- Product managers at startups need to wear sneakers because they must actively search for customers outside the building, unlike at large companies where customers are known.
- Startups go through phases of customer discovery, validation, and creation where hypotheses about customers and products are tested iteratively through contact with potential users.
- There are three types of markets that determine how startups should approach sales, marketing, and business development - existing, resegmented, and new markets.
- Engineering approaches also differ between startups searching for problems/solutions and large companies executing known requirements. Founders must lead the search while product management can help or hinder it.
10. Feed the familySmall BusinessStartupExit Criteria Business Model found- Profitable business Existing team< $1M in revenueSmall Business Startupsknown customer known product
11. Feed the familySmall BusinessStartup- Business Model found- Profitable business Existing team< $10M in revenueSmall Business Startups5.7 million small businesses in the U.S. <500 employees
28. What Silicon Valley means when they say “Startup”ScalableStartupLarge CompanySearch customer needs/product features found i.e. Product/Market fit Business Model found- Repeatable sales model- Managers hiredWhat’s A Startup?A Startup is the organization used to search for a scalable business model
35. Startups Search and PivotThe Search for the Business ModelScalableStartupTransitionLarge CompanyBusiness Model found customer needs/product features found i.e. Product/Market fitFound by founders, not employees
37. Startups Search, Companies ExecuteThe Execution of the Business ModelThe Search for the Business ModelScalableStartupTransitionLarge Company- Cash-flow breakeven- Profitable- Rapid scale- New Senior Mgmt~ 150 peopleBusiness Model found
41. Income StatementMetrics Versus AccountingThe Search for the Business ModelThe Execution of the Business ModelScalableStartupTransitionLargeCompanyStartup Metrics Customer Acquisition Cost
51. Revenue PlanCustomer Validation Versus SalesThe Search for the Business ModelThe Execution of the Business ModelScalableStartupTransitionLargeCompanyCustomer Validation Early Adopters
58. Revenue PlanCustomer Development VersusProduct ManagementThe Execution of the Business ModelScalableStartupTransitionLarge CompanyProduct Management Delivers MRD’s
61. Prod Mgmt drivenCustomer Development Versus Product ManagementThe Search for the Business ModelThe Execution of the Business ModelScalableStartupTransitionLarge CompanyProduct Management Delivers MRD’s
66. Founder-drivenEngineering Versus Agile DevelopmentThe Execution of the Business ModelScalableStartupTransitionLarge CompanyEngineering Requirements Docs.
69. Tech PubsEngineering Versus Agile DevelopmentThe Search for the Business ModelThe Execution of the Business ModelScalableStartupTransitionLarge CompanyEngineering Requirements Docs.
79. Known business modelStartups Model, Companies PlanThe Search for the Business ModelThe Execution of the Business ModelScalableStartupTransitionLarge CompanyUnknown customer needs
86. Known business modelStartups Protect Mavericks, Companies Fire MavericksThe Execution of the Business ModelScalableStartupTransitionLarge CompanyPains in the butt
88. Doesn’t get with the programStartups Protect Mavericks, Companies Fire MavericksThe Search for the Business ModelThe Execution of the Business ModelScalableStartupTransitionLarge Company CEO of your company
92. Doesn’t get with the programStartups Don’t Last ForeverScalableStartupTransitionLarge Company- Cash-flow breakeven- Profitable- Rapid scale- New Senior Mgmt~ 150 people Business Model found
93. Product/Market fit- Repeatable sales model- Managers hiredYou failif you remain a startup!
95. Business PlanA document your investors make you write that they don’t readA useful place for you to collect your guesses about your businessSize of Opportunity
102. What Is a Business Model?Diagram of flows between company and customersScorecard of hypotheses testingRapid change with each iteration and pivotProduct Management-driven* Alex Osterwalder
103. Business Model = Keeping Score in a StartupCUSTOMERRELATIONSHIPPARTNERNETWORKINFRASTRUCTURECUSTOMEROFFERTARGETCUSTOMERCORECAPABILITIESportrays the network of cooperative agreements with other companiesexplains the relationships a company establishes with its customersVALUEPROPOSITIONdescribes the customers a company wants to offer value tooutlines the capabilities required to run a company's business modelgives an overall view of a company's bundle of products and servicesDISTRIBUTIONCHANNELVALUECONFIGURATIONdescribes the channels to communicate and get in touch with customersdescribes the arrangement of activities and resourcessums up the monetary consequences to run a business modeldescribes the revenue streams through which money is earnedCOSTSTRUCTUREREVENUESTREAMSFINANCE
136. Pivot back to Discovery if no customersCustomer ValidationPhase 4Business ModelVerifiedPhase 3PositioningCustomerValidationFrom DiscoveryTo CreationPhase 1Get Readyto SellPhase 2Sell toEarlyVangelists
137. Customer ValidationGet Ready to SellPrelim Sales& Collateral MaterialsPrelim Distribution Channel PlanArticulate a Value PropositionPrelim SalesRoadmap Hire a “Sales Closer”Align YourExecutivesSell to “EarlyVangelists”FormalizeAdvisory BoardRefine ChannelRoadmap ContactVisionaryCustomersSell to ChannelPartners Sell to EarlyCustomersRefine SalesRoadmapDevelop PositioningPresent toAnalysts &Influencers CompanyPositioningProductPositioningVerify Verify theSalesRoadmapVerify theChannelRoadmapIterate or ExitVerify theBusiness ModelVerify the Product
142. Near instantaneous customer feedback drives feature setSidebarThere Are Three Types Of Startups The Role of Market Type
143. New Product ConundrumProduct introductions aren’t predictableWhy?Is it the people that are different?Is it the product that are different?Are there different “types” of startups?
144. Three Markets TypesMarket Type changes everythingSales, marketing and business development differ radically by market type
145. Three Types of MarketsExisting MarketFaster/Better = High endResegmented MarketNiche = marketing/branding drivenCheaper = low endNew MarketCheaper/good enough = creates a new class of product/customerInnovative/never existed before
147. AdoptionMarketMarket SizeCost of EntryLaunch TypeCompetitive BarriersPositioningSalesSales ModelMarginsSales CycleChasm WidthFinance Ongoing Capital
148. Time to ProfitabilitySo What Does Engineering Do?
149. Waterfall / Product ManagementExecution on Two “Knowns”RequirementsProduct Features: knownDesignImplementationVerificationCustomer Problem: knownMaintenanceSource: Eric Rieshttp://startuplessonslearned.blogspot.com
150. Agile - Customer Problem is KnownExisting Company/Market“Product Owner” or in-house customer Unit of progress: a line of working codeProblem: KnownSolution: UnknownSource: Eric Rieshttp://startuplessonslearned.blogspot.com
151. Lean StartupCustomer Problem + Product Features are UnknownProblem: UnknownSolution: UnknownSource: Eric Rieshttp://startuplessonslearned.blogspot.com
154. Lean Startups are not cheap startupsCompany BuildingCompanyBuildingCustomer CreationCustomerValidationCustomerDiscovery(Re)build company’s organization & management
155. Re look at your missionSummaryFounders can’t delegate customer discoveryStartups are about speed of pivotsProductCustomerChannelThey are not about MRD’s and process Product management can be an asset or an albatross in startupsYou can make the difference…with sneakers