As an entrepreneur one of the most satisfying feelings was having an idea that few thought was rational, viable, or the common wisdom and building it into a profitable company.
Though it’s over a decade since I’ve done a startup, I had that feeling again over the last few weeks.
You Actually Did This?
When I wrote the Four Steps to the Epiphany and invented the Customer Development process, my goal was to simply explain to myself what was broken in building a startup and propose an alternative path.
The last few weeks have seen a flurry of Lean Startup conferences and presentations from companies actually using Customer Development to find a business model. It’s no longer a theory. And I found myself having the same kind of satisfied (and surprised) reaction.
The Pivot
One of the key ideas of the Customer Development process was that many of the initial assumptions about your business model would probably be wrong, so it built in an iteration loop to fix them. This business model iteration loop – the Pivot is what makes startups agile and opportunistic. “Pivoting” is when you change a fundamental part of the business model.
Five Time Pivot Champ – Xobni
I learned something from all the companies that presented, but the one that made me smile the most was Xobni. Here were two 20-something founders with $12K in the bank who out of necessity became a Lean Startup and used customer and agile development. It’s not clear that if they had initially raised millions of dollars that they would have had a better result.
Take a look at their presentation and see how they got to 5 million users.
Continuous Learning – Dropbox
The Dropbox team also had a great story about pivoting and customer development.
One of their slides said it best, “Learn Early, Learn Often.”
Watch the video of the Dropbox talk.
[vodpod id=Video.3559310&w=425&h=350&fv=allowFullScreen%3Dtrue%26auto_play%3Dfalse%26start_volume%3D25%26title%3DCustomer+Development+Case+Study%3A+Dropbox%26channel%3Dstartuplessonslearned%26archive_id%3D262672510%26]
Lessons Learned
- Most startup business models are initially wrong.
- The process of iteration in search of the successful business model is called the Pivot.
- Learn early, learn often.
- The speed at which you Pivot is inversely proportional to the amount of cash in your bank.
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Filed under: Corporate/Gov't Innovation, Customer Development |
[…] From Steve Blank’s BLOG post You Actually Did This? […]
Great presentation by Xobni. My question is how do you raise $4M after only having 50 users in 1.5 years on a product that isn’t close to what eventually proved a PM fit? I know Angels / VCs invest in ‘people’, but I’m pretty confident that if I had $4M I could get through 10 pivots and get my business to PM fit too.
Second, I don’t see how Dropbox qualifies as a Lean Startup or used CD. I saw their presentation at SLL and was immediately struck by the fact that they did not go through Discovery or Validation. They seemed to basically make something they thought people would need and then launched it and it caught on. Perhaps I’m missing something, but that’s not my understanding of how to “maximize validated learning”.
Steve, we are studying an E school here in Genova, town with good success stories ( blue jeans, Cristoforo Colombo, Bank check, Amedeo Giannini founder of BofA…good references is’n it?)
I’d be happy to exchange ideas with you…can I meet you during the next SVST ( August 23- Sept 2)?….sorry for using your blog…but we are too far on Linkedin!
Is this the same Dropbox that makes the backup software?
Steve,
I have been reading your blog devoutly the last several days and watched the videos of lean start-up conference. Yes, I’d like to say I was there! 😉
here’s a customer development suggestion for you: non-profits. I keep reading & viewing case studies for tech startups. Your work intuitively resonates with non- profit beginnings. Drucker and Collins were each surprised early on to find non-profits gobble up their work.
Maybe a post on how maybe your fresh work might apply to us? As Collins says, non-profit work requires the most strategic leadership. We are springing up all over. Give some insight…
Brian Ross
Reading, PA
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