COURSE NUMBER: MBA295F.1
This course is cross-listed with the Evening and Weekend MBA Program
COURSE TITLE: Customer and Business Development in Hi-Tech Enterprise
UNITS OF CREDIT: 2 units
INSTRUCTOR: Steve Blank
E-MAIL ADDRESS: sblank@kandsranch.com
CLASS WEB PAGE LOCATION: http://bspace.berkeley.edu
MEETING DAY(S)/TIME: Tuesdays, 6:00 p.m. to 8:00 p.m.
PREREQUISITE(S): MBA295A. The main requirements for this class are passion, energy and resourcefulness. The course also assumes that students have either; experience in bringing a new product to market, taken a basic Entrepreneurship course, or have written a business plan.
CLASS FORMAT: The course will combine lectures, readings, case materials and regular class involvement by entrepreneurs and business professionals. Well-prepared and intellectually engaged students are essential for the class to succeed.
REQUIRED READINGS: The readings for this course are principally from the course text: Four Steps to the Epiphany, articles, book chapters and cases that will be published in an on-line Reader. They are organized as required readings and cases for class discussion along with suggested supplemental readings that will deepen your understanding of the class.
BASIS FOR FINAL GRADE: Students will be graded on the independent research project (50% of final grade), completion and quality of effort related to the Application Exercises (25% of final grade), and class attendance and participation (25% of final grade).
ABSTRACT
OF COURSE'S CONTENT AND OBJECTIVES:
This course is about how to build a “Lean Startup” using the “Customer
Development” methodology to successfully organize sales, marketing and business
development, with particular emphasis on high technology companies. Its premise
is that startups are not smaller versions of large companies. Instead early
stage ventures require their own tools and techniques.
For the purpose of this course, a “startup” can either be a new venture, or an existing company entering a new market. Both must solve a common set of issues: Where is our market? Who are our customers? How do we build the right team? How do we scale sales?
The class will cover the four steps of Customer Development; Customer Discovery - understanding customer problems and needs, Customer Validation -developing a sales model that can be replicated, Customer Creation - creating and driving end user demand, and Company Building - transitioning the organization from learning and discovery to a well oiled machine engineered for execution.
The
key points of this Customer Development class are:
1.
Get out of the building. Very few technology startups fail for lack of
technology. They almost always fail for lack of customers. Yet surprisingly few
companies take the basic step of attempting to learn about their customers (or
potential customers) until it is too late - it's just so easy to focus on
product and technology instead. True, there are the rare products that have
literally no market risk; they are all about technology risk (i.e. life sciences
and a "cure for cancer"). For everyone else you need to get some
facts to inform and qualify our hypotheses ("fancy word for guesses")
about what kind of product customers will ultimately buy.
2.
Theory of market types. Market Types explain why different startups
face wildly different challenges and time horizons. There are three fundamental
situations that change what your company needs to do: creating a new market,
bringing a new product to an existing market, and resegmenting
an existing market. If you're entering an existing market, competition comes
from the incumbent players. When creating a new market, it may take years
before you get traction with early customers.
3.
Finding a market for the product as specified. Customer Development
tries is to find the minimum feature set required to get early customers.
4.
Phases of product & company growth. Customer Development posits
that startups go through four stages of growth; Customer Discovery (when you're
just trying to figure out if there are any customers who might want your
product), Customer Validation (when you make your first revenue by selling your
early product), Customer Creation (akin to a traditional startup launch,) and
Company Building (where you gear up to Cross the Chasm and realign management.
5.
Learning and iterating vs. linear execution. In the early stage of a
startup companies are focused on figuring out which way is up. In a traditional
startup, they would probably launch their product and company, failing or
succeeding spectacularly. Only after a major, public, and expensive failure
would they iterate.
6.
Premature Execution: An insight of Customer Development is that
startups need time spent in a mindset of learning and iterating, before they
try to launch. During that time, they can collect facts and change direction in
private, without dramatic and public embarrassment for their founders and
investors.
This course will challenge your perception of the traditional sales, marketing and business development roles, leave you with a new way to view and organize these roles, and help you increase the odds of a successful venture.
BIOGRAPHICAL
SKETCH:
Steve Blank is a retired serial entrepreneur and private investor. Since 1978
Steve has been a founder of or participant in eight Silicon Valley startups
including Zilog and MIPS, two semiconductor startups;
Ardent, a supercomputer company; Convergent Technologies a workstation company;
SuperMac, an Apple peripheral supplier; Rocket
Science, a video game company, and E.piphany; an enterprise
software company. These startups resulted in five IPO's, and three very deep
craters. Steve's operational roles have spanned CEO to VP of Marketing.
Steve has been lecturing at the Haas School at U.C. Berkeley in the entrepreneurship program since 2002, Columbia Business School since 2005, and Stanford’s Graduate School of Engineering since 2006 and was awarded the Best Teacher of the year in the MS&E department. He is a Trustee at U.C. Santa Cruz. Currently, Steve serves on the boards of Audubon California and the Peninsula Open Space Trust. He was appointed to the California Coastal Commission by Governor Schwarzenegger in February 2007.