Steve Blank is widely recognized as the Father of the Lean Startup Movement which focuses on applying a scientific experimental approach to projects that are launched under conditions of great uncertainty. The current focus of the Lean Startup movement is the development of business startups. For systematically discovering and validating a scalable business model, Steve Blanks uses a toolkit which he calls the “Customer Development Stack.” The approach of the Customer Development Stack is being taught to students at the University of Stanford, Berkeley, and Columbia as well as to selected scientists from America’s National Science Foundation. In spite of the increasing popularity in use of the Customer Development Stack, my observation is that the Customer Development Stack is far from the “ideal” Business Model Innovation toolkit. In the presentation below, I take a critical look at the Customer Development Stack. The critique is presented under 3 headings: Structure; Linkages (Functional Analysis); Logic (Predictive Capability). One critique suggests that transformation of “customer habit” should be a goal for Business and Customer Development; in fact, for every change management project. From this perspective, the toolkit of the Customer Development Stack is “hired” to reduce waste while discovering and validating a scalable business model as well as a customer habit engine. Hence, the imperative of “Getting Out Of the Building” to observe and influence customer habit engines while trying to create and transform them. Another critique notes that the process of the Customer Development Stack is weakly integrated with the Vision-Strategy-Product (VSP) Pyramid that is inherent in the approach of Steve Job as well as Eric Ries’s Lean Startup Method. My final remark is about a question: What would you consider as the characteristics, features, or specs of an Ideal Business Model Innovation Toolkit? For example, how would the Ideal Business Model Toolkit look 30 to 50 years from now? We look forward to hearing your feedback. Rod. http://goo.gl/okVMaS

1. Why
Steve
Blank’s
Customer
Development
Stack
is
Good
But
Not
Great
STRUCTURE
In
an
ideal
world,
the
Customer
Development
Stack
has
3
“CAB”
layers:
q Customer
Development
Model
q Agile
(Product)
Development
Model
q Business
Model
(Logic
Diagram)
In
Steve
Blank’s
Customer
Development
Stack,
ideas,
principles,
and
tools
exist
for
formulaDng,
tesDng,
and
validaDng
a
Customer
Development
Model
as
well
as
9
blocks
of
a
Business
Model.
However,
there’s
a
paucity
of
materials
on
the
Agile
(Product)
Development
Model
as
well
as
“Trade-­‐off”
Problem
Solving.
Also,
there
are
missing
links
between
business
model
strategy,
market
type,
and
product
analogs.
CUSTOMER
DEVELOPMENT
STACK
Source:
h.p://steveblank.com/2009/11/02/lean-­‐
startups-­‐aren%E2%80%99t-­‐cheap-­‐startups/
Customer
Development
Stack
is
a
good
Toolkit
to
systemaFcally
reduce
waste
when
discovering
&
valida7ng
a
scalable
business
model
and
habit
engine
but
…
LINKAGES
(FUNCTIONAL
ANALYSIS)
The
tool
for
organizing
and
managing
ideas
in
the
Customer
Development
Stack
is
the
Business
Model
Canvas.
However,
the
Business
Model
Canvas
is
a
staXc
graphic
organizer
that
ignores
relaXonships/flows
between
blocks
of
a
business
model
(as
well
as
in
their
environment).
The
Business
Model
Canvas
is
not
a
process
(funcDonal
analysis)
diagram
that
shows
dynamic
concepts,
e.g.,
Build-­‐Measure-­‐Learn
Loop,
Problem-­‐SoluXon
Fit,
AIDA,
and
Habit
Loop.
So,
techniques
such
as
Premortem,
NormaXve
Hypothesis
GeneraXon,
and
Habit
Engine
Analysis
&
Design
cannot
be
simply
shown
and
visually
used
with
the
Stack
(Canvas).
LOGIC
(PREDICTIVE
CAPABILITY)
The
predicXve
process
in
the
Customer
Development
Stack
is
currently
largely
qualitaXve.
In
theory,
the
Business
Model
Canvas
can
be
used
to
facilitate
quanXtaXve
analysis
and
predicXon
as
well
as
performance
and
resource
management
of
a
business
model.
However,
in
the
Stack,
use
of
the
Canvas
is
limited
to
visually
documenDng
and
modifying
hypotheses.
Also,
the
Stack
is
weakly
integrated
with
the
Vision-­‐Strategy-­‐Product
(VSP)
Pyramid
of
Steve
Jobs/Lean
Startup
Method.
Further,
the
Customer
Development
Stack
ignores
Outcome-­‐based
approaches
such
as
in
Discovery-­‐driven
Planning.
The
Customer
Development
Stack
hardly
uses,
as
a
starXng
point,
an
organizaXon’s
“Why”:
Mission/Vision/Purpose/Profit.
Finally,
the
Stack
does
not
explicitly
consider
the
transformaXon
of
customer
habits
as
a
goal
of
Customer
Development.
#4ROD.
Dr.
Rod
King.
rodkuhnhking@gmail.com
&
h8p://businessmodels.ning.com
&
h8p://twi8er.com/RodKuhnKing