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Lean Startup Victoria
This meetup is not about how to write a business plan. The end result is not a PowerPoint slide deck for a VC presentation.
Instead, we want to get our hands dirty talking to customers, partners, and competitors to leap into the chaos and uncerta...
We’ll learn how to use  a  business model  to brainstorm each part of a company,  customer development  to get out of the ...
The goal is to have a  validated  business model that can bootstrap profitably or raise capital
Engineering 245 The Lean LaunchPad Session 1: Overview/Business Models/Customer Development Professors Steve Blank, Ann Mi...
Reading <ul><li>Business Model Generation </li></ul><ul><li>Four Steps to the Epiphany </li></ul><ul><li>Founders at Work ...
How to Build A Startup Idea Size Opportunity Business Model Customer Development
How to Build A Startup Idea Size  of the Opportunity Business Model(s) Customer  Discovery Customer  Validation Theory Pra...
How to Build A Startup Idea Size  of the Opportunity Business Model(s) Customer  Discovery Customer  Validation
An Idea is _Not_ a  Company
Size of Opportunity
Small Business  Startups Small Business Startup <ul><li>-  Business Model found </li></ul><ul><li>- Profitable business </...
Small Business  Startups <ul><li>-  Business Model found </li></ul><ul><li>- Profitable business </li></ul><ul><li>Existin...
Scalable  Startup Scalable Startup Large Company >$100M/year <ul><li>Total Available Market > $500m </li></ul><ul><li>Comp...
Scalable  Startup Scalable Startup Large Company >$100M/year <ul><li>Total Available Market > $500m </li></ul><ul><li>Comp...
Very Different  Startup Goals Small Business Startup <ul><li>- Business Model found </li></ul><ul><li>- Profitable busines...
Venture Firms  Invest in  Scalable Startups Small Business Startup Scalable Startup Large Company
Market/Opportunity Analysis <ul><li>How Big is It?:  Market/Opportunity Analysis </li></ul><ul><ul><li>Identify a Customer...
How Big is the Pie? Total Available Market Total Available Market <ul><li>How many   people  would  want/need   the produc...
How Big is My Slice? Served Available Market <ul><li>How many people  need/can use  product? </li></ul><ul><li>How many pe...
How Much Can I Eat? Target Market <ul><li>Who am I going to sell to  in year 1, 2 & 3?  </li></ul><ul><li>How many custome...
Segmentation Identification of groups most likely to buy Target  Market <ul><li>Geographic </li></ul><ul><li>Demographic <...
Market Size: Summary <ul><li>Market Size Questions: </li></ul><ul><ul><li>How big can this market be?  </li></ul></ul><ul>...
Business Model
What Is a Business  Model ? <ul><li>Diagram  of flows between company and customers </li></ul><ul><li>Scorecard  of hypoth...
9 building blocks  of a business model:
CUSTOMER SEGMENTS which 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?
CHANNELS how does each customer segment want to be reached? through which interaction points?
CUSTOMER RELATIONSHIPS what relationships are you establishing with each segment? personal? automated? acquisitive? retent...
REVENUE STREAMS what are customers really willing to pay for? how?  are you generating transactional or recurring revenues?
KEY RESOURCES which resources underpin your business model? which assets are essential?
KEY ACTIVITIES which activities do you need to perform well in your business model? what is crucial?
KEY PARTNERS which partners and suppliers leverage your model?  who do you need to rely on?
COST STRUCTURE what is the resulting cost structure?  which key elements drive your costs?
images by JAM customer segments key partners cost structure revenue streams channels customer relationships key activities...
sketch out your business model
9 Guesses Guess Guess Guess Guess Guess Guess Guess Guess Guess
But, Realize They ’re Hypotheses
More startups  fail from  a lack of customers  than from a failure of product development (focus on “who” more than “what”)
<ul><li>Test Hypotheses: </li></ul><ul><li>Problem </li></ul><ul><li>Customer </li></ul><ul><li>User </li></ul><ul><li>Pay...
The  Pivot <ul><li>The heart of Customer Development </li></ul><ul><li>Iteration without crisis </li></ul><ul><li>Fast, ag...
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Lean startup Victoria 01 Introduction to Lean Startup

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The slides from the introduction to Lean Business Methodology from the Victoria, BC Lean Startup Meetup.

meetup.com/Lean-Startup-Victoria

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Transcript of "Lean startup Victoria 01 Introduction to Lean Startup"

  1. 1. Lean Startup Victoria
  2. 2. This meetup is not about how to write a business plan. The end result is not a PowerPoint slide deck for a VC presentation.
  3. 3. Instead, we want to get our hands dirty talking to customers, partners, and competitors to leap into the chaos and uncertainly of how a startup actually works.
  4. 4. We’ll learn how to use a business model to brainstorm each part of a company, customer development to get out of the building and see whether anyone would want and use your product, and agile development to help us rapidly iterate our products into something customers will use and buy.
  5. 5. The goal is to have a validated business model that can bootstrap profitably or raise capital
  6. 6. Engineering 245 The Lean LaunchPad Session 1: Overview/Business Models/Customer Development Professors Steve Blank, Ann Miura-Ko, Jon Feiber http://e245.stanford.edu/
  7. 7. Reading <ul><li>Business Model Generation </li></ul><ul><li>Four Steps to the Epiphany </li></ul><ul><li>Founders at Work </li></ul>
  8. 8. How to Build A Startup Idea Size Opportunity Business Model Customer Development
  9. 9. How to Build A Startup Idea Size of the Opportunity Business Model(s) Customer Discovery Customer Validation Theory Practice
  10. 10. How to Build A Startup Idea Size of the Opportunity Business Model(s) Customer Discovery Customer Validation
  11. 11. An Idea is _Not_ a Company
  12. 12. Size of Opportunity
  13. 13. Small Business Startups Small Business Startup <ul><li>- Business Model found </li></ul><ul><li>- Profitable business </li></ul><ul><li>Existing team </li></ul><ul><li>< $1M in revenue </li></ul>
  14. 14. Small Business Startups <ul><li>- Business Model found </li></ul><ul><li>- Profitable business </li></ul><ul><li>Existing team </li></ul><ul><li>< $10M in revenue </li></ul><ul><li>5.7 million small businesses in the U.S. <500 employees </li></ul><ul><li>99.7% of all companies </li></ul><ul><li>~ 50% of total U.S. workers </li></ul>http://www.sba.gov/advo/stats/sbfaq.pdf Small Business Startup
  15. 15. Scalable Startup Scalable Startup Large Company >$100M/year <ul><li>Total Available Market > $500m </li></ul><ul><li>Company can grow to $100m/year </li></ul><ul><li>Business model found </li></ul><ul><li>Focused on execution and process </li></ul>
  16. 16. Scalable Startup Scalable Startup Large Company >$100M/year <ul><li>Total Available Market > $500m </li></ul><ul><li>Company can grow to $100m/year </li></ul><ul><li>Business model found </li></ul><ul><li>Focused on execution and process </li></ul><ul><li>Typically requires “risk capital” </li></ul><ul><li>In contrast a scalable startup is designed to grow big </li></ul><ul><li>Typically needs risk capital </li></ul><ul><li>What Silicon Valley means when they say “Startup” </li></ul>
  17. 17. Very Different Startup Goals Small Business Startup <ul><li>- Business Model found </li></ul><ul><li>- Profitable business </li></ul><ul><li>Existing team </li></ul><ul><li>< $10M </li></ul>Scalable Startup Large Company <ul><li>Total Available Market > $500m </li></ul><ul><li>Company can grow to $100m/year </li></ul><ul><li>Business model found </li></ul><ul><li>Focused on execution and process </li></ul><ul><li>Typically requires “ risk capital ” </li></ul>
  18. 18. Venture Firms Invest in Scalable Startups Small Business Startup Scalable Startup Large Company
  19. 19. Market/Opportunity Analysis <ul><li>How Big is It?: Market/Opportunity Analysis </li></ul><ul><ul><li>Identify a Customer and Market Need </li></ul></ul><ul><ul><li>Size the Market </li></ul></ul><ul><ul><li>Competitors </li></ul></ul><ul><ul><li>Growth Potential </li></ul></ul>
  20. 20. How Big is the Pie? Total Available Market Total Available Market <ul><li>How many people would want/need the product? </li></ul><ul><li>How large is the market be (in $ ’s) if they all bought? </li></ul><ul><li>How many units would that be? </li></ul><ul><li>How Do I Find Out? </li></ul><ul><li>Industry Analysts – Gartner, Forrester </li></ul><ul><li>Wall Street Analysts – Goldman, Morgan </li></ul>
  21. 21. How Big is My Slice? Served Available Market <ul><li>How many people need/can use product? </li></ul><ul><li>How many people have the money to buy the product </li></ul><ul><li>How large would the market be (in $ ’s) if they all bought? </li></ul><ul><li>How many units would that be? </li></ul><ul><li>How Do I Find Out? </li></ul><ul><li>Talk to potential customers </li></ul>Served Available Market Total Available Market
  22. 22. How Much Can I Eat? Target Market <ul><li>Who am I going to sell to in year 1, 2 & 3? </li></ul><ul><li>How many customers is that? </li></ul><ul><li>How large is the market be (in $ ’s) if they all bought? </li></ul><ul><li>How many units would that be? </li></ul><ul><li>How Do I Find Out? </li></ul><ul><li>Talk to potential customers </li></ul><ul><li>Identify and talk to channel partners </li></ul><ul><li>Identify and talk to competitors </li></ul>Total Available Market Target Market Served Available Market
  23. 23. Segmentation Identification of groups most likely to buy Target Market <ul><li>Geographic </li></ul><ul><li>Demographic </li></ul><ul><li>Psychographic variables </li></ul><ul><li>Behavioral variables </li></ul><ul><li>Channel </li></ul><ul><li>etc… </li></ul>Total Available Market Served Available Market
  24. 24. Market Size: Summary <ul><li>Market Size Questions: </li></ul><ul><ul><li>How big can this market be? </li></ul></ul><ul><ul><li>How much of it can we get? </li></ul></ul><ul><ul><li>Market growth rate </li></ul></ul><ul><ul><li>Market structure (Mature or in flux?) </li></ul></ul><ul><li>Most important : Talk to Customers and Sales Channel </li></ul><ul><li>Next important: Market size by competitive approximation </li></ul><ul><ul><li>Wall Street analyst reports are great </li></ul></ul><ul><li>And : Market research firms Like Forester, Gartner </li></ul>
  25. 25. Business Model
  26. 26. What Is a Business Model ? <ul><li>Diagram of flows between company and customers </li></ul><ul><li>Scorecard of hypotheses testing </li></ul><ul><li>Rapid change with each iteration and pivot </li></ul><ul><li>Founder- driven </li></ul>* Alex Osterwalder
  27. 27. 9 building blocks of a business model:
  28. 28. CUSTOMER SEGMENTS which customers and users are you serving? which jobs do they really want to get done?
  29. 29. VALUE PROPOSITIONS what are you offering them? what is that getting done for them? do they care?
  30. 30. CHANNELS how does each customer segment want to be reached? through which interaction points?
  31. 31. CUSTOMER RELATIONSHIPS what relationships are you establishing with each segment? personal? automated? acquisitive? retentive?
  32. 32. REVENUE STREAMS what are customers really willing to pay for? how? are you generating transactional or recurring revenues?
  33. 33. KEY RESOURCES which resources underpin your business model? which assets are essential?
  34. 34. KEY ACTIVITIES which activities do you need to perform well in your business model? what is crucial?
  35. 35. KEY PARTNERS which partners and suppliers leverage your model? who do you need to rely on?
  36. 36. COST STRUCTURE what is the resulting cost structure? which key elements drive your costs?
  37. 37. images by JAM customer segments key partners cost structure revenue streams channels customer relationships key activities key resources value proposition
  38. 38. sketch out your business model
  39. 39. 9 Guesses Guess Guess Guess Guess Guess Guess Guess Guess Guess
  40. 40. But, Realize They ’re Hypotheses
  41. 41. More startups fail from a lack of customers than from a failure of product development (focus on “who” more than “what”)
  42. 42. <ul><li>Test Hypotheses: </li></ul><ul><li>Problem </li></ul><ul><li>Customer </li></ul><ul><li>User </li></ul><ul><li>Payer </li></ul><ul><li>Test Hypotheses: </li></ul><ul><li>Demand Creation </li></ul><ul><li>Test Hypotheses: </li></ul><ul><li>Channel </li></ul><ul><li>Test Hypotheses: </li></ul><ul><li>Product </li></ul><ul><li>Market Type </li></ul><ul><li>Competitive </li></ul><ul><li>Test Hypotheses: </li></ul><ul><li>Pricing Model / Pricing </li></ul><ul><li>Test Hypotheses: </li></ul><ul><li>Size of Opportunity/Market </li></ul><ul><li>Validate Business Model </li></ul><ul><li>Test Hypotheses: </li></ul><ul><li>Channel </li></ul><ul><li>(Customer) </li></ul><ul><li>(Problem) </li></ul>Customer Development Team Agile Development
  43. 43. The Pivot <ul><li>The heart of Customer Development </li></ul><ul><li>Iteration without crisis </li></ul><ul><li>Fast, agile and opportunistic </li></ul>
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