The book “The Startup Owner’s Manual”, written by the authors Steve Blank and Bob Dorf, is aimed at entrepreneurs who are still in the initial phase of developing a startup project.
And this might be your case. Who knows, you already have a great idea, but you are at that stage where you need to identify opportunities and turn them into a profitable organization.
Okay, you are already a born entrepreneur: creative, innovative, and bold, but nobody was born “ready”.
So, if you are looking for a guide to help you build a successful startup, you are in the right place!
Want to know how? So, let’s go!
About the book “The Startup Owner’s Manual”
The book “The Startup Owner’s Manual” was written by Steve Blank and Bob Dorf and published in 2012.
This work doesn’t deny what it came from: it is a guide for entrepreneurs of different types of startups. Through the Customer Development Process, it teaches you step by step, so that you can develop an absolute zero winning startup.
An interesting thing is that, according to the authors themselves, this book will be your companion for a period of between six and 30 or more months, which is usually the time it takes to start building a successful and scalable startup.
About the authors Steve Blank and Bob Dorf
Steve Blank is an American entrepreneurial scholar and serial entrepreneur from Silicon Valley. He is recognized for developing the Customer Development methodology, a precursor to the Lean Startup movement.
Also, Blank has been in the technology industry for over thirty years and is the author of other books, such as “The Four Steps to the Epiphany”.
Bob Dorf, also an American and a serial entrepreneur, has invested, trained, and advised more than two dozen startups in more than a decade.
Bob travels the world helping startups, incubators, governments, and established companies to implement the Customer Development Process through lectures and workshops.
To whom is this book indicated?
In the words of the authors Steve Blank and Bob Dorf, “THIS BOOK IS FOR ALL ENTREPRENEURS”. In addition, the content of “The Startup Owner’s Manual” can be useful for leaders and managers.
Main ideas of the book “The Startup Owner’s Manual”
- A startup is not a smaller version of a large company, but a temporary organization;
- The goal of a startup should be to find a scalable, recurring, and profitable business model;
- The five types of startups: Small Business Entrepreneurship, Scalable Startups, “Buyable” Startups, Large Business Entrepreneurship, and Social Entrepreneurs;
- Customer Development is focused to further assist Scalable Startups;
- Each type of startup improves your chances of finding the right path to success using Customer Development;
- The 14 rules that make up The Customer Development Manifesto;
- In a startup, failure is part of the process;
- Startups should discard the Business Plan and adopt the Business Model;
- Study and know your market type;
- A startup made up of people without passion is dead on the day it opens;
- In a Startup, job names are different from that of a large company;
- The goal of Customer Development is not to avoid spending money but to preserve it while pursuing the ideal business model;
- The goal of an investor in a startup is to achieve the scale compatible with a risky investment;
- The Customer Development Process is among the best practices of the winning startups.
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Overview: What is a startup anyway?
According to authors Steve Blank and Bob Dorf, a startup is not a smaller version of a large company, as most people think. A startup is a temporary organization.
As a rule, the goal of a startup should be to find a scalable, recurring, and profitable business model.
Next, we separate the main concepts of the five types of startups defined by the authors Steve Blank and Bob Dorf in the book “The Startup Owner’s Manual”.
Small Business Entrepreneurship
It consists of the service sector, such as dry cleaners, gas stations, and convenience stores. Here, the owners are happy to be “small”. There is no claim to become a multimillion-dollar company.
These startups are formed by technological entrepreneurs and can be worth hundreds of millions or even billions of dollars. From the beginning, a scalable startup has been dedicated to the search for a business model that allows “getting there”.
This phenomenon applies mainly to low-cost digital applications. They are startups made to be bought by large companies. The business is around $5 million to $50 million.
Large Business Entrepreneurship
Yes, big companies can also go for “Disruptive Innovation”.
As explained by authors Steve Blank and Bob Dorf in the book “The Startup Owner’s Manual”, they aim to launch new products in new markets for new consumers.
This is where social purpose and nonprofits fit into areas such as water resources, agriculture, health, and microfinance.
So, how is your startup?
Overview: Customer Development Manifesto
Check the summary of the 14 rules that form the Customer Development Manifesto:
Rule No. 1 - There are no facts inside your building, so get outside
To get started, you have to go out to experience first hand every element of your business model.
Then, it is also up to you to analyze the feedback, consider it, and make any necessary changes or rearticulations that are necessary for the constituent elements of the business model.
Rule No. 2 - Pair customer development with agile development
For the authors Steve Blank and Bob Dorf, your method of product development should be flexible. Whenever necessary, you must adapt it quickly and nimbly.
Rule No. 3 - Failure is an integral part of the search
In the book “The Startup Owner’s Manual”, it is emphasized that, in a startup, failure is part of the process. Because it is by making mistakes that you learn to be a great company!
Rule No. 4 - Make continuous iterations and pivots
A rearticulation can be a major change in your business model. The change can be simple or complex, like changing your target audience.
Rule No. 5 - No business plan survives first contact with customers so use a business model canvas
The authors Steve Blank and Bob Dorf affirm that startups should throw away the Business Plan and adopt the Business Model. Then, as customers approve or dispute the assumptions, you can either accept approval or make changes to your product.
Rule No. 6 - Design experiments and test to validate your hypotheses
It is simple: to convert hypotheses into facts, you have to go out and test them with consumers.
Rule No. 7 - Agree on market type. It changes everything
Different types of markets require different discoveries, MVPs, and sales and marketing strategies, as it is indicated in the book “The Startup Owner’s Manual”. In a new market, you will have to induce your customers to do something they couldn’t do before.
So study and know your market type!
Rule No. 8 - Startup metrics differ from those in existing companies
At your startup, indicators should look at progress in turning assumptions and hypotheses into indisputable facts, rather than measuring the execution of a rigid plan. Be sure to make decisions based on facts, not faith.
Rule No. 9 - Fast decision-making, cycle time, speed and tempo
You should observe the “learn, do, rearticulate” or “repeat, build” cycles. Thus, the chances of finding the business model that will increase its scale with available capital will be greater.
Rule No. 10 - It’s all about passion
In the definition of authors Steve Blank and Bob Dorf, a startup made up of people without passion is dead the day it opens. Startups require people who are passionate about their work, who don’t spend the day counting the hours to the end of the shift.
Rule No. 11 - Startup job titles are very different from a large company’s
Your startup can regroup the traditional titles attributed to sales, marketing, and business development into one simple: Customer Development team.
It’s up to you to engage with customers, gathering insights to develop a viable product.
Rule No. 12 - Preserve all cash until needed. Then spend
According to authors Steve Blank and Bob Dorf, the goal of Customer Development is not to avoid spending money, but to preserve it while looking for the ideal business model. That is, one that is able to increase its scale repeatedly.
Once the Business Model has been found, spend like there is no tomorrow!
Rule No. 13 - Communicate and share learning
As part of the Customer Development “learn and discover” philosophy, you must share.
This communication tool enables people in the company - and from outside - to follow the development closely. Also, to offer suggestions for route corrections.
Rule No. 14 - Customer development success begins with buy-in
The Customer Development Process is among the best practices of winning startups. That’s why you have to get constant feedback from your customer: this leads to the reformulation of your product in search of your target audience, as it is reinforced in the book “The Startup Owner’s Manual”.
What do other authors say about it?
Eric Ries, in the book “The Lean Startup”, explains that it is important that the word “innovation” is understood widely. These can be original scientific breakthroughs, a new use for existing technology, creation of a new business model, among others.
Regarding the foundation of the startup, Peter Thiel and Blake Masters, in the book “Zero to One”, said that a startup with problems in its foundation can’t be fixed. One of the biggest difficulties is choosing your partner. This decision is so important that the authors compare it to a marriage.
Finally, in the book “How to Sell When Nobody’s Buying”, author Dave Lakhani advises: if you are not selling, try to improve your approach. In tough times, bad salespeople give up and open opportunities for the most creative and efficient ones.
Okay, but how can I apply this to my life?
Now that we have covered the main points of Steve Blank and Bob Dorf’s book, let’s go to practical applicability:
- Briefly summarize your business, review the overviews of this PocketBook and find out what kind of startup you are going to build;
- You have to go to the street to experiment firsthand on each element of your business model. Still, in your office, prepare questions and rehearse the demonstration of your product or idea. For this experience, you may need a notebook, pens, a recording device (or smartphone with a recording app), etc. The important thing is to record the responses of your audience in the best possible way.
- An addendum: in addition to going out on the street, you can search for real people through social networks (using Google Forms, for example);
- After the survey, you have to study the feedback;
- If necessary, don’t be afraid to make changes to your business (you can do anything, even change your target audience);
- Do experiments and tests (here, you can count on the help of your family and friends): so you discover the viability of your business;
- Study and know your type of market: search, search, and search;
- Passion is everything, so you have to stay in love with your business. Learn the history of entrepreneurs: to stay motivated, you can read books, watch inspiring movies and documentaries;
- If you already have a partner or team, stay connected: it is important that you exchange ideas and share knowledge. You can hold face-to-face or distance meetings with the help of technology. Additionally, you can create a group in messaging apps;
- If you already have a customer, ask for their constant feedback: this way, you can refine or even change your product. Remember that phrase: “Serve well to always serve.”
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