The Four Steps to the Epiphany

1. Where Are the Customers?

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To begin with, the product development diagram completely ignores the fundamental truth about 

startups and all new products. The greatest risk—and hence the greatest cause of failure—in 

startups is not  in the development of the new product but in the development of customers and 

markets. Startups don’t fail because they lack a product; they fail because they lack customers and a 

proven financial model. This alone should be a pretty good clue about what’s wrong with using the 

product development diagram as the sole guide to what a startup needs to be doing. Look at the 

Product Development model and ask “where are the customers?”