Basel: So, my next question is about product development. I know we touched up on that already but mainly for web startup. What is the product development like for such a company?
Steve: Sure. So, web startups have it incredibly easy. Nowadays you can develop on your Laptops. You can use Amazon Web Services or RackSpace or something in the cloud where you could off load the cost of normally having to buy work stations or computers or hardware, etc. You're just buying computing as a utility, but really the goal for a web startup and an entrepreneur which usually confuses them is they always tend to think: oh, no, no, no. I have my entire vision. We're building my vision now. We're building all the features. We're arguing about the UI. We're arguing about the buttons.
No, that's not what you're doing if I’m involved. What we're building at first is what I call a low fidelity website. I want you to test your assumption of what the problem is and then show me what you think a solution would look like cheaply. Oh, I think the problem is people really want to go do X. Good. Get me a couple of those people to the website and just put up: we do X. If you're interested, push here and see if you can anybody to agree with you about your assumption of their problem.
And so, what we do if you're following a customer development process on the web, is test all the key assumptions in your business model. We're solving this problem. Great. So, you're solving that problem, so if I get people to your site and you say that, you should have hundreds or thousands of people pushing this button that says I agree taking them to the next page. Oh, absolutely. And, of course, the answer never works out like that.
What we do is construct, at least, in my model a website based on these minimum kind of feature set ideas rather than engineering the entire product end to end, which is very different from the "let's argue about whether the button should be blue or green or whether the UI is perfect". I actually go: you know, those are important, but they're second order effects to, are we solving a problem or satisfying a need that people have identified or feel that's important.
About the Guest:
After 21 years in 8 high technology companies, Steve retired in 1999. He co-founded his last company, E.piphany, in his living room in 1996.His other startups include two semiconductor companies, Zilog and MIPS Computers, a workstation company Convergent Technologies, a consulting stint for a graphics hardware/software spinout Pixar, a supercomputer firm, Ardent, a computer peripheral supplier, SuperMac, a military intelligence systems supplier, ESL and a video game company, Rocket Science Games.
After Steve retired, He took some time to reflect on his experience and wrote a book about building early stage companies called "Four Steps to the Epiphany". His latest book, The Startup Owners Manual integrates 10 years of new knowledge.
Steve moved from being an entrepreneur to teaching entrepreneurship to both undergraduate and graduate students at U.C. Berkeley, Stanford University and the Columbia University/Berkeley Joint Executive MBA program.
