Lean Startup Organizational Design: The Customer Development Team

Steve Blank Acting on Customer Discovery Transcript

This is a great question. One of the problems with entrepreneurship and I think I’ll kind of answer your question is that we treat startups as junior versions of large companies. I mean, just fundamentally that’s wrong. Think about it. In a startup like a big company, we say, “Big companies have VPs of sales. We need VPs of sales. Big companies have VPs of marketing. We need VPs of marketing.” This is just a junior version that if we water correctly, we’ll grow into a big company. This is just like IBM but smaller or just like Google but smaller. It turns out until you have your first customers, all the tools and tricks that large companies use are divided by zero. They really don’t work in small startups, because you are actually a different type of animal.

I’m just riffing on the … Should we use salesforce.com or other CRM stuff? That implies that you actually have a sales force that’s just a smaller version of a larger company, and my experience is no. Actually the titles are wrong, if you really want to get into it. One of the first tools I do now with startups are. Really? VP of sales? No, you’re not. VP of marketing? No, you are on the customer development team. Holy cow! What’s a customer development team? VP of sales assumes that all we have to do is drop an additional salesperson and sales will go up at a fixed increment. Customer development says, “We don’t even know who our customers or markets are.” Therefore. the title that says, VP of sales, implies we’re scaling a sales organization is just wrong.