Lean LaunchPad COLUMBIA BLOCK WEEK JANUARY 1216 2015 Turning Hackers Hustlers and Designers into Entrepreneurs Turning great ideas into great businesses A brief HISTORY lesson Youre in good company ID: 765110
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Lean LaunchPadCOLUMBIA BLOCK WEEKJANUARY 12-16, 2015 Turning Hackers, Hustlers and Designers into Entrepreneurs
Turning great ideas into great businesses A brief HISTORY lesson
You’re in good company US National Science Foundation National Institute of Health(last week) Stanford, Berkeley, UCSF, Princeton 3 50 Universities we’re aware of Incubators, Accelerators Worldwide Columbia Block Week and Full Term Hundreds more educators per year
Steve Blank More than a decade developing Customer Development 8 startups in Silicon Valley Semiconductors Supercomputers Consumer electronics Video games Enterprise software Military intelligenceTeach: Stanford, Berkeley, Columbia, UCSF
Teaching team FACULTY: Bob Dorf, seven startups, CBS Adjunct, co-author Startup Owner’s Manual Asha Saxena , Founder/CEO Future Tech, plus multiple other ventures Alicia Syrett , Founder and CEO of Pantegrion Capital Adam Royalty, Designer in Residence, CU Entrepreneurship TBD, Seasoned entrepreneur TA/COACH TEAM: Nathaniel Kelner , Columbia University Entrepreneurship Team Meghan Cross, 2 nd year MBA, Co-President of CEO Club
Course Info Team: Application is by teams of 3-5 (ideally include 1 ENGR or technical); avoid “all MBA” teams where you can Workload: half-day in classroom, half “out of the building don’t plan much of a social agenda for the week Credit: 3 credits based on team improvement Mon-Fri, plus your contribution and student evaluation of startup Format: Flipped Classroom; watch lectures nightly with team Every team presents progress, gets feedback every day Teams split into cohorts Tues-Wed-Thurs
The basics Join a team! Business Model Canvas Is it scalable… ? Who else is doing it?
The Entrepreneurial Venture FOUR PERIODS of DEVELOPMENT Time Cash Flow II III IV I
Customer Development is how you search for the model
The Entrepreneurial Venture FOUR PERIODS of DEVELOPMENT Time Cash Flow II III IV I
Business Models
Business Models
Business Models
9 Guesses Guess Guess Guess Guess Guess Guess Guess Guess Guess
Implications of Search and Execution The Customer Discovery Approach Lower Initial Investment Minimum Viable Product [MVP] tests only crucial features Earlier testing and validation. Room to recover AND REVISE. More capital preserved and higher valuation achieved before scaling Scaling financing more available Clarify the role of the entrepreneur Able to retain entrepreneurs engaged in business senior leadership Higher rate of return for all Entrepreneurs Investors Employees
Example of a Team’s Final Presentation
As of: 8/31/12 Jersey Square “ The Netflix of Licensed Sports Jerseys ” Bryan Gitler Elmer Moore Jay Naik Michael Melmed Jersey Square is a rental service for professional sports jerseys Total Interviews: 169 Total Website Visits: 190 TOTAL SUBSCRIPTIONS SOLD: 2
Customer Discovery Over the course of the week, we spoke with 169 contacts during the customer discovery process Yankee Stadium Nike, NBA, NHL Stores Cleaners, Shipping, Sports Bars Social Media, StarStreet , Sports Bars 1 Customer Sales 1
Key Partners (7) Who are our key partners/ suppliers Key Activities (5) Which key activities does the biz model require Value Proposition (1) What value do we deliver to the customer Customer Relationships (4) What type of relationship does each segment require of us Customer Segments (2) For whom are we creating value Channels (3) Through which channel does each segment want to be reached Cost Structure (9) What are our cost drivers Key Resources (6) Which key resources does the biz model require Professional Sports Game Attendees Male Adult <$100k income Attend 10+ games per yr A cheaper way to wear Officially Licensed sports jerseys to a game Eliminate risk of owning a player jersey who is traded Provide alternative to purchasing counterfeit jerseys Website Stadium Shops/Vendors Ticket Websites Direct Mail Annual Subscription Model Search ads Social Media At Stadium Promotions Revenue Streams (8) How much is each segment willing to pay and how would they like to pay us this amount Warehouse, shipping, cleaning, logistics tracking, website development/maintenance Jersey Inventory Warehouse Logistics system - Rental Tracking - Shipping - Dry cleaning - Marketing - Customer Service Professional Sports Leagues Jersey Suppliers Dry Cleaners Stadium Shop/Vendors Pre-paid Envelope Suppliers USPS/ Fedex /UPS Day 1 Canvas As of: 8/27/12
Day 1 - Yankee Stadium Customer Discovery
Current Canvas Key Partners (7) Who are our key partners/ suppliers Key Activities (5) Which key activities does the biz model require Value Proposition (1) What value do we deliver to the customer Customer Relationships (4) What type of relationship does each segment require of us Customer Segments (2) For whom are we creating value Channels (3) Through which channel does each segment want to be reached Cost Structure (9) What are our cost drivers Key Resources (6) Which key resources does the biz model require Professional Sports Game Attendees Male and Female Young Adult 18-30 <$100k income Attend >10% of home games per yr Casual sports fans A cheaper way to wear Officially Licensed sports jerseys to a game Eliminate risk of owning a player jersey who is traded Provide alternative to purchasing counterfeit jerseys Website Stadium Shops /Vendor s Ticket Websites Direct Mail Annual Subscription Model Pay per Rental GET - Search Ads, Partnerships, At stadium promotion KEEP - Customer Service GROW - Referral Program Revenue Streams (8) How much is each segment willing to pay and how would they like to pay us this amount Jerseys, warehouse, shipping, cleaning, logistics tracking, website development/maintenance, customer service employees Jersey Inventory Warehouse Logistics system - Rental Tracking - Shipping - Dry cleaning - Marketing - Customer Service Professional Sports Leagues Jersey Suppliers Dry Cleaners Stadium Shop/Vendors Pre-paid Envelope Suppliers USPS/ Fedex /UPS Day 2 Canvas As of: 8/28/12
Day 2- Customer Discovery Nike Town NBA Store NHL Store
Current Canvas Key Partners (7) Who are our key partners/ suppliers Key Activities (5) Which key activities does the biz model require Value Proposition (1) What value do we deliver to the customer Customer Relationships (4) What type of relationship does each segment require of us Customer Segments (2) For whom are we creating value Channels (3) Through which channel does each segment want to be reached Cost Structure (9) What are our cost drivers Key Resources (6) Which key resources does the biz model require Professional Sports Fans Website Stadium Shops/Vendors Ticket Websites Direct Mail GET - Search Ads, Partnerships, At stadium promotion KEEP - Customer Service GROW - Referral Program Revenue Streams (8) How much is each segment willing to pay and how would they like to pay us this amount Jerseys, warehouse, shipping, cleaning, logistics tracking, website development/maintenance, customer service employees Jersey Inventory Warehouse Logistics system - Rental Tracking - Shipping - Dry cleaning - Marketing - Customer Service Jersey Suppliers Dry Cleaners Pre-paid Envelope Suppliers USPS/ Fedex /UPS Day 3 Canvas As of: 8/29/12 SPORTS JERSEY OWNERS - Male - Kid to Young Adult 13-35 SINGLE GAME ATTENDEES - Male and Female - Young Adult 18-30 - Casual fan SPORTS JERSEY OWNERS - Flexibility to change jersey - Eliminate risk of owning jersey who is traded SINGLE GAME ATTENDEES - Cheaper way to wear jersey to a game SPORTS JERSEY OWNERS - Annual Subscription SINGLE GAME ATTENDEES - Pay per Rental Jersey Suppliers Dry Cleaners Pre-paid Envelope Suppliers USPS/ Fedex /UPS Jersey Inventory Warehouse Logistics system Rental Tracking Shipping Dry cleaning Marketing Customer Service Jerseys, warehouse, shipping, cleaning, logistics tracking, website development/maintenance, customer service employees Website Stadium Shops/Vendors Ticket Websites Direct Mail GET - Search Ads, Partnerships, At stadium promotion KEEP - Customer Service GROW – Referral/ Reward Program
Day 3 - Customer Discovery Commercial Dry Cleaners USPS & FedEx Sports Bars Jersey Suppliers Left Side of Canvas Right Side of Canvas Social Media
Current Canvas Key Partners (7) Who are our key partners/ suppliers Key Activities (5) Which key activities does the biz model require Value Proposition (1) What value do we deliver to the customer Customer Relationships (4) What type of relationship does each segment require of us Customer Segments (2) For whom are we creating value Channels (3) Through which channel does each segment want to be reached Cost Structure (9) What are our cost drivers Key Resources (6) Which key resources does the biz model require Professional Sports Fans Website Stadium Shops/Vendors Ticket Websites GET - Search Ads, Partnerships, At stadium promotion KEEP - Customer Service GROW - Referral Program Revenue Streams (8) How much is each segment willing to pay and how would they like to pay us this amount Jerseys, warehouse, shipping, cleaning, logistics tracking, website development/maintenance, customer service employees Jersey Inventory Warehouse Logistics system - Rental Tracking - Shipping - Dry cleaning - Marketing - Customer Service Jersey Suppliers Dry Cleaners Pre-paid Envelope Suppliers USPS/ Fedex /UPS Day 4 Canvas As of: 8/30/12 SPORTS JERSEY OWNERS - Male - Kids to Young Adult 13-35 SINGLE GAME ATTENDEES - Male and Female - Young Adult 18-30 - Casual fan SPORTS JERSEY OWNERS - Flexibility to change jersey - Eliminate risk of owning jersey who is traded SINGLE GAME ATTENDEES - Cheaper way to wear jersey to a game SPORTS JERSEY OWNERS - Annual Subscription $200 SINGLE GAME ATTENDEES - Pay per Rental Jersey Suppliers Dry Cleaners Pre-paid Envelope Suppliers USPS / Fedex /UPS Jersey Inventory Warehouse Logistics system Rental Tracking Shipping Dry cleaning Marketing Customer Service Jerseys, warehouse, shipping, cleaning, logistics tracking, website development/maintenance, customer service employees Website Ticket Websites GET - Search Ads, Partnerships, Social Media , At stadium promotion KEEP - Customer Service GROW – Referral/ Reward Program
Launched JerseySquare.com 81 Visitors In 1 st 9 hours
With 30-Second Demo Video www.jerseysquare.com
Our First Customer
Our Email Blasts
Current Canvas Key Partners (7) Who are our key partners/ suppliers Key Activities (5) Which key activities does the biz model require Value Proposition (1) What value do we deliver to the customer Customer Relationships (4) What type of relationship does each segment require of us Customer Segments (2) For whom are we creating value Channels (3) Through which channel does each segment want to be reached Cost Structure (9) What are our cost drivers Key Resources (6) Which key resources does the biz model require Professional Sports Fans Website Stadium Shops/Vendors Ticket Websites Direct Mail GET - Search Ads, Partnerships, At stadium promotion KEEP - Customer Service GROW - Referral Program Revenue Streams (8) How much is each segment willing to pay and how would they like to pay us this amount Jerseys, warehouse, shipping, cleaning, logistics tracking, website development/maintenance, customer service employees Jersey Inventory Warehouse Logistics system - Rental Tracking - Shipping - Dry cleaning - Marketing - Customer Service Jersey Suppliers Dry Cleaners Pre-paid Envelope Suppliers USPS/ Fedex /UPS Day 5 Canvas As of: 8/31/12 SPORTS JERSEY OWNERS - Male - Kids to Young Adult 13-35 SINGLE GAME ATTENDEES - Male and Female - Young Adult 18-30 - Casual fan SPORTS JERSEY OWNERS - Flexibility to change jersey - Eliminate risk of owning jersey who is traded SINGLE GAME ATTENDEES - Cheaper way to wear jersey to a game SPORTS JERSEY OWNERS - Annual Subscription , Monthly Subscription, One-Time SINGLE GAME ATTENDEES - Pay per Rental Jersey Suppliers Dry Cleaners Pre-paid Envelope Suppliers USPS Jersey Inventory Warehouse Logistics system Rental Tracking Shipping Dry cleaning Marketing Customer Service Jerseys, warehouse, shipping, cleaning, logistics tracking, website development/maintenance, customer service employees Website GET - Search Ads, Partnerships, Social Media , At stadium promotion KEEP – Seniority, loyalty program GROW – Premium subs, Family plan
What We Thought Results What We Found Customer segment is adult males who attend lots of games each year X There are two customer segments: SPORTS JERSEY OWNERS Male, Kids to Young Adult 13-35 SINGLE GAME ATTENDEES Male and Female, Young Adult 18-30, Casual fan Customers will use JerseySquare because we are cheaper X Customers like our company because we provide both: the ability to wear different jerseys throughout the season a hedge against players being traded, getting hurt, retiring, etc. Customers will not be willing to spend as much on rental jerseys X Customers are actually willing to spend as much (if not more) on a subscription for jersey rentals as they do on buying a jersey! There is a market for renting professional jerseys! P We received payment from our first customer on Thursday, 8/30/2012 Biggest Learning Moments
Archetypes Attribute Gasol Junior Becky Age 32 15 24 Income $65K N/A $40K Demographics White White White Type Jersey Buyer Social Statement Social Sports Viewer Fan Type Avid In-Season Casual Class Middle Middle Middle Facebook Status Single/It ’ s Complicated Single In Relationship SUBSCRIPTION SUBSCRIPTION PAY PER RENTAL RENTAL TYPE
Unit EconomicsJersey Cost(w/ 25% off) $ 150 Shipping $ 9 Cleaning $ 1 Customer Acquisition $ 25 Processing $ 1 X 5 X 5 X 5 Unit Costs - $ 230 Revenue $ 199 Net - $ 31 Shipping $ 9 Cleaning $ 1 Processing $ 1 X 5 X 5 X 5 Unit Costs - $ 55 Revenue $ 199 Net $ 86 Year 1 Year 2 Retention 60 % x Turns Turns (For One Person)
Current Pricing PlansAnnual Subscription $199 /year Authentic Top of Line Jerseys Free Shipping Send back a jersey in exchange for another Monthly Subscription$29.99 /monthAuthentic Top of Line Jerseys Free ShippingSend back a jersey in exchange for another 1 Time, 1 Week Rental $24.99 Authentic Top of Line Jerseys Free Shipping Send back jersey within 1 week (But A/B Testing for Price Elasticity)
Customer Relationships GET KEEP GROW Results Pending… Google AdWords Guerilla style marketing on FB, YouTube, and Twitter Customer referral bonuses Targeted promotions Customer Loyalty program with bonus rentals and discount purchases Seniority credits Partnership rewards and discounts Free jersey giveaways Sale of customer data Family plan Premium subscriptions Additional products
Market SizeTotal Addressable Market (how big is universe) 150 Million Americans watch the 5 major team sports (in some capacity) Served Available Market (how many can I reach with my sales channel) 11 Million NY Metro Area watch the 5 major team sports (in some capacity)Target Market (who will be most likely buyers) Base d only Yankee Stadium Research: 11.7% of SAM showed strong interest 1.3 Million People - Half subscription / Half Pay Per Rental
Teenager Customer DiscoveryCustomer Acquisition More Google Adwords Testing More Website Conversion Testing LISTEN TO/OBSERVE OUR CUSTOMERS Next Steps
Who Is the Team? 500 CUSTOMERS TEAM MEMBERS Degree program and Department/Major Provide your LinkedIn public profile URL Are you the subject matter expert (SME) for this team? Pick a role you think you most likely will play on this team (Hustler, Hacker, Designer or Product Picker) Anything interesting we should know about you (be brief)
Startup Ecosystem Corporate Higher Education Adult Learning/Skills Institutions What’s the Competitive Landscape?
What’s Your Business Model?
What happens next? Applications will be reviewed and accepted on a rolling basis - first come-first served. Finalists will be notified by email. Step 1: Review Course Website http://www8.gsb.columbia.edu/entrepreneurship/leanlaunchpad / Step 2: Form a Team (Use above website to form or join a team) Step 3: Submit Application (Team submission, not Individual)Step 4: Each Team Member must Acknowledge and Accept Class Requirements by Email (Sent by Jay Mehta)Step 5: Application is Reviewed for completeness and Individual Eligibility is VerifiedStep 6: Notification of Acceptance, Registration and Bid Point Reduction (MBA/EMBA only)January 12 INITIAL CANVAS DUE by 6pm ETJanuary 13 Class starts 8:30am ET
Turning great ideas into great businesses Syllabus and more course info: http://www8.gsb.columbia.edu/entrepreneurship/leanlaunchpad / General Lean LaunchPad background: http://steveblank.com/category/lean-launchpad/Startup Tools:http://steveblank.com/tools-and-blogs-for-entrepreneurs/
In Conclusion…Questions about the course or process?Looking for Team Members?Looking for a Team to Join?First look here : http://www8.gsb.columbia.edu/entrepreneurship/leanlaunchpad / Still need help? Also: Ashley Zwick… az2335@columbia.edu OR if needed… bobdorf@gmail.com