A legendary hero is usually the founder of something—the founder of a new age, the founder of a new religion, the founder of a new city, the founder of a new way of life. In order to found something new, one has to leave the old and go on a quest of the seed idea, a germinal idea that will have the potential of bringing forth that new thing.

— Joseph Campbell, Hero with a Thousand Faces

Joseph Campbell popularized the notion of an archetypal journey that recurs in the mythologies and religions of cultures around the world. From Moses and the burning bush to Luke Skywalker meeting Obi wan Kenobi, the journey always begins with a hero who hears a calling to a quest. At the outset of the voyage, the path is unclear, and the end is not in sight. Each hero meets a unique set of obstacles, yet Campbell's keen insight was that the outline of these stories was always the same. There were not a thousand different heroes, but one hero with a thousand faces.

The hero's journey is an apt way to think of startups. All new companies and new products begin with an almost mythological vision–a hope of what could be, with a goal few others can see. It's this bright and burning vision that differentiates the entrepreneur from big company CEOs and startups from existing businesses. Founding entrepreneurs are out to prove their vision and business are real and not some hallucination; to succeed they must abandon the status quo and strike out on what appears to be a new path, often shrouded in uncertainty. Obstacles, hardships and disaster lie ahead, and their journey to success tests more than financial resources. It tests their stamina, agility, and the limits of courage.

Most entrepreneurs feel their journey is unique. Yet what Campbell perceived about the mythological hero's journey is true of startups as well: However dissimilar the stories may be in detail, their outline is always the same. Most entrepreneurs travel down the startup path without a roadmap and believe no model or template could apply to their new venture. They are wrong. For the path of a startup is well worn, and well understood. The secret is that no one has written it down.

Those of us who are serial entrepreneurs have followed our own hero's journey and taken employees and investors with us. Along the way we've done things our own way, taking good advice, bad advice, and no advice. On about the fifth or sixth startup, at least some of us began to recognize there was an emerging pattern between our successes and failures. Namely, there is a true and repeatable path to success, a path that eliminates or mitigates the most egregious risks and allows the company to grow into a large, successful enterprise. One of us decided to chart this path in the following pages.

Discovering the Path

“Customer Development” was born during my time spent consulting for the two venture capital firms that between them put $12 million into my last failed startup. (My mother kept asking if they were going to make me pay the money back. When I told her they not only didn't want it back, but were trying to see if they could give me more for my next company, she paused for a long while and then said in a very Russian accent, “Only in America are the streets paved with gold.”) Both venture firms sought my advice for their portfolio companies. Surprisingly, I enjoyed seeing other startups from an outsider's perspective. To everyone's delight, I could quickly see what needed to be fixed. At about the same time, two newer companies asked me to join their boards. Between the board work and the consulting, I enjoyed my first-ever corporate “out-of-body experience.”

No longer personally involved, I became a dispassionate observer. From this new vantage point I began to detect something deeper than I had seen before: There seemed to be a pattern in the midst of the chaos. Arguments I had heard at my own startups seem to be repeated at others. The same issues arose time and again: big company managers versus entrepreneurs, founders versus professional managers, engineering versus marketing, marketing versus sales, missed schedule issues, sales missing the plan, running out of money, raising new money. I began to gain an appreciation of how world-class venture capitalists develop pattern recognition for these common types of problems. “Oh yes, company X, they're having problem 343. Here are the six likely ways that it will resolve, with these probabilities.” No one was actually quite that good, but some VCs had “golden guts” for these kinds of operating issues.

Yet something in the back of my mind bothered me. If great venture capitalists could recognize and sometimes predict the types of problems that were occurring, didn't that mean the problems were structural rather than endemic? Wasn't something fundamentally wrong with the way everyone organizes and manages startups? Wasn't it possible the problems in every startup were somehow self-inflicted and could be ameliorated with a different structure? Yet when I talked to my venture capital friends, they said, “Well, that's just how startups work. We've managed startups like this forever; there is no other way to manage them.”

After my eighth and likely final startup, E.piphany, it became clear there is a better way to manage startups. Joseph Campbell's insight of the repeatable patterns in mythology is equally applicable to building a successful startup. All startups (whether a new division inside a larger corporation or in the canonical garage) follow similar patterns—a series of steps which, when followed, can eliminate a lot of the early wandering in the dark. Startups that have thrived reflect this pattern again and again and again.

So what is it that makes some startups successful and leaves others selling off their furniture? Simply this: Startups that survive the first few tough years do not follow the traditional product-centric launch model espoused by product managers or the venture capital community. Through trial and error, hiring and firing, successful startups all invent a parallel process to Product Development. In particular, the winners invent and live by a process of customer learning and discovery. I call this process “Customer Development,” a sibling to “Product Development,” and each and every startup that succeeds recapitulates it, knowingly or not.

This book describes the “Customer Development” model in detail. The model is a paradox because it is followed by successful startups, yet articulated by no one. Its basic propositions are the antithesis of common wisdom, yet they are followed by those who succeed.

It is the path that is hidden in plain sight.

Think Different

— Steve Jobs

When I wrote The Four Steps to the Epiphany over a decade ago, I had no idea I would be starting the Lean Startup revolution. Newly retired, with time to reflect on what I had learned from my 21 years as an entrepreneur, I was struggling to reconcile the reality of my experience with the then-common advice about how to start a company. Investors, VCs and educators all taught entrepreneurs to use the same process used in an established company. To be successful, you wrote a plan, raised money and then executed to the plan, all in a very linear direction.

My experience suggested that they were all wrong.

I spent several years working through a different approach to building startups. This became the Customer Development process and the idea of Market Types. In hindsight, I now realize that while educators and startup investors had adapted tools and processes useful for executing a business model, there were no tools and processes to search for a business model. It seemed obvious to me that searching is what startups actually do, but it was a pretty lonely couple of years convincing others.

Over time necessity – not investors or educators – drove the adoption of the Customer Development process. The emerging web, mobile and cloud apps, built with small teams already using agile development, needed a much faster process to acquire customer feedback. This new generation of entrepreneurs were rapid early adopters of customer development as it helped them reduce the odds of failing – by getting them out of the building to get early customer feedback – as they built their product incrementally and iteratively.

About a decade ago, after The Four Steps was published, I began teaching the Customer Development process as a full-semester course at U.C. Berkeley. A student in my first Berkeley class, Eric Ries, became the first practitioner and tireless evangelist of the process at IMVU, iterating and testing the process as I sat on his board. His insight coupled customer development to the emerging agile engineering practice, and together the two methodologies helped founders to rapidly iterate their products, guided by customer feedback.

A few years later, Alexander Osterwalder's business model canvas provided the Customer Development process with a much-needed front end to organize all of a startup's hypotheses into a simple framework that serves as a baseline and a scorecard for teams as they move through Customer Development.

These new ideas have coalesced into what has today become the Lean Startup movement. And hundreds of thousands of books later, the core ideas of The Four Steps have spread from startups to large corporations and the Lean Startup methodology has become the standard for commercializing scientific research in the U.S. It's taught in most major universities and in thousands of entrepreneurial programs around the world.

And it all started with this one book.

Who would've thought?

This third edition of The Four Steps to the Epiphany is substantively the same as the 2003 version. A few typos were corrected and unfinished sentences completed. The “update” to The Four Steps is The Startup Owner's Manual, published in 2012 with Bob Dorf. While The Four Steps remains the uber text, The Startup Owner's Manual builds on that work with a step-by-step process for building great companies using the business model canvas and the Customer Development process.