Customer development is one the most structured ways to create a startup. It is created by Steve Blank and described in his book the Startup Owners Manual.

CustomerDevelopment-scaled

Steve Blank describes customer development in his book as follows:
The customer development model breaks out all the customer-related activities of an early-stage company into four easy-to-understand steps. The first two steps of the process outline the “search” for the business model. Steps 3 and 4 “execute” the business model that’s been developed, tested, and proven in steps one and two. The steps (Source: Startup Owners Manual):

  • Customer discovery first captures the founders’ vision and turns it into a series of business model hypothesis. Then it develops a plan to test customer reactions to those hypothesis and turn them into facts.
  • Customer validation tests whether the resulting business model is repeatable and salable. If not, you return to customer discovery.
  • Customer creation is the start of execution. It builds end-user demand and drives it into the sales channel to scale the business
  • Company-building transitions he organization from a startup to a company focused on executing a validated model.

Customer Development uses the Business Model Canvas from Alexander Osterwalder as a base. Osterwalters’s Book Business Model Generation (Wiley, 2010) provides the structure for the canvas.

business_model_canvas
Business Model Canvas describes within a business model the flow between key components of the company (Source: Startup Owners Manual):

  • value proposition, which the company offers (product/service, benefits)
  • customer segments, such as users, and payers, or moms or teens
  • distribution channels to reach customers and offer them a value proposition
  • customer relationships to create demand
  • revenue streams generated by the value proposition(s)
  • resources needed to make the business model possible
  • activities necessary to implement the business model possible
  • activities necessary to implement the business model
  • partners who participate in the business and their motivations for doing so
  • cost structure resulting from the business model

We, at ContentForces use Customer Development and Running Lean from Ash Maurya as the base. Running Lean is based on Customer Development but uses an adapted Canvas, called Lean Canvas.

Leave a Reply

Your email address will not be published.