The Four Steps to the Epiphany
Author: Steve G. Blank
Date Published: 2005
Chapter 1: Path to Disaster: The Product Development Model
Startups often follow the Product Development Model, which often leads to disaster. The Product Development Model follows the “get big fast” mentality that even when executed perfectly by the best-managed startup can still lead to disaster.
“Startups don’t fail because they lack a product; they fail because they lack customers and a proven financial model.”
“Simply put, a startup should focus on reaching a deep understanding of customers and their problems, their pains, and the jobs they need done discovering a repeatable roadmap of how they buy, and building a financial model that results in profitability.”
Chapter 2: The Path To Epiphany: The Customer Development Model
The Customer Development model is a process to learn what the customer needs and adjusts the business to that. Steve explains that this model leads to a more reliable foundation to build a business on.
The Four Steps To Epiphany:
- Customer Discovery
- Customer validation
- Customer Creation
- Company Building
“The Customer Development Model is not a replacement for the Product Development Model, but a companion to it.”
“In a startup, the founders and Product Development Team define the first product. The job of the Customer Development team is to see whether there are customers and a market for that visions.”
Chapter 3: Customer Discovery
The Customer Discovery step tests whether a company’s business model is correct. Making sure the product solves customer problems and needs.
“The General goal of Customer Discovery amounts to this: turning the founders’ initial hypotheses about their business model, market and customers into facts.”
Chapter 4: Customer Validation
The Customer Validation step focuses on developing a sales model can be replicated. Instead of executing a sales plan or sales strategy, Steve Blank recommends learning how to sell to a small set of early visionary customers.
“Building a roadmap to sales success, rather than building a sales organization, is the heart of Customer Validation.”
Chapter 5: Customer Creation
The Customer Creation step is all about creating and driving end-user demand. In a startup the market/customer being targeted is completely new. Therefore, startups must forge a strategy—not tactics—to reach customers.
“Launching a new product and company should not be confused with executing a laundry list of marketing tactics.”
Chapter 6: Company Building
In the Company Building step, organizations transition from one designed for learning and discovery to a well oiled machine engineered for execution. This step is designed to help companies adjust to rapid organizational scaling while sustaining a fast learning and discovery climate.
“Startups at the end of the Customer Development process are not just nascent large companies waiting to shed their founders so they can grow. They are small companies that need to innovate continually so they can become large, sustainable businesses.”
“As difficult as it is to find mainstream customers, the tectonic shifts changing cultures bring are equally wrenching. That’s why agility is so important, and why there can be a huge payoff from implementing a mission-centric company and fast-response departments.”