Market risk versus technology risk for startups…


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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.


Republished with author's permission from original post.

Patrick Lefler
Patrick Lefler is the founder of The Spruance Group -- a management consultancy that helps growing companies grow faster by providing unique value at the product level: specifically product marketing, pricing, and innovation. He is a former Marine Corps officer; a graduate of both Annapolis and The Wharton School, and has over twenty years of industry expertise.


  1. Patrick: Thanks for posting this. Steven asks great questions in the video. In a survey I conducted with CustomerThink this year, (Please see Sales Risk Survey Executive Summary, free to CustomerThink registered members), we took on this topic by learning about which risks most sales executives perceive–and what they are doing about them. We measured responses across multiple dimensions of selling risks. The net: today’s sales executives see the economy and competition as the biggest risks they face.

    We didn’t segregate for whether the respondent’s company was a start up or a mature enterprise, but it would be interesting to explore that variable in the next survey.

    The purpose for the survey was to compile insight about selling risks, to learn which ones have high likelihood and high impact, and to devise strategies to mitigate them. I would love to have the opportunity to speak with Steven to find out whether he can get value from these findings, and from the risk model I’ve developed.

  2. Andrew,

    I just downloaded your survey results – thanks for providing the link…give me a day or two to digest. While I don’t know Steven Blank personally, I have to believe that he would be open to having a conversation regarding the survey – you should contact him.

    Thanks for reading and taking the time to comment.


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