[MOOC Course Review] How to Build a Startup? {on Udacity}

How to Build a Startup?

 

Lesson 1: Logistics about this MOOC

Best selling book:

Powerful tools:


 

Lesson 2: What We Now Know

Go to research and write a business plan, and start your business. This approach is very wrong.

This class at this point, claimed that they are going to teach the right way to build a startup. Well, lets see.

Startups are not smaller version of the large companies. MBA programs teach their students how to manage and operate their existing companies. The tools they teach cannot really help startups with their first one or two chaotic years.

Startups search, large companies execute. But search for what? Execute what?

No business plan survives the first contact with customers.

A startup is an incredibly unpredictable series of advance that there is no way that you could put together in a 5-year plan.

We need to plan before the plan. And how to do that? You can use Business Model Canvas the-business-model-canvas

We need to come up with some hypothesis, and go outside the building to turn these hypothesis into facts, and we update the canvas accordingly to turn it into a scorecard.

So the suggestion is that instead of writing an operating plan and financial forecast, we use the model to list hypothesis and turn it into facts and eventually we write them up to be a valid plan.

It turns out that for more startups, their first customers are crazy people like yourself.

The following process turns out to be very wrong for startups.

The waterfall engineering is also problematic because it is based on the assumption that the designer knows what customers need. If you are in a big company, you probably do because of the effort of the market research team or existing customers. But if you are in the startup, it is often based on the vision of the founder, which replaces the actual need of the customers.

Now we know that 80-90% of software’s features are unneeded by customers.

We now also know that most startups fail due to lack of customers, instead of fail in the product development.

We have seen so many tools and process to manage the product development risk, but no whatsoever anything to manage the customer risk.

So the first thing that startups should search for actually is the customer development. You start with a fragmented function of a product, and test it with potential customers. Hear their feedback and add on it to further the development.

If your vision is that one day you are going to have a hierarchy of people working under you, you are out of business on Day 1. What you need to focus is the customer development team. Starting from Day 1, the founders should spend at least 20% of their time understanding the needs of customers.

So what they are teaching is how to search, what to search, for a startup.


 

Lesson 3: Business Models and Customer Development

It is important to get the founder go outside and hear the customers.

 

 

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