In this volume, Steven Gary Blank introduces and then explains in thorough detail the "Customer Development" model, one that he characterizes as "a paradox because it is followed by successful startups, yet has been articulated by no one [other than Blank, prior to its initial publication in 2005]. Its basic propositions are the antithesis of common wisdom yet they are followed by those who achieve success. It is the path that is hidden in plain sight." In fact, Blank insists that what he offers is a "better way to manage startups. Those that survive the first few tough years "do not follow the traditional product-centric launch model espoused by product managers of the venture capital community." And this is also true of product launches in new divisions inside larger corporations or in the "canonical" garages.
Moreover, "through trial and error, hiring and firing, successful [whatever their nature and origin] all invent a parallel process to Product Development. In particular, the winners invent and live by a process of customer learning and discovery. I call this process `Customer Development,' a sibling to `Product Development,' and each and every startup that succeeds recapitulates it, knowingly or not." Wow! This really is interesting stuff and I haven't even begun to read the first chapter.
Few start ups succeed, most don't, and Blank notes that each new company or new product startup involves (borrowing from Joseph Campbell) a "hero's journey" that begins with an almost "mythological vision - a hope of what could be, with a goal few others can see. It is this bright and burning vision that differentiates the entrepreneur from big company CEOs and startups from existing businesses.Read more ›
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Note: The review that follows is of the Third Edition, published in 2007. Other than minor revisions and refinements, the material in the Fifth Edition is essentially the same. "A few typos were corrected and unfinished sentences completed." Blank would be the first to suggest that his book is literally a "work in progress" as is the revolution to which he continues to contribute. I especially appreciate having all of the information, insights, and counsel in a hardbound volume and only regret that it has no Index. Let's all hope that one is provided in the next edition.
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In this volume, Blank introduces and then explains in thorough detail the "Customer Development" model, one that he characterizes as "a paradox because it is followed by successful startups, yet has been articulated by no one [person other than Blank, prior to its initial publication in 2005]. Its basic propositions are the antithesis of common wisdom yet they are followed by those who achieve success. It is the path that is hidden in plain sight." In fact, Blank insists that what he offers is a "better way to manage startups. Those that survive the first few tough years "do not follow the traditional product-centric launch model espoused by product managers of the venture capital community." And this is also true of product launches in new divisions inside larger corporations or in the "canonical" garages.
Moreover, "through trial and error, hiring and firing, successful [whatever their nature and origin] all invent a parallel process to Product Development. In particular, the winners invent and live by a process of customer learning and discovery.Read more ›
Was this review helpful to you?
Most Helpful Customer Reviews on Amazon.com (beta)
393 of 399 people found the following review helpful
What is customer development?Jan. 19 2006
- Published on Amazon.com
This book is required reading at our company - even for the engineers. Following its methodology, we were able to uncover flaws in our product and business plan and correct them before they became costly. Rapid iteration, customer feedback, testing our assumptions - these are all part of our company culture, thanks in no small part to this book. Essential reading for anyone starting something new.
Above is what I wrote about this book two years ago. Here's what I wrote on my blog, after having more time to think about it:
What is customer development?
When we build products, we use a methodology. For software, we have many - you can enjoy a nice long list on Wikipedia. But too often when it's time to think about customers, marketing, positioning, or PR, we delegate it to "marketroids" or "suits." Many of us are not accustomed to thinking about markets or customers in a disciplined way. We know some products succeed and others fail, but the reasons are complex and the unpredictable. We're easily convinced by the argument that all we need to do is "build it and they will come." And when they don't come, well, we just try, try, again.
What's wrong with this picture?
Steve Blank has devoted many years now to trying to answer that question, with a theory he calls Customer Development. This theory has become so influential that I have called it one of the three pillars of the lean startup - every bit as important as the changes in technology or the advent of agile development.
You can learn about customer development, and quite a bit more, in Steve's book The Four Steps to the Epiphany. I highly recommend this book for all entrepreneurs, in startups as well as in big companies. Here's the catch. This is a self-published book, originally designed as a companion to Steve's class at Berkeley's Haas school of business. And Steve is the first to admit that it's a "turgid" read, without a great deal of narrative flow. It's part workbook, part war story compendium, part theoretical treatise, and part manifesto. It's trying to do way too many things at once. On the plus side, that means it's a great deal. On the minus side, that has made it a wee bit hard to understand.
Some notable bloggers have made efforts to overcome these obstacles. VentureHacks did a great summary, which includes slides and video. Marc Andreeson also took a stab, calling it "a very practical how-to manual for startups ... a roadmap for how to get to Product/Market Fit." The theory of Product/Market Fit is one key component of customer development, and I highly recommend Marc's essay on that topic.
Still, I feel the need to add my two cents. There's so much crammed into The Four Steps to the Epiphany that I want to distill out what I see as the key points:
1. Get out of the building. Very few startups fail for lack of technology. They almost always fail for lack of customers. Yet surprisingly few companies take the basic step of attempting to learn about their customers (or potential customers) until it is too late. I've been guilty of this many times in my career - it's just so easy to focus on product and technology instead. True, there are the rare products that have literally no market risk; they are all about technology risk ("cure for cancer"). For the rest of us, we need to get some facts to inform and qualify our hypotheses ("fancy word for guesses") about what kind of product customers will ultimately buy.
And this is where we find Steve's maxim that "In a startup no facts exist inside the building, only opinions." Most likely, your business plan is loaded with opinions and guesses, sprinkled with a dash of vision and hope. Customer development is a parallel process to product development, which means that you don't have to give up on your dream. We just want you to get out of the building, and start finding out whether your dream is a vision or a delusion. Surprisingly early, you can start to get a sense for who the customer of your product might be, how you'll reach them, and what they will ultimately need. Customer development is emphatically not an excuse to slow down or change the plan every day. It's an attempt to minimize the risk of total failure by checking your theories against reality.
2. Theory of market types. Layered on top of all of this is a theory that helps explain why different startups face wildly different challenges and time horizons. There are three fundamental situations that change what your company needs to do: creating a new market (the original Palm), bringing a new product to an existing market (Handspring), and resegmenting an existing market (niche, like In-n-Out Burger; or low-cost, like Southwest Airlines). If you're entering an existing market, be prepared for fast and furious competition from the incumbent players, but enjoy the ability to fail (or succeed) fast. When creating a new market, expect to spend as long as two years before you manage to get traction with early customers, but enjoy the utter lack of competition. What kind of market are you in? The Four Steps to the Epiphany contains a detailed approach to help you find out.
3. Finding a market for the product as specified. When I first got the "listening to customers" religion, my plan was to talk to as many customer as possible, and build them as many features as they asked as possible. This is a common mistake. Our goal in product development is to find the minimum feature set required to get early customers. In order to do this, we have our customer development team work hard to find a market, any market, for the product as currently specified. We don't just abandon the vision of the company at every turn. Instead, we do everything possible to validate the founders' belief.
The nice thing about this paradigm is it sets the company up for a rational discussion when the task of finding customers fails. You can start to think through the consequences of this information before it's too late. You might still decide to press ahead building the original product, but you can do so with eyes open, knowing that it's going to be a tough, uphill battle. Or, you might start to iterate the concept, each time testing it against the set of facts that you've been collecting about potential customers. You don't have to wait to iterate until after the splashy high-burn launch.
4. Phases of product & company growth. The book takes its name from Steve's theory of the four stages of growth any startup goes through. He calls these steps Customer Discovery (when you're just trying to figure out if there are any customers who might want your product), Customer Validation (when you make your first revenue by selling your early product), Customer Creation (akin to a traditional startup launch, only with strategy involved), and Company Building (where you gear up to Cross the Chasm). Having lived through a startup that went through all four phases, I can attest to how useful it is to have a roadmap that can orient you to what's going on as your job and company changes.
As an aside, here's my experience: you don't get a memo that tells you that things have changed. If you did, it would read something like this: "Dear Eric, thank you for your service to this company. Unfortunately, the job you have been doing is no longer available, and the company you used to work for no longer exists. However, we are pleased to offer you a new job at an entirely new company, that happens to contain all the same people as before. This new job began months ago, and you are already failing at it. Luckily, all the strategies you've developed that made you successful at the old company are entirely obsolete. Best of luck!"
5. Learning and iterating vs. linear execution. I won't go through all four steps in detail (buy the book already). I'll just focus on the paradigm shift represented by the first two steps and the last two steps. In the beginning, startups are focused on figuring out which way is up. They really don't have a clue what they should be doing, and everything is guesses. In the old model, they would probably launch during this phase, failing or succeeding spectacularly. Only after a major, public, and expensive failure would they try a new iteration. Most people can't sustain more than a few of these iterations, and the founders rarely get to be involved in the later tries.
The root of that mistake is premature execution. The major insight of The Four Steps to the Epiphany is that startups need time spent in a mindset of learning and iterating, before they try to launch. During that time, they can collect facts and change direction in private, without dramatic and public embarrassment for their founders and investors. The book lays out a disciplined approach to make sure this period doesn't last forever, and clear criteria for when you know it's time to move to an execution footing: when you have a repeatable and scalable sales process, as evidenced by early customers paying you money for your early product.
It slices, it dices. It's also a great introduction to selling and positioning a product for non-marketeers, a workbook for developing product hypotheses, and a compendium of incredibly useful tactics for startups young and old.
When I first encountered this book, my first impulse was as follows. I bought a bunch of copies, gave them out to my co-founders and early employees, and then expected the whole company's behavior would radically change the next day. That doesn't work (you can stop laughing now). This is not a book for everyone. I've only had luck sharing it with other entrepreneurs who are actually struggling with their product or company. If you already know all the answers, you can skip this one. But if you find some aspect of the situation your in confusing, maybe this will provide some clarity. Or at least some techniques for finding clarity soon.
My final suggestion is that you buy the book and skim it. Try and find sections that apply to the startup you're in (or are thinking of building). Make a note of the stuff that doesn't seem to make sense. Then put it on your shelf and forget about it. If your experience is anything like mine, here's what will happen. One day, you'll be banging your head against the wall, trying to make progress on some seemingly intractable problem (like, how the hell do I know if this random customer is an early adopter who I should spend time listening to, or a mainstream customer who won't buy my product for years). That's when I would get that light bulb moment: this problem sounds familiar. Go to your shelf. Get down the book, and be amazed that you are not the first person to tackle this problem in the history of the world.
I have been continually surprised at how many times I could go back to that same well for wisdom and advice. I hope you will be too.
55 of 56 people found the following review helpful
A must have for anyone starting a company!!!!!Nov. 26 2005
- Published on Amazon.com
Every once in awhile you come across a book that changes how you live your life or in this case how you start and operate a company. For years people have talked about "Crossing the Chasm" as the book to read if you are building a company. What you didn't realize is that it takes a few years of hard work to get your company ready to cross the chasm. Well if you are looking for the book that provides the roadmap to the chasm, then this is the book.
What is amazing about this book is how it takes you step by step thru how to actually figure out the right product and market for you startup. It has actual steps to follow, something many books lack.
On the down side, the book needs a good edit as it seems to be a companion to the author's course at Berkeley.
All in all, if you got one idea that saves you making a mistake in the early days of your startup, this book is worth it.
106 of 117 people found the following review helpful
Tough to readJuly 2 2010
- Published on Amazon.com
I had high hopes for this book. I have listened to the author speak, and while I disagreed with some of his hypotheses (such as startups don't need QA), he brings valuable experiences to his view on startups.
Since I am a direct target of the book (CEO of a startup), I was hoping that I would walk away with as many sparks as I did from reading the Innovator's Dilemma. Unfortunately, I found the book, for me at least, often struggled with getting the point across.
This book raises some very good points about the downfalls of waterfall process, and how the Agile processes for engineering apply equally or more so to marketing and sales. There are some excellent points throughout about how the CEO and other key execs need to validate the market and pivot in order to get to success.
But, there is certain snarkiness to the book that detracts, and I often felt that the material was extremely wordy. I didn't get to "aha" moments along the way. I often judge management books by how many pages I mark to follow up on, and whether I want my team to read the book. In this case, I marked two pages for follow up, but can't recommend it to my team.
There are some important pieces of information, but it is so much work to get to them.
The book is at its best when it is going through case studies, showing organizations that survived or failed, and missteps they made along the way. I wish the book had far more of such case studies in it, since for me at least, I found them much more valuable for showcasing the ideas.
37 of 39 people found the following review helpful
Great content, but overpriced for the qualityAug. 10 2011
- Published on Amazon.com
I really liked this book (a lot), and I debated whether to give it a 3 or a 4, but ultimately decided to go with 3 because it has some major problems.
First, the things I liked about the book are that it is based on tried-and-true methods from Steve Blank and many of the companies that he's coached, so the fundamentals seem solid. I really like the worksheets in the back of the book as well, so I don't have to go and reread entire chapters to remember what to include in my documents, or what I should be focusing on when talking to customers.
However; the problems with this book are numerous. I've ordered them from most to least important (IMHO):
- The book is heavily geared towards Enterprise and B2B products. There is some mention of consumer products, but it is inconsistent and insufficient coverage in my opinion. There should have been significantly more coverage on the differences of each step as it applies to a B2B vs. B2C product.
- The book largely assumes you have a team of people who already have a business plan written and have been funded. This is quite a bit to filter through if you're bootstrapping a web startup with two guys working out of a coffee shop part time.
- It is way too pricey for the quality (39.99 when I bought it)
- It was NOT PROOFREAD WELL. There are so many typos and grammatical errors in the beginning of the book, that I almost tossed it aside. It seems to get a bit better after the first few chapters.
- The print/layout quality is poor - sloppy diagrams with hard-to-read black letters on dark gray boxes in several cases, inconsistent use of spacing throughout the book, randomly switching fonts in the middle of a paragraph
- Overall, Its a bit dry and excessively verbose at times
Though I think the price should be 25%-50% of what it currently is (39.99) I think the purchase was worth it overall because AFAIK there are no competing books that provide equally good advice on the topic with better quality. I would still buy the book knowing what I know now.
Update (10/01/2011): One book that I found that takes the sage advice from Four Steps to the Epiphany and evolves and presents it in a much more actionable format is Running Lean by Ash Maurya. This book is mostly geared towards web startups. The book can only be found in eBook format currently and can be purchased here: [...] . The price is less than half of Four Steps, it is a much quicker read, and gives you much more detail on how to do things such as customer problem and solution interviews. If you are building a web or mobile product, I would still suggest reading Four Steps to the Epiphany, but would quickly follow that up by reading Running Lean. I would then follow the step-by-step workflows in Running Lean instead of those in Four Steps to the Epiphany.
28 of 32 people found the following review helpful
will change your [business] life...Jan. 9 2006
Gregory M. Sparzo
- Published on Amazon.com
I first heard about this book from a potential investor and immediately ordered it on his recommendation. This book is FANTASTIC. It creates a step-by-step process for determining if your business "vision" is really a "hallucination." You might be successful without reading this book, but your odds will increase if you do. I cannot recommend this book strongly enough. Ignore it at your peril.