Four Steps to the Epiphany

There’s a book on how to bring a product to market that is almost a samizdat document in the marketing world. It’s a privately published book originally intended to accompany a course at Berkeley and Stanford. It’s not the most readable of prose so don’t expect the Innovator’s Dilemma or Crossing the Chasm. However it is packed with good stuff for any startup, and especially for EDA startups who embody all the problems that the book addresses. It’s called Four Steps to the Epiphany by Steve Blank. You can get it on Amazon for $40 or from CafePress for $29.99 plus shipping and tax which comes to about the same thing.

The heart of the idea of the book is that you don’t know what the customer wants. So in addition to developing a product (preferably the minimum shippable product, since how do you know the customer even wants that?) you need to develop customers. You have a product development process. You need a customer development process. And hiring a VP of sales and a VP of business development and waiting around for engineering to ship doesn’t count.

A secondary idea is that the customer development process is very different if you are creating a brand new market, entering an existing market or re-segmenting an existing market (producing a product that only serves part of the market, usually but not always either creaming off the high-end or disrupting the low-end).

It is hard to summarize an entire book in one blog post and I don’t intend to try. You’ll have to invest in the book yourself and I guarantee that you will find plenty of thoughtful ideas that are immediately applicable to almost any product launch, whether in a startup or a large company.

If you only take one idea away from the book it would be this: get out of the building. Startups don’t fail for lack of technology, they fail for lack of customers. Heed Steve’s words: “In a startup, no facts exist inside the building, only opinions.” You have to go and talk to potential customers and even talking won’t be enough. You’ll have to ship them early product, burn them when it doesn’t do what they needed, and correct your course. If you scale the company before you have the product right, you’ll run out of money (and in the current climate you’re not getting any more).

The idea of listening to customers is not to find out everything that they want and build a laundry list. It is to attempt to narrow the product down to the minimum shippable product, one that at least a few customers can get value from even if it doesn’t do everything they want. Saint-Exupery’s quote that “A designer knows he has achieved perfection not when there is nothing left to add, but when there is nothing left to take away,” summarizes the goal for the earliest stage of customer development. Then start iterating as your understanding increases.

If you read newspaper articles on startups, you often get the idea that a couple of guys in a garage really understood something deep and took down some huge corporation that was too dumb to notice. The reality is that almost all successful startups end up doing something different from what they first intended when they were founded, sometimes dramatically so. Look at Paypal (originally doing beamed payments from Palm Pilots) or more recently Twitter (part of a podcasting company). Or even Google (originally just doing search without a clue about how to monetize it). In EDA the changes are less dramatic but very few business plans survive after contact with the market.

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