AC12 OverviewOverview, house-keeping, business models and customer development. Adapted Steve Blank’s E245
Agenda• Introductions.• Program overview.• Our expectations.• Program objectives.• Introduction to CustDev, Business Models & CustAcq.• 5 x 5 minute exercises.• Week one milestones.• Week one housekeeping.• Key reading for the program.
Mentors & Advisors• VC’s / Entrepreneurs / and SME experts e.g. Legal, UI/ UX etc.• Their role is to help you “get out of the building”• Share contacts• Offer real world entrepreneurial advice• Critical feedback• Note: You should arrange your schedule around them not the other way round.
Demo Day SV & US Trip September 1st - 14th 2012Optional 3 months at Startup House
Budgeting the $20,000• Branding• Trademarks• Front-end design• Brochures/materials• Travel (domestic and international).• Other (you tell us!)• Make a rough budget - get it approved by us and (stick to it)
Survival Nobody talks of entrepreneurship as survival, but thats exactly what it is and what nurtures creative thinking - Anita Roddick, Founder, The Body Shop.• Start charging as early in the • What are your other sources of businesses lifecycle as you can. “after hours” cash ﬂow that Pre-sales, bulk sales, 12 month contracts, require small investments of time? selling waiting list space. Weekend work, teaching, consulting, web development etc.• Start learning how to raise capital day #1 of the program. • Don’t fear being an enterprise We will help you but start preparing sales or consulting company ﬁrst yourself for investment right now. Try - this buys you time, experience and raising $50k during the program. (C- deep customer understanding.You can Note?) always productize your offering later.• Look for leverage right now (3F’s, • Bootstrappers mentality. Never Government grants, credit cards, loans buy what you can borrow, never borrow etc). what you can beg for, never beg for what you can steal ;)
Program goals• Help you discover and validate your • Give you direct, honest and constructive business model. feedback.• Expand your existing network in the • Assist you work on the businesses startup world. metrics, LTV, Cost of Acquisition, etc.• Force you to test key assumptions the • Assist you develop marketing funnels business is built on. (B2C) or sales/lead-gen strategy (B2B)• Help you get traction (users, revenue and • Push you out of your comfort zone and social proof) make you a more rounded entrepreneur.• Help you improve your product and user • Improve your knowledge in a range of key experience. startup areas, capital raising, marketing, metrics, design, strategy, exit strategies• Help you improve your branding, USP and positioning. • Assist you raise further funding, during and after the program.• Help you build channel partners, afﬁliates, key partners. • Give you conﬁdence and skills to turn your startup into a proﬁtable business.
Our expectations of you• That one of the founders spends a • That if you don’t have a product yet minimum of 10-20 hours out of the you have a compelling mock-up building and working on Customer or predesign that you can use to Development. start building excitement.• That you do whatever it takes to learn • That you strive to be the #1 brand in from customers, understand the value your category via PR, marketing, you could deliver, get their buy-in and audience building, social, content lock in $$$ as early as possible. marketing, partnerships & getting your brand noticed and talked about.• That you document your Mindshare. customer development journey, hypothesis’, tests and • That you don’t suck at email learning every week (it is the best (hint: reply instantly to important source of investor readiness you’ll ever people, customers and investors). develop). • That you treat each-other with• That your branding, copywriting, respect, help each-other through good landing pages or front-end and bad times, provide constructive design look f#cking amazing. feedback to your peers and enjoy the ride. Give us plenty of constructive feedback you’re now founders of AngelCube too!
Be prepared for thisPaul Graham’s Startup Roller Coaster Seth Godin’s - The Dip
AngelCube by the numbers• ~24 mentor sessions (2 per week).• 13 milestone sessions (This is #1).• X# of adhoc mentor sessions (usually last minute).• 12 pitch practice sessions.• 10-20 hours per week of Customer Development (biz founder)• 10-20 hours per week of Agile Development (tech founder)• 3 mentor speed-dating events.• 1 hour per week blogging your learnings.
What AngelCube is about• AngelCube is not just about mentor sessions.• AngelCube is not just about “getting feedback”• AngelCube is not just about learning to pitch.• AngelCube is not just about making your product better.AngelCube is really about the work you dooutside the building...It’s the difference between a vision and a hallucination - Steve Blank
Six key area’s we focus on• Going from idea or “a product” to a business. – Business Model + Customer Development – Hypotheses testing of the business model(s) – Getting “out of the building” – Execution. Product development/reﬁnement.• Product/Market Fit.• Positioning (Messaging, Branding & Mindshare)• Economics (Acquisition, Activation, Retention, Referral)• Growth (Marketing, PR, Partners, Momentum)• Investor Readiness. (Pitching. Intro’s. Knowledge, etc)
Two types of Startups.Before product market ﬁt.& After product market ﬁt.Marc Andreeseen, Founder Netscape & Andreeseen Horowitz Capital
What is Product/Market Fit?The customer is willing to pay for the product.The cost of acquiring the customer is less thanwhat they pay for the product. (LTV)There’s sufﬁcient evidence indicating the marketis large enough to support the business.Vlaskovits and Cooper, Entrepreneurs Guide to Customer Development
You can feel when product market ﬁt is not happening “The customers arent quite getting value out of the product, word of mouth isnt spreading, usage isnt growing that fast, press reviews are kind of "blah", the sales cycle takes too long, and lots of deals never close.”http://cye.posterous.com/product-market-ﬁt-and-old-post-by-marc-andre
Creating a hypothesis to test Real Hypothesis are testable, measurable and falsiﬁable. Leaps of faith are not.
5x5 Minute Exercises• Sketch out a draft of your business model canvas.• Identify your riskiest assumption (one to test ﬁrst)• Conceive a test or series of tests you will run this week to validate or falsify this assumption (MVP).• Develop the criteria to determine if your test has passed or failed e.g. not a leap of faith test.• List who you need to interview during the process (user, end-user, decision maker etc).
A pivot can be on the product, business model, and engine of growth. Here’s 10. Zoom-in pivot. 5.Business1.Zoom-out pivot. architecture pivot.2.Customer segment 6.Value capture pivot. pivot. 7.Engine of growth3.Customer need pivot. pivot. 8.Channel pivot.4.Platform pivot. 9.Technology pivot.Eric Ries - 10 Ways Entrepreneurs Pivot a Lean Startup.
I recommend that everystartup have a regularpivot or perseveremeeting.Eric Ries, The Lean Startup 2011
Team Deliverables - Sketch out your business model canvas. - Read pages 38 - 149 of Running Lean, Ash Mayura - Read Marc Andreeseen’s post on Product Market Fit (Hint: Google it). - Identify your most critical / riskiest assumption.- Develop a way to MVP (test) that assumption (slide deck, screenshots, diagram, brochure, landing page, demo etc). - Write your interview process including key insights. - Conduct 10-20 real customer (or user) F2F interviews.- Start a blog, journal, wiki or LeanLaunchLab to describe the key customer insights you’ve gained during these interviews (more detail on Friday).- Use agile tool like PivotalTracker to list, prioritise or icebox any product improvements based on customer feedback and lessons learned from real customers. - Follow Startup L. Jackson.Present key insight from interviews back to the group in 12 minutes - Monday You’ll be doing this each week. Mentors may attend some sessions. Other stuff. Don’t ask for permission, ask for assistance. Keep on building momentum and work harder than you ever have ;)
Housekeeping Over the next two weeks. Develop a loose 13 week plan that you and your co-founder will work toward.- Delegate. We’ve given you a LOT to do. Who does what in your company? Work out the best way to share & own responsibilities. - Sketch a product plan, that can factor in customer insights.- Spreadsheet a rough13 week budget and book a time with Adrian and Andrew for budget approval and funds transfer. - Start thinking about your “survival plan” based on slide 15. - Ensure the company is formed (or process started). - Book a time with Adrian to sign all legal documentation. - Please join the AngelCube Yammer and introduce yourself. - Set-up your AngelList proﬁle with existing brand and logo.
Networks we use.Work / Q&A Social, Photo’s, LOLs Capital Raising
The week ahead.• 10am tomorrow - Diesel Law’s UI/UX for Startups.• 1pm tomorrow - Meet, greet & welcome to Inspire 9.• 4-6pm Thursday - Scott Handsaker, Lean Canvas (detail).• 9-10am Friday - Blogging the boardroom (AB)• 7pm - Midnight - Friday welcome party (guests welcome)• Ofﬁce hours - Legal (AS) Assumptions (AB) Product (NS)
Cust Dev Manifesto A Startup Is a Temporary Organisation Designed to Search for A Repeatable and Scalable Business Model Pair Customer Development with Agile 9. Agree on Market Type – It Changes Development Everything1. Failure is an Integral Part of the Search for 10.Fast, Fearless Decision-Making, Cycle Time, the Business Model Speed and Tempo2. If You’re Afraid to Fail You’re Destined to 11.If it’s not About Passion,You’re Dead the Do So Day You Opened your Doors3. Iterations and Pivots are Driven by Insight 12.Startup Titles and Functions Are Very4. Validate Your Hypotheses Different from a Company’s with Experiments 13.Preserve Cash While Searching. After It’s5. Success Begins with Buy-In from Investors Found, Spend and Co-Founders 14.Communicate and Share Learning6. No Business Plan Survives First Contact 15.Startups Demand Comfort with Chaos and with Customers Uncertainty7. Not All Startups Are Alike 16.There are no facts in the building, so get8. Startup Metrics are Different from Existing out of the building. Companies