Resources

There are 60 posts filed in Resources (this is page 12 of 20).

The Entrepreneur’s Guide to Customer Development

The Entrepreneur's Guide to Customer DevelopmentI was reading Eric Reis’ Lessons Learned blog yesterday and he talked about The Entrepreneur’s Guide to Customer Development. I begrudgingly read Steve Blank‘s Four Steps to the Epiphany, which is a must read for any entrepreneur (begrudgingly read because it is not the easiest reading). It is a great book, but it’s tough reading.

“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.” Eric Reis

I bought a copy yesterday based on Eric’s recommendation. It is a phenomenal resource for learning Customer Development. Patrick and Brant have done a great job writing an understanable how-to guide for using Customer Development and Agile Development in a Lean Startup. The book includes a shout out to our friends Dan Martell at Flowtown and Sean Ellis at 12in6.  

The book incorporates the wisdom and experience of real world practitioners of Customer Development in the 5 years since the inital publication of The Four Steps. For the first time a lot of entrepreneurs will hopefully begin to understand a technology adoption lifecycle and the marketing of products/services. I wrote a chapter in Cost-Justifying Usability back in 2005 where I had first encountered Steve’s Customer Development Methodology from his course notes in 2004 at Stanford (yeah, I know that’s crazy). In the chapter, titled “Valuing Usability for Startups”, I argued that getting out talking to customers and testing your hypotheses were key to success. However, I proposed using the Bell/Mason Diagnostic for evaluating the stage of corporate development in order to calculate Return-on-Investment of usability. In hindsight, I probably should have instructed entrepreneurs and usability professionals to look at processes like Customer Development to search for a “repeatable and scalable business model”.

The Entrepreneur’s Guide to Customer Development is a short mandatory introduction to using customer and agile development to search for a  repeatable and scalable business model.

Discount for StartupNorth Readers

A few quick emails to Patrick today, and he offered to provide StartupNorth readers a 25% discount on any version of the book. First ten StartupNorth readers to go to CustDev.com can use the discount code.

Discount code: STARTUPNORTH (limited to the first 10 users)

Good luck!

Can you pitch in 6 slides?

Can you pitch your company in six slides? I can’t believe that Fred and Brad raised the first USV fund with only six (6) slides.

“We learned to simplify our story and we learned how to create six killer slides. And killer slides are not slides with a dozen bullets each. They are six powerful points that combine to tell the meat of the story.

So when you sit down and build your pitch deck, think of six slides that will inspire and leave something for the imagination. The best part of six slides is that you will get through them in time to have a real substantive conversation face to face about your business. Imagine that.” – Fred Wilson

Constraints are a great thing. They help entrepreneurs filter and focus their presentations and messages. Getting your pitch down to six slides is going to be a challenge, and challenges are fun. I’m a big fan of the sequence of slides recommended by David Rose’s, chairman of the New York Angels, but even this sequence is 15 slides.

  1. Company Title Page
    Start with the name and logo of the company, the name and title of your presenter, a one-line description or tagline about the company, and the dollar amount of the round you are raising.
  2. Business Overview
    Boil down your elevator pitch to one sentence. Tell us what you sell or do in very concrete language. This sets the context for the rest of your presentation.
  3. Management Team
    Show us your talent and experience, with one line of background (two lines max!) on each member.
  4. Market
    What’s the environment in which you operate, how big are the segments, what are the pain points?
  5. Product
    How do you solve a customer’s pain? What exactly do you do? This can be illustrated with a clear product or screen shot, or a simple process diagram, but if we don’t know what you do, we won’t know why we should fund you. (But don’t spend too much time on this, since you’re pitching the company here, not the product.)
  6. Business Model
    Who pays whom, how much, for what and from where. What does this mean for annualized revenue streams?
  7. Customers
    Who are they, how many are there, how do you distribute to them, and how are they attracted and retained?
  8. Strategic Relationships
    If you have any, make sure we know about them.
  9. Competition
    Who and how threatening are they? What are the differentiation factors? Include both direct and indirect competitors. Remember that everyone has competition, even if it is just “the old way” of doing something.
  10. Barriers to Entry
    How will other potential competitors be kept at bay?
  11. Financial Overview
    Show us your top-line revenues and expenses, and EBITDA two years back and four years out.
  12. Use of Proceeds
    Where will our money take you?
  13. Capital & Valuation
    How much have you raised previously, who are your current investors, what are you looking for in this round, and how do you come to your suggested valuation?
  14. Review
    Provide a brief summary of what you said, in this same order, narrowed to the five or six most important points.
  15. Contact Info/Next Steps
    Lead us into the next step, such as a follow-up meeting for due diligence…and include your contact info!

I can immediately reduce this to 7 slides, it’s not 6 but it’s close. The goal here is not to provide all of the information in these slides but to boil down the critical information to the salient points. I have been using Business Model Generation and the work of Alex Osterwalder to help build a better understanding of business model, value proposition, key partners and revenue streams. This combined with the slide sequence is a really effective way to model your business, customers, partners, costs and revenues.

Business Model Canvas Poster V.1.0