9: Customer Development & Business Models

Summary:   The first part of this class will focus on customer development.  Once you have an idea, sized the opportunity, and have convinced yourself it is a business worth pursing, what do you do next?  How do you execute and bring the product to customers and have them clamoring at your doorstep to buy it? Effective entrepreneurs understand that startups are not small versions of large companies.  Bringing startup products to market are not the same as launching products from large established companies. Because marketing is an art rather than a science, there are a plethora of marketing models entrepreneurs can follow. This session will follow the last session's introduction of entrepreneurial marketing by examining another compelling model called customer development.  The second part of the class will be a lecture on business models.

<!--[endif]--> <!--[endif]-->Quote of the Day:
"There are no facts inside your building.  So get the heck outside your building and go find the facts.” Steve Blank

Guests (Click for Bios)
Steve Blank, Stanford

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?

Team Case Analysis (Policy on Case Analyses.) Group A only submits
Should IMVU (1) work with ROC, (2) Pacific Capital or (3) take the Janga acquisition?  Why?

Required Readings (Policy on Required Readings.)

• "Four Steps to the Epiphany" Chapter 1
  
• "Four Steps to the Epiphany” Chapter 2
  
• Case: IMVU (  http://cb.hbsp.harvard.edu/cb/access/5992713 )
• Browse Steve Blank's blog categories: Customer Development and Customer Development Manifesto
  
• Browse Eric Ries’ blog posts on customer development
• Technology Ventures (Byers, Dorf, and Nelson): Ch 6.2-6.3 (Highlights)
  

Recommended Readings (Policy on Recommended Readings)
"Four Steps to the Epiphany" available on Amazon or at http://www.cafepress.com/kandsranch

Term Projects (Policy on Online Assignments.)
Initial Positioning Statement. The Entrepreneurial Marketing class session will help you and your team get started in writing your positioning statement. Fill in Geoff Moore's two-sentence positioning template for your OAP product or service concept. The template is:



Sentence #1

• For (target customer)
• who (statement of the need or opportunity),
• the (product/service name) is a (product/service category)
• that (statement of benefit).

Sentence #2

• Unlike (primary competitive alternative),
• our product (statement of primary differentiation).

Create two PowerPoint slides. One slide should simply list the name of your project team with all the team members and their majors. The second slide should have a succinct draft of your positioning statement above.  Send via email to the teaching team with your team name clearly identified by 9 AM the day of the session.  Also post the slides to the website that your team has created for the OAP and the OEP term projects. For extra credit, please share how your potential venture will make meaning and not just money.

Please see Term Projects page for further instructions.