Steve Blank - The Waterfall Model

A startup has to act quickly and adapt the development of the soft- and hardware to the market. Here, try and fail or succeed are very important. The waterfall method can only work if you don’t launch a completely new product and if it is based on a lot of experience and on customers that you know very well.

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First of all, we need to understand what the so-called waterfall method is about. Basically, it is a process that is planned AND executed step by step. The first step is market analysis in which you decide what market requirements the product has to meet. Once you come to a decision, the product will be divided into individual features by the engineering team in order to design and/or implement it. This could be program code as well as hardware or something else. Once the product is finished, it will be thoroughly tested and diligently maintained in the following process.

The world is so simple, you just use the waterfall method, go through the steps, set up the sales department and everyone is happy...Unfortunately, this mindset existed (and still exists in many large companies) for the last 40 years. Certainly, this might work in principle in a large company. For example, in the auto industry, you know your customers well and you simply develop products following this principle. If you take a look at the switch to electric cars, you very quickly notice the fatal mistake. Simply equipping an already established car with a large battery and replacing the combustion engine with a dynamo just doesn’t work. TESLA shows all the large companies how to do it and, to this day, only BMW learned from it and set up a completely independent department from which the i3 and the i8 resulted.

Back to our startup. We develop a multilingual video platform. Sure, we know very well what customers want when it comes to the topic of (online)video. After all, there are pioneers such as YouTube or Vimeo. But what about multilingualism, translations, voice over, how to distribute it, how to be found on Google, where exactly do our customers need the videos, on which devices are they watched...and these are only some of the questions we have to deal with every day. How are we supposed to know all this right from the start? How are we supposed to develop a product for which we don’t know the specific customers needs. We know that WE need such a solution and thus we can get started. However, we are only one aspect, one user, for this solution. But we are only successful when our product will be accepted in the market and THAT only happens when we meet the needs of our customers.

A startup almost always starts with the vision of an individual who then gets other people interested and with whom he can start something. However, the vision is not often that what meets the need of the customer. Development almost always takes place equally. First of all, you implement as many features as possible for version 1.0. However, it’s then all the more disappointing because 85-90% of all the features are unused or unwanted by the customers. 

The bottom line is that the waterfall method is rather daily business for large companies, but it is the wrong approach for startups.

This article is written by our CEO, Bernd Korz. With his experience as an entrepreneur, he shares his vision about the lessons provided by Steve Blank. Join us every week for a new article on Steve Blank’s lectures.

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