10 Major Flaws to Using the Product Development Model in a startup

“And I – I took the road less traveled by and that has made all the difference.” Robert Frost

There are so many things that I have forgotten about elementary school, but the poem, “The Road Not Taken” by Robert Frost has resided in my heart all this time. Was it because it was the first poem I ever learned and recited; was it my English teacher, Mrs. Bynum, whose expectations of me were grander that I could fathom at the time; maybe I just wanted an A; or in reality it was a seed planted in my heart about choices. I have never been one to follow the crowd, but that doesn’t mean I haven’t had some do-overs. Choices have made some forerunners and some trailblazers; while other choices have created casualties of bankruptcy and public shame on the road to entrepreneurial success.

In his book The Four Steps to the Epiphany, Steve Blank shares that start-ups follow a worn path that should lead to success, but unfortunately it dwindles into bankruptcy by using the Product Development Model. “The Product Development model is used by almost every organization launching a new product…to take their first product to market.” (2013, Pg. 6) He insists that successful start-ups do not follow the “traditional product-centric launch model espoused by product managers or venture capital community.” (pg. vii) But instead, they take a less trodden path; “through trial and error, hiring and firing successful startups all invent a parallel process to Product Development-a process of customer learning and discovery…[known as] “Customer Development.” (Pg. vii)

In this blog we are going to take a closer look at why Blank believes that following the path of the Product Development Model leads to disaster. (pg. 6-18)

10 Major Flaws to Using the Product Development Model (PDM) in a startup

  1. Where are the Customers? – Product focused instead of customer focused
  2. The Focus on First Customer Ship Date – “Fire, Ready, Aim” strategy – the only date when PDM thinks they are ‘finished’ building a product
  3. An Emphasis on Execution Instead of Learning and Discovery – ‘get it done, and get it done fast’, relating prior experience to a new venture
  4. Lack of Meaningful Sales, Marketing and Business Development Milestones – lacking a way to identify, stop and fix what’s broken
  5. The Use of a Product Development Methodology to Measure Sales –  readiness to sell instead of discovering the right market
  6. The Use of a Product Development Methodology to Measure Marketing – all marketing plans are made in a virtual vacuum
  7. Premature Scaling – having sales and marketing believe that by the first customer ship, they need fully staffed organizations
  8. Death Spiral: The Cost of Getting Product Launch Wrong – effects of premature scaling-causes the burn rate to accelerate
  9. Not All Startups Are Alike – PDM ignores this fact
  10. Unrealistic Expectations – ‘build it and the customers will come’ is not a good strategy

I have found that the road less traveled is one that is people centered and not product or production centered. As we gravitate towards our human nature, we are often driven by the whom and not so much the what, even though the what creates a change for the whom. Therefore, as we launch our startup, we must carefully consider the consumer in all aspects of the business from startup, to expansion, to succession.

Next week’s blog will explore the Customer Development Model.

Resource

Blank, Steven G. The Four Steps to the Epiphany: Successful Strategies for Products That Win. 2nd ed. California: Steve Blank, 2013.