Thursday, January 29, 2015

Reading :: The Four Steps to the Epiphany

The Four Steps to the Epiphany
By Steve Blank

Just a side note here before I start on the review itself. This book is subtitled "The book that launched the Lean Startup revolution," and indeed Steve Blank taught and supported Eric Reis, whose The Lean Startup made the term famous. The book is cited quite a bit and is de rigeur in the startup world. I read this book in fall 2014, and when I decided to cite it for some research I'm working on, I realized that Blank had self-published it. Based on my own experience with a self-published book that is not nearly as famous I'm sure Blank has turned this and his other book into handsome income-producing assets.

That's what Blank excels at, of course: helping people to identify a hypothesis about a market's need, test and iterate that hypothesis, then execute a plan to fill that need. In this book, Blank argues that customer development—the process of identifying a potential market segment, developing a hypothesis about what it needs, validating and iterating that hypothesis, and executing—occurs in four sequential but iterated stages: (1) customer discovery, (2) customer validation, (3) customer creation, and (4) company building. In steps 1-2 (the “Search” phase), entrepreneurs search for the right business model and test value propositions as hypotheses; in steps 3-4 (the “Execute” phase), entrepreneurs execute based on the business model and the validated value proposition. That is, in rhetorical terms, the essential claim is established in the first two steps, then serves as the foundation for the last two steps.

To develop that hypothesis, Blank advocates calling at least 100 potential customers. He provides scripts and examples to help you figure out how to make such a call, how to extract actual feedback (as opposed to brush-offs), and how to apply it. He discusses when one must pivot and even how to structure one's organization to make it more nimble so that pivots can be executed more swiftly. Throughout, he draws on a deep well of experience, including both successes and failures, and he is quite candid about the latter.

I'm not planning to start a high-tech organization soon, but if I were, this would be a good playbook to follow. If you're interested in becoming an entrepreneur, or studying how entrepreneurs make their arguments, this is an essential read.

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