GoKawiilPosted on by steve blank
One of the most exciting things a startup CEO in a business-to-business market can hear from a potential customer is, “We’re excited. When can you come back and show us a prototype?”
This can be the beginning of a profitable customer relationship or a disappointing sinkhole of wasted time, money, resources, and a demoralized engineering team.
It all depends on one question every startup CEO needs to ask.
I was having coffee and pastries with Justin, an ex-student, listening to him to complain over the time he wasted with a potential customer. He was building a complex robotic system for factories. “We spent weeks integrating the sample data they gave us to build a functional prototype, and then after our demo they just ghosted us. I still don’t know what happened!”
After listening to how he got into that predicament, I realized it sounded exactly like the mistake I had made selling enterprise software.
Enthusiasm Versus Validation
Finding product/market fit is the holy grail for startups. For me, it was a real rush when potential users in a large company loved our slideware and our minimum viable product (MVP). They were ecstatic about the time the product could save them and started pulling others into our demos. A few critical internal recommenders and technical evaluators gave our concept the thumbs up. Now we were in discussions with the potential buyers who had the corporate checkbook, and they were ready to have a “next step” conversation.
This buyer wanted us to transform our slideware and MVP into a demonstration of utility with their actual data. This was going to require our small, overcommitted engineering team to turn the MVP into a serviceable prototype.
When I heard a potential customer offer us their own internal customer data I was already imagining popping Champagne corks once we showed them our prototype. (For context, our products sold for hundreds of thousands of dollars, and lifetime value to each customer was potentially measured in millions.) I rallied our engineering team to work for the next few months to get the demo of the prototype ready. As much as we could, we integrated the customers’ users and technical evaluators into our prototype development process. Then came the meeting with the potential customer. And it went great. The users were in the room, the buyer asked lots of questions, everyone made some suggestions and then we all went home. And the follow up from the potential customer? Crickets…
... continue reading