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Introduction to Startups - BMG+CustDev+Lean

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Deck I used several times for teaching an intro to startup methods, incl Business Model Generation, Customer Development, Lean Startups, and others.

Deck I used several times for teaching an intro to startup methods, incl Business Model Generation, Customer Development, Lean Startups, and others.

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  • Manche VCs und auch Startups (siehe Interviews) verstehen unter BM ihr Finanazmodell, der Rest gehört zu der „Idee“
  • Ignore comptetition vs. Know your competitors
  • MVP anecdotes
  • Stories about MVPs
  • Transcript

    • 1. Introduction to Startups │ Puja Abbassi │ Business Model Generation, Customer Discovery, & Lean Startup Principles Introduction to Startups
    • 2. Introduction to Startups │ Puja Abbassi │ Researcher & PhD Candidate - University of Cologne ▪Entrepreneurship & Venture Capital ▪Diversity ▪Cyber Security ▪Supply Chain (& Food) Security Work in and advise startups since 2004 Organizer, Speaker, Startup Mentor Puja Abbassi http://pujaabbassi.com @puja108 Who am I 24.06.2014 2
    • 3. Introduction to Startups │ Puja Abbassi │ A business organization, which sells a product or service in exchange for revenue and profit. A company is executing a proven business model. What is a Company? 24.06.2014 3 Quelle: Steve Blank – How to build a startup
    • 4. Introduction to Startups │ Puja Abbassi │ Not the smaller version of a big company! What is a Startup? 24.06.2014 4 Quelle: Steve Blank – How to build a startup
    • 5. Introduction to Startups │ Puja Abbassi │ Not the smaller version of a big company! A temporary organization designed to search for a repeatable and scalable business model. These companies, generally newly created, are in a phase of development and research for markets. Repeat! What is a Startup? 24.06.2014 5 Quelle: Steve Blank – How to build a startup
    • 6. Introduction to Startups │ Puja Abbassi │ ▪Search for business model vs. Executing business model ▪Not a smaller version of a large company ▪Business Model Generation vs. Business Plans & Forecasts ▪Customer Development vs. Product Development ▪Agile Build-Measure-Learn vs. Waterfall Model ▪Organizational structures and roles are different Startups vs. Company 24.06.2014 6
    • 7. Introduction to Startups │ Puja Abbassi │ Startups... 24.06.2014 7 Quelle: Yevgeniy Brikman - Startup DNA
    • 8. Introduction to Startups │ Puja Abbassi │ ▪Co-Founders fight ▪Cannot build initial spec ▪No one will fund the idea ▪Too few people buy or use the product or service ▪Premature scaling (scaling organization before product/market or problem/solution fit is properly validated) Why do Startups Fail? 24.06.2014 8
    • 9. Introduction to Startups │ Puja Abbassi │ “Startups don’t fail because they lack a product; they fail because they lack customers and a profitable business model” - Steve Blank Why Startups Fail 24.06.2014 9 Quelle: Steve Blank – How to build a startup
    • 10. Introduction to Startups │ Puja Abbassi │ “No business plan ever survives first contact with a customer!” - Steve Blank Business Plans 24.06.2014 10
    • 11. Introduction to Startups │ Puja Abbassi │ A business model describes the rationale of how an organization creates, delivers and captures value while delivering products or services to customers. What is a Business Model? 24.06.2014 11 Quelle: Business Model Generation - Alexander Osterwalder & Yves Pigneur
    • 12. Introduction to Startups │ Puja Abbassi │ Business Models – Bottom Line 24.06.2014 │ 12 Source: Timmers (1998), Magretta (2002) PURPOSE • Consequent, exact evaluation of a business idea • Attention to all relevant elements and their interconnection • Base for business plans and strategies ANSWERS THE QUESTIONS • Who is the customer? • What does the customer value? • How do we make money in this business? • What is the underlying economic logic that explains how we can deliver value to customers at an appropriate cost? ORIENTATED AT A GENERIC VALUE CHAIN Making something Selling something
    • 13. Introduction to Startups │ Puja Abbassi │ There are several frameworks that can be used Business Model Frameworks 24.06.2014 │ 13 Source: Dubosson-Torbay et al. (2001); Magretta (2002); Wirtz (2010); Business Model Foundry; Decomposition into multiple parts is typical
    • 14. Introduction to Startups │ Puja Abbassi │ Key Activities Key Resources Cost Structure Revenue Flows Distribution Channels Client Segments Partner Network Client Relationships Source: What is a business model? Alex Osterwalder , 5-10-2005, http://business-model-design.blogspot.com/2005/11/what-is-business-model.html Value Proposition Business Model Canvas A business model is nothing else than a representation of how an organization makes (or intends to make) money. This can be nicely described through the 9 building blocks illustrated in the graphic below, which we call "business model canvas”.
    • 15. Introduction to Startups │ Puja Abbassi │ „Business Model Generation“ - Alexander Osterwalder & Yves Pigneur (first chapter for free) • http://www.businessmodelgeneration.com/downloads/businessmo delgeneration_preview.pdf Online Course from Steve Blank on Udacity • http://www.udacity.com/view#Course/ep245/ Recommended Book and Video Course Business Model Canvas 24.06.2014 15
    • 16. Introduction to Startups │ Puja Abbassi │ ▪No business plans survive first contact with customers ▪Business plans are static faith-based monoliths ▪Business Model Generation is a dynamic and iterative process to discover a fact-based repeatable and scalable business model ▪The BMC is a communication tool to help you think, talk and share about your business model Business Model Generation vs. Business Plans 24.06.2014 16
    • 17. Introduction to Startups │ Puja Abbassi │ Product/Market Fit Being in a good market with a product that can satisfy that market. - Marc Andreessen Startups are Looking for Product/Market Fit 24.06.2014 17
    • 18. Introduction to Startups │ Puja Abbassi │ Customer Development 24.06.2014 18 Quelle: Steve Blank
    • 19. Introduction to Startups │ Puja Abbassi │ Value Proposition + Customer Segment = Product/Market Fit Value Proposition Canvas Remember this one thing! 24.06.2014 19 Quelle: Business Model Generation
    • 20. Introduction to Startups │ Puja Abbassi │ Market Size and Competition are missing! Business Model Canvas 24.06.2014 20 Market Size Competition
    • 21. Introduction to Startups │ Puja Abbassi │ Total Available Market (TAM) ▪Theoretical total market size or customer mass with problem Serviceable Available Market (SAM) ▪Theoretical total market size or customer mass that can use your solution Serviceable Obtainable Market (SOM) ▪Your target market cap or customer base for the next 2-3 years Market Size 24.06.2014 21
    • 22. Introduction to Startups │ Puja Abbassi │ ▪There is no such thing as “I have no competitors” ▪Anything or anyone standing in between the money and you is a competitor Competition 24.06.2014 22
    • 23. Introduction to Startups │ Puja Abbassi │ ▪Customers want to "hire" a product to do a job ▪"People don't want to buy a quarter-inch drill. They want a quarter-inch hole!“ - Theodore Levitt (HBS) ▪The job, not the customer, is the fundamental unit of analysis ▪Framework for practice: 1. What are the high-level jobs-to-be-done? 2. What are the current approaches and what pain points result? 3. What benchmarks exist in the full range of competing offerings and analogies? 4. What performance criteria do customers use? 5. What prevents new solutions from being adopted? 6. What value would success create for customers? Clayton M. Christensen Jobs to be done 24.06.2014 23 Video: http://www.youtube.com/watch?v=KYVdf5xyD8I
    • 24. Introduction to Startups │ Puja Abbassi │ Simon Sinek – The Golden Circle Start with the Why 24.06.2014 24 Quelle: http://www.ted.com/talks/simon_sinek_how_great_leaders_inspire_action.html
    • 25. Introduction to Startups │ Puja Abbassi │ Get-Keep-Grow Customer Relationships 24.06.2014 25
    • 26. Introduction to Startups │ Puja Abbassi │ Customer Lifecycle: 5 Steps to Success Startup Metrics for Pirates: AARRR 24.06.2014 26 Quelle: http://slideshare.net/dmc500hats/startup-metrics-for-pirates-long-version Acquisition: users come to the site from various channels Activation: users enjoy 1st visit: "happy" user experience Retention: users come back, visit site multiple times Referral: users like product enough to refer others Revenue: users conduct some monetization behavior AARRR!
    • 27. Introduction to Startups │ Puja Abbassi │ Draw the Diagram Revenue Model 24.06.2014 27 Quelle: https://www.udacity.com/course/viewer#!/c-ep245/l-48730232/m-48624673
    • 28. Introduction to Startups │ Puja Abbassi │ ▪The discovery process of validating the product/market fit by conducting customer interviews ▪Requires you to get out of the building and find the facts, because inside there’s only faith and opinions Customer Development 24.06.2014 28
    • 29. Introduction to Startups │ Puja Abbassi │ 1. Define your hypothesis: map out your guesses about your business model using a Business Model Canvas as your communication and tracking tool 2. Test the problem you think you are solving by getting out of the building and talking to and listening to potential customers, partners and resources – real people Test the Problem Customery Discovery 24.06.2014 29
    • 30. Introduction to Startups │ Puja Abbassi │ ▪No Selling Allowed - Ever! Listen, listen, listen. ▪Frequency - You need to do at least 15-20 customer interviews a week, 50-150 in total to notice meaningful patterns ▪No friends, colleagues or family - only real potential customers ▪You must define pass/fail tests in advance, results cannot just be anecdotes and after-the-fact feel-good fakery ▪Your goal is: Test for the problem, not for the details Customer Discovery Interview Dos & Don’ts 24.06.2014 30
    • 31. Introduction to Startups │ Puja Abbassi │ 1. Test the solution you think solves the problem to a known set of customers by building a minimum viable product (MVP) containing just the minimum features needed to allow you to start learning, to start an iterative build-measure-learn cycle 2. Iterate or pivot your business model repeating the steps until you have validated it Test the Solution Customer Validation 24.06.2014 31
    • 32. Introduction to Startups │ Puja Abbassi │ Innovation Accounting: ▪Build a Minimal Viable Product, the minimal thing you need to have to get real data, start validating learning and to start the build-measure-learn cycle ▪Using metrics, measure the right and important things, not randomness. How do we know that the changes we’ve made are related to the results we’re seeing? ▪Move the product from the baseline to the ideal, set a path to a sustainable product to reach a decision point ▪Pivot or persevere? Continue doing the same or trying something else. Key Concepts The Lean Startup – Eric Ries 24.06.2014 32
    • 33. Introduction to Startups │ Puja Abbassi │ ▪A Pivot is when you fundamentally change one or more element(s) in your Business Model Canvas ▪It is not a minor change or iteration of existing element(s) The Pivot 24.06.2014 33
    • 34. Introduction to Startups │ Puja Abbassi │ Waterfall is not for Startups 24.06.2014 34
    • 35. Introduction to Startups │ Puja Abbassi │ Lean and Agile are for Startups 24.06.2014 35
    • 36. Introduction to Startups │ Puja Abbassi │ Build – Measure – Learn 24.06.2014 36