The Startup Owner's Manual

CHAPTER 2The Path to the Epiphany: The Customer Development Model

How narrow the gate and constricted the road that leads to life. And those who find it are few.

—Matthew 7:14

WHEN WILL HARVEY APPROACHED STEVE BLANK with a new business idea in June 2004, Steve uncharacteristically almost took out his checkbook before hearing Will’s pitch. Steve had invested in Will’s previous company, There.com, and sat on its board. Before that, Will had been Steve’s engineering VP at Rocket Science, a video-game company with Steve as founding CEO. Rocket Science is infamous for appearing on the cover of Wired magazine while blowing through $35 million in venture capital in less than three years, leaving a crater so deep it has its own iridium layer.

Sitting in Steve’s living room, Will explained his vision for IMVU, a “virtual world” company with 3D avatar-based instant messaging and social networking. Will had a world-class reputation. He developed Music Construction Set, a worldwide best-selling video game, at the age of 15. He earned his bachelor’s, master’s and Ph.D. in computer science at Stanford while running a video-game company that developed hits like Zany Golf, Immortal, and Marble Madness.

Will’s co-founder, Eric Ries, had started an online recruiting company while earning his computer science degree at Yale. Eric had joined Will’s last startup as a senior software engineer. That company built a “virtual world” on the web using a multiyear waterfall development model. After three ...