Lester Center for Entrepreneurship and Innovation Haas School of Business University of California, Berkeley
The Customer Development Process in High Tech: Sales, Marketing & Business Development in a Startup 2
This course is about how to successfully organize sales, marketing and business development in a for-profit startup, with particular emphasis on high technology companies. For the purpose of this course, a “startup” can either be a new venture, or an existing company entering a new market. Both must solve a common set of issues: Where is our market? Who are our customers? How do we build the right team? How do we scale sales? These issues are at the heart of the “Customer Development” process covered in this course.
This class provides insight and concrete lessons into what is it that makes some startups successful and leaves others selling off their furniture. The course is built around the premise that startups that survive the first few tough years do not follow the traditional product-centric launch model. Through trial and error, hiring and firing, successful startups all invent a new, parallel process to product development for sales, marketing and business development. In particular, startups that succeed and thrive invent and live by a process of customer learning and discovery called “Customer Development.”
The Customer Development process for launching a new product into a new market is the antithesis of the well- honed Product Management rules observed by large companies. Indeed, following traditional Product Management rules are a recipe for failure when it comes to a startup in a new market.
The class also introduces the notion of Market Type; the idea that not all startups follow the same pattern of bringing a product to market and early sales. That in fact the activities of the sales and marketing departments are radically different in a startup entering an existing market, than in one trying to create a new market.
This course describes the “Customer Development” model in detail; it will challenge your perception of the traditional sales, marketing and business development roles and leave you with a new way to view and organize these roles.
Objectives and Teaching Methods
The course combines lectures, readings, case materials and regular class involvement by entrepreneurs and business professionals. Well-prepared and intellectually engaged students are essential for the class to succeed.
The readings for this course are principally from the course text: Four Steps to the Epiphany, articles, book chapters and cases that will be published in an on-line Reader. They are organized as required readings and cases for class discussion along with suggested supplemental readings that will deepen your understanding of the class.
Deliverables and Requirements
The main requirements for this class are passion, energy and resourcefulness. The course also assumes that students have either; experience in bringing a new product to market, taken the core Entrepreneurship course, or have previously written a business plan.
Application Exercises: Students must individually and independently complete 3 Application Exercises. Each exercise entails analyzing Market Type, Customer Discovery, Customer Validation and Customer Creation choices the subject companies have made. Students will analyze the subject company’s customer and market hypothesis, channel and sales strategy, and demand creation activities. These exercises will cover understanding early customer needs and matching them with product features, how to research product distribution channels, creating a sales