9. OUR HYPOTHESES
Startups are not smaller versions of large companies
Startups are about search, not about execution
Business plans are based on guesses
Entrepreneurs and VCs execute on these guesses
Facts are outside the building
First test hypotheses, then create a fact-based plan
21. CUSTOMER DEVELOPMENT
Pivot
Customer Discovery
Customer Validation
Customer Creation
Company Building
Search
Execution
22. CUSTOMER DEVELOPMENT
Pivot
Customer Discovery
Customer Validation
Customer Creation
Company Building
Search
Execution
23. CUSTOMER DISCOVERY
Test the solution
Verify or pivot
Draw BMC & state hypotheses
Test the problem
Customer validation
24. CUSTOMER DEVELOPMENT
Pivot
Customer Discovery
Customer Validation
Customer Creation
Company Building
Search
Execution
25. CUSTOMER VALIDATION
Develop positioning
Verify / metrics that matter
Get ready to sell
Get out of the building & sell
Customer discovery
Customer creation
26. FOUR PERIODS OF DEVELOPMENT
Cash flow
Time
Pure entrepreneurship
27. PURE ENTREPRENEURSHIP
•Who are our customers?
•What is our value proposition?
•Do I have product-market fit?
•Lots of pivoting
29. STRATEGIC FOCUS
•What business are we in and what not?
•Know better than anybody else:
owhat people will pay
ohow many they will buy
ohow to distribute
•Develop relationships with partners & suppliers
•From prototype to truly scalable product
•Raising money to build the company
•Recruit a team
31. SYSTEMS BUILDING
•Financial controls
•Stable division of labor
•Developing systems of internal control
•Formalizing terms of sale
•Operational systems:
oProduction, outsourcing
oDistribution, sales
oService, warranties
32. FOUR PERIODS OF DEVELOPMENT
Cash flow
Time
Corporate management
33. CORPORATE MANAGEMENT
•Hiring “outsiders”
•Going public
•Adding the follow-on product(s)
•Shedding those who can’t keep up
•Formalizing the culture
•Rationalizing the strategy
34. Cash flow
Time
FOUR PERIODS OF DEVELOPMENT
Customer Discovery
Customer Validation
Customer Creation
Company Building
Search
Execution
36. EVIDENCE BASED ENTREPRENEURSHIP
State your idea
Create an initial business model
Construct a hypothesis for each part of the business model
Test your hypothesis by doing an experiment
Analyze your data and draw a conclusion
Communicate your results
42. STEVE BLANK?
Co-founded 8 startups in 21 years, mostly engineering products
Educator at Stanford, Berkeley, Haas, CalTech & Columbia.
Was the source of inspiration for Eric Ries to create Lean Startup.
Created the customer development method (mid 90s)
Created the Lean Launchpad class (2011)
Published ‘Four steps to epiphany’ (2005)
Published ‘The startup owner’s manual’ (2012)
One of the 11 ‘Notable entrepreneurs teaching the next generation’ (CNBC)
