Brant's Rant | Customer Development | Lean Startup

5th Anti-Lean Startup Archetype – We Already Do It

I recently blogged about 4 anti-lean startup archetypes. These are people who, in my opinion, are at first blush, unwilling (or unable) to adopt Eric Ries’ lean startup principles, and specifically, Steve Blank’s customer development methodologies.
The four are:

  • The renaissance salesperson – He or she can sell a sno-cone to an Eskimo; they don’t need no stinkin’ customer development.
  • If you build-it, they will come Engineers – Our product rocks, therefore we win.
  • Madison Ave marketers – All we need is some advertising, PR, branding — mix in a little social media marketing, and you’re good to go!
  • The “you don’t get it” entrepreneur – If you don’t see the billion dollar win the CEO sees, you simply lack the vision.  See?

I think I’ve met one of each in the last week. This is why I’m so perplexed by this recent Steve Blank comment:

Entrepreneurs who have a startup or two under their belt tend to rattle off preliminary customer findings and data that blow me away (not because I think their data is going to be right, but because it means they have built a process for learning and discovery from day one.)

(emphasis mine)
If only it were true!
In my experience, the more things change, the more they remain the same.   VCs want a proven CEO.  The CEO hires a familiar exec team.  The execs practice the same principles they always have in order to meet expectations set by a business plan written with hockey stick revenues based on market research designed to prove assumptions, rather than test them.
Please, re-read that paragraph and tell me if it’s not true.
Customer development isn’t (just) about solving a startup problem.  Steve’s SuperMac problem was and is, I believe, emblematic of the standard operating procedure of many if not most small to medium sized high tech businesses today.   In 2001, it was popular to blame  the Internet bubble on the 20 or 30-something year old CEOs, who were purportedly leading the financial system into believing in exorbitant valuations based on fluff.  When stated that way, the absurdity of the belief is plain to see.  The 40 and 50+ year old VCs, financial analysts, investment bankers, et. al., were at least as much to blame for not only convincing the “youngsters” that scale before profits was totally cool, but also seasoned and noob investors around the world!  In a similar vein, the reluctance to “fail fast” — to look boldly at the real market viability of a particular capital investment — is an institutional failure, not merely a misunderstanding by a green CEO.
I blather on about this because, to be melodramatic about it, the future of “customer development” and “lean startup” is dependent upon it being recognized as a solvent for a core failure in the present system at all levels, not just with pre-VC startups.   Otherwise, the terminology is easily co-opted, as some have claimed has happened to the agile development movement. It’s possible that the customer development movement will be relegated to a segment that “doesn’t get it” and so needs to go back to school, rather than as is really the case in my opinion, to the industry as a whole, whose members (generally) don’t get it and need to adapt.
So finally, we come to the 5th archetype:  those which provide the means of co-opting customer development so as to render it meaningless, by way of the “we already do it” archetype.  These are the people who talk to customers for market research.  They “wow” us with their user stories, case studies, and focus groups results.
I recently spoke with a company who were looking for some traditional demand generation marketing to fill their pipeline.   Some of the execs had read or heard of Steve Blank (great!), who were interested in MVP (woo hoo!), and they had sold some product, but hadn’t found the sweet spot in the marketplace that would enable their product to take off.  They were all for iterative learning about who their right customers are and how to sell to them and they hadn’t yet rolled out a nationwide sales force.  I was impressed.  They practiced customer development.  Right?
The late arriving nugget most telling was, however, that their prospect database that was filled with hundreds of leads, all of whom had directly expressed interest, many of whom had even tested the product in a formal “proof of concept,” yet had not purchased product!
Old way:  Wrong marketing.  Fire sales or marketing.  Fill pipeline (ie, database) with new leads.
New way: Call every customer in the database and interview them.