CreatingStart-UpSuccess 101AlexOsterwalder.com               SteveBlank.com@business_design                  @sgblankContr...
this presentation combines two global bestsellers                                    +BusinessModelGeneration.com         ...
So what makes for asuccessful start-up?
Start with a brilliantfounder like...
Mike, 34StanfordAlumnus
he used to be an...
ExperiencedExec
All his operatingexperience built upsome...
...outstandingcredentials!
One day Mike has...
A “killer”product idea!
A “killer”product idea!he’s reallypassionate about it
Mike’s experienced.He knows how to test hisidea using...
...marketresearch
The research looks good!Mike moves forward, andwrites a fantastic....
Great!Based on the credentials,research, and plan, Mike hassecured the final piece...
...VC Funding!
Money in hand,Mike get’s started on
...building his      start-up.
He makes the headlinesof every major...
... and is invited to give...
...keynote talks
Mike and hisstart-up are   on a roll!
How likely is hisbusiness tosucceed?
Despite the experience,research and plan...
...Mikeslipped up.
Let’s help Mikewith 5 things he didn’t know.                   29
1    No business    plan survives         the first        customer         contact.
Sticking to a planningdocument works for aknown future, not for astart-up context.Plan’s fail in start-ups.
2    It’s the    business     model,     stupid.
Hey Mike, your plan wasto build a company, butdid your plan include aBusiness Model?
“A business model describesthe rationale of how an organizationcreates, delivers, and captures value”
Here are the 9 building blocks ofa business model:
CUSTOMER SEGMENTSwhich customers and users are you serving?which jobs do they really want to get done?                    ...
VALUE PROPOSITIONS what are you offering them? what is that  getting done for them? do they care?                         ...
CHANNELShow does each customer segment want to be reached?         through which interaction points?                      ...
CUSTOMER RELATIONSHIPSwhat relationships are you establishing with each segment?       personal? automated? acquisitive? r...
REVENUE STREAMS  what are customers really willing to pay for? how?are you generating transactional or recurring revenues?...
KEY RESOURCESwhich resources underpin your b.model?      which assets are essential?                                      ...
KEY ACTIVITIESwhich activities do you need to perform well in       your b.model? what is crucial?                        ...
KEY PARTNERSwhich partners and suppliers leverage your model?           who do you need to rely on?                       ...
COST STRUCTUREwhat is the resulting cost structure?which key elements drive your costs?                                   ...
key       value          customer            activities   proposition       relationships     key                         ...
“Hmm, interesting so  what do I make of              that?”
use it as a tool to...
sketch out your business model
building block
building     block                building               building                block      blockbuilding block
building                       block                                            building                                  ...
This tool is called theBusiness Model Canvas(download with instructions atwww.businessmodelgeneration.com/downloads)
3     Take time        to think        through     alternative    possibilities.
the same technology, product, or servicecan have numerous business models
try sketching out alternativebusiness models by askingyourself...
transactional vs.          product vs. service        scale vs. scoperecurring revenues                                   ...
only make a first choice after prototypingand thinking through several models...
OK. You’ve got your model,but you’re not done yet...
4   Your business     model idea is      just a set of      hypotheses.
a business model might look great onpaper...                  building                   block                            ...
... just a set of hypotheses        guess                guess          guess                  guess                guessg...
...so you need to get out of thebuilding and...
test each hypothesis(e.g. with customers)
this business model testing process iscalled Customer Developmentcustomer            customer     customer    companydisco...
two different phases...
searchcustomer            customer     customer    companydiscovery           validation    creation    building          ...
and it starts with...
... verifyingeveryhypothesis  customer              customer     customer    company  discovery             validation    ...
test your hypotheses        product       market type       competition
test your hypotheses                       problem                       customer                         user            ...
test your hypotheses              channel
test your hypotheses                                       demand                                       creation          ...
to accomplish this you will need a specialand agile ...
customerdevelopmentteam
A team that ...
... gets out of thebuilding!
... to test and adapt your model             agile business                 model                        demand           ...
you need to adapt thebusiness model untilyou can prove it workscustomer            customer     customer    companydiscove...
“How do I provea businessmodel works?”
One example of “proving” isconcluding the ...
... sales of a “minimum viablefeature set”
This adaptation process is called ...
the pivotcustomer            customer     customer      companydiscovery           validation    creation      building   ...
so do you have any “factual” proof?
Congratulations!
You finished the searchprocess!
So don’t ever forget ...
5    Don’t build your     company, until     you’ve verified      your Business              Model
or you’ll risk ...
Burning your cash whilesearching for a workingbusiness model
execution is not search
execution follows search
Build when you’ve foundyour model
only then execute:
scale your marketingcustomer            customer     customer    companydiscovery           validation    creation    buil...
and build your org                                         structurescustomer            customer     customer    companyd...
1   No business plan survives the    first customer contact.2   It’s the business model, stupid.3   Take time to think thr...
you can read more about business models and thecustomer development process here:                                   +Busin...
GoodLuck!BusinessModelGeneration.com StevenBlank.com/books.htmlAlexOsterwalder.com         SteveBlank.com@business_design ...
Successful entrepreneurship
Successful entrepreneurship
Successful entrepreneurship
Successful entrepreneurship
Successful entrepreneurship
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Successful entrepreneurship

  1. 1. CreatingStart-UpSuccess 101AlexOsterwalder.com SteveBlank.com@business_design @sgblankContribution by Alan Smith @thinksmith
  2. 2. this presentation combines two global bestsellers +BusinessModelGeneration.com StevenBlank.com/books.html
  3. 3. So what makes for asuccessful start-up?
  4. 4. Start with a brilliantfounder like...
  5. 5. Mike, 34StanfordAlumnus
  6. 6. he used to be an...
  7. 7. ExperiencedExec
  8. 8. All his operatingexperience built upsome...
  9. 9. ...outstandingcredentials!
  10. 10. One day Mike has...
  11. 11. A “killer”product idea!
  12. 12. A “killer”product idea!he’s reallypassionate about it
  13. 13. Mike’s experienced.He knows how to test hisidea using...
  14. 14. ...marketresearch
  15. 15. The research looks good!Mike moves forward, andwrites a fantastic....
  16. 16. Great!Based on the credentials,research, and plan, Mike hassecured the final piece...
  17. 17. ...VC Funding!
  18. 18. Money in hand,Mike get’s started on
  19. 19. ...building his start-up.
  20. 20. He makes the headlinesof every major...
  21. 21. ... and is invited to give...
  22. 22. ...keynote talks
  23. 23. Mike and hisstart-up are on a roll!
  24. 24. How likely is hisbusiness tosucceed?
  25. 25. Despite the experience,research and plan...
  26. 26. ...Mikeslipped up.
  27. 27. Let’s help Mikewith 5 things he didn’t know. 29
  28. 28. 1 No business plan survives the first customer contact.
  29. 29. Sticking to a planningdocument works for aknown future, not for astart-up context.Plan’s fail in start-ups.
  30. 30. 2 It’s the business model, stupid.
  31. 31. Hey Mike, your plan wasto build a company, butdid your plan include aBusiness Model?
  32. 32. “A business model describesthe rationale of how an organizationcreates, delivers, and captures value”
  33. 33. Here are the 9 building blocks ofa business model:
  34. 34. CUSTOMER SEGMENTSwhich customers and users are you serving?which jobs do they really want to get done? images by JAM
  35. 35. VALUE PROPOSITIONS what are you offering them? what is that getting done for them? do they care? images by JAM
  36. 36. CHANNELShow does each customer segment want to be reached? through which interaction points? images by JAM
  37. 37. CUSTOMER RELATIONSHIPSwhat relationships are you establishing with each segment? personal? automated? acquisitive? retentive? images by JAM
  38. 38. REVENUE STREAMS what are customers really willing to pay for? how?are you generating transactional or recurring revenues? images by JAM
  39. 39. KEY RESOURCESwhich resources underpin your b.model? which assets are essential? images by JAM
  40. 40. KEY ACTIVITIESwhich activities do you need to perform well in your b.model? what is crucial? images by JAM
  41. 41. KEY PARTNERSwhich partners and suppliers leverage your model? who do you need to rely on? images by JAM
  42. 42. COST STRUCTUREwhat is the resulting cost structure?which key elements drive your costs? images by JAM
  43. 43. key value customer activities proposition relationships key customerpartners segments cost revenuestructure key streams resources channels images by JAM
  44. 44. “Hmm, interesting so what do I make of that?”
  45. 45. use it as a tool to...
  46. 46. sketch out your business model
  47. 47. building block
  48. 48. building block building building block blockbuilding block
  49. 49. building block building block building block building buildingbuilding block block block building block building building block block buildin g building block building block block
  50. 50. This tool is called theBusiness Model Canvas(download with instructions atwww.businessmodelgeneration.com/downloads)
  51. 51. 3 Take time to think through alternative possibilities.
  52. 52. the same technology, product, or servicecan have numerous business models
  53. 53. try sketching out alternativebusiness models by askingyourself...
  54. 54. transactional vs. product vs. service scale vs. scoperecurring revenues blue ocean vs. redniche market vs. ocean direct sales vs.mass market indirect sales personal vs.capital expenditure vs. automated open vs. closedpartnership disruptive vs. difficult questions human intensive vs. incrementalacquisition vs. retention system intensive tailor-made vs. mass physical vs. virtual productionone customer segmentvs. another copyright vs. copyleft fixed vs. variablepaid vs. free costsdistributed vs. in-sourcing vs. out- advertising vs.centralized sourcing sales
  55. 55. only make a first choice after prototypingand thinking through several models...
  56. 56. OK. You’ve got your model,but you’re not done yet...
  57. 57. 4 Your business model idea is just a set of hypotheses.
  58. 58. a business model might look great onpaper... building block building buildin block g block building block block building block ... but be buildin block g building building block block building block build blocing k buildin block g honest that it’s buildin block g
  59. 59. ... just a set of hypotheses guess guess guess guess guessguess guess guess guess guess guess guess
  60. 60. ...so you need to get out of thebuilding and...
  61. 61. test each hypothesis(e.g. with customers)
  62. 62. this business model testing process iscalled Customer Developmentcustomer customer customer companydiscovery validation creation building pivot
  63. 63. two different phases...
  64. 64. searchcustomer customer customer companydiscovery validation creation building pivot execution
  65. 65. and it starts with...
  66. 66. ... verifyingeveryhypothesis customer customer customer company discovery validation creation building pivot
  67. 67. test your hypotheses product market type competition
  68. 68. test your hypotheses problem customer user payer
  69. 69. test your hypotheses channel
  70. 70. test your hypotheses demand creation problem channel product customer(customer) market type user(problem) competition channel payer validate business pricing model model
  71. 71. to accomplish this you will need a specialand agile ...
  72. 72. customerdevelopmentteam
  73. 73. A team that ...
  74. 74. ... gets out of thebuilding!
  75. 75. ... to test and adapt your model agile business model demand adaptation creation problem channel product customer(customer) market type user (problem) competition payer customer development channel team validate business pricing model model
  76. 76. you need to adapt thebusiness model untilyou can prove it workscustomer customer customer companydiscovery validation creation building pivot
  77. 77. “How do I provea businessmodel works?”
  78. 78. One example of “proving” isconcluding the ...
  79. 79. ... sales of a “minimum viablefeature set”
  80. 80. This adaptation process is called ...
  81. 81. the pivotcustomer customer customer companydiscovery validation creation building pivot (repeat * until proven)
  82. 82. so do you have any “factual” proof?
  83. 83. Congratulations!
  84. 84. You finished the searchprocess!
  85. 85. So don’t ever forget ...
  86. 86. 5 Don’t build your company, until you’ve verified your Business Model
  87. 87. or you’ll risk ...
  88. 88. Burning your cash whilesearching for a workingbusiness model
  89. 89. execution is not search
  90. 90. execution follows search
  91. 91. Build when you’ve foundyour model
  92. 92. only then execute:
  93. 93. scale your marketingcustomer customer customer companydiscovery validation creation building pivot execution
  94. 94. and build your org structurescustomer customer customer companydiscovery validation creation building pivot execution
  95. 95. 1 No business plan survives the first customer contact.2 It’s the business model, stupid.3 Take time to think through alternative possibilities4 Your business model idea is just a set of hypotheses.5 Don’t build your company, until you’ve verified your Business Model
  96. 96. you can read more about business models and thecustomer development process here: +BusinessModelGeneration.com StevenBlank.com/books.html
  97. 97. GoodLuck!BusinessModelGeneration.com StevenBlank.com/books.htmlAlexOsterwalder.com SteveBlank.com@business_design @sgblankContribution by Alan Smith @thinksmith
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