Customer Development

We put the interview I did with Floyd Tucker of DreamSimplicity about a month ago but in the last two days I have had two people comment to me directly and one tweet about my “three equations and three unknowns” answer: @dorait Sean: Startups are trying to solve 3 equations with three unknowns – http://bit.ly/dq7Sqd Here is the relevant excerpt from the transcript: FLOYD TUCKER:  [...] Can you tell me a little bit about the early customer stage? SEAN MURPHY: We just spend a lot of time on this.  It’s a very

The business buyer views software as the promise of a relationship. This means that you need to assess not only the strength of prospects’ interest but also your customers commitment to the business relationship. They often pay you not just for what your product can do today but for what you promise that it will become with their help. This requires you to continually evaluate customer commitment to use, to pay for, to suggest improvements, and to offer testimonials and referrals that help your sales efforts. One natural approach to evaluating customer commitment is to ask direc

One recurring question is “Why Can’t We Do More to Test “Customer Development” Theories.” Where Steve Blank identifies three kinds of markets–existing, resegmented, new–there are probably thousands, or at least fine gradations if his three. So your “lab equipment” is complex.

Vivek Wadhwa wrote a great post recently called “Ditch the Biz Plan and Buy a Lottery Ticket” which oddly enough contains a number of good pointers on bootstrapping. His opening paragraph explains the title (emphasis added) Hardly a day goes by when I don’t have a rookie entrepreneur ask for advice on raising money from VCs. They usually have a fancy-looking business plan with detailed spreadsheets showing how their company will be worth billions by capturing just 1% of a market. All they need is some financing, and they’ll take the world by storm.