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E140A - Session 7

Market Strategy II - Customer Development


Summary

This session provides new insight into what it is that makes some startups successful and leaves others selling off their furniture. We'll explore the premise that startups that survive the first few tough years do not follow the traditional product-centric launch model. Rather, through trial and error, hiring and firing, successful startups all invent a new, parallel process to product development for sales, marketing and business development. In particular, startups that succeed and thrive invent and live by a process of customer learning and discovery called "Customer Development."

The Customer Development process for launching a new product into a new market are the antithesis of the well-honed Product Management rules observed by large companies. Indeed, following traditional Product Management rules is a recipe for failure when it comes to a startup in a new market.

The session also introduces the notion of Market Type; the idea that not all startups follow the same pattern of bringing a product to market and early sales. Iin fact the activities of the sales and marketing departments are radically different in a startups entering an existing market than in one trying to create a new market.

Guest

Steve Blank

Required Readings (Policy on Required Readings.)

Suggested Reading

Study Questions (Policy on Study Questions.)

Take a look at the upcoming IMVU case and see if you can answer the following questions.

1. What were the three operating principles of the IMVU Owners Manual?
2. How long do you think the development cycle for each release of the IMVU software was?  Why?

Assignment

Login into the MFP Forum. Under the session assignment topic answer the following questions. For this assignment, only one submission is required from the opening team (Team #1). All others must submit individual postings!

Should IMVU (1) work with ROC, (2) Pacific Capital or (3) take the Janga acquisition?  Why?