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2009</a></li> <li><a href='https://steveblank.com/2009/11/'>November 2009</a></li> <li><a href='https://steveblank.com/2009/10/'>October 2009</a></li> <li><a href='https://steveblank.com/2009/09/'>September 2009</a></li> <li><a href='https://steveblank.com/2009/08/'>August 2009</a></li> <li><a href='https://steveblank.com/2009/07/'>July 2009</a></li> <li><a href='https://steveblank.com/2009/06/'>June 2009</a></li> <li><a href='https://steveblank.com/2009/05/'>May 2009</a></li> <li><a href='https://steveblank.com/2009/04/'>April 2009</a></li> <li><a href='https://steveblank.com/2009/03/'>March 2009</a></li> <li><a href='https://steveblank.com/2009/02/'>February 2009</a></li> </ul> </li> <li id="pages-2" class="widget widget_pages"><h2 class="widgettitle">Other Stuff</h2> <ul> <li class="page_item page-item-2"><a href="https://steveblank.com/about/">About Steve</a></li> <li class="page_item page-item-22"><a href="https://steveblank.com/tools-and-blogs-for-entrepreneurs/">Startup Tools</a></li> <li class="page_item page-item-62"><a href="https://steveblank.com/secret-history/">Secret History</a></li> <li class="page_item page-item-68"><a href="https://steveblank.com/books-for-startups/">Books for Startups</a></li> <li class="page_item page-item-11025"><a href="https://steveblank.com/slides/">Slides/Videos</a></li> <li class="page_item page-item-25609"><a href="https://steveblank.com/raising-money/">Raising Money</a></li> </ul> </li> </ul> </div>  <div class="narrowcolumnwrapper"><div class="narrowcolumn"> <div id="content" class="content"> <div class="post-6881 post type-post status-publish format-standard hentry category-ardent category-customer-development" id="post-6881"> <h2><a href="https://steveblank.com/2010/10/07/strategy-is-not-a-to-do-list/" rel="bookmark">Strategy is Not a To Do List</a></h2> <div class="postinfo"> Posted on <span class="postdate">October 7, 2010</span> by steve blank </div> <div class="entry"> <p>I had breakfast with two of my ex-students from Singapore who were building a really interesting startup. They were deep into Customer Discovery and presented a ton of customer data on the validity of their initial hypothesis – target customers, pricing, stickiness, etc. I was unprepared for what they said next. “We’re going to do a big launch of our product in three weeks.” I almost dropped my coffee. “Wait a minute, what about the rest of <a href="http://steveblank.com/2009/09/17/the-path-of-warriors-and-winners/" target="_blank">Customer Development</a>? Aren’t you going to validate your hypotheses by first getting some customers?”</p> <p>Without any sense of irony they said, “Oh, our investors convinced us to skip that part, because our customer feedback was all over the map and our schedule showed us launching in three weeks and they were worried that we’d run out of cash. They told us to stay on schedule.” Now I was confused, and I asked, “Well what do you guys believe – Customer Development or launch on a schedule?” Without missing a beat they said, “Oh, we believe both are right.”</p> <p>I realized I was listening to them treat Customer Development as an item on their<br /> <a href="http://www.amazon.com/gp/product/B002V0AN2C?ie=UTF8&tag=wwwsteveblank-20&linkCode=as2&camp=1789&creative=9325&creativeASIN=B002V0AN2C" target="_blank"> To Do list</a>.</p> <p>Suddenly, I had a massive case of déjà vu.</p> <p><strong>Can You Pull This Off<br /> </strong>I was VP of marketing at <a href="http://steveblank.com/category/ardent/" target="_blank">Ardent</a>, a supercomputer company where a year earlier I had <a href="http://steveblank.com/2009/10/08/get-out-of-my-building/" target="_blank">a painful and permanent lesson</a> about Customer Discovery. I was smart, aggressive, young and a very tactical marketer who really hadn’t a clue about what strategy actually meant.</p> <p>One day the CEO called me into his office and asked, “Steve I’ve been thinking about this as our strategy going forward. What do you think?” And he proceeded to lay out a fairly complex and innovative sales and marketing strategy for our next 18 months. “Yeah, that sounds great,” I said. He nodded and then offered up, “Well what do you think of this other strategy?” I listened intently as he spun an equally complex alternative strategy. “Can you pull both of these off?” he asked looking right at me. By the angelic look on his face I should have known that I was being set up. I replied naively, “Sure, I’ll get right on it.”</p> <p><strong>Ambushed<br /> </strong>25 years later I still remember what happened next. All of sudden the air temperature in the room dropped by about 40 degrees. Out of nowhere the CEO started screaming at me, “You stupid x?!x. <em>These strategies are mutually exclusive</em>. Executing both of them would put us out of business. You don’t have a clue about what the purpose of marketing is because all you are doing is<em> executing a series of tasks like they’re like a big To Do list</em>. Without understanding why you’re doing them, you’re dangerous as the VP of Marketing, in fact you’re just a glorified head of marketing communications.”</p> <p>I left in daze angry and confused. There was no doubt my boss was a jerk, but unlike <a href="http://steveblank.com/2009/10/08/get-out-of-my-building/" target="_blank">the other time I got my butt kicked</a>, I didn’t immediately understand the point. I was a great marketer. I was getting feedback from customers, and I’d pass on every list of what customers wanted to engineering and tell them that’s the features our customers needed. I could implement any marketing plan sales handed to me regardless of how complex. In fact I was implementing three different ones. Oh…hmm… perhaps I was missing something.</p> <p>I was doing a lot of marketing “things” but why was I doing them? I had approached my activities as simply as a task-list to get through. With my tail between my legs I was left to ponder; what was the function of marketing in a startup?</p> <p><strong>Strategy is Not a To Do List, It <em>Drives</em> a To Do List<br /> </strong>It took me awhile, but I began to realize that the <em>strategic</em> part of my job was two-fold. First, (in today’s jargon) we were still searching for a scalable and repeatable business model. My job was to test our hypotheses about who were potential customers, what problems they had and what their needs were. Second, when we found these customers, marketing’s job was to put together the tactical marketing programs (ads, pr, tradeshows, white papers, data sheets) to drive end user demand into our direct sales channel and to educate our channel about how to sell our product.</p> <p>Once I understood the strategy, the To Do list became clear. It allowed me to prioritize what I did, when I did it and instantly understand what would be mutually exclusive.</p> <p><strong>Good Luck and Thanks For the Fish<br /> </strong>My students were going through the motions of <a href="http://www.amazon.com/gp/product/0976470705?ie=UTF8&amp;tag=wwwsteveblank-20&amp;linkCode=as2&amp;camp=1789&amp;creative=9325&amp;creativeASIN=0976470705" target="_blank">Customer Development</a> rather than understanding the purpose behind it. It was trendy, they had read my book and to them it was just another step on the list of things they had to do. They had no deep understanding of why they were doing it. So they were at a crossroads. Since their investors had asked them to launch now, what happened if their initial assumptions were wrong?</p> <p>As they left I hoped they would be really lucky.</p> <p><strong>Lessons Learned</strong></p> <blockquote> <ul> <li>Entrepreneurs get lots of great advice.</li> <li>Most of it is mutually exclusive.</li> <li>Don’t do it if you can’t explain why you’re doing it.</li> <li>Or else it all becomes a To Do list.</li> </ul> </blockquote> <p>Listen to the post here: Download the Podcast <a href="http://clearshore.net/page/10/" target="_blank">here</a></p> <div class="sharedaddy sd-sharing-enabled"><div class="robots-nocontent sd-block sd-social sd-social-official sd-sharing"><h3 class="sd-title">Share this:</h3><div class="sd-content"><ul><li class="share-print"><a rel="nofollow noopener noreferrer" data-shared="" class="share-print sd-button" href="https://steveblank.com/2010/10/07/strategy-is-not-a-to-do-list/" target="_blank" title="Click to print" ><span>Print</span></a></li><li class="share-email"><a rel="nofollow noopener noreferrer" data-shared="" class="share-email sd-button" href="mailto:?subject=%5BShared%20Post%5D%20Strategy%20is%20Not%20a%20To%20Do%20List&body=https%3A%2F%2Fsteveblank.com%2F2010%2F10%2F07%2Fstrategy-is-not-a-to-do-list%2F&share=email" target="_blank" title="Click to email a link to a friend" data-email-share-error-title="Do you have email set up?" data-email-share-error-text="If you're having problems sharing via email, you might not have email set up for your browser. 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I liked to fail fast, move on, and not look back.</p> <p>However, in catching up with the VP of Sales of <a href="http://steveblank.com/category/ardent/">Ardent</a> last night, I was reminded one of the few times I did return for closure.</p> <p><strong>National Supercomputer Centers<br /> <span style="font-weight:normal;">For a decade starting in 1985, the National Science Foundation (NSF) established and spent a pile of money (~$50 million/year) on four supercomputing centers in the U.S. – Cornell University; University of Illinois, Urbana-Champaign; the Pittsburgh Supercomputing Center at Carnegie Mellon University; and the San Diego Supercomputer Center at the University of California at San Diego. The ostensible goal of these centers was to allow scientists and researchers access to supercomputers to simulate commercial phenomena that were too expensive, too dangerous or too time consuming to physically build.</span></strong></p> <p>The reality was that the U.S. Nuclear Weapons Laboratories used supercomputers to run their <a href="//localhost/cfdocs/CCIM/docs/Rider_CSRI_June27_2007.pdf">hydrodynamics codes</a> for nuclear weapon design and the National Security Agency used them to <a href="http://www.moyogo.com/blog/2005/09/secret-opcodes.html">decrypt codes</a>. But with the cold-war winding down these agencies could no longer be counted on to provide Cray Research with enough business to sustain the company. Commercial applications needed to be found that could take advantage of this class of computers.</p> <p>The search for <a href="http://steveblank.com/2009/10/15/ardent-war-story-4-you-know-you’re-getting-close-to-your-customers-when-they-offer-you-a-job/" target="_blank">commercial supercomputer applications</a> was good news for Ardent, as this was our business as well. But bad news was that the supercomputing centers had concluded that they could justify their existence (and budget) only by buying the biggest and most expensive supercomputers <a href="http://en.wikipedia.org/wiki/Cray#ERA.2C_CDC_and_Cray_Research:_1950_to_1996" target="_blank">Cray Research</a> made.</p> <p><strong>We Lost the Deal<br /> <span style="font-weight:normal;">At <a href="http://steveblank.com/category/ardent/">Ardent</a> we were building a personal supercomputer powerful enough to run and display numerical simulations just about the time the National Science Foundation was funding these centers. I remember that the Pittsburgh Supercomputing Center had put out a request for a proposal for a supercomputer to replace the <a href="http://en.wikipedia.org/wiki/Cray_X-MP" target="_blank">Cray X-MP</a> they installed in 1986. In reading it, there was no doubt that it was written only in a way that <a href="http://research.microsoft.com/en-us/um/people/gbell/craytalk/" target="_blank">Cray</a> could respond.</span></strong></p> <p>I realized that given the amount of money the Supercomputing Center wanted to spend on buying the new <a href="http://netlib2.cs.utk.edu/benchmark/top500/reports/report94/Architec/node10.html" target="_blank">Cray Y-MP</a> (list price $35 million,) we could put an Ardent personal supercomputer next to every scientist and researcher connected to the university. I responded to their RFP by proposing that Ardent build the Pittsburgh Supercomputing Center a distributed supercomputing environment with hundreds of Ardent personal supercomputers rather than a monolithic Cray supercomputer.</p> <p>As one could imagine this was the last thing the supercomputer center management wanted to hear. All their peers were buying Cray’s, and they wanted one as well. We had support from the scientists and researchers who had bought one of our machines and were beginning to see that distributed computing would ultimately triumph, but bureaucracy marched on, and we lost the bid.</p> <p>In my career I’ve been involved with lots of sales deals, and for some reason losing this was the <em>one</em> deal I never forgot. Maybe because a win here would have meant success rather than failure for the company, perhaps because I really believed we could make the impossible happen and win. For whatever reason, I hated that particular Cray that got installed in Pittsburg.</p> <p><strong>Closure<br /> <span style="font-weight:normal;">Fast forward 15 years. Retired for a year, I ran across an article that said, “<a href="http://www.tgc.com/dsstar/00/0905/102139.html">$35 Million Dollar Supercomputer For Sale for Scrap</a>.” It was the Pittsburgh Supercomputing Center <a href="http://www.psc.edu/machines/cray/c90/">Cray Y-MP</a> that had beaten me at Ardent. It was <a href="http://www.theregister.co.uk/2000/09/05/cray_supercomputer_for_sale/" target="_blank">for sale</a> on <a href="http://nl.newsbank.com/nl-search/we/Archives?p_product=PG&p_theme=pg&p_action=search&p_maxdocs=200&p_topdoc=1&p_text_direct-0=0EADE4974C61E125&p_field_direct-0=document_id&p_perpage=10&p_sort=YMD_date:D&s_trackval=GooglePM" target="_blank">Ebay</a>.</span></strong></p> <p><a href="http://news.cnet.com/eBay-ed-supercomputer-may-be-put-out-to-pasture/2100-1017_3-245519.html" target="_blank">I bought the Cray</a>.</p> <p>It took two semi-trailers to deliver it.</p> <p>It sat in my barn next to the tractors and manure for five years. I had the only farm capable of nuclear weapons design.</p> <p>Cray called two years ago and bought it back for parts for an unnamed customer still running one.</p> <p><em>Closure</em>.</p> <p class="getsocial" style="text-align:left;"><img data-recalc-dims="1" decoding="async" style="border:0;margin:0;padding:0;" src="http://getsocialserver.files.wordpress.com/2009/02/gs1001.png?w=468" alt="" /><a title="Add to Facebook" href="http://www.facebook.com/sharer.php?u=http://steveblank.com/2009/11/19/closure" target="_blank"><img data-recalc-dims="1" decoding="async" style="border:0;margin:0;padding:0;" src="http://getsocialserver.files.wordpress.com/2009/02/gs1011.png?w=468" alt="Add to Facebook" /></a><a title="Add to Digg" href="http://digg.com/submit?phase=2&url=http%3A%2F%2Fsteveblank.com%2F2009%2F11%2F19%2Fclosure&title=Closure" target="_blank"><img data-recalc-dims="1" decoding="async" style="border:0;margin:0;padding:0;" src="http://getsocialserver.files.wordpress.com/2009/02/gs1021.png?w=468" alt="Add to Digg" /></a><a title="Add to Del.icio.us" href="http://del.icio.us/post?url=http%3A%2F%2Fsteveblank.com%2F2009%2F11%2F19%2Fclosure&title=Closure" target="_blank"><img data-recalc-dims="1" decoding="async" style="border:0;margin:0;padding:0;" src="http://getsocialserver.files.wordpress.com/2009/02/gs1031.png?w=468" alt="Add to Del.icio.us" /></a><a title="Add to Stumbleupon" href="http://www.stumbleupon.com/submit?url=http%3A%2F%2Fsteveblank.com%2F2009%2F11%2F19%2Fclosure&title=Closure" target="_blank"><img data-recalc-dims="1" decoding="async" style="border:0;margin:0;padding:0;" src="http://getsocialserver.files.wordpress.com/2009/02/gs1041.png?w=468" alt="Add to Stumbleupon" /></a><a title="Add to Reddit" href="http://reddit.com/submit?url=http%3A%2F%2Fsteveblank.com%2F2009%2F11%2F19%2Fclosure&title=Closure" target="_blank"><img data-recalc-dims="1" decoding="async" style="border:0;margin:0;padding:0;" src="http://getsocialserver.files.wordpress.com/2009/02/gs1051.png?w=468" alt="Add to Reddit" /></a><a title="Add to Blinklist" href="http://www.blinklist.com/index.php?Action=Blink/addblink.php&Description=&Url=http%3A%2F%2Fsteveblank.com%2F2009%2F11%2F19%2Fclosure&Title=Closure" target="_blank"><img data-recalc-dims="1" decoding="async" style="border:0;margin:0;padding:0;" src="http://getsocialserver.files.wordpress.com/2009/02/gs1061.png?w=468" alt="Add to Blinklist" /></a><a title="Add to Twitter" href="http://twitter.com/home/?status=Closure+%40+http%3A%2F%2Fsteveblank.com%2F2009%2F11%2F19%2Fclosure" target="_blank"><img data-recalc-dims="1" decoding="async" style="border:0;margin:0;padding:0;" src="http://getsocialserver.files.wordpress.com/2009/02/gs1071.png?w=468" alt="Add to Twitter" /></a><a title="Add to Technorati" href="http://www.technorati.com/faves?add=http%3A%2F%2Fsteveblank.com%2F2009%2F11%2F19%2Fclosure" target="_blank"><img data-recalc-dims="1" decoding="async" style="border:0;margin:0;padding:0;" src="http://getsocialserver.files.wordpress.com/2009/02/gs1081.png?w=468" alt="Add to Technorati" /></a><a title="Add to Furl" href="http://www.furl.net/storeIt.jsp?u=http%3A%2F%2Fsteveblank.com%2F2009%2F11%2F19%2Fclosure&t=Closure" target="_blank"><img data-recalc-dims="1" decoding="async" style="border:0;margin:0;padding:0;" src="http://getsocialserver.files.wordpress.com/2009/02/gs1091.png?w=468" alt="Add to Furl" /></a><a title="Add to Newsvine" href="http://www.newsvine.com/_wine/save?u=http%3A%2F%2Fsteveblank.com%2F2009%2F11%2F19%2Fclosure&h=Closure" target="_blank"><img data-recalc-dims="1" decoding="async" style="border:0;margin:0;padding:0;" src="http://getsocialserver.files.wordpress.com/2009/02/gs1101.png?w=468" alt="Add to Newsvine" /></a><img data-recalc-dims="1" decoding="async" style="border:0;margin:0;padding:0;" src="http://getsocialserver.files.wordpress.com/2009/02/gs1111.png?w=468" alt="" /></p> <div class="sharedaddy sd-sharing-enabled"><div class="robots-nocontent sd-block sd-social sd-social-official sd-sharing"><h3 class="sd-title">Share this:</h3><div class="sd-content"><ul><li class="share-print"><a rel="nofollow noopener noreferrer" data-shared="" class="share-print sd-button" href="https://steveblank.com/2009/11/19/closure/" target="_blank" title="Click to print" ><span>Print</span></a></li><li class="share-email"><a rel="nofollow noopener noreferrer" data-shared="" class="share-email sd-button" href="mailto:?subject=%5BShared%20Post%5D%20Closure&body=https%3A%2F%2Fsteveblank.com%2F2009%2F11%2F19%2Fclosure%2F&share=email" target="_blank" title="Click to email a link to a friend" data-email-share-error-title="Do you have email set up?" data-email-share-error-text="If you're having problems sharing via email, you might not have email set up for your browser. 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But few realize how this differs from most of the population. Watching others try to solve problems reminded me why entrepreneurs are different.</span></em></p> <p><strong>Progress Report<br /> <span style="font-weight:normal;">Last week I happened to be sitting in my wife’s office as she was on the phone to my daughter in college. Struggling with one of her classes my daughter had assured us that she was asking for help – and was reporting on her progress (or lack of it).</span></strong></p> <p>She had sent several emails to the resource center asking for help. She was also trying to set up a meeting with her professor. All good, and all part of the “when you’re stuck, ask for help” heuristic we taught our kids. But the interesting part for me was learning that in spite of her efforts no one had gotten back to her.</p> <p>She believed she had done all things that could be expected from her and was waiting for the result.</p> <p>I realized that my daughter had confused <em>motion with action.</em></p> <p><em><span style="font-style:normal;">This reminded me of a conversation with one of my direct reports years before my daughter was born.</span></em></p> <p><strong>Status Report<br /> <span style="font-weight:normal;">At <a href="http://steveblank.com/category/ardent/">Ardent</a> the marketing department was responsible for acquiring applications for our supercomputer. This required convincing software vendors to move their applications to our unique machine architecture. Not a trivial job considering <a href="http://steveblank.com/2009/10/05/ardent-part-1-supercomputers-get-personal/">our computer</a> was one of the first parallel architectures, and <a href="http://www.netlib.org/tennessee/vector.ps">our compiler</a> required specific knowledge of our vector architecture to get the most out of it. Oh, and we had no installed customer base. I had hired the VP of marketing from a potential software partner who was responsible to get all this 3<sup>rd</sup> party software on our computer. Once he was on board, I sat down with him on a weekly basis to review our progress with our list of software vendors.</span></strong></p> <p><strong>Think Different<br /> <span style="font-weight:normal;">I still remember the day I discovered that I thought about progress differently than other people. Our conversation went like this:</span></strong></p> <p style="padding-left:30px;">Me: Jim, how are we doing with getting <a href="http://www.ansys.com/products/">Ansys</a> ported?<br /> Jim: Great, I have a bunch of calls into them.<br /> Me: How are we doing on the <a href="http://www.mscsoftware.com/Contents/Products/CAE-Tools/MSC-Nastran.aspx">Nastran</a> port?<br /> Jim: Wonderful, they said they’ll get back to me next month.<br /> Me: How about <a href="//localhost/mdg/mdg_codes_dyna3d.html">Dyna 3D</a>?<br /> Jim: It’s going great, we’re on their list.</p> <p>The rest of the progress report sounded just like this.</p> <p>After hearing the same report for the nth week, I called a halt to the meeting. I had an executive who thought he was making progress. I thought he hadn’t done a damn thing.</p> <p>Why?</p> <p><strong>The Difference Between Motion and Action<br /> <span style="font-weight:normal;">One of Jim’s favorite phrases was, “I got the ball rolling with account x.” He thought that the <em>activities</em> he was doing – making calls, setting up meetings, etc. – was his job. In reality they had <em>nothing to do with his job. </em>His real job – <em>the action</em> – was to get the software moved onto our machine. Everything he had done to date was just the <em>motion</em> to get the process rolling. And so far the motion hadn’t accomplished anything. He was confusing “the accounting” of the effort with achieving the goal. But Jim felt that since he was doing lots of motion, “lots of stuff was happening.” In reality we hadn’t gotten any closer to our goal than the day we hired him. We had accomplished nothing – zero, zilch, nada. In fact, we would have been better off if we hadn’t hired him as we wouldn’t have confused a warm body with progress.</span></strong></p> <p>When I explained this to him, the conversation got heated. “I’ve been working my tail off for the last two months…” When he calmed down, I asked him how much had gotten accomplished. He started listing his activities again. I stopped him and reminded him that I could have hired anyone to set up meetings, but I had brought him in to <em>get the software onto our machine.</em> “How much progress have we made to that goal?” “Not much,” he admitted.</p> <p><strong>Entrepreneurs are Relentless<br /> <span style="font-weight:normal;">Jim’s goal was to get other companies to put their software on an unfinished, buggy computer with no customers. While a tough problem, not an insurmountable one for an entrepreneur focused on the objective, not the process.</span></strong></p> <p>This was my fault. It had taken me almost two months to realize that other people didn’t see the world the same way I did. My brain was wired to <em>focus on the end-point and work backwards, removing each obstacle in my path or going around them all while keeping the goal in sight</em>. Jim was following a different path.</p> <p>Focused on the process, he defined progress as moving through a step on his to-do list, and feeling like progress was being made when he checked them off. The problem was his approach let others define the outcome and set the pace.</p> <p>The difference between the two ways of thinking is why successful entrepreneurs have the reputation for being relentless. To an outsider it looks like they’re annoyingly persistent. The reality is that their <em>eyes are on the prize.</em></p> <p><strong>Teaching Moment<br /> <span style="font-weight:normal;">If you’re not born with this kind of end-goal focus, you can learn this skill.</span></strong></p> <p>My wife and I called our daughter back, declared a family “teaching moment,” and explained the difference between motion and action, and asked her what else she could do to get help for class. She realized that more persistence and creativity was required in getting to the right person. 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(Context <a style="text-decoration:underline;color:#105cb6;" href="http://steveblank.com/category/ardent/">here</a>.) The company failed.</p> <p align="left"><strong>Getting Out of the Building Wasn’t Entertainment – Discovery and Validation</strong><br /> Now that I was the master of the “facts” about customer needs in these <a href="http://steveblank.com/2009/10/15/ardent-war-story-4-you-know-you’re-getting-close-to-your-customers-when-they-offer-you-a-job/">specialized vertical markets</a>, and with my <a href="http://steveblank.com/2009/10/19/ardent-war-story-5-the-best-marketers-are-engineers/">team of vertical marketers</a>, I thought I had achieved <a href="http://steveblank.com/2009/10/08/get-out-of-my-building/">absolution and redemption</a>. Opinions had been eliminated as part of marketing’s dialog inside the company; we had achieved “fact nirvana.” But there was one fatal flaw. As I <a href="http://steveblank.com/2009/10/15/ardent-war-story-4-you-know-you’re-getting-close-to-your-customers-when-they-offer-you-a-job/">enjoyed my post-graduate vertical marketing education</a>, I had forgotten the real purpose of spending time in the field.</p> <p align="left">While understanding how customer’s do their work was one key part of <a href="http://www.slideshare.net/venturehacks/customer-development-methodology-presentation" target="_blank">Customer Discovery</a>, I neglected the other key component – <a href="http://www.slideshare.net/venturehacks/customer-development-methodology-presentation">Customer Validation</a> – to <em>understand whether there were sufficient number of customers who had a problem that needed to be solved – and </em><em><span style="text-decoration:underline;">would pay to solve it</span></em>. I had needed to ask customers four simple questions.</p> <ol> <li>Did the customers know they had a problem?</li> <li>If so, did they want to change the way they were doing things to solve that problem?</li> <li>If so, how much would they pay to solve the problem?</li> <li>Would they write us a Purchase Order now before our supercomputer was even complete, to be the first to solve their problems?</li> </ol> <p align="left">In hindsight, these questions seem blindingly apparent yet not asking them led to the ultimate demise of Ardent. I just assumed that since customers were talking to me and spending time with me, it must mean that they agreed with our new company’s vision and would spend piles of money with us. At this point in my career I didn’t understand that the goal of getting outside the building was not only finding markets with potential customers to sell to but also<em> confirming the company’s vision, business model and product/market fit.</em></p> <p align="left">I had done a good job of Customer Discovery but failed at Customer Validation.</p> <p align="left"><strong>Ignoring the Red Flags</strong><br /> While I had lots of people willing to talk to me, we never really pushed hard to see if any customers were willing to buy and pay for the product <em>before </em>it shipped.</p> <p align="left">Early startup customers are visionaries just like the founders selling to them. If your startup’s vision is compelling enough, these early customers want to buy into the dream of what could be, and they want to get in early. They will put up with an unfinished system that barely works to get a competitive advantage outside their company (or sometimes a political one inside their company.) They will count on your startup to listen to their needs for subsequent releases or follow-on systems that actually deliver on the initial promise.</p> <p align="left">All industries, markets and segments have these visionary, <a href="http://oai.dtic.mil/oai/oai?verb=getRecord&metadataPrefix=html&identifier=ADA221051">early adopters</a>. It is one of the wonderful intersections between human nature, capitalism, and startups. <em>Not finding a sufficient set of these early visionaries is the biggest red flag a company can encounter. Ignoring these warning signs is fatal.</em></p> <p align="left"><strong>Product/Market Fit</strong><br /> Getting out of the building is <em>not to</em> collect feature lists from prospective customers nor run tons of focus groups (I had passed this test.) Instead it was to validate the product/market fit by <em>discovering if their were enough customers who would buy our product as spec’d</em>. <em>This was where I had failed at Ardent</em>. Once we had found our target customers we spent our meetings describing our new personal supercomputer and what it could do for these researchers instead of listening and truly understanding whether what we were offering was a “nice to have it” or “got to have it.”</p> <p align="left">If I had had actually been asking “Were we solving a problem these scientists and engineers felt they had?” I would have gotten a half-hearted “maybe.” If I had followed that up with a “If our personal supercomputer delivers as promised, would you write me a check now, before it ships?” I would have seen that no one was falling over themselves to be the first to buy our product. Another clue: lots of people said, “We’d try it if you give it to us.” That answer is always a dead give-away that you don’t yet have a product compelling enough to build a business.</p> <p align="left">As often happens in a startup, <em>we confused our own vision and passion with the passion of our potential customers</em>.</p> <p align="left"><span style="text-decoration:underline;">I had talked too much and listened too little</span>.</p> <p align="left">What did the company do when we heard customer input that contradicted our business plan and assumptions? More in the next post.</p> <p align="left"><strong>Lessons learned:</strong></p> <ul> <blockquote> <li>We had “discovered” Ardent’s initial markets and customers</li> <li>We spent too much time selling our vision and not enough time validating whether customers would actually buy</li> <li>A lack of early, eager purchasers is a red-flag – time to revisit your business model</li> </blockquote> </ul> <p class="getsocial" style="text-align:left;"><img data-recalc-dims="1" decoding="async" style="border:0;margin:0;padding:0;" src="http://getsocialserver.files.wordpress.com/2009/02/gs1005.png?w=468" alt="" /><a title="Add to Facebook" href="http://www.facebook.com/sharer.php?u=http://steveblank.com/2009/10/22/ardent-war-stories-6-listen-more-talk-less" target="_blank"><img data-recalc-dims="1" decoding="async" style="border:0;margin:0;padding:0;" src="http://getsocialserver.files.wordpress.com/2009/02/gs1015.png?w=468" alt="Add to Facebook" /></a><a title="Add to Digg" 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(Context <a href="http://steveblank.com/category/ardent/">here</a>.) While the last post was titled “<strong><a style="text-decoration: none; color: #105cb6; border-bottom-width: 1px; border-bottom-style: solid; border-bottom-color: #75abea;" title="Ardent War Story 4: You Know You’re Getting Close to Your Customers When They Offer You a Job" href="http://steveblank.com/2009/10/15/ardent-war-story-4-you-know-you%e2%80%99re-getting-close-to-your-customers-when-they-offer-you-a-job/" rel="bookmark"><span style="font-weight: normal;">You Know You’re Getting Close to Your Customers When They Offer You a Job</span></a>“,</strong> this post should probably be titled, “You Know You’re Getting Close to Your Customers When You Offer <em>Them</em> a Job.”</p> <p align="left">I would discover that there was a more effective alternative in building a marketing department than hiring traditional marketers with MBA’s.</p> <p align="left"><strong>Building an Advisory Board<br /> <span style="font-weight: normal;">In my travels outside the building I kept my eyes out for articulate and visionary scientists and engineers who had expertise we lacked, and were willing to help in an advisory capacity. I set up an advisory board as a vehicle to get these industry experts engaged with the company and product. Some of these advisors from the academic community would work with our of VP of Engineering and help us solve specific technical problems.</span></strong></p> <p align="left">Other advisors provided marketing with industry-specific advice in our initial vertical markets (computational fluid dynamics, computational chemistry, finite element analysis, and petroleum engineering). They gave us input on 1) features our system needed, 2) what applications we needed to have, and 3) how to sell to people just like them. Of course we also hoped that in listening to their advice in how to build the perfect computer for customers just like them, they would actually buy one of the first computers. Since some of these advisory board members were leaders in their fields, we knew they would tell their peers about our company. Our company’s stock was an inducement, but all of them were in it to help us build a better computer.</p> <div id="attachment_3814" style="width: 2610px" class="wp-caption aligncenter"><a href="https://i0.wp.com/steveblank.com/files/2009/10/ardent_supercomputing_poster_1988.jpg"><img data-recalc-dims="1" fetchpriority="high" decoding="async" aria-describedby="caption-attachment-3814" data-attachment-id="3814" data-permalink="https://steveblank.com/2009/10/19/ardent-war-story-5-the-best-marketers-are-engineers/ardent_supercomputing_poster_1988/" data-orig-file="https://i0.wp.com/steveblank.com/wp-content/uploads/2009/10/ardent_supercomputing_poster_1988.jpg?fit=2600%2C1929&ssl=1" data-orig-size="2600,1929" data-comments-opened="1" data-image-meta="{"aperture":"0","credit":"","camera":"","caption":"","created_timestamp":"0","copyright":"","focal_length":"0","iso":"0","shutter_speed":"0","title":""}" data-image-title="Ardent_Supercomputing_Poster_1988" data-image-description="" data-image-caption="<p>Velvet Painting Period – MFLOPS Poster</p> " data-medium-file="https://i0.wp.com/steveblank.com/wp-content/uploads/2009/10/ardent_supercomputing_poster_1988.jpg?fit=300%2C223&ssl=1" data-large-file="https://i0.wp.com/steveblank.com/wp-content/uploads/2009/10/ardent_supercomputing_poster_1988.jpg?fit=468%2C347&ssl=1" class="wp-image-3814 size-full" title="Ardent_Supercomputing_Poster_1988" src="https://i0.wp.com/steveblank.com/wp-content/uploads/2009/10/ardent_supercomputing_poster_1988.jpg?resize=468%2C347&ssl=1" alt="Velvet Painting Period - MFLOPS Poster" width="468" height="347" /></a><p id="caption-attachment-3814" class="wp-caption-text">Velvet Painting Period – MFLOPS Poster</p></div> <p align="left"><strong>Engineers as Marketers</strong><br /> There was one other reason I was talent-spotting our advisors and potential customers. In most other companies a product-marketing department was responsible for the pricing, positioning and promotion of the product. Yet in our case the product, the machine as delivered from engineering, was a blank, featureless computer with just an operating system and compilers. The hardware held no interest for our target customers until it had become a “whole product,” – that is not until the computer had the complete suite of applications appropriate for a scientist in their specific vertical market – i.e. all the applications to run computational fluid dynamics or finite element analysis.</p> <p align="left">While I had learned a lot about our target markets in the first few months, I would never know as much as people who had spent their careers in these fields. Since the universe of people who were great marketers who also understood these esoteric applications like finite element analysis could be counted on one hand, (and were all working at Cray, the market leader) my choices were limited. I could either hire smart MBAs who were generalists and try to get them up to speed on these simulation applications, or I could hire some of the most articulate domain experts and teach them how to be marketers.</p> <p align="left"><em>I chose to hire engineers from within each of our target markets</em> and set up “Steve’s one month MBA course for engineers.”</p> <p align="left">At the time this was a pretty controversial decision. These hires were definitely not your standard marketing types. We hired a PhD in computational fluid dynamics from Duke who had worked on helicopter design. (Years later he would become a venture capitalist at Sequoia Capital.)</p> <p align="left">Our head of finite element analysis came from General Motor’s Chevy division, where he headed up one of their analysis groups. (He would go on to be a co-founder of two mechanical engineering software companies.) The rest of the vertical marketing recruits had similar backgrounds (and similar careers.) (I never could find one from the petroleum industry so I wore that hat along with the VP of Marketing title.)</p> <p align="left">Few of them had ever seen a data sheet or a price list let alone written one, but they were domain experts, they knew their fields, and they could communicate the benefits of owning a machine like ours to run their applications. They knew which applications were critical for their markets and which were nice-to-have. And they were responsible for helping our 3<sup>rd</sup> party software group reach the right application providers to port their software to our computer. Since these marketers knew what publications their peers read and what conferences and trade shows they attended, they led our presence at the right shows and conferences. They knew the technology trendsetters in their fields and got us in front of them. In short order they learned how to transition from being customers on the receiving end of a sales pitch to giving one. To a person they became passionate evangelists and effective marketers.</p> <p align="left"><strong>Technical Marketing<br /> <span style="font-weight: normal;">Years later in my career I would realize I had simply reinvented what the early pioneers in Silicon Valley knew and did – hiring engineers who were domain experts who could talk as peers to customers and communicate effectively with their own company’s engineers. (Back in the 1960’s and 70’s no sane MBA’s would work for a Silicon Valley startup.) While MBA’s have a ton of useful skills, what they don’t have is what most marketing departments lack – customer insight. I found that having a senior marketer responsible for business strategy surrounded by ex-engineers and domain experts makes one heck of a powerful marketing department.</span></strong></p> <p align="left">A quick diagnostic I now use for marketing departments: if you are in a startup selling to a specific set of customers and/or industry and <em>your marketing department doesn’t have any people from that industry, your tenure as a VP of Marketing has passed its half-life</em>.</p> <p align="left"><strong>Lessons learned:</strong></p> <blockquote> <ul> <li>Advisory boards with domain experts get you connected quickly to customer needs</li> <li>In specialized markets, hire domain experts, and teach them to be marketers</li> </ul> </blockquote> <p class="getsocial" style="text-align: left;"><img data-recalc-dims="1" decoding="async" style="border: 0; margin: 0; padding: 0;" src="http://getsocialserver.files.wordpress.com/2009/02/gs1002.png?w=468" alt="" /><a title="Add to Facebook" href="http://www.facebook.com/sharer.php?u=http://steveblank.com/2009/10/19/ardent-war-story-5-the-best-marketers-are-engineers" target="_blank" rel="noopener"><img data-recalc-dims="1" decoding="async" style="border: 0; 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To understand our potential markets, we started by <a href="http://steveblank.com/2009/10/12/ardent-3-supercomputer-porn/" target="_blank" rel="noopener">analyzing the marketing literature from Cray Research</a> then crisscrossed the country talking to prospective customers – scientists and researchers in advanced corporate R&D centers and universities – to understand their needs.</p> <p>A week might start with a visit to the <a href="http://www.media.mit.edu/">MIT Media Lab</a>, the next day at <a href="http://aero-comlab.stanford.edu/jameson/">Princeton in the Aerospace Engineering</a> department, then off to General Motors’ advanced research group, across to the <a href="http://www.intel.com/pressroom/kits/bios/kuck.htm" target="_blank" rel="noopener">computer science department</a> at the University of Illinois, up to Minneapolis to meet with <a href="http://en.wikipedia.org/wiki/ETA10">ETA</a>, <a href="http://www.computerhistory.org/brochures/companies.php?alpha=a-c&company=com-42b9d5af185f1">Control Data</a> and Cray, and across the country to Seattle to speak with Boeing’s advanced propulsion group before returning to to the <a href="http://sep.stanford.edu/doku.php?id=sep:about:about">geophysics department</a> at Stanford.</p> <p align="left"><strong>Simulation applications</strong><br /> After six months, we hypothesized that our most likely customers were scientists and engineers who used one of five applications: <em>computational fluid dynamics, finite element analysis, computational chemistry and seismic data processing </em>and<em> reservoir simulation.</em></p> <p align="left">At Boeing we had learned aircraft designers needed to calculate the airflow and turbulence around wings and engines. Instead of building a new wing to test designs, numerical simulation would allow them to use a supercomputer to build a virtual model of a wing on the screen and use an application called <em><a href="http://www.cfd-online.com/" target="_blank" rel="noopener">computational fluid dynamics</a></em> to watch the resulting airflow without ever flying a plane. If they didn’t like what they saw (say the wing had more drag than expected), they could change the design and rerun the simulation.</p> <p align="left">At General Motors we heard from mechanical engineers who needed to calculate the strength, breaking point and failure modes of structures – everything from piston rods to bumpers. Their interest was easy to understand. Before computer simulation, they would test real objects until they physically broke (or get sued when <a href="http://www.flightglobal.com/blogs/flightblogger/2009/06/a-closer-look-understanding-th.html">something important broke</a>, blew up, or collapsed.) Now applications called <em><a href="http://www.sv.vt.edu/classes/MSE2094_NoteBook/97ClassProj/num/widas/history.html" target="_blank" rel="noopener">finite element analysis</a></em> could calculate these stresses and failure modes on a computer screen<em>.</em></p> <p align="left">A third simulation market, this one new and just emerging, allowed biologists to examine how drugs would interact by simulating them on a computer. A precursor to today’s biotech revolution, these <em><a href="http://press.eu-egee.org/fileadmin/documents/infosheets/final/en/infosheet_compuchem-final.pdf" target="_blank" rel="noopener">computational chemistry</a></em> applications allowed the active docking sites of potential drugs to be modeled and tested on a computer screen rather than in a test tube.</p> <p align="left">Finally, we could see that petroleum engineers at oil companies like Chevron and Exxon were using computers in exploration and extraction with <em><a href="http://sepwww.stanford.edu/sep/prof/" target="_blank" rel="noopener">seismic data processing</a></em> and <em><a href="http://books.google.com/books?id=-DujQRDF4kwC&printsec=frontcover&source=gbs_v2_summary_r&cad=0#v=onepage&q=&f=false" target="_blank" rel="noopener">reservoir simulation</a></em><em>, </em>applications which were moving oil companies into the supercomputer age.</p> <p>Traveling around the country had helped me begin to understand how these customers currently did their work, what journals they read, where they got their funding, what other software they ran on their machines, etc. I came back to the company and described the <a href="http://www.google.com/search?client=safari&rls=en&q=Spend+a+Day+in+the+Life+of+Your+Customers&ie=UTF-8&oe=UTF-8">day-in-the-life</a> of each type of customer.</p> <p align="left">This was one of the happiest times in my life as a marketer. I had known nothing about supercomputers and numerical simulation applications; now there wasn’t a day that went by that I wasn’t learning something new. As I traveled to some of the most arcane trade shows and conferences (<a href="http://www.aiaa.org/">AIAA</a>, <a href="http://www.spe.org/">SPE</a>, <a href="http://www.mscsoftware.com/">MSC</a>, etc.), my hotel room was stacked with the journals and textbooks about each vertical market just to keep up with the people we were meeting. (I was a marketer, not an engineer and most of the fine points were way over my head – and probably not just the fine points. But reading their literature allowed me to discuss the problems and opportunities with customers.)</p> <div id="attachment_3813" style="width: 2410px" class="wp-caption aligncenter"><a href="https://i0.wp.com/steveblank.com/files/2009/10/ardent_new_class_of_computing_poster_1988.jpg"><img data-recalc-dims="1" decoding="async" aria-describedby="caption-attachment-3813" data-attachment-id="3813" data-permalink="https://steveblank.com/2009/10/15/ardent-war-story-4-you-know-you%e2%80%99re-getting-close-to-your-customers-when-they-offer-you-a-job/ardent_new_class_of_computing_poster_1988/" data-orig-file="https://i0.wp.com/steveblank.com/wp-content/uploads/2009/10/ardent_new_class_of_computing_poster_1988.jpg?fit=2400%2C1795&ssl=1" data-orig-size="2400,1795" data-comments-opened="1" data-image-meta="{"aperture":"0","credit":"","camera":"","caption":"","created_timestamp":"0","copyright":"","focal_length":"0","iso":"0","shutter_speed":"0","title":""}" data-image-title="Ardent_New_Class_of_Computing_Poster_1988" data-image-description="" data-image-caption="<p>My Velvet Painting Period</p> " data-medium-file="https://i0.wp.com/steveblank.com/wp-content/uploads/2009/10/ardent_new_class_of_computing_poster_1988.jpg?fit=300%2C224&ssl=1" data-large-file="https://i0.wp.com/steveblank.com/wp-content/uploads/2009/10/ardent_new_class_of_computing_poster_1988.jpg?fit=468%2C350&ssl=1" class="wp-image-3813 size-full" title="Ardent_New_Class_of_Computing_Poster_1988" src="https://i0.wp.com/steveblank.com/wp-content/uploads/2009/10/ardent_new_class_of_computing_poster_1988.jpg?resize=468%2C350&ssl=1" alt="My Velvet Painting Period" width="468" height="350" /></a><p id="caption-attachment-3813" class="wp-caption-text">My Velvet Painting Period</p></div> <p align="left"><strong>You Know You’re Getting Close to Your Customers When They Offer You a Job<br /> </strong>I believed that good marketers used their own products. I got facile enough with a few of the applications that I could even run some of them myself. I could build simple finite element models with <a href="http://www.mscsoftware.com/Contents/Products/CAE-Tools/Patran.aspx">Patran</a> and set up a run of the <a href="http://www.mscsoftware.com/Contents/Products/CAE-Tools/MSC-Nastran.aspx">Nastran</a> analysis codes.</p> <p align="left">Later on in the company’s life I went to give a lunch-time seminar to Chevron’s La Habra research center on the use of graphics supercomputers in petroleum applications. I spoke about the state of the art in computational reservoir simulation and what could be accomplished using finite difference and finite element methods on the new class of machines that were coming from companies like ours. During the question and answer session my heart was in my throat since like any good marketer, my depth of knowledge was no more than one level away from being a complete idiot. At the end of the talk the head of the research facility came up to me and said, “That was a great talk. We’re glad your company hired a real petroleum engineer to come speak to us. We hate when the sales and marketing types come down and try to get us to buy something.”</p> <p align="left">For one of the few times in my life I was at a loss for words, and I was completely unprepared for what came next. “Here’s my card, if you ever want to consider a career in Chevron research. We’d be happy to talk to you.”</p> <p align="left">Marketing was really fun.</p> <p align="left"><strong>Lessons learned</strong>:</p> <blockquote> <ul> <li>To sell to customers you need to understand them: how they work, what they do and what problem you will solve for them.</li> <li>You can’t understand customers from inside your building.</li> </ul> </blockquote> <p class="getsocial" style="text-align: left;"><img data-recalc-dims="1" decoding="async" style="border: 0; margin: 0; padding: 0;" src="http://getsocialserver.files.wordpress.com/2009/02/gs1002.png?w=468" alt="" /><a title="Add to Facebook" href="http://www.facebook.com/sharer.php?u=http://steveblank.com/2009/10/15/ardent-war-story-4-you-know-you’re-getting-close-to-your-customers-when-they-offer-you-a-job" target="_blank" rel="noopener"><img data-recalc-dims="1" decoding="async" style="border: 0; margin: 0; padding: 0;" src="http://getsocialserver.files.wordpress.com/2009/02/gs1012.png?w=468" alt="Add to Facebook" /></a><a title="Add to Digg" href="http://digg.com/submit?phase=2&url=http%3A%2F%2Fsteveblank.com%2F2009%2F10%2F15%2Fardent-war-story-4-you-know-you’re-getting-close-to-your-customers-when-they-offer-you-a-job&title=Ardent%20War%20Story%204%3A%20You%20Know%20You’re%20Getting%20Close%20to%20Your..." target="_blank" rel="noopener"><img data-recalc-dims="1" decoding="async" style="border: 0; 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data-src='https://widgets.wp.com/likes/?ver=14.1-a.3#blog_id=6599589&post_id=3815&origin=steveblank.com&obj_id=6599589-3815-67426821dbc89&n=1' data-name='like-post-frame-6599589-3815-67426821dbc89' data-title='Like or Reblog'><h3 class="sd-title">Like this:</h3><div class='likes-widget-placeholder post-likes-widget-placeholder' style='height: 55px;'><span class='button'><span>Like</span></span> <span class="loading">Loading...</span></div><span class='sd-text-color'></span><a class='sd-link-color'></a></div> <p class="postinfo"> Filed under: <a href="https://steveblank.com/category/ardent/" rel="category tag">Ardent</a>, <a href="https://steveblank.com/category/customer-development/" rel="category tag">Customer Development</a>, <a href="https://steveblank.com/category/marketing/" rel="category tag">Marketing</a>, <a href="https://steveblank.com/category/vertical-markets/" rel="category tag">Vertical Markets</a> | <a href="https://steveblank.com/2009/10/15/ardent-war-story-4-you-know-you%e2%80%99re-getting-close-to-your-customers-when-they-offer-you-a-job/#comments">7 Comments »</a> </p> </div> </div> <div class="post-3786 post type-post status-publish format-standard hentry category-ardent category-customer-development" id="post-3786"> <h2><a href="https://steveblank.com/2009/10/12/ardent-3-supercomputer-porn/" rel="bookmark">Ardent 3: Supercomputer Porn</a></h2> <div class="postinfo"> Posted on <span class="postdate">October 12, 2009</span> by steve blank </div> <div class="entry"> <p align="left">As VP of Marketing at our new startup, the CEO literally threw me out of the building and told me not to return until I understood the market and could identify the key applications and customers for Ardent’s new personal supercomputer. (See the <a href="http://steveblank.com/category/ardent/">previous Ardent posts</a> for context.)</p> <p align="left"><strong>Supercomputers<br /> <span style="font-weight: normal;">With the introduction in 1976 of the </span><a href="http://research.microsoft.com/en-us/um/people/gbell/craytalk/sld001.htm"><span style="font-weight: normal;">Cray-1</span></a><span style="font-weight: normal;">, supercomputers were defined as the <a href="http://www.top500.org/project/linpack" target="_blank" rel="noopener">fastest vector-processing computer</a>, one in which a single instruction performed <a href="http://www.cs.berkeley.edu/~pattrsn/252S98/Lec06-vector.pdf" target="_blank" rel="noopener">operations on an array</a> rather than a single number. Cray’s first customers were the U.S. Nuclear Weapons Laboratories which used supercompurters to run their </span><a href="https://cfwebprod.sandia.gov/cfdocs/CCIM/docs/Rider_CSRI_June27_2007.pdf" target="_blank" rel="noopener"><span style="font-weight: normal;">hydrodynamics codes</span></a><span style="font-weight: normal;"> to simulate what went on in the first microseconds in a nuclear weapon and the National Security Agency (with Cray putting in a special </span><a href="http://www.moyogo.com/blog/2005/09/secret-opcodes.html"><span style="font-weight: normal;">population count</span></a><span style="font-weight: normal;"> hardware instruction) used to facilitate decryption of codes.</span></strong></p> <p align="left">At first only the national laboratories and the largest companies could afford to buy supercomputers, (the Cray-1 cost ~$9 million) but over time scientists and researchers were also starting to use them. Companies wanted to run numerical simulations to model things that were too expensive, too dangerous or too time consuming to physically build. Because of the vagaries of how floating point units in computers were designed, your average IBM mainframe of the day would take forever to run a simulation application. A supercomputer could be a 100x faster.</p> <p align="left"><strong>What Markets?<br /> <span style="font-weight: normal;">At Ardent our hypothesis was that if we could build a desktop supercomputer powerful enough to run and display these numerical simulations there were enough customers to make this a big business. My job was to figure out what markets Ardent should target, who were the key customers in these markets and what applications these customers had to have.</span></strong></p> <p align="left">The problem was I didn’t have a clue. And while others in our new startup came from companies like Digital Equipment Corporation (DEC) that had sold computers to automate scientific instrumentation and process control, the computers we were building at Ardent were targeted to different customers and markets.</p> <p align="left">The one thing I did know is that we were probably going to be running some of the same applications as the market leader Cray. I concluded that my first job was to understand what Cray’s markets, customers and applications. When I learned that Cray users would be giving papers at the Society of Petroleum Engineering conference in Denver the next day, I got on a plane to listen and learn.</p> <p align="left"><strong>Follow the Leader<br /> <span style="font-weight: normal;">At the conference I attended a bunch of technical sessions, and got lost when the speaker got past, “My name is xxx.” I could see that quite a few oil companies were buying or thinking of buying their own supercomputer. As I walked out of the conference hall, I ran into a small booth with salespeople from Cray. Since their computers were way too large to bring to a trade show, the Cray booth just had literature describing their machines. I grabbed one of each piece of literature, stuffed into my bag, and wandered through the exhibit hall looking at other hardware and petroleum software companies.</span></strong></p> <p align="left">Later I sat down for lunch and began to leaf through the bag of data sheets and brochures I had collected. Hmm… typical booth stuff…key chains, data sheets, pens… Until I got to the material from Cray.</p> <p align="left"><strong>Intelligence<br /> <span style="font-weight: normal;">As I leafed through the Cray sales material, a glossy magazine with the headline <em>Cray</em> <em>Channels</em> jumped out of the pile. Skimming a few pages, I realized that this particular issue was all about <a href="http://www.cfd-online.com/Wiki/Main_Page">computational fluid dynamics</a>, one of Cray’s key markets. The articles described the applications these users depended on and featured interviews with their most important customers.</span></strong></p> <p align="left">I went back and looked at the cover not quite believing what I was reading was real. <em>Cray Channels</em> was describing my market, applications and customers for me. Was it possible that <em>my market research was being handed to me by the existing market incumbent?</em></p> <p align="left"><a href="https://i0.wp.com/steveblank.com/files/2009/10/cray-channels-magazine-covers.jpg"><img data-recalc-dims="1" decoding="async" data-attachment-id="3785" data-permalink="https://steveblank.com/2009/10/12/ardent-3-supercomputer-porn/cray-channels-magazine-covers/" data-orig-file="https://i0.wp.com/steveblank.com/wp-content/uploads/2009/10/cray-channels-magazine-covers.jpg?fit=1322%2C871&ssl=1" data-orig-size="1322,871" data-comments-opened="1" data-image-meta="{"aperture":"0","credit":"","camera":"","caption":"","created_timestamp":"0","copyright":"","focal_length":"0","iso":"0","shutter_speed":"0","title":""}" data-image-title="Cray Channels Magazine Covers" data-image-description="" data-image-caption="" data-medium-file="https://i0.wp.com/steveblank.com/wp-content/uploads/2009/10/cray-channels-magazine-covers.jpg?fit=300%2C198&ssl=1" data-large-file="https://i0.wp.com/steveblank.com/wp-content/uploads/2009/10/cray-channels-magazine-covers.jpg?fit=468%2C308&ssl=1" class="aligncenter wp-image-3785 size-full" title="Cray Channels Magazine Covers" src="https://i0.wp.com/steveblank.com/wp-content/uploads/2009/10/cray-channels-magazine-covers.jpg?resize=468%2C308&ssl=1" alt="Cray Channels Magazine Covers" width="468" height="308" /></a></p> <p align="left">I kept thinking, “could this be possible? Did Cray ever publish any more of these magazines?” I looked at the cover of the magazine again and almost fell off my chair. It was Volume 7 issue 2. These magazines had been published for the last <em>seven years</em>. Could Cray have actually been describing their markets and users for that long?</p> <p align="left">I ran back to the Cray booth and as casually as I could, asked the salesman about the magazine. He assured me that each one profiled a different market, applications and users. I could order back issues from their publications department.</p> <p align="left">I don’t remember how quickly I got to a payphone, but I’m pretty sure that every back issue of these magazines were on the way to Sunnyvale by the end of that day.</p> <p align="left"><strong>Supercomputer Porn<br /> <span style="font-weight: normal;">When the back issues of Cray Channels arrived at Ardent, I ripped open the package with the Cray return address and eagerly started to flip through them. I was excited about what I was going to learn, yet somehow felt guilty, as if I really shouldn’t be looking at them. The pictures were great but I was reading it for the articles. But I was breathing heavy and it felt like I was looking at <a href="http://images.bidorbuy.co.za/user_images/649/1073649_24307_207_Playboy_I_read_articles_closed.jpg" target="_blank" rel="noopener">supercomputer porn.</a> The magazines got passed around to all the engineers until they were dog-eared and worn.</span></strong></p> <p align="left"><strong><span style="font-weight: normal;">I spent the next few days building a table with three columns: markets, applications, key customers. At the same time I had found <a href="http://www.smaby.com/quatris/gary.html">the Wall Street analyst who followed Cray</a> (now a public company) who kept a list of where every one of Cray’s machines was installed. I could now cross-correlate the markets by company who used supercomputers.</span></strong></p> <p align="left"><strong><span style="font-weight: normal;">I started sharing what I had learned about potential target markets with our engineering team and my CEO. We agreed that now we had a roadmap, it was time to hit the road, talk to Cray customers and learn about supercomputer markets and applications in detail.</span></strong></p> <p align="left"><strong>Lessons learned</strong>:</p> <blockquote> <ul> <li>If you are in an existing market or trying to resgement an existing market you need to understand the market leader</li> <li>Market leaders tend to educate the market</li> <li>Step one for a startup is know what the market leader knows</li> </ul> </blockquote> <p class="getsocial" style="text-align: left;"><img data-recalc-dims="1" decoding="async" style="border: 0; margin: 0; padding: 0;" src="http://getsocialserver.files.wordpress.com/2009/02/gs1002.png?w=468" alt="" /><a title="Add to Facebook" href="http://www.facebook.com/sharer.php?u=http://steveblank.com/2009/10/12/ardent-3-supercomputer-porn" target="_blank" rel="noopener"><img data-recalc-dims="1" decoding="async" style="border: 0; margin: 0; padding: 0;" src="http://getsocialserver.files.wordpress.com/2009/02/gs1012.png?w=468" alt="Add to Facebook" /></a><a title="Add to Digg" href="http://digg.com/submit?phase=2&url=http%3A%2F%2Fsteveblank.com%2F2009%2F10%2F12%2Fardent-3-supercomputer-porn&title=Ardent%203%3A%20Supercomputer%20Porn" target="_blank" rel="noopener"><img data-recalc-dims="1" decoding="async" style="border: 0; 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At Ardent I learned many of them with a sharp smack on the side of the head from a brilliant but abusive boss. Not a process I recommend, but one in which the lessons stuck for a lifetime. (Read <a href="http://steveblank.com/category/ardent/">the previous Ardent post</a> for context.)</p> <p><strong>Lessons to Learn</strong><br /> By the time I joined Ardent I thought I was an experienced marketer, but I’ll never forget my first real lesson in what it meant to understand customers and product/market fit.</p> <p>We were sitting in our conference room in our first “system-planning meeting” trying to define the specifications of our new supercomputer and make the trade-offs between what was possible to build, and what customers in this new market would actually want and need. The conversation that day would become one of my professional watermarks.</p> <p><strong>Marketing is Heard From</strong><br /> Engineering was discussing how sophisticated the graphics portion of our computer should be, debating cost and time-to-market tradeoffs of arcane details such as double-buffering, 24 versus 32-bits of color, alpha channels, etc. I was pleased with myself that not only did I understand the issues, but I also had an opinion about what we should build. All of a sudden I decided that I hadn’t heard the sound of my own voice in a while so I piped up: “I think our customers will want 24-bits of double-buffered graphics.”</p> <p>Silence descended across the conference table. The CEO turned to me and asked “What did you say?” Thinking he was impressed with my mastery of the subject as well as my brilliant observation, I repeated myself and embellished my initial observation with all the additional reasons why I thought our customers would want this feature. I was about to get an education that would last a lifetime.</p> <p>Picture the scene: the entire company (all 15 of us) are present. For this startup we had assembled some of the best and brightest hardware and software engineers in the computer industry. My boss, the CEO, had just come from a string of successes at Convergent Technologies, Intel and Digital Equipment, names that at that time carried a lot of weight. Some of us had worked together in previous companies; some of us had just started working together for the first time. I thought I was bright, aggressive and could do no wrong as a marketer. I loved my job and I was convinced I was god’s gift to marketing. Now in a voice so quiet it could be barely heard across the conference table our CEO turns to me and says, “That’s what I thought you said. I just wanted to make sure I heard it correctly.” It was the last sentence I heard before my career trajectory as a marketer was permanently changed.</p> <p><strong>Get Out of My Company</strong><br /> At the top of his lungs he screamed, “You don’t know a damn thing about what these customers need! You’ve never talked to anyone in this market, you don’t know who they are, you don’t know what they need, and you have no right to speak in any of these planning meetings.” I was mortified with the dressing down in front of my friends as well as new employees I barely knew. Later <a href="https://en.wikipedia.org/wiki/Jon_Rubinstein" target="_blank">my friends</a> told me my face went pale. He continued yelling, “We have a technical team assembled in this room that has more knowledge of scientific customers and scientific computers than any other startup has ever had. They’ve been talking to these customers since before you were born, and they have a right to have an opinion. You are a disgrace to the marketing profession and have made a fool of yourself and will continue to do so every time you open your mouth. Get out of this conference room, get out of this building and get out of my company; you are wasting all of our time.”</p> <p>I was stunned by the verbal onslaught. At that moment I felt so small I could have walked out of a room underneath the crack in a closed door.</p> <p><strong>Facts Not Opinions</strong><br /> The shock quickly wore off as I processed the gist of what he told me. He was right. I personally didn’t have any facts, and if we were counting opinions, there were a bunch more educated opinions in that room than I had. All I had been doing was filling the air with marketing noises.</p> <p>I was convinced that I had just been humiliatingly fired – 90 days into our new company.</p> <p><strong>Get Out of the Building</strong><br /> As I got up to leave the room, the CEO said, “I want you out of the building talking to customers; find out who they are, how they work, and what we need to do to sell them lots of these new computers.” Motioning to our VP of Sales, he ordered: “Go with him and get him in front of customers, and both of you <em>don’t come back until you can tell us something we don’t know</em>.”</p> <p>And he was smiling.</p> <p>My career as marketer had just begun.</p> <p><strong>Lessons learned:</strong></p> <blockquote> <ul> <li>Corporate culture is either set by fiat, by default, or by consensus. 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We were on the University of North Carolina campus to meet with <a href="http://en.wikipedia.org/wiki/Fred_Brooks">Fred Brooks</a> and <a href="http://www.cs.unc.edu/~fuchs/">Henry Fuchs</a>. We just turned on the rental car radio as we entered campus and heard the mid day BBC news – the space shuttle Challenger had just exploded.</p> <p align="left"><strong>It was the best of times, it was the worst of times<br /> <span style="font-weight:normal;">Ardent would be my third technology company as a VP of Marketing (Convergent Technologies and MIPS Computers were the other two.) It would be the company where I actually earned the title.</span></strong></p> <p align="left">This is the first of a series of posts on the company.</p> <p align="left"><strong>A Phone Call<br /> <span style="font-weight:normal;">After I left MIPS Computers I was in New York tagging along with a friend (a computer architect whose products at Apple a decade later would change the shape of personal computing) who was consulting for a <a href="http://portal.acm.org/citation.cfm?id=800132.804317">voice recognition</a> startup. We were sitting in our cheap hotel room when the phone rang. It was my ex boss from Convergent Technologies, “Steve we’ve all just resigned from Convergent and we’re starting a new company. I’ve convinced the team you’d be perfect, come join us as the VP of Marketing.” My ex-boss was going to be the VP of Engineering and I would report to the CEO whose marketing acumen and sales instincts seemed at the time to be telepathic and sense of theater was legend. And so was his reputation for being verbally abusive to his direct reports. Gulp.</span></strong></p> <p align="left">The culture and work ethic of Convergent had earned it the title “the Marine Corps of Silicon Valley”. (Not until I was older and wiser did I realize that this was not always meant as a compliment.)</p> <p align="left">Working with my old boss sounded like a great idea. And in the course of the phone call I put my friend on the phone and let him interview for a job. On the ride to the airport my friend asked me what our new company was going to do.</p> <p align="left">Only then did I realize we both forgot to ask.</p> <p align="left"><strong>Never mind<br /> <span style="font-weight:normal;">The first idea for our new company was a software product that looked something like <a href="http://www.cs.brown.edu/memex/HT_87_Keynote_Address.html">Hypertext</a>. With a bit of research it turned out that a professor at Brown University had invented something <a href="http://en.wikipedia.org/wiki/FRESS">close to what we had in mind</a>. The VP of Sales and I flew to Providence to convince <a href="http://www.cs.brown.edu/~avd/">Andy van Dam</a> at Brown to join our company, or at a minimum lead our advisory board.</span></strong></p> <p align="left">On a rainy day in Providence we tracked Andy down just as he was leaving for a trip to Europe. He agreed to talk to us as he packed his office, and we followed him down the street as he went to get a haircut. With me holding the umbrella our VP of Sales kept reminding him how wonderful it would be if his research could turn into commercial products- all as we all walked downtown to the barbershop. While van Dam sat in the chair getting his haircut, the VP of Sales and I flanked him on either side, with the barber trying to get his clippers in between us. We were painting a picture of hypertext on every desktop computer. I knew we almost had him convinced when our sales guy and Andy started talking to each other in Dutch.</p> <p align="left">As the conversation began to get down to how much stock and salary we could offer van Dam, we left the barber to finish his work and went to a <a href="http://en.wikipedia.org/wiki/Payphone">payphone</a> to call our CEO to confirm the deal. The response from across the country? “Glad you two called, we were trying to get a hold of you guys. Forget the Hypertext idea and come on back to California. We’re building a supercomputer.” Oops. We told Andy we’d talk further when he got back from Europe.<strong> </strong></p> <p align="left"><strong>Supercomputers get Personal<br /> <span style="font-weight:normal;">Back in Sunnyvale my friend had not only been hired but had convinced the team that we should be building hardware – making a new class of computers not a software application. Our vision was that just as the PC was revolutionizing the business market, we were going to do the same for scientists and engineers. We were going to target scientists and researchers who were longing to do “interactive simulations,” requiring both scientific computing and visualization of real-world phenomena. We were going to invent a new product and create an entirely new market by putting a <em><a href="http://www.nytimes.com/1988/02/26/business/the-shrinking-supercomputer.html?pagewanted=all"><span style="font-style:normal;">personal graphics supercompute</span>r</a></em> on every desk.</span></strong></p> <p align="left">By the mid 1980’s microprocessor technology—specifically off-the-shelf <a href="http://en.wikipedia.org/wiki/Reduced_instruction_set_computer">RISC</a>-based microprocessors like the one from MIPS, my previous startup– had evolved to support the speed needed to support <em>a new class of computers for scientists and engineers</em>. Unlike Intel chips, MIPS chip architecture also made it possible to plug in a math co-processor. By adding a vector unit to these RISC processors, we believed we could take some of the supercomputer market from <a href="http://archive.computerhistory.org/resources/text/Cray/Cray.X-MP.1985.102646183.pdf">Cray</a> (at the time the maker of the most powerful scientific computers in the world) as well as from the emerging class of mini-supercomputers (Convex and Alliant.)</p> <p align="left">To do that we needed to build a supercomputer, but since the RISC processors weren’t fast enough, we decided to build a multiprocessor supercomputer, (running up to 4 processors in parallel.) We had to write our parallelizing and vectorizing compilers and build our own high-end graphics boards, and write our own 3d graphics subroutine language – and put in all in a box that could fit in an office. Oh, and since it was not code compatible with anything, we were going to have to port all the key scientific applications our customers needed (as soon as we figured out who they were.) Some of the other founders had sold minicomputers to scientists and engineers, but no one knew or understood the unique class of applications and customers of supercomputers. We were going to be guessing.</p> <p align="left"><a href="http://portal.acm.org/citation.cfm?id=48468">Personal supercomputer</a>s meant yet again learning something completely new; new computer architectures, new applications and customers, new markets.</p> <p align="left">I couldn’t believe they were paying me to do this job; I would have gladly done it for free.</p> <p align="left"><strong>The Streets of Palo Alto<br /> <span style="font-weight:normal;">As our company was getting formed, I happened to bump into <a href="http://en.wikipedia.org/wiki/Gordon_Bell">Gordon Bell</a> – the ex VP of Engineering of DEC (the company that <a href="http://archive.computerhistory.org/resources/text/Oral_History/Bell_Gordon_1/102702036.05.01.pdf">defined the minicomputer</a>) on the streets of Palo Alto. (It was Gordon who had prodded <a href="http://silicongenesis.stanford.edu/transcripts/hennessy.htm">John Hennessy</a> and the MIPS team at Stanford to start a commercial chip company.) After telling Gordon what we were doing and who was doing it, he realized that he knew most of our founding team when they all had worked at DEC. I invited him to meet the team. A few days later Gordon became a founder. (Later he would leave for a few years to start the <a href="http://www.nsf.gov/cise/oad/frmr_ad.jsp">Computing Directorate at the National Science Foundation</a>, help spec what became the Internet and then come back and run Ardent’s engineering.)</span></strong></p> <p align="left">I would learn a ton from Gordon for over a decade, not only about practical heuristics for managing complex engineering projects (i.e. the “schedule fantasy factor,”) or his <a href="http://www.ece.cmu.edu/~koopman/titan/rules.html">eleven rules of supercomputer design</a> but also a real appreciation for how a technical visionary thinks. (I tried my best to narrow the time that I went from believing that Gordon had yet another insane idea to when I realized it was a <a href="http://www.youtube.com/watch?v=3gWEUA47Q4g">profound insight</a>.) It was a challenge to keep up with him (I never did) but it was fun to try.</p> <p align="left">At the same time Gordon was looking forward, he had a great appreciation of saving the past. He and his wife Gwen would found the Computer Museum, first in the lobby of DEC headquarters, <a href="http://en.wikipedia.org/wiki/The_Computer_Museum,_Boston">then in Boston</a> (and now as the <a href="http://www.computerhistory.org/">Computer History Museum</a> in Mountain View, California.) When our kids were little they would play with the computer artifacts (<a href="http://www.computerhistory.org/collections/accession/102622601">Napier bones</a> and Pascal engines) scattered across their living room and overflowing their shelves when we stayed at their condo in Boston. My first inkling that computing had a history (with deep military connections) was looking at the <a href="http://history.sandiego.edu/GEN/20th/sage.html">SAGE air defense</a> computer at the Boston Computer Museum.</p> <p align="left">I would be lucky in my career to work with Gordon and three other people I consider as mentors. They would all work in this one company.</p> <p align="left"><strong>Get Out of Building</strong><br /> Our trip to North Carolina was part of a year long effort to get out of the building to understand our market, customers and their applications. 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