So You Want To Be An Entrepreneur?    (a 12-step program from authors of the new Four Steps*)                       Bob Do...
A bit about me…• “Unemployable” since age 22, (gasp) 4 decades ago• 6 startups: 2 homeruns, 2 base hits, 2 tax losses    –...
So What Do I Do?
12 Steps to a Startup1. Decide what type of entrepreneur2. Do you have what it takes?3. Find an idea of sufficient size4. ...
Step 1: What’s A Startup?Who’s An Entrepreneur?
Lifestyle Startups               Work to Live their Passion     Startup• Serve known customer with  known product• Work fo...
Small Business Startups               Work to Feed the Family                                          Small     Startup  ...
Small Business Startups                    Work to Feed the Family                                                 Small  ...
Social Entrepreneurship Startups      Social                            Large     Startup                          Non-Pro...
Scalable Startup    Search                              Execute    Scalable                              Large    Startup ...
Buyable Startup                    Born to Be Big     Search                                Sell     Scalable             ...
What’s A Startup?Search             Build            Execute                                     LargeStartup          Tra...
Step 2: Do You Have What It Takes?• Founder?• Early Employee?• Later Stage?•    Resilient•    Relentless•    Agile•    Cur...
Step 3: Find an Idea of Sufficient Size• Idea sources:  –   New technology  –   Regulatory/legal changes  –   Customer tas...
Step 4: Craft Company Hypotheses• Any company can be described in 9 hypotheses
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?
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 business model? which                assets are essential?
KEY ACTIVITIESwhich activities do you need to perform well in your        business model? what is crucial?                ...
KEY PARTNERSwhich 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?
key activities   value             customer                         proposition       relationships     key               ...
sketch out yourbusiness model
Step 5: Website Logistics• Get a domain name• Set up Google Apps• For Coders: set up a web host  – Use virtual private ser...
Step 6: Build a “Low-Fidelity” Web Site • Splash Page   – value proposition, benefits summary, and a call-to-action to lea...
Step 7: Get Customers to the Site• Start showing the site to potential customers, testing  customer segment and value prop...
Step 8: Build a Complete Solution• Build a more complete solution (Connect the User  Interface to code)• Connect the UI to...
Step 9: Test the Customer Problem
Customer DevelopmentThe Search for the repeatable and    scalable Business Model
Customer DevelopmentThere are no facts inside your building          So get the hell out
More startups fail froma lack of customers than from afailure of product development
Customer DevelopmentThe Search For the Business ModelCustomer            Customer     Customer   CompanyDiscovery         ...
Customer Discovery  Customer            Customer     Customer   Company  Discovery           Validation   Creation    Buil...
Customer Discovery
Customer Validation      Customer            Customer     Customer   Company      Discovery           Validation   Creatio...
The Pivot• The heart of Customer Development• Iteration without crisis• Fast, agile and opportunistic
Pivot Cycle Time Matters• Speed of cycle minimizes cash needs• Minimum feature set speeds up cycle time• Near instantaneou...
The Minimum Viable Product (MVP) • Smallest feature set that gets you the most …    - orders, learning, feedback, failure…
Pivot Example    Robotic WeedingTalked 75 Customers in 8 Weeks
Our initial plan                   Confidential
20 interviews, 6 site visits…                                We got OUR Boots dirtyMowingInterviewed:• Golf: Stanford Golf...
Business Plan      Autonomous Vehicles for Mowing & Weeding                  - Innovation                            Deale...
Found weeding in organic crops is HUGE      problem; 50 - 75% of costs                        Crews of 100s-1000          ...
Decision to make – mowing vs weedingApplication     If ROI is < 1   Labor costs     Autonomous             TAM            ...
Autonomous vehicles WEEDING                  - Innovation                            Dealers sell,       - Low density- Ag...
1 Week – 1 CarrotBot        Confidential
CARROTBOT   Machine Vision data    collection platform     Monochrome    &      Color Cameras     Laser-line sweep     ...
The Business Plan Canvas Updated                 •Technology                            •Farming                 Design   ...
Visit Highlights                    Carrot vs. WeedsDue to small root systems, carrots have no chance against weeds
Visit HighlightsOrganic Broccoli, closelycultivated. Weeds close toplants are hand-picked
Visit HighlightsState of the Art in Weeding Technology for OrganicCrops
Customer HypothesisPre-Test                                               Large                                           ...
Customer Map #1 – Industrial GrowersExample: Bolthouse Farms – Large Industrial Carrot Producer – 8K acres/yr      End Use...
Customer Map #2 – Service ProvidersExample: Ag Services – Service Provider, Salinas Valley  End User       • Equipment Ope...
The Business Plan Canvas Updated                 •Technology                            •Farming                 Design   ...
World Ag Expo interviews:the need is real and wide spread                    • 10+ interviews at show                     ...
The Business Plan Canvas Updated                 •Technology                              •Farming                 Design ...
Autonomous weeding - Final                  - Innovation                            Direct               - Low density- Ag...
Step 11: Ask for MoneyHINT: YOUR VC PITCH WAS HIDING IN  THE LAST 12 SLIDES…DISCOVERY
Step 12: Scale and Celebrate!
Step 13: Repeat 
Thanks     now go PIVOT!   www.steveblank.comTONS of free tools, help, ideas   bob@kandsranch.com
Want more info on upcoming events?                Henrik Berglund         Chalmers University of Technology          Cente...
Want to do it Yourself?     WinterCampMarcus.Thorin@chalmersinnovation.com Timo.Lehes@chalmersinnovation.com    www.chalme...
Bob Dorf "The four steps 12 step program"
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Bob Dorf "The four steps 12 step program"

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Slides from Bob Dorf's open presentation at Chalmers on November 29 2011.

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  • November 16 2011 – CSE.
  • November 16 2011 – CSE.
  • Bob Dorf "The four steps 12 step program"

    1. 1. So You Want To Be An Entrepreneur? (a 12-step program from authors of the new Four Steps*) Bob Dorf allegedly retired serial entrepreneur www.steveblank.com *Caution: this 12 step program may require alcohol
    2. 2. A bit about me…• “Unemployable” since age 22, (gasp) 4 decades ago• 6 startups: 2 homeruns, 2 base hits, 2 tax losses – 1to1: from 3 people/10k revenue to 400 people/$44mm in 8 years – D&S: from 1 person/12k revenue to 150 people/15mm in 20 years• >20x startup Investor: 10 personally, 10 via fund• >12x startup advisor including EPNY, BVSN, DCLK, ICGE• 3 fleece vests: greatest all-time tuition• 2 years with Steve, teaching, consulting, new book
    3. 3. So What Do I Do?
    4. 4. 12 Steps to a Startup1. Decide what type of entrepreneur2. Do you have what it takes?3. Find an idea of sufficient size4. Craft company hypotheses5. Build the Website Logistics6. Build a “low-fidelity” web site7. Get customers to the site8. Add the backend code to make the site work9. Test the “problem” with customer data10. Test the “solution” by building the “high-fidelity” website11. Ask for money12.Celebrate success!
    5. 5. Step 1: What’s A Startup?Who’s An Entrepreneur?
    6. 6. Lifestyle Startups Work to Live their Passion Startup• Serve known customer with known product• Work for their passion
    7. 7. Small Business Startups Work to Feed the Family Small Startup Business• Serve known customer with known product• Feed the family
    8. 8. Small Business Startups Work to Feed the Family Small Startup Business Exit Criteria• known customer - Business Model found known product - Profitable business• Feed the family - Existing team < $500K in revenue
    9. 9. Social Entrepreneurship Startups Social Large Startup Non-Profit• Solve pressing social problems• Social Enterprise: Profitable• Social Innovation: New Strategies
    10. 10. Scalable Startup Search Execute Scalable Large Startup CompanyGoal is to solve for: Exit Criteria unknown customer and - Business model found unknown features - Total Available Market > $500m - Can grow to $100/year
    11. 11. Buyable Startup Born to Be Big Search Sell Scalable $2 to $50M Startup AcquisitionGoal is to solve for: Sell to larger company Internet, Mobile, Gaming Apps
    12. 12. What’s A Startup?Search Build Execute LargeStartup Transition Company A Startup is a temporary organization used to search for a repeatable and scalable business model
    13. 13. Step 2: Do You Have What It Takes?• Founder?• Early Employee?• Later Stage?• Resilient• Relentless• Agile• Curious• Passionate• Driven• “Fire in the Belly”
    14. 14. Step 3: Find an Idea of Sufficient Size• Idea sources: – New technology – Regulatory/legal changes – Customer tastes changes – Unmet customer needs• Size the opportunity: – Total Available Market – Served Available Market – Target Market
    15. 15. Step 4: Craft Company Hypotheses• Any company can be described in 9 hypotheses
    16. 16. CUSTOMER SEGMENTS which customers and users are you serving? which jobs do they really want to get done?
    17. 17. VALUE PROPOSITIONS what are you offering them? what is that getting done for them? do they care?
    18. 18. CHANNELShow does each customer segment want to be reached? through which interaction points?
    19. 19. CUSTOMER RELATIONSHIPSwhat relationships are you establishing with each segment? personal? automated? acquisitive? retentive?
    20. 20. REVENUE STREAMS what are customers really willing to pay for? how?are you generating transactional or recurring revenues?
    21. 21. KEY RESOURCESwhich resources underpin your business model? which assets are essential?
    22. 22. KEY ACTIVITIESwhich activities do you need to perform well in your business model? what is crucial? 23
    23. 23. KEY PARTNERSwhich partners and suppliers leverage your model? who do you need to rely on?
    24. 24. COST STRUCTURE what is the resulting cost structure?which key elements drive your costs?
    25. 25. key activities value customer proposition relationships key customerpartners segments cost revenuestructure key streams resources channels 26 images by JAM
    26. 26. sketch out yourbusiness model
    27. 27. Step 5: Website Logistics• Get a domain name• Set up Google Apps• For Coders: set up a web host – Use virtual private servers (VPS) – “Platform As A Service like Heroku, Dotcloud or Amazon Web Services
    28. 28. Step 6: Build a “Low-Fidelity” Web Site • Splash Page – value proposition, benefits summary, and a call-to-action to learn more, answer a short survey, or pre-order • For Non-coders – Make a quick prototype in PowerPoint or use Unbouce, Wordpress – For surveys and pre-order forms use Wufoo or Google Forms • For Coders – Build the User Interface with a wireframe prototyping tool – Create a fake sign up/order form
    29. 29. Step 7: Get Customers to the Site• Start showing the site to potential customers, testing customer segment and value proposition• Use Ads, textlinks or Google AdWords, Facebook ads and natural search• Usse your network to find target customers• For B2B products, use Twitter, Quora, and industry mailing lists are a good place to find target customers.• Use Mailchimp, Postmark or Google Groups to send out emails and create groups• Create online surveys with Wufoo or ZoomerangGet feedback on your Minimum Viable Product (MVP) features and User Interface
    30. 30. Step 8: Build a Complete Solution• Build a more complete solution (Connect the User Interface to code)• Connect the UI to a web application framework ( – Node.js, Rubyon Rails, Django, SproutCore, jQuery, Symfony, Sencha, etc.)
    31. 31. Step 9: Test the Customer Problem
    32. 32. Customer DevelopmentThe Search for the repeatable and scalable Business Model
    33. 33. Customer DevelopmentThere are no facts inside your building So get the hell out
    34. 34. More startups fail froma lack of customers than from afailure of product development
    35. 35. Customer DevelopmentThe Search For the Business ModelCustomer Customer Customer CompanyDiscovery Validation Creation Building Pivot
    36. 36. Customer Discovery Customer Customer Customer Company Discovery Validation Creation Building Pivot• Stop selling, start listening• Test your hypotheses – problem and solution• Continuous Discovery
    37. 37. Customer Discovery
    38. 38. Customer Validation Customer Customer Customer Company Discovery Validation Creation Building Pivot• Repeatable and scalable business model?• Passionate earlyvangelists?• Pivot back to Discovery if no customers
    39. 39. The Pivot• The heart of Customer Development• Iteration without crisis• Fast, agile and opportunistic
    40. 40. Pivot Cycle Time Matters• Speed of cycle minimizes cash needs• Minimum feature set speeds up cycle time• Near instantaneous customer feedback drives feature set
    41. 41. The Minimum Viable Product (MVP) • Smallest feature set that gets you the most … - orders, learning, feedback, failure…
    42. 42. Pivot Example Robotic WeedingTalked 75 Customers in 8 Weeks
    43. 43. Our initial plan Confidential
    44. 44. 20 interviews, 6 site visits… We got OUR Boots dirtyMowingInterviewed:• Golf: Stanford Golf course• Parks: Stanford Grounds Supervisor, head of maintenance and lead operator (has crew of 6)• Toro dealer (large mower manufacturer)• User of back-yard mowing system• Maintenance Services for City of Los Altos• Colony Landscaping (Mowing service for stadiums)WeedingVisited two farms in Salinas Valley to better understand problemInterviewed:• Bolthouse Farms, Large Agri-Industry in Bakersfield• White Farms, Large Peanut farmer in Georgia• REFCO Farms, large grower in Salinas Valley• Rincon Farms, large grower in Salinas Valley• Small Organic Corn/Soy grower in Nebraska• Heirloom Organics, small owner/operator, Santa Cruz Mts• Two small organic farmers at farmers market• Ag Services of Salinas, Fertilizer applicator
    45. 45. Business Plan Autonomous Vehicles for Mowing & Weeding - Innovation Dealers sell, Mowing- Dealers - Customer We reduce installs and - Owners of(Mowing and Education operating cost supports public orAg) - Dealer training - Labor reduction customer commercially- Vehicle OEMs - Better used green(John Deere, utilization of Co. trains spaces (e.g. golfToro, Jacobsen, assets (eg mow dealers, supports courses)etc) or weed at dealers - Landscaping Engineers on nights) - Mowing service provider- Research labs Autonomous - Improved Dealers vehicles, GPS, performance - Ag Dealers Weeding path-planning (less rework, - Farmers with food safety) manual weeding operationsDealer discount Asset saleCOGS seek a 50-60% Gross Margin Our revenue stream derives from selling theHeavy R&D investment equipment
    46. 46. Found weeding in organic crops is HUGE problem; 50 - 75% of costs Crews of 100s-1000 Back-breaking task (Ilegal) labor harder to get 1-5 weedings per year/field $250-3,500 per acre and increasing Food contamination risk
    47. 47. Decision to make – mowing vs weedingApplication If ROI is < 1 Labor costs Autonomous TAM yr they will significant? would solve buy problem?Mowing of Yes. Yes Yes Adjusted up to Professionally xxxlarge fields run organizationsWeeding in Agri Industry: YES! for TAM increased YES! organic crops Not necessarily to $2.6 B (TotalAgriculture organic) Large They are Key need is Growers: Yes spending weed vs. crop Target Market $500/ac! differentiation (organic Small specialty) Growers: No 162 M/yr 18%/yr growth
    48. 48. Autonomous vehicles WEEDING - Innovation Dealers sell, - Low density- Ag Dealers - Customer We reduce installs and vegetable- Ag Service Education operating cost supports growersproviders - Dealer training - Labor reduction customer - High density (100 to 1) vegetable- Research labs - Reduced risk of Co. trains growers contamination dealers, supports - Thinning - Mitigate labor dealers operations Engineers on availability - Ag Dealers - Conventional Machine Vision concerns - Ag Service vegetables Two problems: providers - Identification - EliminationDealer discount Asset saleCOGS seek a 50-60% Gross Margin Our revenue stream derives from selling theHeavy R&D investment equipment
    49. 49. 1 Week – 1 CarrotBot Confidential
    50. 50. CARROTBOT Machine Vision data collection platform  Monochrome & Color Cameras  Laser-line sweep (depth measurement) CarrotBot 1.0  Encoders (position/velocity)  Onboard data acquisition & power
    51. 51. The Business Plan Canvas Updated •Technology •Farming Design conventions. •Marketing •Demo, demo, •Demo and and demo!! customer •Cost •Proximity is •Organic•Research Labs feedback paramount Farmers Reduction•Equipment •Weeding •Remove laborManufacturers Service force pains•Distribution Providers •Eliminate bio-Network •Conventional waste hazards•Service •IP – Patents FarmersProviders •Video •Dealers Classifier Files •Direct Service •Robust •Indirect Service Technology • … then Dealers •Asset Sale Value-Driven •Direct Service with equipment rental •… then Asset Sale
    52. 52. Visit Highlights Carrot vs. WeedsDue to small root systems, carrots have no chance against weeds
    53. 53. Visit HighlightsOrganic Broccoli, closelycultivated. Weeds close toplants are hand-picked
    54. 54. Visit HighlightsState of the Art in Weeding Technology for OrganicCrops
    55. 55. Customer HypothesisPre-Test Large Growers Us Dealer Industrial Growers Hypothesis Confirmed • Growers interested in own Industrial equipment Growers • Industrial (10,000s of acres) Post-Test • Large (1,000s of acres) Large • Willing to pay $100k for one unit Growers Us Dealer • Smaller growers (100s of acres) Service usually subcontract the labor Providers services or rent equipment Equipment • All purchases through local dealers Rental • Customer service is essential
    56. 56. Customer Map #1 – Industrial GrowersExample: Bolthouse Farms – Large Industrial Carrot Producer – 8K acres/yr End User • Equipment Operator Influencer • Local Farm Mgr • Cliff Kirkpatrick, visited Recommender • Director, Ag Equipment Operator Technology • Justin Grove, interviewed Decision • VP, Growing Maker Operations Approver • CFO, CEO (Jeff Dunn) Cliff, Farm Mgr
    57. 57. Customer Map #2 – Service ProvidersExample: Ag Services – Service Provider, Salinas Valley End User • Equipment Operator Influencer • GrowerRecommender • Service Mgr Me (left), Marty (middle, Service Mgr), Doug (right, Grower)Decision Maker • ?? (service mgr’s & Approver boss)
    58. 58. The Business Plan Canvas Updated •Technology •Farming Design conventions. •Marketing •Demo, demo, •Mid/Large •Demo and and demo!! Organic Farmers customer •Cost •Proximity is •Agricultural•Research Labs feedback paramount Reduction corporations•Equipment •Remove labor •Weeding ServiceManufacturers force pains Providers•Distribution •Eliminate bio-Network•Service •IP – Patents waste hazards •Mid/LargeProviders •Video •Direct Service Conventional Classifier Files •Indirect Service Farmers •Robust • … then Dealers Technology •Direct Service with equipment rental Value-Driven •($1,500/d; 120d/yr ) •Low density: $1,500/d •High density: $6,000/d
    59. 59. World Ag Expo interviews:the need is real and wide spread • 10+ interviews at show – Everyone confirmed the need – Robocrop, UK based, crude competitor sells for $171 K • Revenue Stream – Mid to small growers prefer a service – Large growers prefer to buy, but OK with service until technology is proven – Charging for labor cost saved is OK, as we provide other benefits (food safety, labor availability) Confidential
    60. 60. The Business Plan Canvas Updated •Technology •Farming Design conventions. •Marketing •Demo, demo, •Mid/Large•Research Labs •Demo and and demo!! Organic Farmers•Equipment customer •Cost •Proximity is •AgriculturalManufacturer feedback Reduction paramount corporations•Distribution •Remove labor •Weeding ServiceNetwork force pains Providers•Service •Eliminate bio-Providers •IP – Patents waste hazards •Mid/Large• 2 or 3 Key •Video •Direct Service ConventionalFarms Classifier Files •Indirect Service Farmers •Robust • … then Dealers Technology Value-Driven •Direct Service with • R&D equipment rental • Bill of Materials •Low density: $1,500/d • Training & Service •High density: $6,000/d • Sales
    61. 61. Autonomous weeding - Final - Innovation Direct - Low density- Ag Service - Customer We reduce - Provide high vegetableproviders Education operating cost quality service at growers - Dealer training - Labor reduction competitive price - High density- Research (100 to 1) vegetableInstitutes (eg - Reduced risk of growersUC Davis, Laser contamination - ThinningZentrum - Mitigate labor operationsHannover) Engineers on availability Direct - Conventional Machine Vision concerns - Alliance with vegetables- 3-4 key farms Two problems: service - Identification providers - Elimination - Eventually sell through dealersCosts for service provision Service provisionCOGS seek a 50-60% Gross Margin - Charge by the acre with modifier according toHeavy R&D investment weed density - Eventually move to asset sale
    62. 62. Step 11: Ask for MoneyHINT: YOUR VC PITCH WAS HIDING IN THE LAST 12 SLIDES…DISCOVERY
    63. 63. Step 12: Scale and Celebrate!
    64. 64. Step 13: Repeat 
    65. 65. Thanks now go PIVOT! www.steveblank.comTONS of free tools, help, ideas bob@kandsranch.com
    66. 66. Want more info on upcoming events? Henrik Berglund Chalmers University of Technology Center for Business Innovation henber@chalmers.se www.henrikberglund.com @khberglund
    67. 67. Want to do it Yourself? WinterCampMarcus.Thorin@chalmersinnovation.com Timo.Lehes@chalmersinnovation.com www.chalmersinnovation.com
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