Who am I Serial entrepreneur CoFounded or worked in 14 startup companies Seven exits Raised close to 100m Venture and Angel Investor Ran a 50m venture fund Helped launch and advised two seed funds ID: 759725
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Slide1
Beyond the Business Plan: An Introduction to Lean Startup
Slide2Slide3Who am I?
Serial entrepreneur
Co-Founded or worked in 14 startup companies
Seven exits
Raised close to $100m
Venture and Angel Investor
Ran a $50m venture fund
Helped launch and advised two seed funds
Ran my on seed investing and advisory business for 15 years
Launched multiple products
Consumer internet, SAAS, Print
Entrepreneurship instructor
I-Corps, GWU, GMU
Slide4You probably know who these guys are
Slide5But you may never have heard of these guys
Slide6Eric Ries: Author of The Lean Startup
Steve Blank: Father of the Customer Discovery Method
Alexander
Osterwalder
: Inventor of the Business Model Canvas
Slide7They are leaders behind a revolutionary idea
Slide8Placing customers at the center of the business startup and
product development universe
Slide9Slide10More startups fail from a
lack of customers
than from product / tech failure
Slide11Slide12Slide13Do companies build product that nobody cares about?
OF COURSE they do!
Segway raised over $100MM USD in 2001. Used funds for tech development. Hired poorly. Hired logistics consultants to work on providing 10,000 Segways per week. At the end of 2 years they sold 6,000 TOTAL Segways.Without identifying a particular problem for a particular customer that they could solve, they were unable to market effectively.
Slide14What we used to believe
Slide15Startups are
smaller
versions
of
larger
companies
Slide16What we now know
Slide17Startups aresmaller versions of larger companies
Slide18What we used to believe
Business plan, financial model
Slide19Slide20Write
the
plan
Slide21Execute
the
plan
Slide22Create Financial Statements
Slide23Slide24What we now know
Slide25What history teaches us:
No plan survives
first contact with the enemy
Helmut von
Moltke
Slide26Everyone has a plan…
Slide27…until he gets punched in the face.”
Slide28No
business plan
survives first contact
with customers
Slide29So what IS a startup?
Slide30What’s a Startup
?
A
temporary
organization
designed
to
search
for a
repeatable and
scalable
business
model
Slide31… how a company creates, delivers, and captures value.
What’s a
business model?
Slide32…or how a company
makes money!
Slide33How do we build a Business Model?
Slide34Get
out
of the building!
Slide35Tool of Choice:
The
Business Model
Canvas
Slide36Business
Model Canvas
Slide37Your
idea
is
only
the
starting point
Slide38Guess
Guess
Guess
Guess
Guess
Guess
Guess
Guess
Guess
Process based on
Guesses
Slide39…with customers at the center of the universe
Slide40Our Focus is
Here
Slide41Our Goal
Fact
Fact
Fact
Fact
Fact
Fact
Fact
Fact
Fact
Product
– Market - Fit
Finding the right solution to the right customer problem with strong enough demand to warrant launching a business
Slide42Who is the
customer
?
What
problem
do they want
solved
?
What
value
do
they
derive from the solution?
Slide43Customer Development Process
Slide44Search for
Problem-Solution Fit
Slide45Customer Discovery is
not an exact science…
Look for
patterns
and
apply judgment
when validating or invalidating hypotheses.
Slide46Get to Know the
Customer
Who are they?
What do they do?
How do they do it?
Who do they work with?
Slide47Identify customer
problems
and
needs…
Uncover
Problems
Slide48focus on customer pains, desired gains, and jobs.
How Big is the
Problem?
Slide49You
must become
experts in your
customers
Slide50Archetypes
End users
Slide51Archetypes
End usersInfluencer
Slide52Archetypes
End usersInfluencerRecommender
Slide53Archetypes
End usersInfluencerRecommenderDecision makersPayer
Slide54Archetypes
End usersInfluencerRecommenderDecision makersPayerSaboteur
Slide55Archetypes
End usersInfluencerRecommenderDecision makersPayerSaboteur
Still not done…..
Slide56Archetypes
End usersInfluencerRecommenderDecision makersPayerSaboteur
Customer
sub-segments
Slide57Different segments
often have
different business models
Slide58Iterate and
Pivot
Slide59Restate Your Guesses
Slide60Repeat
as needed
Slide61Exercise #
1 Customers
List
a customer you intend to sell to
Describe
the problem
What
are the current alternatives
?
Name two Archetypes you will have to deal with.
Slide62Uncover the
value
Slide63…describe the
benefits
your customers derive from your products or services.
Slide64…describe the benefits your customers derive from your products or services.
Slide65Product Features = Value Propositions
Slide66Product Benefits
=
Value Propositions
Slide67Simple VP
Example
Slide68Temperature Rating
-60ºF / -51.1ºCDimensions64" / 60" / 39"LengthReg: 6' 0" / 183 cmLong 6' 6" / 198 cmSleeping Bag Shell FabricPertex® Shield EX waterproof/breathableLining FabricPertex® 30 denier nylon taffetaFill Power850+ Goose DownFill WeightReg 52.9 oz / 1,501 g Long 55.7 oz / 1,580 gAverage WeightReg 5 lb 0 oz / 2,273 g Long 5 lb 4 oz / 2,403 gPacked Size9" x 21" | 35LZip SideLeftCountry of OriginManufactured in the USA from imported materials
Snowy Owl EX -60 Price: $1,079
Slide69But What is
Value?
Slide70Is it:Warmest Sleeping Bag on the Planet?Full Loft (insulation) at head/shoulders?Inner zipper maintains seal if outer zipper fails?
But What is
Value?
Slide71Is it:Warmest Sleeping Bag on the Planet?Full Loft (insulation) at head/shoulders?Inner zipper maintains seal if outer zipper fails?Value = Survival
But What is
Value?
Slide72If your product is
“less expensive”
than the Snowy Owl, is it
more valuable
?
Slide73If your product is
“less expensive”
than the Snowy Owl, is it
more valuable
?
To a Polar Explorer?
Slide74If your product is
“less expensive”
than the Snowy Owl, is it
more valuable
?
To a Polar Explorer?
To a Weekend Camper?
Slide75We think in terms of products and features This is why you will find it difficult to define your own value propositions
Remember, as consumers, we don’t think in terms of Value Propositions
Slide76Fact
Fact
Fact
Fact
Fact
Fact
Fact
Fact
Fact
End
Goal
Product
– Market - Fit
Slide77Exercise
#2: Value Propositions
How does your solution address the customers problem?
Why is your solution better than the current alternative?
What value do you provide to the customer?
Slide78Product and Process
Slide79Product development
Customers known
Product known
Slide80Product development
Customers known
Product known
Slide81Product development
Slide82The Holy
Grail!
MVP
Slide83Lean
Organization
Slide84Slide85Slide86Founders run a
customer development team
(No sales, marketing, or business development)
Slide87Only founders
can choose which problems to solve
Slide88Only founders
can pivot
Slide89The Business Plan in 15 Seconds
Slide90The Elevator Pitch or Business Thesis
Slide91What is a Business Thesis?
Our company has a solution
That helps our customer(s)
Address
a specific problem(s) (Pain/gain points)
Providing
them with value they seek
Resulting in us making money
Slide92Exercise
#3: Business Thesis
Using your customer description and value proposition write a business thesis for your business
How does your solution match with the customer need and sought value?
Is there product market fit?
Slide93Q&A