Berkeley columbia alumni 092411
 

Berkeley columbia alumni 092411

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Berkeley columbia alumni 092411 Berkeley columbia alumni 092411 Presentation Transcript

  • Customer Development Update
  • I Write a Blog
    www.steveblank.com
  • This Talk is Based On
    Business Model Generation
    Four Steps to the Epiphany
    The Lean Startup
  • This Talk
    What’s a Startup?
    Search versus Execution
    Entrepreneurship As a Mgmt Science
    B-Schools = Large company mgmt
    Incubators = the transition
    E-School = the conclusion
  • First -What’s A Startup?
    Six Types of Startups
  • Startup
    Lifestyle Startups Work to Live their Passion
    • Serve known customer with known product
    • Pay for their passion
  • Small Business
    Startup
    Small Business StartupsWork to Feed the Family
    • Serve known customer with known product
    • Feed the family
  • Small Business
    Startup
    Exit Criteria
    • Business Model found
    - Profitable business
    • Existing team
    < €100K in revenue
    Small Business StartupsWork to Feed the Family
    • known customer known product
    • Feed the family
  • Small Business
    Startup
    - Business Model found
    - Profitable business
    • Existing team
    < $10M in revenue
    Small Business Startups
    • 5.7 million small businesses in the U.S. <500 employees
    • 99.7% of all companies
    • ~ 50% of total U.S. workers
    http://www.sba.gov/advo/stats/sbfaq.pdf
  • Scalable
    Startup
    Large Company
    Scalable Startup
    Search
    Goal is to solve for:
    unknown customer and unknown features
  • Execute
    Search
    Scalable
    Startup
    Large Company
    Exit Criteria
    • Business model found
    • Total Available Market > €300m
    • Can grow to €50/year
    Scalable StartupBorn to Be Big
  • Scalable
    Startup
    Large Company
    • Total Available Market > $500m
    • Company can grow to $100m/year
    • Business model found
    • Focused on execution and process
    • Typically requires “risk capital”
    Scalable Startup
    Execute
    Search
    • In contrast a scalable startup is designed to grow big
    • Typically needs risk capital
    • What Silicon Valley means when they say “Startup”
  • The Transition – Founders Leave
    Scalable
    Startup
    Transition
    Large Company
    Build
    Execute
    Search
    Founders depart
    • Operating executives
    • Professional Mgmt
    • Process
    • Beginning of scale
  • Buyable StartupBorn to Be Big
    Search
    Sell
    Scalable
    Startup
    €3 to 30M Acquisition
    Goal is to solve for:
    Internet, Mobile, Gaming Apps
  • Buyable Startup
    Search
    Sell
    Scalable
    Startup
    €3 to e0M Acquisition
    Goal is to solve for:
    Internet and Mobile Apps
    Sell to larger company
  • Scalable
    Startup
    Large Company
    • Business Model found
    • i.e. Product/Market fit
    - Repeatable sales model
    - Managers hired
    What’s A Startup?
    Search
    Execute
    A Startup is a temporary organization used to search for a repeatable and scalable business model
  • Large Company Sustaining InnovationInnovate or Evaporate
    Sustaining Innovation
    Transition
    Scalable
    Startup
    Large Company
    • Existing Market / Known customer
    • Known product feature needs
  • Large Company Disruptive Innovation
    New Division
    Transition
    Large Company
    Disruptive Innovation
    • New Market
    • New tech, customers, channels
  • Large Company Disruptive Innovation
    New Division
    Transition
    Large Company
    Disruptive Innovation
    • Build
    • Acquire
    - IP- Talent
    - Product
    - Customers
    - Business
  • Large Non-Profit
    Social Startup
    Social Entrepreneurship Startups
    • Solve pressing social problems
    • Social Enterprise: Profitable
    • Social Innovation: New Strategies
  • Each of these startups require different skills
    They Can Not Be Taught the Same Way
  • Search Versus ExecutionWhy Accountants Don’t Run Startups
  • Startups Search and Pivot
    The Search for the Business Model
    Scalable
    Startup
    Transition
    Large Company
    Business Model found
    • customer needs/product features found
    i.e. Product/Market fit
    • Found by founders, not employees
    • Repeatable sales model
    - Managers hired
  • Startups Search, Companies Execute
    The Execution of the Business Model
    The Search for the Business Model
    Scalable
    Startup
    Transition
    Large Company
    - Cash-flow breakeven
    - Profitable
    - Rapid scale
    - New Senior Mgmt
    ~ 150 people
    • Business Model found
    • Product/Market fit
    - Repeatable sales model
    - Managers hired
  • Metrics Versus Accounting
    The Execution of the Business Model
    Scalable
    Startup
    Transition
    Large
    Company
    Traditional Accounting
    • Balance Sheet
    • Cash Flow Statement
    • Income Statement
  • Metrics Versus Accounting
    The Search for the Business Model
    The Execution of the Business Model
    Scalable
    Startup
    Transition
    Large
    Company
    Startup Metrics
    • Customer Acquisition Cost
    • Viral coefficient
    • Customer Lifetime Value
    • Average Selling Price/Order Size
    • Monthly burn rate
    • etc.
    Traditional Accounting
    • Balance Sheet
    • Cash Flow Statement
    • Income Statement
  • Customer Validation Versus Sales
    The Execution of the Business Model
    Scalable
    Startup
    Transition
    Large
    Company
    Sales
    • Sales Organization
    • Scalable
    • Price List/Data Sheets
    • Revenue Plan
  • Customer Validation Versus Sales
    The Search for the Business Model
    The Execution of the Business Model
    Scalable
    Startup
    Transition
    Large
    Company
    Customer Validation
    • Early Adopters
    • Pricing/Feature unstable
    • Not yet repeatable
    • “One-off’s”
    • Done by founders
    Sales
    • Sales Organization
    • Scalable
    • Price List/Data Sheets
    • Revenue Plan
  • Customer Development VersusProduct Management
    The Execution of the Business Model
    Scalable
    Startup
    Transition
    Large Company
    Product Management
    • Delivers MRD’s
    • Feature Spec’s
    • Competitive Analysis
    • Prod Mgmt driven
  • Customer Development Versus Product Management
    The Search for the Business Model
    The Execution of the Business Model
    Scalable
    Startup
    Transition
    Large Company
    Product Management
    • Delivers MRD’s
    • Feature Spec’s
    • Competitive Analysis
    Customer Development
    • Hypothesis Testing
    • Minimum Feature Set
    • Pivots
    • Founder-driven
  • Engineering Versus Agile Development
    The Execution of the Business Model
    Scalable
    Startup
    Transition
    Large Company
    Engineering
    • Requirements Docs.
    • Waterfall Development
    • QA
    • Tech Pubs
  • Engineering Versus Agile Development
    The Search for the Business Model
    The Execution of the Business Model
    Scalable
    Startup
    Transition
    Large Company
    Engineering
    • Requirements Docs.
    • Waterfall Development
    • QA
    • Tech Pubs
    Agile Development
    • Continuous Deployment
    • Continuous Learning
    • Self Organizing Teams
    • Minimum Feature Set
    • Pivots
  • Startups Model, Companies Plan
    The Execution of the Business Model
    Scalable
    Startup
    Transition
    Large Company
    Business Plan
    • Plan describes “knowns”
    • Known features for line extensions
    • Known customers/markets
    • Known business model
  • Startups Model, Companies Plan
    The Search for the Business Model
    The Execution of the Business Model
    Scalable
    Startup
    Transition
    Large Company
    Business Model
    • Unknown customer needs
    • Unknown feature set
    • Unknown business model
    • Model found by iteration
    • Plan describes “knowns”
    • Known features for line extensions
    • Known customers/markets
    • Known business model
  • Startups Are Not Small Versions of Large Companies
    Scalable
    Startup
    Transition
    Large Company
    Build
    Execute
    Search
    Yet our curriculums assume they are – we teach that the knowledge is interchangeable
  • The Business Model:
    Any company can be described in 9 building blocks
  • 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? retentive?
  • 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?
    43
  • 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?
  • value proposition
    customer relationships
    key activities
    customer segments
    key partners
    cost structure
    revenue streams
    key
    resources
    channels
    46
    images by JAM
  • sketch out your business model
  • sketch out your business models
  • But,Realize They’re Hypotheses
  • 9 Guesses
    Guess
    Guess
    Guess
    Guess
    Guess
    Guess
    Guess
    Guess
    Guess
  • Customer Development
    The founders
    ^
    Get Out of the Building and Search for the Business Model
  • The Customer Development Process
    Customer Discovery
    Customer Validation
    Customer Creation
    Company Building
    Pivot
  • The Customer Development ProcessCustomer Discovery
    Customer Discovery
    Customer Validation
    Customer Creation
    Company Building
    Bus Model Canvas
    Extract Hypotheses
    Test Problem
    Test Solution
    Pivot or Proceed
  • Customer Discovery: Physical/Web
    Bus Model Canvas
    Extract Hypotheses
    Test Problem
    Test Solution
    Pivot or Proceed
  • Customer Discovery
    Bus Model Canvas
    Extract Hypotheses
    Test Problem
    Test Solution
    Pivot or Proceed
  • Customer Discovery - Physical
    Bus Model Canvas
    Extract Hypotheses
    Test Problem
    Test Solution
    Pivot or Proceed
    • TAM/SAM
    • Product MVP
    • Customers
    • Channel
    • Market Type
    • Customer Relationships: Get/Keep/Grow
    • Key Resources
    • Partners
    • Pricing
  • Customer Discovery - Web
    Bus Model Canvas
    Extract Hypotheses
    Test Problem
    Test Solution
    Pivot or Proceed
    • TAM/SAM
    • Low Fidelity MVP
    • Customers/Source
    • Channel
    • Market Type
    • Customer Relationships: Acquire/Activate
    • Traffic Partners
    • Pricing
  • Customer Discovery - Physical
    Bus Model Canvas
    Extract Hypotheses
    Test Problem
    Test Solution
    Pivot or Proceed
    • TAM/SAM
    • Low Fidelity MVP
    • Customers
    • Channel
    • Market Type
    • Cust Relationships
    • Traffic Partners
    • Pricing
    • Customer Contacts
    • Problem Understanding
    • Customer Understanding
    • Market Knowledge
  • Customer Discovery - Web
    Bus Model Canvas
    Extract Hypotheses
    Test Problem
    Test Solution
    Pivot or Proceed
    • TAM/SAM
    • Low Fidelity MVP
    • Customers
    • Channel
    • Market Type
    • Cust Relationships
    • Traffic Partners
    • Pricing
    • Customer Engagement
    • Test Low Fidelity MVP
    • Customer Understanding
    • Traffic & Competitive Analysis
  • Customer Discovery - Physical
    Bus Model Canvas
    Extract Hypotheses
    Test Problem
    Test Solution
    Pivot or Proceed
    • TAM/SAM
    • Low Fidelity MVP
    • Customers
    • Channel
    • Market Type
    • Cust Relationships
    • Traffic Partners
    • Pricing
    • Update Bus Model
    • Create Prototype/Prod Presentation
    • Test Solution with Customer
    • Update Business Model
    • 1st Advisory Board Members
  • Customer Discovery - Web
    Bus Model Canvas
    Extract Hypotheses
    Test Problem
    Test Solution
    Pivot or Proceed
    • TAM/SAM
    • Low Fidelity MVP
    • Customers
    • Channel
    • Market Type
    • Cust Relationships
    • Traffic Partners
    • Pricing
    • Customer Engagement
    • Test Low Fidelity MVP
    • Customer Understanding
    • Traffic & Competitive Analysis
    • Update Bus Model
    • Test High Fidelity MVP
    • Measure Customer Behavior
    • Update Business Model
    • 1st Advisory Board Members
  • Customer Discovery – Web/Physical
    Bus Model Canvas
    Extract Hypotheses
    Test Problem
    Test Solution
    Pivot or Proceed
    Verify the:
    • Value Prop
    • Cust Segment
    • Cust Relationships
    • Channel
    • Revenue Model
    • Pivot or Proceed
    • TAM/SAM
    • Low Fidelity MVP
    • Customers
    • Channel
    • Market Type
    • Cust Relationships
    • Traffic Partners
    • Pricing
    • Customer Engagement
    • Test Low Fidelity MVP
    • Customer Understanding
    • Traffic & Competitive Analysis
  • The Customer Development ProcessCustomer Validation
    Customer Discovery
    Customer Validation
    Customer Creation
    Company Building
    Get Ready to Sell
    Sell, Sell, Sell
    Positioning
    Pivot or Proceed
  • Customer Validation - Web
    Get Ready to Sell
    Sell, Sell, Sell
    Positioning
    Pivot or Proceed
    Pivot
  • Customer Validation - Physical
    Get Ready to Sell
    Sell, Sell, Sell
    Positioning
    Pivot or Proceed
    • Craft Positioning
    • Develop Sales Materials
    • Hire “Sales Closer”
    • Sales Channel Action Plan
    • Refine the Sales Roadmap
    • Formalize advisory board
  • Customer Validation - Web
    Get Ready to Sell
    Sell, Sell, Sell
    Positioning
    Pivot or Proceed
    • Craft Positioning
    • Acquire/Activate Plans and Tools
    • Build High Fidelity MVP
    • Build Metrics Toolset
    • Hire data analytics chief
    • Formalize advisory board
  • Customer Validation - Physical
    Get Ready to Sell
    Sell, Sell, Sell
    Positioning
    Pivot or Proceed
    • Craft Positioning
    • Acquire/Activate Plans
    • Build High Fidelity MVP
    • Build Metrics Toolset
    • Hire data analytics chief
    • Formalize advisory board
    • Find Earlyvangelists
    • Test Sell – Out of the Building
    • Refine Sales Roadmap
    • Test Sell Channel Partners
  • Customer Validation - Web
    Get Ready to Sell
    Sell, Sell, Sell
    Positioning
    Pivot or Proceed
    • Craft Positioning
    • Acquire/Activate Plans
    • Build High Fidelity MVP
    • Build Metrics Toolset
    • Hire data analytics chief
    • Formalize advisory board
    • Prepare Optimization Plans & Tools
    • Out of the building Activation Test
    • Measure and Optimize Results
    • Test Sell Traffic Partners
  • Customer Validation - Physical/Web
    Get Ready to Sell
    Sell, Sell, Sell
    Positioning
    Pivot or Proceed
    • Craft Positioning
    • Acquire/Activate Plans
    • Build High Fidelity MVP
    • Build Metrics Toolset
    • Hire data analytics chief
    • Formalize advisory board
    • Company Positioning
    • Product Positioning
    • Validate Positioning
    • Prepare Optimization Plans
    • Out of the building Activation Test
    • Measure and Optimize Results
    • Test Sell Traffic Partners
  • Customer Validation - Physical/Web
    Get Ready to Sell
    Sell, Sell, Sell
    Positioning
    Pivot or Proceed
    • Assemble Data
    • Validate Business Model
    • Validate Financial Model
    • Pivot or Proceed
    • Craft Positioning
    • Acquire/Activate Plans
    • Build High Fidelity MVP
    • Build Metrics Toolset
    • Hire data analytics chief
    • Formalize advisory board
    • Prepare Optimization Plans
    • Out of the building Activation Test
    • Measure and Optimize Results
    • Test Sell Traffic Partners
  • The Minimum Viable Product (MVP)
    • Smallest feature set that gets you the most …
    - orders, learning, feedback, failure…
  • 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 instantaneous customer feedback drives feature set
  • The Pivot
    A Pivot is the change of one or more Business Model Canvas Components
  • The Pivot
    Strong clinical data
    Training
    Maintenance
    Conferences
    CME courses
    Product Development
    IP
    Clinical trials
    FDA
    Publishing
    Doctors:
    Earlier detection
    Price
    Accuracy
    Patients:
    Radiation Free
    Non-Invasive
    A Pivot is the change of one or more Business Model Canvas Components
    Leading doctors
    Key Opinion Leaders
    3rd party manufacturers
    Distributors
    Breast Cancer Foundations
    ACOGACS
    OB/GYNs
    PCPs
    Direct Sales to hospitals
    Distributor
    IP
    Leading doctors
    Technical Expertise
    Product Development
    Clinical trials
    Operating Costs
    Marketing Costs
    Capital Equipment Sales and disposable item
    Per use fees
  • Thanks
    www.steveblank.com