Customer Development for Web Startups
steveblank.comInteresting post, but the first flow-chart seems to perpetuate the (Silicon Valley oriented ?) mindset that a startup should be pursuing:
* Rapid growth
* Frenzied hiring
* Profitability relatively late in the game
* Focus on the product and passionate users (ala Paul Buchheit and Gmail)
* Focus on exactly how you make money from that product
* Hire incrementally at (or just before) the point you are profitable
* Accept slower (less fashionable and exciting ?) growth
It also has the added advantage of freeing you from the hand of the VCs and looking over you shoulder fretting about your burn rate.
"Interesting post, but the first flow-chart seems to perpetuate the (Silicon Valley oriented ?) mindset that a startup should be pursuing:
* Rapid growth, Frenzied hiring and Profitability relatively late in the game "
If anything, Steve Blank reccomends a strategy completely opposed to the above. Read his book. The flowchart may make more sense then?
I confess I haven't read Steve's book (and probably should), but in the context of this post that flow-chart is misleading if it doesn't accurately represent his position.
I think it feels "misleading" because there is no time scale attached to it and maybe the word "Scalable Startup" should be changed. Building a scalable startup is all about the things you highlight... getting to problem/solution fit, then product/market fit... Key is getting there with low burn.
Once you have product/market fit, you have the semblance of a business. You transition towards growth from there.
Yep, maybe a timescale would help. However, I still have some beef with the chart and the mindset it perpetuates.
I just don't like the idea of hiring "managers" before profitability is reached. Seems crazy to me.
I agree and hadn't really noticed the "Hire managers" text till now... Then again Steve is painting a picture for any type of business from a web startup to biotech.
My interpretation of this process for a Web startup is getting to transition using just the founders (plus advisors).
The idea is that you don't move beyond the 1st phase until you've thoroughly proved that your business model will scale. At that point, you DO want to hire managers, and grow your team. You've spent a lot of energy up till that point ensuring that your business formula will work, and it makes sense to take advantage of that by growing quickly.
It is different than the stereotypical valley mindset because the dotcom companies scaled before they knew that they had found a real problem, created the right solution, and sorted out a business model that could scale with more manpower behind it.
Customer development is an often overlooked process that boils down to understanding what is actually useful for the end user or customer, rather than what the entrepreneur thinks is useful.