My previous blog was about building a successful product which your customers will love. I define a successful product as one which is valuable, usable, and feasible. Valuable, making the customer want to pay for it. Usable implies that in the result of their purchase, the user has a good experience while using the product. Feasible implies that the product can be built within a reasonable time and within budget.
I highly encourage everyone to read Steve Blank’s book “The Four Steps to the Epiphany”. This book along with Eric Ries’s book “The Lean Startup: How Today's Entrepreneurs Use Continuous Innovation to Create Radically Successful Businesses” are must reads for any Silicon Valley entrepreneurs. Steve Blank is a Silicon Valley serial-entrepreneur and academician who is recognized for coming up with the Customer Development methodology, which launched the Lean Startup movement.
One of the key points Steve Blank’s stresses in his book is that most companies ignore the customer development process until after the product development phase when it might be too late to modify the product to fit the market’s needs. This is a big topic in and of itself and requires a dedicated blog. I am going to mostly focus on the Customer Creation and Company Building phase of the customer development process.
So again, the main tenant is to focus on customer development parallel to product development. During the first two phases of the customer development process you are mostly focusing on problem-solution fit- using what I call the product discovery process, defining an MVP and validating the product in the market by testing product-market fit, and discovering the business model and creating a go-to-market strategy. The combination of my previous blog and the blog “Product Management Approaches - New Product vs. Existing Product” should give you a good idea of these concepts. I do understand that I am skimming over these and will try to address each one of them in individually dedicated blogs in the future. But more than that, I highly recommend grabbing the book “The Four Steps to the Epiphany” and giving it a quick read. It is a long book, but there is 30 pages of abstract that you can read online if you want to get a quick understanding of the concepts.
The stage where most startup founders falter is in the Customer Creation and Company Building phase of the customer development process. The skills required to succeed in these phases are different from the earlier phases. When you are still figuring out the product and market fit you are mostly adopting an approach of “start-fire-aim”, but now that you have discovered and validated a customer and discovered a repeatable sales process, you need to start focusing on building the business. This phase of defining business processes and creating a company is what most startup founder’s dread, because it goes against their no process system.. Business processes have gotten a bad reputation due to an over emphasis in large organizations and its tendency to promote bureaucracy.
To create a scalable business you need
· Process
· People
· Tools
So you need hire the following people to handle various aspects of the business
· Product Management group – Since you are going to be busy focusing on sales, meeting your key customers to keep them happy (in case of an enterprise product) or evangelizing (in case of consumer facing product), you will not have enough time to be thinking about the product, market, competition, trends and the roadmap
· Marketing group – You need a team or individual who can take care of both product marketing (blogs, social media, communication, product launch plan) and field marketing (events, conferences, out-bound marketing)
· Customer support group – Responsible for that 1-800 number and customer support website. This group is there to address your customer’s issues with usage of the product and also filing bugs into the product backlog to improve the future products
· Business Development group – You need dedicated people focused on lead generation, pre-sales, and closing the contracts
· Account Management/Partner relationship managers – If your product is enterprise focused you need account managers who can keep current customers happy and also expand the business through those customers.
· Architects – You hacked together a product. Good, but now you run into the issue of scalability, performance issues. You need to re-architect the solution until you get it right. Note, re-architecture is never really done. More on this in a future blog.
· Engineering management – Your startup has a lot of engineers. It is not possible for your technical co-founder to manage all of these engineers directly. You need middle ground managers who can manage various modules
· Program Management – You also need dedicated program managers to manage the execution of your product – managing schedules, reporting status, and removing roadblocks in the path to product delivery.
· UX design team – You need interaction designers, visual designers, and interface designers. Design, specifically interaction design, is something I am passionate about and I will write a lot more about it in future.
· Operations group – Someone needs to keep track of all the money that is coming in, that you are burning on salaries, and what needs to be paid out to your channel partners or affiliates. Operations workers keep the lights on.
I propose the following organization structure: Customer Development group run by Chief Operating Officer (COO) and Product Development group run by Chief Product Officer (CPO) both reporting to the CEO. Product Management group sits in the intersection between Customer Development Group and Product Development Group. I believe this would lead to the most organized and effective Customer and Product Development.
I highly encourage everyone to read Steve Blank’s book “The Four Steps to the Epiphany”. This book along with Eric Ries’s book “The Lean Startup: How Today's Entrepreneurs Use Continuous Innovation to Create Radically Successful Businesses” are must reads for any Silicon Valley entrepreneurs. Steve Blank is a Silicon Valley serial-entrepreneur and academician who is recognized for coming up with the Customer Development methodology, which launched the Lean Startup movement.
One of the key points Steve Blank’s stresses in his book is that most companies ignore the customer development process until after the product development phase when it might be too late to modify the product to fit the market’s needs. This is a big topic in and of itself and requires a dedicated blog. I am going to mostly focus on the Customer Creation and Company Building phase of the customer development process.
So again, the main tenant is to focus on customer development parallel to product development. During the first two phases of the customer development process you are mostly focusing on problem-solution fit- using what I call the product discovery process, defining an MVP and validating the product in the market by testing product-market fit, and discovering the business model and creating a go-to-market strategy. The combination of my previous blog and the blog “Product Management Approaches - New Product vs. Existing Product” should give you a good idea of these concepts. I do understand that I am skimming over these and will try to address each one of them in individually dedicated blogs in the future. But more than that, I highly recommend grabbing the book “The Four Steps to the Epiphany” and giving it a quick read. It is a long book, but there is 30 pages of abstract that you can read online if you want to get a quick understanding of the concepts.
The stage where most startup founders falter is in the Customer Creation and Company Building phase of the customer development process. The skills required to succeed in these phases are different from the earlier phases. When you are still figuring out the product and market fit you are mostly adopting an approach of “start-fire-aim”, but now that you have discovered and validated a customer and discovered a repeatable sales process, you need to start focusing on building the business. This phase of defining business processes and creating a company is what most startup founder’s dread, because it goes against their no process system.. Business processes have gotten a bad reputation due to an over emphasis in large organizations and its tendency to promote bureaucracy.
The lack of having a process works when you are a small startup company still discovering the market, but once you have customers coming in faster than you can handle, you can’t expect to be on top of everything. It worked in the past, because you as a CEO had the time to micro-manage ever aspect of product and customer development process. While I recommend creating a business process to automate the product development and customer delivery/support of your product/business, I also recommend you not do it before this phase. It can limit what your product will become if you start defining processes too early during the product development.
To create a scalable business you need
· Process
· People
· Tools
So you need hire the following people to handle various aspects of the business
· Product Management group – Since you are going to be busy focusing on sales, meeting your key customers to keep them happy (in case of an enterprise product) or evangelizing (in case of consumer facing product), you will not have enough time to be thinking about the product, market, competition, trends and the roadmap
· Marketing group – You need a team or individual who can take care of both product marketing (blogs, social media, communication, product launch plan) and field marketing (events, conferences, out-bound marketing)
· Customer support group – Responsible for that 1-800 number and customer support website. This group is there to address your customer’s issues with usage of the product and also filing bugs into the product backlog to improve the future products
· Business Development group – You need dedicated people focused on lead generation, pre-sales, and closing the contracts
· Account Management/Partner relationship managers – If your product is enterprise focused you need account managers who can keep current customers happy and also expand the business through those customers.
· Architects – You hacked together a product. Good, but now you run into the issue of scalability, performance issues. You need to re-architect the solution until you get it right. Note, re-architecture is never really done. More on this in a future blog.
· Engineering management – Your startup has a lot of engineers. It is not possible for your technical co-founder to manage all of these engineers directly. You need middle ground managers who can manage various modules
· Program Management – You also need dedicated program managers to manage the execution of your product – managing schedules, reporting status, and removing roadblocks in the path to product delivery.
· UX design team – You need interaction designers, visual designers, and interface designers. Design, specifically interaction design, is something I am passionate about and I will write a lot more about it in future.
· Operations group – Someone needs to keep track of all the money that is coming in, that you are burning on salaries, and what needs to be paid out to your channel partners or affiliates. Operations workers keep the lights on.
I propose the following organization structure: Customer Development group run by Chief Operating Officer (COO) and Product Development group run by Chief Product Officer (CPO) both reporting to the CEO. Product Management group sits in the intersection between Customer Development Group and Product Development Group. I believe this would lead to the most organized and effective Customer and Product Development.
Custom software development specialists explore exactly what it is a company does - what the necessities of the company are on a day to day basis and what they need from their IT system in order to operate to their optimum. In order to perform efficient functionality, a company would ideally need its software to do exactly what they want it to.
ReplyDelete