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5 Lessons I Learned Following Steve Blank's 'The Four Steps to the Epiphany' The "Four Steps" is the best way to validate your idea. It does not make your idea a great one.

By Michael Pratt

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I co-founded Panamplify with Christopher St. John back in 2013. Chris and I spun the company out of our marketing agency Extra Sauce, and from day one we were determined to follow Steve Blank's process called Customer Development outlined in his book The Four Steps to the Epiphany. A little over three years later, we have a funded company that has achieved "product market fit" and we are heading into the third phase of the process called "Customer Creation." Following the Four Steps works. By "works" I mean it's the best way to validate your idea. It does not make your idea a great one.

Be prepared for a painful process.

Customer Development is a painful and counterintuitive process. The traditional product-centered approach made famous by Steve Jobs and Steve Wozniak, and William Hewlett and David Packard (disappear for 18 months into a garage and emerge with a product to spring on the market) gives way to the exact opposite: Get out of the office with barely an idea and find out what the (potential) customer actually needs and is willing to pay for. Most entrepreneurs with an idea shudder at the idea of getting something half-baked in front of a customer. "My product's not close to ready" is a common refrain.

Related: 10 World-Renowned Entrepreneurs Reveal Their Business Secrets

Panamplify automates client report building for marketing agencies. In order to verify the need we were confident existed, we built a real client report for an agency and delivered it to them literally by hand. No system. No login. Nothing. And they paid for it. Then we built another a little less by hand. The bottom line is that if a customer really needs your product they won't care about anything else and you will have learned a ton and saved a lot of money by simply focusing on what they need. This does not insult your vision. It validates it.

Don't chase shiny objects.

Following the Four Steps requires discipline. When we were in the Customer Discovery phase (Step One) and were trying to narrowly define just exactly what our customer looked like, we were often tempted by requests to solve tangential problems. These requests came with lures of big money (read: consultant fees), but taking any of those side projects would have temporarily lined our pockets and torpedoed our company. Customer Development demands the discipline of discovering if a vision of product-price point-customer type has merit and should be vigorously pursued. It leads to many small failures and iterations with occasional pivots (large scale shifts of vision). We have not had to pivot at Panamplify but we have endured countless iterations in the last two years.

Related: Why Your Dream Customers Should Be the Very First One You Approach

Don't think you already know who your customer is.

Customer Discovery is always the most difficult step, particularly when founders are convinced they know exactly who their customer is. With a one-page business model canvas in hand, we set out to see if other agencies were on the same page. Would these agencies actually pay for a product/solution? We took a basic sketch of 15 features and benefits and visited 50 agencies to conduct customer interviews. We identified three agencies who not only felt the pain but were "Band-Aiding" a solution it hurt so much. These early adopters turned into Panamplify's first real customers.

Take time to validate.

It's easy to confuse discovery with validation. In Customer Discovery, the goal is to identify the customer that will pay for our product. In Customer Validation we built the Panamplify platform to match exactly what we had "discovered." I spent most of my time honing and defining a repeatable sales process all the while feeding Chris and his development team additional customers. Several years ago, we ranked the 15 features we had sketched out in order of what we thought customers would find most useful. After a gruelling customer validation process, we identified two truths -- we got the list mostly right and the order mostly wrong. Imagine the time and resources we would have wasted if we built our product exactly according to our vision.

Related: 4 Steps to Maximizing Business Referrals

Plan anyway.

Founders love but often misunderstand General George Patton's famous quip "No plan survives contact with the enemy." Indeed, the best battle plans go out the window after contact with the enemy but planning is still absolutely vital. Why? Because it is impossible to adjust a plan (upon contact) if there isn't one in the first place. That is the essence of The Four Steps to the Epiphany and the key to building successful strategies for products that win.

I will be speaking about these lessons learned at VETCON, the premier conference for veteran entrepreneurs, March 23-25 in Silicon Valley.

Michael Pratt

Co-founder and CEO of Panamplify

Michael Pratt is the co-founder and CEO of Panamplify, a company using artificial intelligence to automate report building for marketing agencies. Panamplify was born out of insights identified while running Extra Sauce, the digital marketing agency he founded in 2010. Pratt has a degree in aerospace engineering from the United States Military Academy at West Point, and after serving in the Army Corps of Engineers he received an MBA in finance from Duke University. 

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