Market risk versus technology risk for startups...
The odds of success for most startups is about .1% - that means for every winner the likes of Google and Facebook, there are roughly a thousand losers whose names are not remembered and where real money is lost forever. And of the thousand or so that don’t make it, only about ten percent fail because of faulty technology or engineering while the remaining ninety percent fail because they can’t pinpoint the right market or the right customer. That means even if you get the technology right, there is still an almost ninety percent chance that you will still fail. It’s all about getting the customer development process right.
Serial entrepreneur and author Steven Gary Blank drives this point home in this short video clip from a lecture given at Stanford University’s Technology Ventures Program.
Here’s the takeaway: The customer development process is the most important factor for determining success or failure for most startups. And it’s a process that requires you to discover what problems customers have; whether your product solves that process; and who will buy it.