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Steve Blank is a driving force in innovation, helping to radically reshape how startups are built and how entrepreneurship is taught. His new Startup Owner's Manual is his latest addition for entrepreneurial practitioners.
Steve created the Customer Development methodology that spawned the Lean Startup movement. He teaches entrepreneurship at Stanford University, U.C. and Columbia. His blog, www.steveblank.com, is "must" reading among entrepreneurs. In 2011, Steve created the Lean LaunchPad, a hands-on class using Customer Development to train students as well as elite teams of scientists selected by the U.S. National Science Foundation.
Steve arrived in Silicon Valley in 1978, as boom times began, joining his first of eight startups. After 21 years the results were two deep craters, several "base hits," one massive "dot-com bubble" home run, and immense experiential learning that resulted in his first break-through book, The Four Steps to the Epiphany.
Bob Dorf is a serial entrepreneur, founding his first success at age 22 and, since then, six more¿"two homeruns, two base hits, and three great tax losses," as he puts it. He's advised and/or invested in a score since. Dorf is often called the "midwife of Customer Development," having critiqued early drafts of The Four Steps to the Epiphany; he and Steve have been friends and colleagues ever since.
Entrepreneurial from his teens, Bob received his last W-2 almost 40 years ago, when he quit his editor's job at New York's WINS Radio to launch his first successful startup. In his "spare" time, he teaches "Introduction to Venturing," on Customer Development and getting startups right, at Columbia Business School.
For tons more insight and helpful tools for entrepreneurs and educators: www.steveblank.com
How to Read This Book vii
Preface xiii
Who is This Book For? xvii
Introduction xxi
A Repeatable Path xxii
Why a Second Decade? xxiv
The Four Steps: A New Path xxix
Getting Started
Chapter 1: The Path to Disaster: A Startup is Not a Small Version of a Big Company 1
Chapter 2: The Path to the Epiphany: The Customer Development Model 19
The Customer Development Manifesto 31
Step One: Customer Discovery
Chapter 3: An Introduction to Customer Discovery 53
Chapter 4: Customer Discovery, Phase One: State Your Business Model Hypotheses 69
Chapter 5: Customer Discovery, Phase Two: "Get Out of the Building" to Test the Problem: "Do People Care?" 189
Chapter 6: Customer Discovery, Phase Three: "Get Out of the Building" and Test the Product Solution 227
Chapter 7: Customer Discovery, Phase Four: Verify the Business Model and Pivot or Proceed 257
Step Two: Customer Validation
Chapter 8: Introduction to Customer Validation 277
Chapter 9: Customer Validation, Phase One: "Get Ready to Sell" 291
Chapter 10: Customer Validation, Phase Two: "Get Out of the Building and Sell!" 357
Chapter 11: Customer Validation, Phase Three: Develop Product and Company Positioning 413
Chapter 12: Customer Validation, Phase Four: The Toughest Question of All: Pivot or Proceed? 429
The Startup Owner's Manual "Site" Map 465
Appendix A: Customer Development Checklists 469
Appendix B: Glossary 531
Appendix C: How to Build a Web Startup: A Simple Overview 541
Acknowledgements 549
About the Authors 553
Index 557
CLEARLY, THE STARTUP OWNER'S MANUAL IS not a novel. This book is a step-by-step how-to guide that details a process for building a successful, profitable, scalable startup. It has more in common with a car repair manual than it does with your favorite page-turner. Don't attempt to read this book in a single sitting or long weekend. It will be your companion-and, we hope, your very best friend-for the six to 30 months or more that it often takes to begin building a successful, scalable startup business.
This book is organized in four distinct sections. The first, Getting Started, describes the Customer Development methodology and ends with the "Customer Development Manifesto," a series of 14 guiding principles for startups deploying the Customer Development process.
Don't read too much at a time.
The next section, Step One, "Customer Discovery," turns the founders' vision into a business model canvas and then into a series of hypotheses. Those hypotheses are turned into experiments, and tested with customers to see if your understanding of the customer problem and proposed solution mesh.
Step Two, "Customer Validation," expands the scope of the business model testing to see if you can get enough orders or users to prove that you have a repeatable and scalable business model.
The fourth key section, found in Appendix A, is a series of Checklists that help you track your progress at every stage of the Customer Development process. Use the checklists at the end of each step (yes, there's one for each) to make sure you have completed all the key tasks outlined in that step. Photocopy them, scan them, and circulate them to team members. But most important, use them to be sure you have completed each step-before you move on to the next.
This book recognizes that Customer Development operates at different speeds for web/mobile startups versus products sold through physical distribution channels. The process to "Get/Keep/Grow" customers-the core job of any business-is different, and web products are built and obtain feedback faster. Recognizing this, we offer parallel tracks through the book: one focused on physical goods and channels, and one focused on web/mobile products and channels. Often, the book addresses them separately. When it does, we begin with the physical channel, then follow with web/mobile.
In each phase of customer discovery and validation, you'll see diagrams like this to help you understand where you are in the process:
The upper row indicates the recommended steps for physical channel startups. The lower row depicts steps for web/mobile startups. When the steps are nearly identical, the boxes merge.
When we're discussing web and mobile channels, products, strategies or tactics, you'll see the at the start of those discussions, always in this typeface, alongside the text that shows you've "changed channels."
It's worth reading both versions of a step before turning to the one explaining "your" business type. When information in one channel is essential for startups in the other, we'll tell you so-and tell you what to read. Web/mobile startup founders should skim the physical section before they read and begin implementing the web/mobile processes in each section.
This book is not a novel. It's a reference manual.
These quotes highlight the 100 or so "big ideas" found throughout the book and offer a "CliffsNotes" or "Twitter" sense of the nearly 600 pages of text.
We see a direct correlation between the entrepreneurs' success and the degree to which their copy is dog-eared, beat up and tattered. USE the book, don't just read it!
We see a direct correlation between the entrepreneurs' success and the degree to which their copy is dog-eared, beat up and tattered.
Use the checklists. There are more than 40 at the back of the book-one for every step.
Don't read too much at a time. This is a reference manual. It's exhausting when read as a book. Take "small bites" of a few sections at a time, at most. Dog-ear it and use Post-it notes to mark your place, and keep the book close at hand so you can refer to it often.
Scan ahead. It gives you context for what you are currently doing. If you're starting work on Chapter 4, for example, quickly scan Chapter 5 first so you understand how what you're doing now supports what comes next.
For a helpful online tool to monitor your team's progress in the Customer Development process, visit
http://www.zoomstra.com/foundersworkbook/
Entrepreneurship is not a cookbook or a checklist. At the end of the day, founders are artists. Don't expect everything...
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