Start-ups Need Customer Development

Series: What start-ups critically need - that mature companies don't.

This Venture Wings Series is designed to distinguish how start-ups are different from mature businesses and why understanding these distinctions are critically important to your success as an entrepreneur.

If you read and watch nothing else in our Venture Wings Substack except for Steve Blank’s Customer Development Methodology, I feel I will have provided value to you.

Most start-up ventures I see, (easily over 90% of them) are founded by brilliant, talented, and capable engineers, doctors, scientists and other experts in their industry. They embark on the typical start-up path of raising money to develop their products. THEN work on bringing them to market. They develop products and technologies first. Then develop the business after in which they start thinking about their customers, pricing and go to market GTM).

They build the Product. Then build the Business.

Unfortunately this is often a receipe for business failure.

See why below and how to course-correct. I hope you enjoy it.

Steve Blank's Customer Development Process is must-have knowledge for you - the start-up entrepreneur (and your financial backers). This distinctions about developing customers and revenue will save you huge amounts of time, energy, money and might save your start-up too. If you raise equity or debt financing - it will save their investments too.

Steve Blank’s customer development methodology will give you at least a chance to be successful. Without knowing it, you will quite possibly fail. This presentation is so simple that one would (judgementally) say it should be self-evident for an entrepreneur, but given the failure rates for start-ups - it clearly is not. Customer Development is a lot of common sense that I never received in my MBA (or I wasn’t paying attention in my classes). In the video below you can listen to Steve Blank present his methodology in a Stanford class. Enjoy.

Steve Blank Customer Development Methodology Presentation

Steve Blank’s presentation at Stanford University.

So in summary, in most new, truly innovative businesses - you need to build the business in parallel to building your product or service. Leaving customers and sales channels out of the product development process significantly increases the chance of failure. Developing your customers first (which includes key product requirements to make your first dollar) - is a recipe for success.

Downloading this customer development methodology presentation is available to paid subscribers of Venture Wings.