event has great potential.  There were some rough spots, but no major problems and the learning that went on was tremendous.

10) It will be interesting to hear more feedback, but my general impression is that this was the first real encounter with customer development for most of the participants and that the experience they gained was invaluable.  My belief is that to truly grok customer development, you must “get a win;” meaning you need to experience first hand the empowerment that comes from customer validated ideas.  I think we had a lot of that!

If there’s something in particular you’d like to hear more about the weekend, please let me know in comments.

The size of your sales force, the money you make.

Lean is not how much money you spend,

That you like your product and so does your friend.

To test your guess and iterate,

To kill your favorite feature your customers hate,

To exercise ideas, removing the sheen,

That is what makes a startup lean.

Figure 2. My interpretation of Ries' Lean Startup: Customer and product development interrelatedness

*CPS = Customer-Problem-Solution

As shown in Figure 2, customer development and product development are two distinct, but interrelated and iterative processes. As Eric Ries describes, the Customer Development team works on testing the problem-customer-solution assumptions, while the Product Development team tackles the solution.  The product development process receives input from customers indirectly through customer development, and (in the web world) directly through measurement of product usage.  The product development process actively iterates on the product, releasing new or different functionality directly to the customer as quickly as possible.

The customer development process receives input from customers indirectly through product development reports on feature usage, but also directly from customer development processes and analytics.  The customer development process iterates on core business assumptions, product functionality, and acquisition and conversion assumptions, resulting in updated hypotheses, honed messaging, positioning, marketing tactics, and feature requirements.

In the Customer Discovery context, a lean startup is not one that necessarily uses lean manufacturing precepts per se, but rather one that uses fast, iterative development practices in conjunction with customer development methodologies in order to:

1)       Validate core hypotheses (customer-problem-solution),

2)       Produce an MVP,

3)       Achieve Product-Market fit,

4)       Produce a development and marketing roadmap for scaling.

Creating a proper iteration loop requires you to predefine success and failure for each stage, and a means to measure your progress.  For example, in the web-based world, Dave McClure’s AARRR metrics (Acquisition, Activation, Retention, Referral, Revenue) might be applied to measure the stages from concept to product-market fit.

(BTW, if you are interested in being notified when the book is published, sign up here.)

1) The Renaissance Salesperson  — This individual can sell anything to anyone, e.g., ice to an Eskimo, water to a drowning man, aluminum siding to a brick house owner.  The quintessential salesperson, as depicted in Tin Men, Glengarry Glen Ross, et. al., is driven by the confidence that despite all odds, he or she can close.   Product is merely a milestone in order fulfillment.

Quote:

After selling vaporware for 25 years for large vendors like Oracle & Peoplesoft, believe me, I can sell this…

These highly successful sales people turned CEOs sell their trackrecord to raise funds, an exercise deemed a necessary evil to afford hiring the sales team.  This path is clearly fraught with danger.  Ethics aside, it’s one thing for a billion dollar company to promise first and deliver later and quite another for a startup to depend on these tactics to get going.

2) Speak-softly and carry a big Product — This individual believes product development solves market shortcomings.  There is at least some altruism here, in that these individuals believe in building high-quality products that customers want.  Unfortunately, the believe system is often typified by the “if we build it they will come” mentality, whereby products are magically discovered by their customers through the luminance of their high-quality sheen.  Quote:

We can provide the depth of content Google can’t.

In Field of Dreams, Kevin Costner had a magic spirit or baseball god to ensure the players indeed came.  This tactic may work for you, too, assuming you have a marketing god filling the stadium for you.

3) Madison Avenue Marketer — These people recognize that a “Field of Dreams” is pipe-driven. Their answer: a really big megaphone.    In the past, this has meant heavy advertising and lots of PR, topped off with, perhaps a Superbowl ad.  While this method might be right for some (Go-Daddy comes to mind), for most startups, not so much.

These days most startups won’t get enough funding to take this tact, but there’s a smaller version that is equally pernicious. Quote:

What we need to do is create a blog, a Facebook fan page, keep the updated, tweet, max-out SEO, create backlinks, etc., and make as big a splash as possible.  It’s not cheap.

This strategy reminds me of the movie, Wag the Dog, where a political spin-doctor teams with a Hollywood producer to create a false war to distract the population from other matters.   While the analogy doesn’t exactly fit, the creation of a huge spectacle is really a marketing strategy and anytime you are attracting attention you are necessarily distracting, as well.  The point to startups is : 1st) The attraction/distraction are typically transient in nature, even if you have the money to sustain the programs; 2nd) While “wagging the dog” is a purposeful diversion to hide something, “wagging the startup” results in internal diversion away from what you should be doing.  What if your buyer doesn’t tweet or read blogs?

(See Steve Blank’s market type discussions to learn when a big megaphone might be the right approach.)

4) You Can’t Handle the Truth! — I’ve mentioned this before, but one of the most difficult predicaments for entrepreneurs is handling the truth that a market doesn’t exist.  If  you don’t want to hear the answer, don’t ask the question.  In “A Few Good Men,” Lt. Kafee asks the question.

Denial is a powerful human defense mechanism.  Rationalization protects the denial.  Quotes:

The answer was close enough, I phrased the question wrong.
You don’t get it.
All my friends say I’ve nailed it.
They don’t realize they need it yet.
I only need 1% and that’s a no-brainer.
I’d pay for it.  There’s gotta be lots like me.
It makes too much sense.
Their boss will make them buy it.
…

The passion that drives entrepreneurship often hides blind spots.   The point is not to not “go for it,” but rather to make “going for it” refer to proving the market exists, rather than assuming a market exists and building a business based on untested assumptions.

*****

I’m sure there are plenty more, but these are the most typical anti-lean startup archetypes I encounter.  These people don’t necessarily overtly reject continuous deployment, minimum viable product, or customer development, but rather mentally morph the concepts to fit into their existing beliefs of how things “should be done.”  Truth be told, I even recognize some of these traits in myself!

What about you?  Have you encountered these?  Do you recognize yourself in any of these archetypes?  How have you overcome them?

Words are powerful and and the intent of catchy phrases can be lost when removed from their original context.  I brought this up before a few weeks back, when the “Fail Fast” meme was cruising through Twitter and among some cheerleaders, it seems, failing itself had become the best means to success, as if it were the end objective, as if tripping your way to finish line will ensure you are the winner.

So it goes, IMO, with this quote about the customer’s vision:

Early customers are often more visionary than the startup they work with for that product.

I’m not so sure.  So while the initial intent of the phrase is not to misplace ownership of the vision, I fear (perhaps unwarrantedly so) that upon oft-repeats or retweets, that the wrong message emerges.  Not to repeat myself, but one has to treat customer input carefully.

Customers are inherently egocentric and have a limited view.  Their motivation is to solve problems that will increase their market share, increase revenue, or decrease expenses.   They certainly don’t wish to solve their competitor’s problems, though you would be happy to solve both.

“Visionary” customers make up a statistically insignificant portion of your market.

Visionary customers likely understand the problem you’re trying to solve better than you.  They may be working internally to solve the problem.  But the objective of their solution is to solve their internal issues, not achieve your greater market vision. (If they are trying to solve that, they are a competitor, not a customer.)

This is not wordsmithing or semantics, but rather is an important distinction.  The right visionary customers for you are ones who illuminate the path toward achieving your vision.

Is Google’s vision better than Yahoo’s because Google ceded their vision to their customers?

The danger in relying the customer’s vision is that in truth, the customer is not always right.  Their limited perspective and selfish (rightfully so) objectives means they will, if it is in their best interests, change your product to fit their needs.  If you have several customers doing this, and you opportunistically give each customer what they’re asking for, you will face an untenable situation that will prevent you from scaling the business.

Facts Exist Outside the Building, Opinions Reside Within

Your vision.   Your assumptions about your vision.  Test your assumptions.  Validate the vision.  Allow customers to shape your vision.  (This is really tough!  Are speaking with the right customer?)

Non-visionary customers know the features they want.  But customer development is not about gathering feature requirements.  So early on, you must be speaking with early adopters or if you can find them, visionary customers.  As Sean O’Malley says,

[Vision] should be built by triangulating as many inputs as possible.

Here lies the intuitive and creative part of being an entrepreneur.  You are the pied piper, who plays snippets of music you hear customers humming.  You need to select — all through product development, not just at startup time — the minimum features required to keep existing customers satisfied and acquire new ones within your defined segment, while heading toward fulfilling your vision.

Intuit didn’t know that printing checks was going to be the “killer feature” that would win the day (until they talked to customers), but they did envision that a financial management system that made it easy for home computer users to pay bills could be a big winner.

At SuperMac, desktop publishers bought their graphics cards because they solved their application problems.  But Steve Blank had the marketing vision to implement a strategy to target desktop publishers.

Friends & family, employees, partners, customers, investors, analysts & media will all attempt to alter your vision based on their personal experiences and needs.

In The Four Steps to the Epiphany, Steve Blank writes:

[Visionary Customers] are a special breed of customers willing to take a risk on your startup’s product or service because they can actually envision its [your product!] potential to solve a critical and immediate problem]

Your product.  Your vision.  The customer is the expert about their problem.  You may need to shape your vision as you learn more about the problem.

You must skate the fine line between holding onto your vision, while receiving input that helps shape the vision and providing the path toward achieving it.

Comments are welcome!