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Customer Development changes almost every aspect of startup behavior, performance, metrics, and, as often as not, success potential.
Unless you have tested the assumptions in your business model first, outside the building, your business plan is just creative writing.
Each industry in a region should develop a playbook that expands and details the strategy and tactics of how to build a scalable startup.
By the beginning of the 21st century, entrepreneurs, led by Web and mobile startups, began to seek and develop their own management tools.
It typically takes multiple iterations and pivots to find product/market fit - the match between what you're building and who will buy it.
At the end of the day, VCs have to provide their limited partners with great returns, or they aren't going to be able to raise another fund.
We now understand the distinction between startups - who search for a business model - versus existing companies - that execute a business plan.
One of the mistakes we'll make because we're human beings is to believe that your vision is a fact. That's the natural optimism of human beings.
The Columbia Startup Lab is a visible symbol of how the university is making entrepreneurship an integral part of all colleges at the university.
Measuring how hard your team is working by counting the number of hours they work or what time they get in and leave is how amateurs run companies.
Visionary CEOs are not 'just' great at assuring world-class execution of a tested and successful business model: they are also world-class innovators.
A startup is not just about the idea: it's about testing and then implementing the idea. A founding team without these skills is likely dead on arrival.
Products are sold because they solve a problem or fill a need. Understanding problems and needs involves understanding customers and what makes them tick.
VCs like acquisitions as much as IPOs because the acquiring companies often can rationalize paying large multiples over the current valuation of the startup.
First and deadliest of all is a founder's unwavering belief that he or she understands who the customers will be, what they need, and how to sell it to them.
The goal of listening to customers is not to please every one of them. It's to figure out which customer segments serve your needs - both short and long term.
The convergence of digital trends, along with the rise of China and globalization, has upended the rules for almost every business in every corner of the globe.
One of the biggest mistakes entrepreneurs make is not understanding the relationship they have with their investors. At times, they confuse VCs with their friends.
Learning how to keep track of inventory and cash flow and creating an income statement and a balance sheet are great skills to learn for managing existing businesses.
If you've never founded a company, rest assured it never happens as elegantly and smoothly as articles in 'Inc.' and other business magazines or case studies suggest.
Unfortunately, as you hire more people, the casual, informal 'do what it takes' culture, which worked so well at less than 40 people, becomes chaotic and less effective.
Founding a company is a sheer act of will and tenacity in the face of immense skepticism from everyone - investors, customers, friends, family, and employees, to name a few.
The introduction of new technology is always disruptive to existing markets, particularly to content/copyright owners who sell through well-established distribution channels.
It's worth noting that everything - from the Internet to electric cars, genomic sequencing, mobile apps, and social media - were pioneered by startups, not existing companies.
Innovation in an existing company is not just the sum of great technology, key acquisitions, or smart people. Corporate innovation needs a culture that matches and supports it.
At the commencements I attended, graduates were classified by their academic rankings. Outstanding academic performance was noted in the programs and awarded with special honors.
At the intersection of food science and technology, food replacement startups are creating substitutes for the basic components of meals as well as replacements for complete meals.
At some major events - your birth and death, for example - while you may be the center of attention, the events are managed by others and are more important to the people around you.
Great VCs do everything they can to make you successful. But just like your bank, credit card company, mortgage holder, etc. they are not confused where their long-term loyalty lies.
Once you establish what activities your company needs to do, the next question is, 'How do these activities get accomplished?' i.e. what resources do I need to make the activities happen?
History has shown that time and market forces provide equilibrium in balancing interests, whether the new technology is a video recorder, a personal computer, an MP3 player, or now the Net.
Using the Product Development Waterfall diagram for Customer Development activities is like using a clock to tell the temperature. They both measure something, but not the thing you wanted.
Most people appear to live an unexamined life, cruising through the years without much reflection about what it means, and/or taking what life hands them and believing it's all predestined.
The art of entrepreneurship and the science of Customer Development is not just getting out of the building and listening to prospective customers. It's understanding who to listen to and why.
While 'The Owner's Manual' is not a formula for guaranteed success by any means, we're confident it will help reduce the failure rate of most startups that use our Customer Development process.
Decades before we were able to articulate the value of 'getting out of the building' and the Lean Startup, the value in having skunk works controlling their own distribution was starkly evident.
The Lockheed Skunk Works, led by Kelly Johnson, was responsible for its Advanced Development Projects - everything from the P-80, the first U.S. jet fighter plane, to the U-2 and A-12 spy planes.
Entrepreneurial education in grades K-12, if it exists at all, still focuses on teaching potential entrepreneurs small business entrepreneurship - the equivalent of 'how to run a lemonade stand.'
My imagination ran 24/7, and to me, every problem was a challenge to solve and new product to create. It wasn't until I started teaching that I realized that not everyone's head worked the same way.
Customer discovery is the process of translating a founder's vision for the company into hypotheses about each component of the business model and creating a set of experiments to test each hypothesis.
Value Proposition Design is a 'must have' for anyone creating a new venture. It captures the core issues around understanding and finding customer problems and designing and validating potential solutions.
We now know that something between 85 and 90 percent of most software product features are unwanted and unneeded by customers. That is an enourmous ammount of waste of time and money that ends up on the floor.
Out of electronics school, my first assignment was to a fighter base in Florida. My roommate, Glen, would become my best friend in Florida and Thailand as we were sent to different air bases in Southeast Asia.
Any dispassionate observer would recognize that on Day One, a start-up has no customers, and unless the founder is a true domain expert, he or she can only guess about the customer, problem, and business model.
Startups are companies that are still in the process of searching for a business model. Ventures that are further along and executing their business models are no longer startups; they are early-stage companies.
For busy young adults, the lure of meal substitutes is simple - it's all about convenience - the level of effort to open a bottle or package is minimal, and the time from thinking you're hungry to eating is almost zero.
The food replacement category is what it sounds like - companies are substituting plants or food grown in a lab to replace meat, fish, eggs, milk - or, like Soylent, to package nutritionally complete meals into a drink.
The core tenant of what I teach is there are no facts inside the building. When we come up with a new idea, we tend to slide into our own reality distortion field to convince ourselves and others. And that's not healthy.
For Customer Development to succeed, everyone on the team - from investor or parent company to engineers, marketers and founders - needs to understand and agree that the Customer Development process is different to its core.
People talk about getting lucky breaks in their careers. I’m living proof that the “lucky breaks” theory is simply wrong. You get to make your own luck... The world is run by those who show up…not those who wait to be asked.