Holding a Cat by the Tail: Lessons From an Entrepreneurial Life by Steve Blank

Author:Steve Blank [Blank, Steve]
Language: eng
Format: epub
Tags: Startups, Management, Sales, Customer development
Amazon: B00FVXYXHC
Publisher: Hyperink Entrepreneur and Business Books
Published: 2013-10-12T21:00:00+00:00

An early indication that you’ve found the right business model is when you believe the cost of getting customers will be less than the revenues the customers will generate. For web startups, this is when the cost of customer acquisition is less than the lifetime value of that customer. For biotech startups, it’s when the cost of the R&D required to find and clinically test a drug is less than the market demand for that drug. These measures are vastly different from those captured in balance sheets and income statements especially in the near term.

What should you be talking about in your board meeting? If you are following Customer Development, the answer is easy. Board meetings are about measuring progress measured against the hypotheses in Customer Discovery and Validation. Do the metrics show that the business model you’re creating will support the company you’re trying to become?

Startup Metrics

Startups need different metrics than large companies. They need metrics to tell how well the search for the business model is going, and whether at the end of that search is the business model you picked worth scaling into a company. Or is it time to pivot and look for a different business model?

Essentially, startups need to “instrument” all parts of their business model to measure how well their hypotheses in Customer Discovery and Validation are faring in the real world.

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