Raising Money Using Customer Development « Steve Blank - The Diigo Meta page

• 10 Nov 09
  

  Vincent Chan
  • When you are presenting to a VC there are two conversations going on – the one you are presenting and the one that investors are thinking as they are listening to your presentation. (If they’re not busy looking at their Blackberry’s/iPhone’s.)
  • I believe all this advice is wrong. It’s akin to putting lipstick on a pig.  The problem isn’t your pitch, it’s your fundamental assumption that you can/should get funded without having real customer and product feedback.
  • 8 more annotations...
  • • if you are following a Customer Development process you have a greater chance of getting listened to, believed and funded.
    • extracting hypotheses from the business plan and getting the founders out of the building to test the hypotheses in front of customers.
    • turned these guesses into facts and searched for a repeatable and scalable sales model
    • Your proof that you have a business rather than a hobby comes from customer orders or users for your buggy, unfinished product with a minimum feature set.
    • Even better is “Customer Validation”– “We just got $50K from a customer” or “we got 100,000 users spending x minutes on our site”
    • Here’s What We Thought is you describing your initial set of hypotheses. Here’s What We Did allows you to talk about building the first-pass of the products minimum feature set. Here’s What Happened is the not so surprising story of why customers didn’t react the way you thought they would. A Progress Graph on the right visually shows how far you’ve come (in whatever units of goodness you’re tracking – revenue, units, users, etc.)
    • They will realize that you have built a startup that’s agile, resilient and customer-centric.
    • This is a radical departure from a traditional VC pitch. It will blow the minds of 70-80% of investors.  The others will throw you out of their office.
• 05 Nov 09
  

  Joel Liu

  customer development VC

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