1. Customer Development Update

2. I Write a Blog www.steveblank.com

3. This Talk is Based On Business Model Generation Four Steps to the Epiphany The Lean Startup

4. 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

5. First -What’s A Startup? Six Types of Startups

10. 99.7% of all companies

11. ~ 50% of total U.S. workershttp://www.sba.gov/advo/stats/sbfaq.pdf

12. Scalable Startup Large Company Scalable Startup Search Goal is to solve for: unknown customer and unknown features

14. Total Available Market > €300m

15. Can grow to €50/yearScalable StartupBorn to Be Big

17. Company can grow to $100m/year

18. Business model found

19. Focused on execution and process

21. Typically needs risk capital

23. Professional Mgmt

24. Process

26. Buyable Startup Search Sell Scalable Startup €3 to e0M Acquisition Goal is to solve for: Internet and Mobile Apps Sell to larger company

28. 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

32. Acquire - IP- Talent - Product - Customers - Business

34. Social Enterprise: Profitable

36. Search Versus ExecutionWhy Accountants Don’t Run Startups

38. Repeatable sales model- Managers hired

40. Product/Market fit- Repeatable sales model - Managers hired

42. Cash Flow Statement

44. Viral coefficient

45. Customer Lifetime Value

46. Average Selling Price/Order Size

47. Monthly burn rate

49. Cash Flow Statement

51. Scalable

52. Price List/Data Sheets

54. Pricing/Feature unstable

55. Not yet repeatable

56. “One-off’s”

58. Scalable

59. Price List/Data Sheets

61. Feature Spec’s

62. Competitive Analysis

64. Feature Spec’s

66. Minimum Feature Set

67. Pivots

69. Waterfall Development

70. QA

72. Waterfall Development

73. QA

75. Continuous Learning

76. Self Organizing Teams

77. Minimum Feature Set

79. Known features for line extensions

80. Known customers/markets

82. Unknown feature set

83. Unknown business model

84. Model found by iteration

85. Plan describes “knowns”

86. Known features for line extensions

87. Known customers/markets

89. The Business Model: Any company can be described in 9 building blocks

90. CUSTOMER SEGMENTS which customers and users are you serving? which jobs do they really want to get done?

91. VALUE PROPOSITIONS what are you offering them? what is that getting done for them? do they care?

92. CHANNELS how does each customer segment want to be reached? through which interaction points?

93. CUSTOMER RELATIONSHIPS what relationships are you establishing with each segment? personal? automated? acquisitive? retentive?

94. REVENUE STREAMS what are customers really willing to pay for? how? are you generating transactional or recurring revenues?

95. KEY RESOURCES which resources underpin your business model? which assets are essential?

96. KEY ACTIVITIES which activities do you need to perform well in your business model? what is crucial? 43

97. KEY PARTNERS which partners and suppliers leverage your model? who do you need to rely on?

98. COST STRUCTURE what is the resulting cost structure? which key elements drive your costs?

99. value proposition customer relationships key activities customer segments key partners cost structure revenue streams key resources channels 46 images by JAM

100. sketch out your business model

101. sketch out your business models

102. But,Realize They’re Hypotheses

103. 9 Guesses Guess Guess Guess Guess Guess Guess Guess Guess Guess

104. Customer Development The founders ^ Get Out of the Building and Search for the Business Model

105. The Customer Development Process Customer Discovery Customer Validation Customer Creation Company Building Pivot

106. 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

107. Customer Discovery: Physical/Web Bus Model Canvas Extract Hypotheses Test Problem Test Solution Pivot or Proceed

108. Customer Discovery Bus Model Canvas Extract Hypotheses Test Problem Test Solution Pivot or Proceed

110. Product MVP

111. Customers

112. Channel

113. Market Type

114. Customer Relationships: Get/Keep/Grow

115. Key Resources

116. Partners

118. Low Fidelity MVP

119. Customers/Source

120. Channel

121. Market Type

122. Customer Relationships: Acquire/Activate

123. Traffic Partners

125. Low Fidelity MVP

126. Customers

127. Channel

128. Market Type

129. Cust Relationships

130. Traffic Partners

131. Pricing

132. Customer Contacts

133. Problem Understanding

134. Customer Understanding

136. Low Fidelity MVP

137. Customers

138. Channel

139. Market Type

140. Cust Relationships

141. Traffic Partners

142. Pricing

143. Customer Engagement

144. Test Low Fidelity MVP

145. Customer Understanding

147. Low Fidelity MVP

148. Customers

149. Channel

150. Market Type

151. Cust Relationships

152. Traffic Partners

153. Pricing

154. Update Bus Model

155. Create Prototype/Prod Presentation

156. Test Solution with Customer

157. Update Business Model

159. Low Fidelity MVP

160. Customers

161. Channel

162. Market Type

163. Cust Relationships

164. Traffic Partners

165. Pricing

166. Customer Engagement

167. Test Low Fidelity MVP

168. Customer Understanding

169. Traffic & Competitive Analysis

170. Update Bus Model

171. Test High Fidelity MVP

172. Measure Customer Behavior

173. Update Business Model

175. Cust Segment

176. Cust Relationships

177. Channel

178. Revenue Model

179. Pivot or Proceed

180. TAM/SAM

181. Low Fidelity MVP

182. Customers

183. Channel

184. Market Type

185. Cust Relationships

186. Traffic Partners

187. Pricing

188. Customer Engagement

189. Test Low Fidelity MVP

190. Customer Understanding

192. Customer Validation - Web Get Ready to Sell Sell, Sell, Sell Positioning Pivot or Proceed Pivot

194. Develop Sales Materials

195. Hire “Sales Closer”

196. Sales Channel Action Plan

197. Refine the Sales Roadmap

199. Acquire/Activate Plans and Tools

200. Build High Fidelity MVP

201. Build Metrics Toolset

202. Hire data analytics chief

204. Acquire/Activate Plans

205. Build High Fidelity MVP

206. Build Metrics Toolset

207. Hire data analytics chief

208. Formalize advisory board

209. Find Earlyvangelists

210. Test Sell – Out of the Building

211. Refine Sales Roadmap

213. Acquire/Activate Plans

214. Build High Fidelity MVP

215. Build Metrics Toolset

216. Hire data analytics chief

217. Formalize advisory board

218. Prepare Optimization Plans & Tools

219. Out of the building Activation Test

220. Measure and Optimize Results

222. Acquire/Activate Plans

223. Build High Fidelity MVP

224. Build Metrics Toolset

225. Hire data analytics chief

226. Formalize advisory board

227. Company Positioning

228. Product Positioning

229. Validate Positioning

230. Prepare Optimization Plans

231. Out of the building Activation Test

232. Measure and Optimize Results

234. Validate Business Model

235. Validate Financial Model

236. Pivot or Proceed

237. Craft Positioning

238. Acquire/Activate Plans

239. Build High Fidelity MVP

240. Build Metrics Toolset

241. Hire data analytics chief

242. Formalize advisory board

243. Prepare Optimization Plans

244. Out of the building Activation Test

245. Measure and Optimize Results

248. Iteration without crisis

250. Minimum feature set speeds up cycle time

252. 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

253. Thanks www.steveblank.com