Tag: 4 steps to epiphanhy

Customer Creation

Posted on by empirestateofmind_grp1v2

Week 6 Reflection: Customer Creation

The fifth chapter of Steven Blank’s, The Four Steps to the Epiphany: Successful Strategies for Products that Win finally allow the audience a glimpse at what they’ve been working towards. While the goal is ultimately to create an amazing product and subsequently a flourishing business, it is most important to understand the consumers who will drive the demand for the product and bring in the revenue for the company. Here, “in the customer development model, the phrase “customer creation” represents the essential marketing activities necessary to help customers learn about a product and create a desire to buy it.” Startups need to understand the market they have entered so they can best strategize their positioning, launches, and plan how they will need to attract consumers and compete with their counterparts (Blank also introduces the New Lanchester Strategy which is an interesting way to understand your market and prepare accordingly with how you will need to proceed to make the venture sustainable in relation to your opposition.) He reminds us that, “in looking at any existing market, your startup is the weakest player with the least resources,” and, will certainly need to be well equipped to contend with other competitors. (I would be remiss if I didn’t mention that Blank even goes on to compare business tactics much to fighting. He quotes Sun Tzu’s, The Art of War, to identify the best tactics to use on an enemy…I mean competitor.) He asserts that, “the major risk in entering an existing market is the dominance of the competitors and the consequent cost of entry.” This philosophy is expounded on as Blank inserts an interesting narrative about how adroit businessman Sam Walton re-segmented the market when he introduced “Wal-Mart” to small communities that were oftentimes overlooked by big box retailers such as Sears and Kmart. Fast forward fifty years and Walton would go on to create one of the largest, most profitable companies in the world while Kmart declared bankruptcy in 2002!

While Blank yet again delivers way too much information in a somewhat compressed format, he is knowledgeable and thorough and his experience drips from each chapter to climax to the best practices for entrepreneurs to follow. Although it is oftentimes overwhelming, it is masterfully placed together and gives founders a clear and concise method for victory!

References
Blank, S. G. (2006). Four Steps to the Epiphany: Successful Strategies for Products that Win (3rd ed.). Cafepress.com.
Hayes, A. (2020, January 29). Lanchester Strategy Definition. Retrieved February 23, 2020, from https://www.investopedia.com/terms/l/lanchester-strategy.asp

Customer Validation

Posted on by empirestateofmind_grp1v2

 Week Five Reflection: Customer Validation

 

In Chapter 4 of Steven Blanks’, The Four Steps to the Epiphany: Successful Strategies for Products that Win, Blank continues to guide his audience on how they can effectively progress through the various stages associated with maintaining a startup. At the beginning of the chapter, he calmly quotes Nietzsche saying, “Along the journey we commonly forget its goal,” before repitiously throwing a massive amount of info directly at his audience. Blank maintains that customer validation has 4 phases which prepare the founder to navigate through the murky philosophies dealing with what market the startup is entering (existing, new, or re-segmented), and how these differences will direct and define the path the distribution channel will need to follow to successfully sell the product. Once you understand how the consumers for your products behave (how they spend their time and money) and how you must be innovative to stay ahead of competitors and trends, Blank argues that you can initiate activities to sell to your first “real” customers. Here, Blank affirms that the customer validation process is meant to help the startup gather indispensable intelligence about their consumers so that they can assemble a cohesive plan of action that will allow the entity to progress productively.

At this step, Blank also encourages startups to articulate a value proposition which will clearly express why your product is worth buying. “The value proposition builds the bond between you and your customer, focuses marketing programs, and becomes the focal point for building the company…Transformational value propositions deal with how the solution will create a new level of class of activity—i.e. something people could never do before.”

Once this is actuated, Blank wants founders to direct their attention to their distribution channels and understand how this “food chain” of wholesalers, distributors and retailers will work to support the enterprise. “One of the mistakes startups often make is assuming that their channel partners invest in creating customer demand.” Understanding these principles will be key to the longevity of the startup and to the overall achievements of the venture. Additionally, amassing individuals for their expertise on advisory boards is commendable at this stage and can only serve to facilitate the founder in getting things “right” the first time. As always, Blank urges his readers to continually iterate their ideas, return to the stage of the plan that did not yield the results that were predicted, and provide a solution for the issue. If it can’t be repaired, by all means exit!!! If it can or doesn’t need to be resolved at all, you are ready to proceed to the last phase of the plan, also known as Customer Creation.

References
Blank, S. G. (2006). Four Steps to the Epiphany: Successful Strategies for Products that Win (3rd ed.). Cafepress.com.