The Dark Side of Customer Development and Lean Startups

Posted on November 28, 2009
Filed Under Business |

Update: Clarification added at the end of the post

Version 1 of Backupify was built with less than $10,000. A friend of mine had suggested that an automated Flickr backup tool might be useful, and a few others agreed. But rather than raise a bunch of money and waste it on something that we was unproven, we chose to launch with the smallest possible feature set and just see what happened. The results were awesome.

In 6 weeks we signed up over 200 paying customers, were featured on several popular blogs, and had a ton of great feedback and ideas from our users. It worked just like Steve Blank said it would. But as time has progressed and we have continued to sign up users at a faster rate than we anticipated, we have struggled to keep up. Much of the struggle is because of the way the customer development process works, and the dark side that no one talks about.

Customer Development and the Lean Startup offshoots of it are the latest tech startup fads. The ideas have some kernels of truth, but they are taken as gospel by web entrepreneurs instead of taken as tools in the toolkit that are appropriate in some instances and not appropriate in others. Since no one ever talks about the down side of the customer development approach, I thought someone should write about it. And since I haven’t received hate mail in awhile, (and honestly, I kind of miss it) I figured that person should be me.

Let me start by saying that capital chases good opportunities. Good ideas can employ lots of capital in a productive fashion, which is why good ideas attract a lot of money. Capital is required to grow. I’m not aware of any $100 million companies built with a lean startup mindset. Those companies are usually built with a “go big or go home” mindset instead. If Google had been a lean startup they would probably be some minor search player right now instead of one of the top technology companies in the world. So if you can’t attract a lot of capital to your idea, one possible reason is that your idea sucks. Granted, there are other reasons (location, lack of connections, etc) that come into play, but if you can’t attract a decent amount of capital to your idea, it could be because the ideas isn’t that great.

If you do go down the customer development path, the main problem, as I have experienced it, is that it puts you in a constant short-term thinking mode. Startups are always a bit more short-term focused than other companies, but product development always needs to have a balance between short-term and long-term. We punted on tons of key issues because we wanted to wait until we proved there was a market for our product. Once we realized there was much more of a market than we thought, we suddenly had to allocate a bunch of resources to customer support and bug fixes… things that we wouldn’t have needed at the same level if we had built a more robust and full featured product out of the gate. As a result, our product development slowed to a crawl at a time when we needed to double our pace to catch up with user demand.

Think of it this way… some ideas are just bigger ideas. Charlie wrote that Path101 was a $1 million product that only raised $350K, and that was a problem. We are finding out that Backupify is the same way. It isn’t a cheap an easy thing to build.

Imagine you have an idea for a new type of hotel. Would you build just two rooms and see if people liked the general idea then, if they did build 15 rooms and if those sold build 40 rooms and then eventually 100? If so, you would end up with a building whose core infrastructure was not designed to make it efficient to service and run a 100 room hotel. That is what can happen with a lean startup. You could argue that once you prove a market then you can always go back and rebuild the thing from scratch when you have more resources, but that too isn’t really true.

Investors always ask how much money you have raised and at what valuations, so when you do small raises on low valuations because of the lean startup process, you get stuck in that mindset. Each time you try to break out of it and go for a lot of money at a larger valuation, that round of investors feel like they are getting screwed compared to the “good deal” the earlier investors received.

The result of all this is that if you are on to something big, you risk proving the market so that someone else can come in and take it from you while you struggle with a small product that should have been bigger. Or you shoot yourself in the foot on valuation. Or you struggle for months to catch up on product development and build what you should have built in the first place.

My advice is to treat these fads like all other fads in business -suck out the kernels of truth and throw the rest away. The broader idea behind customer development is that you should get close to customers early. That should be your goal whether you raise $100 or $100 million. The broader idea behind a lean startup is that you should be capital efficient. And you should, regardless of the size, scope and age of your business.

Don’t be afraid to go big and fail. Lean startups can be attractive because they minimize your chances of failure. They allow you to string along a mediocre business for years while keeping your day job and justifying the whole thing by saying you are lean. But if you are that afraid of failure, you probably shouldn’t be working on a startup anyway. Shooting for a big idea and failing still means you will learn a lot (like how to deal with VCs and how to manage momentum), meet lots of interesting people, and in the end you could end up better off than you would if you had boostrapped a company for years only to go nowhere.

So take my experience and advice for what you paid for it ($0). I’m sure those of you who have never started a company but read startup blogs all day long will feel compelled to email me and tell me how stupid I am. My email address is idontcare-at-coconutheadsets-dot-com. If you do have good counterpoints, questions, or ideas, please leave a comment. They all get published, whether you agree with me or not.

UPDATE: Here is a better way to describe one of the problems we had. Our first 500 customers gave us VERY different feedback than the ones we got beyond that point. Five hundred customers seemed like a good number, but the truth is, they were a skewed sample. Most of our first few hundred customers were hard core tech guys who wanted to use their own S3 accounts and wanted features that later customers didn’t care about. Of course, we listened intently to those first customers. Then we realized our product could have the mass appeal that we thought it may have, but we had made architecture decisions that made some of the mass appeal features more difficult to implement.

UPDATE 2: The other thing I think is misleading is this insistence on surveying all the early users. We did it, and learned a bunch of stuff we already knew. What we really need to know is why the people that don’t sign up don’t sign up. Do the 80% of people coming to the site and not signing up think that we aren’t trustworthy, or do they not understand what we do? Do they think the product is overpriced? Do they want features we don’t have? Surveying my existing user base all the time will never tell me that.

Comments

46 Responses to “The Dark Side of Customer Development and Lean Startups”

  1. uberVU - social comments on November 28th, 2009 2:48 pm

    Social comments and analytics for this post…

    This post was mentioned on Twitter by Rob May: New blog post: The Dark Side of Customer Development and Lean Startups http://bit.ly/4K6Ee9...

  2. Mike Faith on November 28th, 2009 3:11 pm

    Yes, the hotel analogy is right. But for every case where it wont work, there’s probably a case where it does work. i’ve built the rooms as i’ve gone at headsets.com, and Tony did the same at Zappos. It depends on the type of biz and infrastructure needed.

  3. Deyan Vitanov on November 28th, 2009 3:25 pm

    Rob,

    These are excellent points, thanks for an insightful article. They very much overlap with my observations and beliefs as well.

    At the same time, I think the lean startup model offers a few important insights that apply no matter the startup you are trying to make:

    - Unknown customer, unknown product - this seems to me to be one of the crucial elements of any startups (it is true by definition) and keeping a mentality of execution that recognizes and exploits this fact is a smart move.

    - Importance of capital efficiency before product/market fit - this is obviously tied in with the previous point and a key to deploying capital in a reasonable/smart/strategic manner, which I think is also a good thing.

    - Customers, customers, customers - as you mentioned yourself, this is a valuable “insight” of the lean startup model - or rather a good no-brainer reminder in a startup world dominated by engineers, who are often detached from customers.

    I am sure I missed a few, but in any case the broader point I am trying to make is very much in line with what you said: which is to think critically and extract the good insights out of any framework.

    I also hope that this article inspires more people to think bigger, because there are too many small apps and not enough world changing ideas out there right now.

    Thanks again!
    Deyan

  4. Ashley Moran on November 28th, 2009 4:28 pm

    Rob,

    I have started a company, but I’m only just thinking about entering product development for myself. So possibly some of my comments should be sent to idontcare@ :) You make a valid argument, but I think one of your assumptions is faulty. Let me see if I can explain…

    I interpret a core part of your argument as being that if you build your initial product inadequately, you will be playing constant catchup to market demand, and be unable to meet the needs of larger numbers of customers, while someone with larger funding can use your market validation research to capture the market before you.

    Your analogy is that if you validate a 15 room hotel market, you have the wrong foundation to build a 40 room hotel. (I suspect that the market validation could be done by other means than actually building a hotel, but that isn’t my point - and there’s a whole raft of other thoughts that spring to mind, but I’ll avoid them.) The fundamental problem is that you’re confusing design and manufacturing. Running applications are to code what buildings are to blueprints - code is the design of software, not its manufactured state. (See Jack Reeves[1] for a good description.)

    My background in agile thinking puts this perspective on the problem:
    * the design of software can _always_ be changed (you can change a blueprint easily, but a building is much harder)
    * quality should be moved upfront, ie automated testing prepared before the code (a strategy that emerges in other systems of thinking)
    * internal quality is non-negotiable (OO design, test coverage, etc)

    Setting an internal quality bar is done to prevent gradual slowdown to the development process - the crushing effect of trying to exceed the capacity of a design. But once you fix internal quality, you can no longer sacrifice long term maintainability for a quick release - you can only sacrifice features. Given this, you can ask - “Can we build the necessary features to our quality standards given the resources and time available?” This is a yes or no answer, even if the answer is partially unknown. (One way to determine the answer is to try.) Agile thinking says that you release the minimum marketable feature (MMF), which to my current (limited) understanding should be no greater than the minimum viable product (MVP). There’s nothing you can do if your MMF is too large to deliver. But lets say your MMF is the same as the MVP you found, and is deployed, and makes money, but in the process validates a larger market than you thought, in terms of users.

    What has happened is that the constraining factor has moved from the market (initially, you didn’t have any customers) to scalability or new feature development. (If it appears to be customer support or bug fixing, the agile explanation would be that there is insufficient upfront quality, and the development process needs improvement.) You can only be constrained by new feature development if you have all the possible customers in the market that want your subset of features.

    This leads me to the conclusion that if you are constrained by something other than your ability to build new features to reach new markets, you need to deliberately constrain the market by restricting new customer signups, to prevent a non-value-adding part of your process (eg customer support) stalling you.

    But, you never throw one away. Rebuilding something from scratch is such an epic loss of investment that it must be avoided at almost all costs. It demonstrates lack of “agility”, aka insufficient engineering practices, and the team must invest in learning and self-improvement, or they will be doomed to repeat a cycle of mediocre projects which turn out to be false starts.

    This is all just conjecture - I’m learning stuff as I go along. I am taking the principles I know and applying them to lean startups, about which I know relatively little. I don’t have an answer to the “go big or go home” theory for increased expected return. There are certainly faults hidden (or not so hidden) in my arguments. But I hope they put a new perspective on things.

    And, I intend to only bootstrap my own product development projects, so I will at some point have real answers for myself, rather than hypotheses.

    Ashley

    [1] http://www.developerdotstar.com/mag/articles/reeves_design.html

  5. randv on November 28th, 2009 5:19 pm

    Good analysis and I agree with you on using custdev as a tool in your tool kit rather than follow it like a religion. Another point, Steve always talks about shortcutting the custdev process if you happen to be the SME on the subject. If you know lot about what customers want in a area because you have experience in then you can skip portions of it.

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  7. Kyle Mathews on November 28th, 2009 5:46 pm

    Lean != cheap, lean != bootstrapped. Many lean startup concept and practices are borrowed from lean manufacturing and both focus on eliminating waste which is defined as practices that don’t deliver value to customers.

    Your post is rather strawmanish — you’re conflating lean startups with bootstrapping and than criticizing CD/lean startups for failures in the bootstrapping model.

    Also see this discussion on the lean startup group — http://groups.google.com/group/lean-startup-circle/browse_thread/thread/4b2a72cf262a02cb/4325db13997e208b?lnk=gst&q=lean+startup+not+a+bootstrapped#4325db13997e208b

  8. Chris on November 28th, 2009 5:55 pm

    It was good reading about your perspective on the other side of things. I would add to this the emotional roller coaster, the high high’s and very low low’s that can be experienced during this process (at least, that’s been my experience).

    I do have a few comments though…

    “…If so, you would end up with a building whose core infrastructure was not designed to make it efficient to service and run a 100 room hotel. That is what can happen with a lean startup…”

    One way I’ve found to account for this is to build a core infrastructure that does handle a bit of growth. Sure, you could take that idea, spin your wheels, and build something so grand and scalable that you’d never get a product launched, but the point I’m making is that you dont. In reality, with some experience under your belt, you can build something from the ground up (in some cases, not all) that allows for one to scale a bit without to much extra time involved.

    I think a great example of this would be Markus Frind @Plentyoffish.com - Anyways, good post, thanks for sharing :)

  9. Kartik Agaram on November 28th, 2009 6:10 pm

    Restated: Don’t let lean keep you from building market-agnostic parts of your infrastructure. Those don’t have to wait until you’ve proved your market.

    You don’t have to provision for a million users before the market is proven, just setup the core architecture to make future scaling possible.

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  11. Rich Collins on November 28th, 2009 6:36 pm

    You are bashing two strawmen:

    1. Lean Startups aren’t cheap startups

    http://steveblank.com/2009/11/02/lean-startups-aren’t-cheap-startups/

    2. Lean Startup’s aren’t small startups. Steve Blank based much of his methodology on his experiences running E.Piphany. E.Piphany IPO’d before reaching a 4 Billion dollar market cap:

    http://news.cnet.com/IPO-Update-Kana-Communications,-E.piphany-soar-in-debuts/2100-12_3-266199.html

  12. Dave on November 28th, 2009 6:52 pm

    Thanks for the interesting post, Rob. I’ve been reading about customer development process lately. It’s always good to hear the other side, and I think you make some good points here.

  13. David Haddad on November 28th, 2009 6:54 pm

    I think it makes sense to treat every new idea or method in the startup world with balance and context. I also think that the majority of your article talks about the disadvantages of running a startup with limited financial resources. I think you’re confusing bootstrapping with lean startups. A lean startup can have a lot of money in the bank, and that gives it a lot of runway to test various ideas and learn as the product is increasingly being developed and the customers are increasingly being defined and understood.

  14. thomasknoll on November 28th, 2009 6:57 pm

    Sorry, but I don’t have any juicy arguments for you. I agree with most of the concerns you raised here. It would be foolish for any startup to build their business in the way you described in the hotel example. In my understanding of the suggestions put forward by those exploring the lean startup methodology, the point is to be lean, not starving.

    If you have a repeatable sales model, based on actual customer activity, hell yeah… go for broke. It doesn’t make any sense to just grow a little bit. On the other end of the equation, it doesn’t make much sense to front load your sales and marketing team with a budget of $100million based on assumptions which don’t have customer actions to back it up.

    All that to say, I don’t understand the point of leanstartup methodology as being cheap for the sake of being cheap. But rather, not dumping money and resources into aspects of the business which haven’t been verified by actual paying customers.


    http://www.linkedin.com/in/thomasknoll

  15. thomasknoll on November 28th, 2009 7:03 pm

    Good conversation on this post is also taking place at http://news.ycombinator.com/item?id=965148

  16. Gregory (@piplzchoice) on November 28th, 2009 8:20 pm

    Rob,

    I hate to disappoint you, but this is not a hate mail. You bring an excellent point of view - not every start-up will benefit from the “lean start-up” approach, even though everyone can benefit from the approach at one degree to the other. Thank you for articulating it so well.

  17. Robert on November 28th, 2009 8:40 pm

    We just launched 1 week ago. We are going through the same problems - bug fixing, new requests… This is slowing down our progress on other big features. Still, I’m glad we launched, because only now we can make real decisions based on real feedback. Feedback from our short beta stage turned out to be nearly useless.

  18. james on November 28th, 2009 9:04 pm

    Overall I agree with you. And with a fair amount of hindsight, I failed with my startup and both the customer development and understanding how to go big, fast. But I did learn that customer development (or put another way, finding what was valuable to the customers) was necessary to really have anything viral, or worth spending money on marketing.

    However, I do disagree with the implication that you need to work with VC’s early on. For me learning to work with my VC’s was about not taking their money until customer development was pretty far along. That would have been better for our business. We didn’t benefit from having the added pressure of their outside money. Maybe we just had the wrong investors.

    Or put another way, if you can’t get $$ from the right VC’s, better not to get it all, and work your butt off to prove it, and then get $$.

  19. Jeffrey McManus on November 28th, 2009 9:08 pm

    You assert that no lean startups have achieved meaningful exits but I’m sure that’s not true. Off the top of my head, eBay might be a good example of a lean startup that succeeded; it was a small team in its infancy and they took venture dough but my understanding is that they never actually had to use that money since they got to profitability very quickly.

    I think the problem is not with your thesis but with your frame of reference. Lean startups simply haven’t been happening long enough to foster Google-like exits yet; also “lean” is a pretty vague term. I’m sure that more than a few startups with $100M of venture dough in the bank would consider themselves to be “lean” based on run rate.

  20. Murali Krishna Devarakonda on November 28th, 2009 9:47 pm

    I have “boostrapped” (sic;lol) twice so trust me, I do know what you’re talking about. Your last four paragraphs (minus the last one) sum it all pretty well- and I tend to agree with you there.

    However, you may want to rethink your hotel analogy- it’s the same tired, incorrect apples vs. oranges analogy that was used by the proponents of ‘waterfall’ development model. Software - unlike a building- lends itself naturally to refactoring - especially when it’s built by those who know what they’re doing. I’m not saying you don’t have a valid point, it’s just that you picked a really bad analogy that tends to discredit your “thesis”.

    Another factor you glossed over is what the founder wants from his startup and his life. It’s not just fear of failure that makes people choose to go lean - often it’s the wise course of action if they want to pursue a dream without risking all they have.

    The spectrum of “failure” on one extreme consists of those who will never launch a startup, to those who will raise tens or hundreds of millions of dollars in financing and still go bust - with the bootstrappers in between who lose a lot in personal wealth, career and other costs.

    Oh btw, before I go, I have one word to answer your question, “I’m not aware of any $100 million companies built with a lean startup mindset”:

    Facebook

  21. rvangeldrop on November 28th, 2009 9:54 pm

    I partially agree on your article. Startups might see Customer Development as a hammer and once you have that in your hands everything becomes a nail. Your long term strategy and goals might phase out because of this pitfall.

    More importantly, the concept is about validation of your business; the facts are outside the building. You should do some reality checks on your assumptions. You can have a vision and idea, which in these days can be verified quite easily by applying customer development. Once you have your hundred-so customers, you might be ready to go full throttle and go for a series A round, which can still be big, hence execution mode.

    The methodology doesn’t take away the fact that you need great engineers and entrepeneurs that produce a high-quality service. They can apply Lean Startup as a methodology at a certain stage as part of their daily activities.

  22. Yu-kai Chou on November 28th, 2009 11:09 pm

    Good article.

    Another thing I found out about Lean Startups is that the lean startup can cause a lot of morale issues. Not referring to how everyone is low paid, but when the market does not catch onto your product (which is often the case if you really have a crappy first launch), do you think “Oh the idea was bad. Lets switch ideas” which could happen over and over, OR do you say “Well, that’s because we don’t have X yet, and Y” and when do you stop? You don’t know when is your product proven and when to stop.

    In a full out product development cycle, you will know for sure that your complete product is accepted or rejected. It may be more expensive, but since team morale is the biggest currency in a boostrapped startup, that’s something to consider too.

  23. Vivek on November 28th, 2009 11:35 pm

    I think you should rename this post to “The Reality of the Customer Development model for Large Undiscovered Markets”.

    I dont understand why your blaming the process of Customer Development or showing it in a negative light (”dark side”). Its done what it advertised, ie gave you a low capital method of measuring the market.

    Maybe the only problem you have is that no one has told you how to switch from Customer Development to Grow-Big-Fast.

    I guess you’ll be the first one to write it :).

  24. Niall Smart on November 28th, 2009 11:42 pm

    You’re struggling to keep up with growth? Great! That’s what a friend of mine calls “a rich man’s problem”. If the market’s big enough, and you’re a smart team that’s found product/market fit, then the next step is to go raise some growth capital at a great valuation and blow the doors off, right?

    That approach beats the hell out of spending tens of millions and many months building a big hotel, only to slowly realize it’s in the wrong part of town. That’s the problem the lean startup model is trying to solve.

  25. Richard Cunningham on November 29th, 2009 12:18 am

    I thought Facebook, Digg, Meebo and Tweetdeck had significant traction before raising any external funding?

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  27. Rob on November 29th, 2009 1:58 am

    @Ashley - The real issue here is that we listened intently to our first 500 customers so, and when we grew beyond them, we realized that what the first 500 wanted was a lousy gauge of what the rest wanted.

    @Chris - Plentyoffish.com is an outlier, not the norm. Every entrepreneur can’t shoot for a business model with so much revenue for so little work. I don’t really think it should be studied at all, any more than winning the lottery should be studied as a way to get rich.

  28. Gerald Wluka on November 29th, 2009 2:17 am

    There are always trade-offs when allocating resources: bug fixes vs. new features vs. long term road map vs. stability and so on.

    It’s all a matter of product management. The thing is, with money in the bank (or a big development team or both) you have more resources to focus on more things.

    Having bootstrapped a successful enterprise software company our success was driven by laser directed focus.

  29. John Siegrist on November 29th, 2009 2:35 am

    Your growth problems and playing catch-up with the user demand has nothing to do with “lean thinking” and everything to do with bad engineering. Nowhere in lean does it say to do a bad job or to do things on the cheap. Instead lean advocates constantly strive to improve how your company works to remove waste and inefficiency. Continual reworking your code base because it wasn’t designed well at the start is just another form of waste.

  30. Chris on November 29th, 2009 2:39 am

    @Rob

    “@Chris - Plentyoffish.com is an outlier, not the norm. Every entrepreneur can’t shoot for a business model with so much revenue for so little work. I don’t really think it should be studied at all, any more than winning the lottery should be studied as a way to get rich.”

    Well, your looking at it from an income perspective, I’m not (I should have been a bit clearer).

    Dig around and look at what that guy did when he started (and had little to no revenue generated) being a one man shop, with a full-time job, in a highly competitive market and against an established industry of heavy weights.

    He built surprisingly scalable, custom software (on a Microsoft platform no less) that allowed him to accomplish some of things that you discuss as challenging and time consuming in your post.

    Your right, he’s not the “norm”, but his approach to quick, scalable software *IS* well worth studying…

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  33. Venkatesh Sellappa on November 29th, 2009 10:10 am

    This is in fact a very good point and rarely pointed out.

    I am not sure why you think people would send you hate mail but for anyone who has started a lean startup , this is just self-evident.

  34. Chris Schmitt on November 29th, 2009 10:48 pm

    We’re building a start-up based on the lean principles. The reason is simple: none of us are ready to quit our jobs until we’re sure we have a winner. Call us cowards perhaps, but we have families to feed.

    The problem will bulking up at the beginning is that no one will invest in your product if it doesn’t exist and you’ll never get started on anything. The lean approach encourages you to get off your butt and just do it.

    For our situation the lean startup approach is working very well. We got a working product out the door very quickly and we’re learning a lot from our first customers. Plus we’re having a ball!

  35. Ashley Moran on November 30th, 2009 12:28 am

    @Rob

    Ah - your first update significantly changes the way I interpreted your situation.

    @John Siegrist

    I fully agree. There’s an inherent cost in all forms of product development, and a certain standard below which cost saving bites you sooner than you can recoup your investment. Attempting to do things on the cheap turns any project into a crapshoot.

  36. Jamie Flinchbaugh on November 30th, 2009 12:31 am

    I agree with your conclusions.

    However, I disagree with one of your arguments. You essentially argue that the capital markets are infinitely wise. Capital chasing an idea is perfectly corrected to the strength of the idea. I think the history suggests there is plenty of friction in this market. There are times when wads and wads of money chase a popular but ultimately failed idea. And plenty of evidence that you might have a great idea that people don’t quite get until eventually, somehow you get a chance only to show up big.

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  38. Len Feldman on November 30th, 2009 1:58 am

    Your first update hits on an important risk of the Customer Development process–the “cul-de-sac” problem. You hit a rich vein of users in your first go-around…but they weren’t representative of the larger market opportunity.

    Despite what the Customer Development process says, it’s often wise to ask questions about what customers want early in the process, rather than waiting until the product as initially defined fails to get traction. The “laundry list” of features doesn’t preclude developing a Minimum Viable Product, but it allows you to build a product or service that anticipates future requirements.

  39. Mark Essel on November 30th, 2009 2:35 am

    I have yet to see the dark side. The customer development model doesn’t replace the product development model. It compliments it.

    You discovered several customer bases at once! Pick the user base that will define your personality as a business and run with it. Probing for value yields in our society and economy is why many grasp onto the customer development model. Of course it can’t replace what you learn by doing, by building, by listening.

    Ultimately you and your team plant the seeds for a new business with your first product or service. I don’t think you can rationally expect to explosively grow to be one of the biggest corporations in 4 years. Those mega corporations are homeruns. They’re the result of multiple points of chance all aligning around great team leadership, at an opportune moment.

    Comparing yourself to Google is setting yourself up for failure. You can’t be Google, and they can never be your team. The dynamics of the market evolves and changes fast. Your leadership and navigation will blaze an identity trail through history.

    Once you have knocked one out of the park you can try again to win the distance record. What matters is how many lives you can positively impact before the merry go round stops. Look at what today’s corporate titans really value.

    Altruism.

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    [...] The Dark Side of Customer Development and Lean Startups : Coconut … [...]

  41. Out of the Stream – Nov 30 to Dec 4 | social media montreal on November 30th, 2009 2:26 pm

    [...] The Dark Side of Customer Development and Lean Startups “Customer Development and the Lean Startup offshoots of it are the latest tech startup fads. The ideas have some kernels of truth, but they are taken as gospel by web entrepreneurs instead of taken as tools in the toolkit that are appropriate in some instances and not appropriate in others.” -More [...]

  42. Mark MacLeod on November 30th, 2009 2:49 pm

    You absolutely nailed why I had reservations about customer development. Totally agree.

    Also, I would add that you can’t discover your way into a new market. Your customers just don’t know. Even the crazy early adopters. You need to balance that feedback with your own vision and long-term thinking.

  43. Edwin Oh on November 30th, 2009 9:40 pm

    I’ve been in high tech marketing for +20 years, and it never ceases to amaze me the many ways Marketing 101 concepts get repackaged as something new.

    Having said that, I don’t feel this way about Customer Development and am an advocate of the this methodology. I find it one of the more useful marketing frameworks to come along in the last 10 years. But, as you correctly point out, it is a tool, appropriate in some situations and not in others. The trick is knowing when.

    You may already have considered this, but is it possible your UPDATE and UPDATE2 at the end of your post might be indicative of an early adopter to early majority user “crossing the chasm” issue(a different useful marketing framework pioneered by Geoffrey Moore)?

  44. Why are Customer Development and Lean Startup Principles So Popular? on December 7th, 2009 6:13 pm

    [...] Customer Development and Lean Startup models are frameworks, like Ruby on Rails or religion. No framework is perfect. It can’t be, nor does it have to be. Frameworks are guides for doing things a certain way that may prove useful and successful for you. [...]

  45. Jeff on December 9th, 2009 1:31 am

    I have to say that I am in the same situation wrt short term vs long term tradeoffs when following CD process.

    My first prototype was utterly ugly, yet still took a while to implement. When put in front of potential customers, they couldn’t get over how ugly it was!

    Support/bugfixes/maintenance have also been extremely stressful due to the leanness of the initial MVP, and I find myself apologizing a lot for the bugs in the product.

  46. kuwamoto.org » Blog Archive » Apple vs. Lean Startups on December 11th, 2009 8:10 pm

    [...] You may end up cutting corners you wish you hadn’t Best summarized here. [...]

  • About Rob

    Rob is co-founder of Backupify.com. He likes value investing, the Rolling Stones, college basketball, artificial intelligence, economic history and people who think independently.