Week 7 Reflection: Company Building

 

Although I typically finish a read and can bask in a sense of accomplishment, I completed Stephen Blank’s book, The Four Steps to the Epiphany: Successful Strategies for Products that Win and was absolutely relieved to have simply finished such a tedious read. I’ve said from the start that Blank’s book reads more like an instructional manual, although detailed and thorough, it is rather monotonous providing precise details to implement for every…. single…. stage…. of the startup! Despite the fact that I was a little annoyed by his approach, I choose to see the best in the book; the point that Blank provides a wealth of knowledge for those looking to put their best foot forward into those business “doors” of opportunity.
I am a sucker for quotes, and I must admit that Blank does a remarkable job intertwining some memorable excerpts into his narrative. For example, he starts off this last chapter with,

“The essential thing is action. Action has three stages: the decision born of thought, the order or preparation for execution, and the execution itself. All three stages are governed by the will. The will is rooted in character, and for the man of action character is of more critical importance than intellect. Intellect without will is worthless, will without intellect is dangerous.” Sun Tzu

a critical piece of the Marine Corps War Doctrine, to inform future entrepreneurs that now is the time to implement everything they have learned to build their company (and, that this journey is certainly akin to war!). See, up until now, Blank ascertains that there was no real reason to have a standardized company complete with departments specializing in an array of functions. Although you may have had a few sales or even a few thousand sales, everything you’ve learned now culminates into whether this is a scalable project or whether you should iterate or exit. Up until now, Blank has been persistent that readers have to understand that the product development model that has typically been used for startups should be converted to a customer development model which will better prepare the enterprise to enter their selected market, use the sales of earlyvangelists (those who like to use products early on and will sing it’s praises to the high heavens) and profitably build a mainstream customer base for future success.

Blank maintains that in order to successfully scale the company for the mainstream market, entrepreneurs will not only have to build their customer base, but also, “build the company’s organization, management, and culture to support greater scale.” As leaders, business owners must be adept at not micromanaging their employees; but continue to provide support which places value on the individual and on the company’s vision. Furthermore, managers must continually encourage innovation and creativity so as not to stifle ideas and be able to implement change, when necessary, that satisfies both customers and the market (competition).
In addition, business owners must create fast-response departments to support the climate of learning that will be necessary for the venture to progress into the next phase of building the company. This “positioning” prepares the entity to be ready for the next opportunity since, “success in a startup is all about searching, finding, and exploiting ephemeral opportunities.” As he has preached throughout the book, Blank further maintains that it is fundamental to know what market the company is planning to enter because as he has stated previously, it will determine how entrepreneurs will need to proceed on the playing field. Just like each venture is unique, each market has its own set of guidelines that will need to be adhered to, to mitigate the entrepreneurial risks that ensue. Blank affirms that too many new enterprises construe growth as a call to construct, staff, and scale traditional departments corresponding to a cookie-cutter model (thinking all companies must have certain branches) rather than assembling structure from a clear strategic standpoint.

 

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

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

 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.

Week Four Reflection: Customer Discovery

 

Although the read is still unvaried and can get dull fast, it is full of gems that shine brightly through the rubble of details. In Chapter 3 of Blank’s, The Four Steps to the Epiphany: Successful Strategies for Products that Win, he is explaining to his audience that the business models that were once widely acceptable and used across various industries are no longer applicable today! Blank ascertains that, “the general goal of customer discovery amounts to turning the founders’ initial hypothesis about their market and customers into facts.” Here, Blank wants the individual to work on getting the product out to early visionaries known as “earlyvangelists,” so that they can get the word out about the new “it” product to those they influence. He explains that at this point, the product should have minimal specs that address the customer’s concerns/issues and should not be crafted to satisfy a mainstream consumer.

In addition, Blank affirms that everyone who is collaborating on the project should be knowledgeable about differentiating between customer development and product development processes so that all associated have a clear understanding of the milestones that should be met at each stage (board members and investors are not always privy to what is transpiring in the company since they are oftentimes not directly observing the actions of the employees). Moreover, Blank encourages founders to create both a mission statement and core values statement of the founding team to reinforce fundamental beliefs and clarify why exactly the company is in operation when the vision is stymied.

Blank goes on to encourage entrepreneurs to maintain a dependency analysis so that they will have an idea of what needs to happen in order for their venture to be a success. “For each factor, the dependency analysis specifies what needs to happen, when it needs to happen, and what it means for the business if it does not occur as expected.”

Lastly, Blank urges individuals to build a reference story that will highlight key components of the product or service they are trying to sell. The story should entail how exactly your product features will be a beneficial solution for the customer. Blank says that after you have established this protocol you can then get out and talk to customers who are experiencing this need and are actively pursuing a resolution. He acknowledges that now that you have found a solution (your product) to a “real problem” (the market) you can begin to delve further into the needs of future consumers by asking, “if you could wave a magic wand and change anything in what you do, what would it be?” Blank maintains that this is an IPO question that, when asked (and subsequently answered successfully), it is almost sure to yield exciting results such as your company going public and you being ridiculously lucrative.

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

 Week Three Reflection: The Customer Development Model

 

In Chapter 2 of Blank’s, The Four Steps to the Epiphany: Successful Strategies for Products that Win, the tone is much the same…and the struggle remains real to stay alert for Blank’s tips! While the information is certainly useful, it is delivered with no enthusiasm and leaves the reader wearied at times. However, Blank does a tremendous job of adding in fascinating narratives about startups who ultimately failed because in some way, shape, or form, they did not follow the advice (whether they were knowledgeable or not) presented in this book.
Upon delving into another chapter, I am always reminded of Jay-Z’s lyrics from the song, “Guns and Roses.” Jay-Z, Hove, Hova, Sean Carter, or whatever you want to call him clearly states, “You can get a return on investment if you just pay attention!” Seriously, did you get that play on words? Well, that’s exactly what Blank does in each chapter…if and only if the reader can stay woke to comprehend his command, he/she will be enlightened as to how to begin the customer development process and any other business process known to man!

Once individuals have identified their profitable problem to be “real,” the goal of customer discovery is finding out who the customers for your products are and whether the problem you are solving is important to them. Blank asserts that many startups fail because they simply burn through their cash with staff that should not have been hired. Early in the game, he asserts that a minimal number of employees are necessary and that will allow the company to conserve their capital.

Most importantly, Blank maintains that customer discovery entails getting outside the building to learn and discover your users and customers, learn what customers problems are and what it is about your product that solves their problems. Furthermore, the objective of this stage is to build a repeatable sales road map for the sales and marketing team to follow later down the road when it does become necessitous to make those changes.
Blank upholds that product development and customer development are parallel processes. “While the customer development group is engaged in customer-centric activities outside the building, the product development group is focused on product-centric activities that are taking place internally.”

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

 

 Week Two Reflection: The Product Development Model

 

Steven Gary Blank’s The Four Steps to the Epiphany: Successful Strategies for Products that Win is a useful resource for founders looking to create successful products for the masses and market them appropriately. The book reads more like a manual (and is oftentimes very direct, and very monotonous!!!), but it does delineate each step and further detail how each phase should be enacted to ensure the most success for your enterprise. Blank explains that initially when founders are crafting their companies, they must think of their product development as, “the path hidden in plain view.”

Quoting Joseph Campbell, “A legendary hero is usually the founder of something-the founder of a new age, the founder of a new religion, the founder of a new city, the founder of a new way of life. In order to found something new, one has to leave the old and go on a quest of the seed idea, a germinal idea that will have the potential of bringing forth that new thing.”

Blank goes on to explain that much like heroes in movies, founders must prepare a path for themselves that will allow their startup to be more prone to success. Although this will not eliminate obstacles, it will mitigate risks and increase the chances of the enterprise being profitable for a substantial period of time. Blank asserts that, “startups don’t fail because they lack a product; they fail because they lack customers and markets.” He maintains that before founders worry about first product ship dates or utilize the product development paradigm to predict the future of the enterprise; they must initially “focus on reaching a deep understanding of customers and their problems, discovering a repeatable road map of how they buy, and building a financial model that results in profitability.”

In order for individuals to successfully decimate these obstacles Blank insists that before any of the traditional functions of selling and marketing can happen, the company has to prove that a market could exist, verify that someone would pay real capital for the solutions the company provides, and then go out and create the market.
If founders have effectively answered these aforementioned questions, then they will set themselves on the “hero’s” path, learning about their customers and their problems; and, creating a market that will be lucrative and further substantiate these claims.

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