In the traditional approach to building startups, the process was heavily influenced by the methodologies used in large companies. This involved a structured, step-by-step process known as [[waterfall development]], where startups would begin with a concept, secure seed funding, and proceed through stages like product development, alpha and beta testing, and finally, first customers. Marketing and sales were also planned in a linear fashion, with marketing creating demand and sales executing a predefined revenue plan. Business development focused on forming partnerships to create a comprehensive product offering, assuming that initial customers would be mainstream. However, this approach often failed to account for the unique challenges startups face, particularly the assumption that early customers would be mainstream rather than early adopters or niche markets. The realization that most startups fail due to a lack of customers rather than product development issues led to a shift in focus toward [[customer development]]. This approach emphasizes which help startups identify and refine their business model. This approach is complemented by [[agile development]] practices, such as extreme programming (XP), which focuses on iterative and incremental product development. By continuously interacting with customers and testing product features, startups can ensure that their offerings meet real market needs and reduce the risk of failure. The integration of customer development with agile engineering represents a significant shift from the traditional execution-first mindset. Instead of immediately hiring product managers and following a rigid development plan, startups are encouraged to begin with customer development to validate their business model. Agile methodologies, which have been successfully applied in both software and hardware industries, support this approach by allowing for flexibility and adaptation based on customer feedback. This iterative process helps startups build products that are more likely to succeed in the market, as they are developed with a clear understanding of customer needs and preferences. ## Activities - Watch the video [Process - How to Build a Startup - YouTube](https://youtu.be/IrcP_IQuYk4), on the traditional approach to building startups, followed by the video [Customer vs Product Development - How to Build a Startup - YouTube](https://youtu.be/f_LNNnNfpp4) describing the new approach. - Answer the quiz on this video [Why Do Startups Fail - How to Build a Startup - YouTube](https://youtu.be/B68m804UDhg), and see if you got the correct answer here [Why Do Startups Fail Solution - How to Build a Startup - YouTube](https://youtu.be/pSH3NHuSTsQ) Next: [[Team organization]] Back to [[Key Concepts on EITT]]