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Biz barcelona 061511
Biz barcelona 061511
Biz barcelona 061511
Biz barcelona 061511
Biz barcelona 061511
Biz barcelona 061511
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Biz barcelona 061511

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  • 1. Six Ways to Fail at a Startup<br />Steve Blank<br />www.steveblank.com<br />Twitter: @sgblank<br />
  • 2. Six Ways to Fail at a StartupAnd How to Get it Right<br />Steve Blank<br />www.steveblank.com<br />Twitter: @sgblank<br />
  • 3. This Talk is Based On<br />Business Model Generation<br />Four Steps to the Epiphany<br />Lean Startup<br />
  • 4. I Have a Vision<br />
  • 5. I Know What Needs to Be Done<br />
  • 6. Lets Start A Company!<br />
  • 7. Six Ways to Fail<br />
  • 8. #1I Know Who The Customer Is<br />
  • 9. #2I Know Exactly the Product They Need<br />
  • 10. #3I Know the Problem They Have<br />
  • 11. #4We Can Fix It After We Ship It All<br />
  • 12. #5<br />All I Need to Do is Execute the Plan<br />
  • 13. #6<br />Let’s Use Large Company Tools <br />
  • 14. Product Introduction Model<br />Concept/Seed Round<br />Product Dev.<br />Alpha/Beta Test<br />Launch/<br />1st Ship<br />
  • 15. Product Introduction Model<br />The Leading Cause of Startup Death<br />Concept/Seed Round<br />Product Dev.<br />Alpha/Beta Test<br />Launch/<br />1st Ship<br />
  • 16. Product Introduction Model:Two Implicit Assumptions<br />Customer Problem: known<br />Concept/Seed Round<br />Product Dev.<br />Alpha/Beta Test<br />Launch/<br />1st Ship<br /> Product Features: known<br />
  • 17. Tradition – Hire Marketing<br />Concept/Seed Round<br />Product Dev.<br />Alpha/Beta Test<br />Launch/<br />1st Ship<br />- Create Demand<br />- Launch Event<br />- “Branding”<br />- Hire PR Agency<br />- Early Buzz<br /><ul><li> Create Marcom </li></ul> Materials<br />- Create Positioning<br />Marketing<br />
  • 18. Tradition – Hire Sales<br />Concept/Seed Round<br />Product Dev.<br />Alpha/Beta Test<br />Launch/<br />1st Ship<br />- Create Demand<br />- Launch Event<br />- “Branding”<br />- Hire PR Agency<br />- Early Buzz<br /><ul><li> Create Marcom </li></ul> Materials<br />- Create Positioning<br />Marketing<br /><ul><li> Build Sales Organization
  • 19. Hire Sales VP
  • 20. Hire 1st Sales Staff</li></ul>Sales<br />
  • 21. Tradition – Hire Bus Development<br />Concept<br />Product Dev.<br />Alpha/Beta Test<br />Launch/<br />1st Ship<br />- Create Demand<br />- Launch Event<br />- “Branding”<br />- Hire PR Agency<br />- Early Buzz<br /><ul><li> Create Marcom </li></ul> Materials<br />- Create Positioning<br />Marketing<br /><ul><li> Build Sales Channel / Distribution
  • 22. Hire Sales VP
  • 23. Pick distribution Channel</li></ul>Sales<br />Business <br />Development<br /><ul><li> Hire First Bus Dev
  • 24. Do deals for FCS</li></li></ul><li>Tradition – Hire Engineering<br />Concept<br />Product Dev.<br />Alpha/Beta Test<br />Launch/<br />1st Ship<br />- Create Demand<br />- Launch Event<br />- “Branding”<br />- Hire PR Agency<br />- Early Buzz<br /><ul><li> Create Marcom </li></ul> Materials<br />- Create Positioning<br />Marketing<br /><ul><li> Build Sales Channel / Distribution
  • 25. Hire Sales VP
  • 26. Pick distribution Channel</li></ul>Sales<br />Business <br />Development<br /><ul><li> Hire First Bus Dev
  • 27. Do deals for FCS</li></ul>Engineering<br /><ul><li> Write MRD
  • 28. Waterfall
  • 29. Q/A
  • 30. Tech Pubs</li></li></ul><li>Startups Are Not Smaller Versions of Large Companies<br />
  • 31. A Startup is a temporary organization<br />
  • 32. A Startup is a temporary organization designed to search<br />
  • 33. A Startup is a temporary organization designed to search for a repeatable and scalable business model<br />
  • 34. Startups need their own tools, different from those used in existing companies<br />
  • 35. Startups need their own tools, different from those used in existing companies<br />
  • 36. Startups Are Not Smaller Versions of Large Companies<br />Large Companies Execute Known Business Models<br />
  • 37. Startups Are Not Smaller Versions of Large Companies<br />Startups Search for Unknown Business Models<br />
  • 38. So Search for a Business Model<br />
  • 39. The Business Model:<br />Any company can be described in 9 building blocks<br />
  • 40. CUSTOMER SEGMENTS<br />which customers and users are you serving? <br />which jobs do they really want to get done?<br />
  • 41. VALUE PROPOSITIONS<br />what are you offering them? what is that <br />getting done for them? do they care?<br />
  • 42. CHANNELS<br />how does each customer segment want to be reached? through which interaction points?<br />
  • 43. CUSTOMER RELATIONSHIPS<br />what relationships are you establishing with each segment? personal? automated? acquisitive? retentive?<br />
  • 44. REVENUE STREAMS<br />what are customers really willing to pay for? how? <br />are you generating transactional or recurring revenues?<br />
  • 45. KEY RESOURCES<br />which resources underpin your business model? which assets are essential?<br />
  • 46. KEY ACTIVITIES<br />which activities do you need to perform well in your business model? what is crucial?<br />37<br />
  • 47. KEY PARTNERS<br />which partners and suppliers leverage your model? <br />who do you need to rely on?<br />
  • 48. COST STRUCTURE<br />what is the resulting cost structure? <br />which key elements drive your costs?<br />
  • 49. value proposition<br />customer relationships<br />key activities<br />customer segments<br />key partners<br />cost structure<br />revenue streams<br />key <br />resources<br />channels<br />40<br />images by JAM<br />
  • 50. sketch out your business model<br />
  • 51. But,Realize They’re Hypotheses<br />
  • 52. But,Realize They’re HypothesesGuesses<br />
  • 53. 9 Guesses<br />Guess<br />Guess<br />Guess<br />Guess<br />Guess<br />Guess<br />Guess<br />Guess<br />Guess<br />
  • 54. How Do Startups Search For A Business Model?<br />
  • 55. There are no facts inside your building<br />
  • 56. There are no facts inside your building<br />So Get Outside<br />
  • 57. Customer Development = process to searchBusiness Model Canvas is the ScorecardAgile Engineering is How We Build Startups<br />
  • 58. Customer Development =process to searchBusiness Model Canvas =the ScorecardAgile Engineering is How We Build Startups<br /><ul><li>Farming conventions.
  • 59. Demo, demo, and demo!!
  • 60. Proximity is paramount
  • 61. Technology Design
  • 62. Marketing
  • 63. Demo and customer feedback
  • 64. Research Labs
  • 65. Equipment Manufacturers
  • 66. Distribution Network
  • 67. Service Providers
  • 68. Cost Reduction
  • 69. Remove labor force pains
  • 70. Eliminate bio-waste hazards
  • 71. Organic Farmers
  • 72. Weeding Service Providers
  • 73. Conventional Farmers
  • 74. IP – Patents
  • 75. Video Classifier Files
  • 76. Robust Technology
  • 77. Dealers
  • 78. Direct Service
  • 79. Indirect Service
  • 80. … then Dealers
  • 81. Asset Sale
  • 82. Direct Service with equipment rental
  • 83. … then Asset Sale</li></ul>Value-Driven<br />
  • 84. Customer Development is the process used to searchBusiness Model Canvas is the ScorecardAgile Development is How We Build Startups<br />
  • 85. Customer Development<br />The founders<br />^<br />Get Out of the Building<br />
  • 86. Customer DevelopmentThe Search For the Business Model<br />Company<br />Building<br />CustomerDiscovery<br />CustomerValidation<br />Customer Creation<br />Pivot<br />
  • 87. Customer Discovery<br />CustomerDiscovery<br />CustomerValidation<br />Company<br />Building<br />CustomerCreation<br />Stop selling, start listening<br />Test your hypotheses<br />Continuous Discovery<br />Done by founders<br />
  • 88. Test Hypotheses:<br /><ul><li>Product
  • 89. Market Type
  • 90. Competition</li></ul>Turning Hypotheses to Facts<br />
  • 91. Test Hypotheses:<br /><ul><li>Problem
  • 92. Customer
  • 93. User
  • 94. Payer</li></li></ul><li>Test Hypotheses:<br /><ul><li>Channel</li></li></ul><li>Test Hypotheses:<br /><ul><li>Demand Creation</li></ul>Test Hypotheses:<br /><ul><li>Problem
  • 95. Customer
  • 96. User
  • 97. Payer</li></ul>Test Hypotheses:<br /><ul><li>Product
  • 98. Market Type
  • 99. Competitive</li></ul>Test Hypotheses:<br /><ul><li>Channel
  • 100. (Customer)
  • 101. (Problem)</li></ul>Test Hypotheses:<br /><ul><li>Channel</li></ul>Test Hypotheses:<br /><ul><li>Pricing Model / Pricing</li></ul>Test Hypotheses:<br /><ul><li>Size of Opportunity/Market
  • 102. Validate Business Model</li></li></ul><li>Test Hypotheses:<br /><ul><li>Demand Creation</li></ul>Test Hypotheses:<br /><ul><li>Problem
  • 103. Customer
  • 104. User
  • 105. Payer</li></ul>Agile Development<br />Test Hypotheses:<br /><ul><li>Product
  • 106. Market Type
  • 107. Competitive</li></ul>Test Hypotheses:<br /><ul><li>Channel
  • 108. (Customer)
  • 109. (Problem)</li></ul>Customer Development Team<br />Test Hypotheses:<br /><ul><li>Channel</li></ul>Test Hypotheses:<br /><ul><li>Pricing Model / Pricing</li></ul>Test Hypotheses:<br /><ul><li>Size of Opportunity/Market
  • 110. Validate Business Model</li></li></ul><li>The Minimum Viable Product (MVP)<br /><ul><li> Smallest feature set that gets you the most …orders, learning, feedback, failure…</li></li></ul><li>The Pivot<br /><ul><li>The heart of Customer Development
  • 111. Iteration without crisis
  • 112. Fast, agile and opportunistic</li></li></ul><li>How Does This Really Work?Lean LaunchPad Class<br />
  • 113. How Does This Really Work?Lean LaunchPad Class<br />8 Weeks From an Idea to a Business<br />
  • 114. Pivot ExampleRobotic Weeding<br />Talked 75 Customers in 8 Weeks<br />
  • 115. Our initial plan<br />
  • 116. 20 interviews, 6 site visits…We got OUR Boots dirty<br />Weeding<br />Visited farms in Salinas Valley to better understand problem<br />Interviewed:<br /><ul><li>Bolthouse Farms, Large Agri-Industry in Bakersfield
  • 117. White Farms, Large Peanut farmer in Georgia
  • 118. REFCO Farms, large grower in Salinas Valley
  • 119. Rincon Farms, large grower in Salinas Valley
  • 120. Small Organic Corn/Soy grower in Nebraska
  • 121. Heirloom Organics, small owner/operator, Santa Cruz Mts
  • 122. Two small organic farmers at farmers market
  • 123. Ag Services of Salinas, Fertilizer applicator</li></ul>Mowing<br />Interviewed:<br /><ul><li>Golf: Stanford Golf course
  • 124. Parks: Stanford Grounds Supervisor, head of maintenance and lead operator (has crew of 6)
  • 125. Toro dealer (large mower manufacturer)
  • 126. User of back-yard mowing system
  • 127. Maintenance Services for City of Los Altos
  • 128. Colony Landscaping (Mowing service for stadiums)</li></li></ul><li>Business Plan Autonomous Vehicles for Mowing & Weeding<br />Dealers sell, installs and supports customer<br />Co. trains dealers, supports dealers<br />- Innovation<br />- Customer Education<br />- Dealer training<br />Mowing<br />- Owners of public or commercially used green spaces (e.g. golf courses)<br />- Landscaping service provider<br />Weeding<br />- Farmers with manual weeding operations<br />We reduce operating cost<br />- Labor reduction<br />- Better utilization of assets (eg mow or weed at nights)<br />- Improved performance (less rework, food safety)<br />- Dealers (Mowing and Ag)<br />- Vehicle OEMs (John Deere, Toro, Jacobsen, etc)<br />- Research labs<br />- Mowing Dealers<br />- Ag Dealers<br />Engineers on Autonomous vehicles, GPS, path-planning<br />Dealer discount <br />COGS seek a 50-60% Gross Margin<br />Heavy R&D investment <br />Asset sale<br />Our revenue stream derives from selling the equipment<br />
  • 129. Autonomous vehiclesWEEDING<br />Dealers sell, installs and supports customer<br />Co. trains dealers, supports dealers<br />- Innovation<br />- Customer Education<br />- Dealer training<br />- Low density vegetable growers<br />- High density vegetable growers<br />- Thinning operations<br />- Conventional vegetables<br />We reduce operating cost<br />- Labor reduction (100 to 1)<br />- Reduced risk of contamination<br />- Mitigate labor availability concerns<br />- Ag Dealers<br />- Ag Service providers<br />- Research labs<br />- Ag Dealers<br />- Ag Service providers<br />Engineers on Machine Vision<br />Two problems:<br />- Identification<br />- Elimination<br />Dealer discount <br />COGS seek a 50-60% Gross Margin<br />Heavy R&D investment <br />Asset sale<br />Our revenue stream derives from selling the equipment<br />
  • 130. 1 Week – 1 CarrotBot<br />Confidential<br />
  • 131. The Business Plan Canvas Updated<br /><ul><li>Technology Design
  • 132. Marketing
  • 133. Demo and customer feedback
  • 134. Farming conventions.
  • 135. Demo, demo, and demo!!
  • 136. Proximity is paramount
  • 137. Organic Farmers
  • 138. Weeding Service Providers
  • 139. Conventional Farmers
  • 140. Cost Reduction
  • 141. Remove labor force pains
  • 142. Eliminate bio-waste hazards
  • 143. Research Labs
  • 144. Equipment Manufacturers
  • 145. Distribution Network
  • 146. Service Providers
  • 147. IP – Patents
  • 148. Video Classifier Files
  • 149. Robust Technology
  • 150. Dealers
  • 151. Direct Service
  • 152. Indirect Service
  • 153. … then Dealers
  • 154. Asset Sale
  • 155. Direct Service with equipment rental
  • 156. … then Asset Sale</li></ul>Value-Driven<br />
  • 157. The Business Plan Canvas Updated<br /><ul><li>Technology Design
  • 158. Marketing
  • 159. Demo and customer feedback
  • 160. Farming conventions.
  • 161. Demo, demo, and demo!!
  • 162. Proximity is paramount
  • 163. Mid/Large Organic Farmers
  • 164. Agricultural corporations
  • 165. Weeding Service Providers
  • 166. Mid/Large Conventional Farmers
  • 167. Cost Reduction
  • 168. Remove labor force pains
  • 169. Eliminate bio-waste hazards
  • 170. Research Labs
  • 171. Equipment Manufacturers
  • 172. Distribution Network
  • 173. Service Providers
  • 174. IP – Patents
  • 175. Video Classifier Files
  • 176. Robust Technology
  • 177. Direct Service
  • 178. Indirect Service
  • 179. … then Dealers
  • 180. Direct Service with equipment rental
  • 181. ($1,500/d; 120d/yr )
  • 182. Low density: $1,500/d
  • 183. High density: $6,000/d</li></ul>Value-Driven<br />
  • 184. World Ag Expo interviews:the need is real and wide spread<br />10+ interviews at show<br />Everyone confirmed the need<br />Robocrop, UK based, crude competitor sells for $171 K<br />Revenue Stream<br />Mid to small growers prefer a service<br />Large growers prefer to buy, but OK with service until technology is proven<br />Charging for labor cost saved is OK, as we provide other benefits (food safety, labor availability)<br />
  • 185. The Business Plan Canvas Updated<br /><ul><li>Technology Design
  • 186. Marketing
  • 187. Demo and customer feedback
  • 188. Farming conventions.
  • 189. Demo, demo, and demo!!
  • 190. Proximity is paramount
  • 191. Mid/Large Organic Farmers
  • 192. Agricultural corporations
  • 193. Weeding Service Providers
  • 194. Mid/Large Conventional Farmers
  • 195. Research Labs
  • 196. Equipment Manufacturer
  • 197. Distribution Network
  • 198. Service Providers
  • 199. 2 or 3 Key Farms
  • 200. Cost Reduction
  • 201. Remove labor force pains
  • 202. Eliminate bio-waste hazards
  • 203. IP – Patents
  • 204. Video Classifier Files
  • 205. Robust Technology
  • 206. Direct Service
  • 207. Indirect Service
  • 208. … then Dealers
  • 209. Direct Service with equipment rental
  • 210. Low density: $1,500/d
  • 211. High density: $6,000/d</li></ul>Value-Driven<br /><ul><li> R&D
  • 212. Bill of Materials
  • 213. Training & Service
  • 214. Sales</li></li></ul><li>Autonomous weeding - Final<br />Direct<br />- Provide high quality service at competitive price<br />- Innovation<br />- Customer Education<br />- Dealer training<br />- Low density vegetable growers<br />- High density vegetable growers<br />- Thinning operations<br />- Conventional vegetables<br />We reduce operating cost<br />- Labor reduction (100 to 1)<br />- Reduced risk of contamination<br />- Mitigate labor availability concerns<br />- Ag Service providers<br />- Research Institutes (eg UC Davis, Laser Zentrum Hannover)<br />- 3-4 key farms<br />Direct <br />- Alliance with service providers<br />- Eventually sell through dealers<br />Engineers on Machine Vision<br />Two problems:<br />- Identification<br />- Elimination<br />Costs for service provision<br />COGS seek a 50-60% Gross Margin<br />Heavy R&D investment <br />Service provision<br />- Charge by the acre with modifier according to weed density <br />- Eventually move to asset sale<br />
  • 215. Thanks<br />www.steveblank.com<br />
  • 216. I Write a Blog <br />www.steveblank.com<br />
  • 217. Personal Libraries<br />
  • 218. Insight: No more bookshelves<br />eBooks+150% YoY ‘10<br />Printed Books <br />-20% YoY ‘10<br />
  • 219. Version 1.0: Personal Libraries<br />
  • 220. Original Idea: Personal Digital Libraries<br />Import, organize and share thousands of digital papers<br />
  • 221. something-something-something.com<br />Original idea<br />Invincible Business Model: Version 1.0<br />SHORT TERMResearchers<br />Lawyers<br />Scientists <br />LONG TERMAvid book readers<br />Professionals <br />FB/TW posts from users you know<br />Company blog, FB, TW, support forums<br />Import, organize and share thousands of papers<br />Targeted marketing<br />Product development<br />Constant iteration & testing<br />Libraries, Universities, Research Centers<br />Bloggers and media targeting customer segment<br />Academic Database providers<br />Affiliate program<br />SEO/SEM/SM<br />IE/FF/Chrome App Stores<br />Developers<br />Marketers<br />Affiliate program fees<br />Licensing<br />Subscription fees<br />Ad revenue<br />AWS Infrastructure<br />SEM<br />Eng & Marketing OpEx<br />
  • 222. Here’s What We Did<br />Version 1.0: Personal Libraries<br />
  • 223. Got out of the building<br />
  • 224. Got out of the building<br /><ul><li>100+ Interviews</li></ul>Professors, Litigators, IP lawyers, Post-docs, PhD researchers, Engineering Students, Law Students…<br />
  • 225. Got out of the building<br /><ul><li>100+ Interviews
  • 226. Extensive Surveys</li></li></ul><li>Got out of the building<br /><ul><li>100+ Interviews
  • 227. Extensive Surveys
  • 228. 33,000+ Adwords</li></li></ul><li>Got out of the building<br /><ul><li>100+ Interviews
  • 229. Extensive Surveys
  • 230. 33,000+ Adwords
  • 231. Compete Review</li></li></ul><li>Got out of the building<br /><ul><li>100+ Interviews
  • 232. Extensive Surveys
  • 233. 33,000+ Adwords
  • 234. Compete Review
  • 235. Market Sizing</li></li></ul><li>Got out of the building<br /><ul><li>100+ Interviews
  • 236. Extensive Surveys
  • 237. 33,000+ Adwords
  • 238. Compete Review
  • 239. Market Sizing
  • 240. 50 bloggers</li></li></ul><li>Got out of the building<br /><ul><li>100+ Interviews
  • 241. Extensive Surveys
  • 242. 33,000+ Adwords
  • 243. Compete Review
  • 244. Market Sizing
  • 245. 50 bloggers
  • 246. 6 Social Networks</li></li></ul><li>Got out of the building<br /><ul><li>100+ Interviews
  • 247. Extensive Surveys
  • 248. 33,000+ Adwords
  • 249. Compete Review
  • 250. Market Sizing
  • 251. 50 bloggers
  • 252. 6 Social Networks
  • 253. Usability Tests</li></li></ul><li>Got out of the building<br /><ul><li>100+ Interviews
  • 254. Extensive Surveys
  • 255. 33,000+ Adwords
  • 256. Compete Review
  • 257. Market Sizing
  • 258. 50 bloggers
  • 259. 6 Social Networks
  • 260. Usability Tests
  • 261. Rapid Iteration</li></li></ul><li>Here’s What We Found<br />Version 1.0: Personal Libraries<br />
  • 262. Here's what we found: Version 1.0<br />A great business if we had more users…<br />GOOD<br /><ul><li>Subscriptions Rock</li></li></ul><li>Here's what we found: Version 1.0<br />Shorter pages raise conversions 80%<br />GOOD<br /><ul><li>Subscriptions Rock
  • 263. Pipelines Optimize</li></li></ul><li>Here's what we found: Version 1.0<br />Sites will feature your service<br />GOOD<br /><ul><li>Subscriptions Rock
  • 264. Pipelines Optimize
  • 265. The Web Listens</li></li></ul><li>Here's what we found: Version 1.0<br />GOOD<br /><ul><li>Subscriptions Rock
  • 266. Pipelines Optimize
  • 267. The Web Listens</li></ul>BAD<br /><ul><li>Academics = Cheap</li></ul>Teaching team saw pattern in our data<br />
  • 268. Run away from this customer as fast as possible. <br />
  • 269. Run away from this customer as fast as possible. <br />They don’t want to spend money and will incur infinite support and infinite cost.<br />
  • 270. Here's what we found: Version 1.0<br />Working for peanuts, and hitting wild product success leads to economic failure<br />GOOD<br /><ul><li>Subscriptions Rock
  • 271. Pipelines Optimize
  • 272. The Web Listens</li></ul>BAD<br /><ul><li>Academics = Cheap
  • 273. Negative Margins</li></li></ul><li>Here's what we found: Version 1.0<br />GOOD<br /><ul><li>Subscriptions Rock
  • 274. Pipelines Optimize
  • 275. The Web Listens</li></ul>BAD<br /><ul><li>Academics = Cheap
  • 276. Negative Margins
  • 277. ECM = Boring</li></ul>No adjacent pivots worked for the team<br />
  • 278. Version 2.0: Trusted Advice<br />
  • 279. something-something-something.com<br />Original idea<br />Invincible Business Model: Version 2.0<br />Upwardly mobile young professionals making $2-10K of discretionary online purchases a year (excluding travel)<br />FB/TW posts from users you know<br />Company blog, FB, TW accounts<br />Discover online goods recommended by friends at the lowest possible price from trusted vendors<br />Developing trusted advice and advisors<br />Web marketing <br />Affiliate partnerships<br />Constant iteration & testing<br />Bloggers and Media targeting customer segment<br />Retail marketing partners<br />IE/FF/Chrome teams<br />Affiliate Program Providers<br />Affiliate program<br />SEO/SEM/SM<br />IE/FF/Chrome App Stores<br />Developers<br />Marketers<br />Content Library<br />Install base<br />Readership base<br />Affiliate program fees<br />Licensing<br />Subscription fees<br />Ad revenue<br />AWS Infrastructure<br />SEM<br />Eng & Marketing OpEx<br />
  • 280. New Hypotheses<br />
  • 281. Here’s What We Did<br />Version 2.0: Trusted Advice<br />
  • 282. Got out of the building, again<br /><ul><li>40+ Interviews</li></li></ul><li>Got out of the building, again<br /><ul><li>40+ Interviews
  • 283. Extensive Surveys</li></li></ul><li>Got out of the building, again<br /><ul><li>40+ Interviews
  • 284. Extensive Surveys
  • 285. Landing Page Tests</li></ul>Landing pages tested on affluent, career aged professionals, approximately 70/30 male/female, N=800+<br />
  • 286. Got out of the building, again<br /><ul><li>40+ Interviews
  • 287. Extensive Surveys
  • 288. Landing Page Tests
  • 289. Market Research</li></li></ul><li>Got out of the building, again<br /><ul><li>40+ Interviews
  • 290. Extensive Surveys
  • 291. Landing Page Tests
  • 292. Market Research
  • 293. Compete Research</li></li></ul><li>Got out of the building, again<br /><ul><li>40+ Interviews
  • 294. Extensive Surveys
  • 295. Landing Page Tests
  • 296. Market Research
  • 297. Compete Research
  • 298. Revenue Analysis</li></li></ul><li>Got out of the building, again<br /><ul><li>40+ Interviews
  • 299. Extensive Surveys
  • 300. Landing Page Tests
  • 301. Market Research
  • 302. Compete Research
  • 303. Revenue Analysis
  • 304. Two Prototypes</li></ul>Insidely.com<br />wantio.com<br />
  • 305. Got out of the building, again<br /><ul><li>40+ Interviews
  • 306. Extensive Surveys
  • 307. Landing Page Tests
  • 308. Market Research
  • 309. Compete Research
  • 310. Revenue Analysis
  • 311. Two Prototypes
  • 312. Refined Personas</li></li></ul><li>Customer Segment: Professional-class consumers shopping frequently online<br /> Pat the Professional<br />Upwardly mobile professional (some Grad Students)<br />Salary: $40,000 – 150,000/year<br />Finance, Consulting, PR, Marketing<br />Follows fashion/technology trends<br />Spends $1-15K on discretionary items online<br />Purchased online in last 30 days<br />Demographics<br /><ul><li>Male/female, aged 18-35
  • 313. Minimum bachelors from expensive school</li></ul>Traits:<br /><ul><li>Ideas from blogs & shopping websites
  • 314. Values celebrity trends & friends’ opinions
  • 315. Wants high ticket items at lowest price
  • 316. Event-driven shopper—new release or sale</li></ul>Motivation<br /><ul><li>Craves new products
  • 317. Hates tedious work
  • 318. Identifies as influencer among friends
  • 319. Fears being cheated online</li></ul>Behavior<br /><ul><li>Spends 5 hour+ monthly hearing about products
  • 320. Shares online and in person about products he loves</li></ul>Budget<br /><ul><li>$2-10K+/year in discretionary online purchases</li></ul>“The XXX is awesome, I really want one. I know I just bought the YYY, but it’s probably time to upgrade.” <br />~5.9M “Pat the Professionals” in US<br />Drawn from top 1/3 of 17.8M frequent online shoppers<br />17.8M based on 40.2M Professionals (2008 Census) * 0.762 US Internet Penetration (Nielsen 2010Q1) * 0.58 consumers shopping online in last month (Nielsen 2010Q1) <br />Online Recommendation Market Opportunity (conservative strawman #s)<br />Assuming 10% share, 5% affiliate fees<br />Top Shoppers (~$7B/year spend): ~ $35M/year <br />Professional-class frequent shoppers (~$1.8B/year): ~ $9M/year<br />Other Professional-class shoppers ($0.7B/year): ~3.5M/year <br />Source: US Bureau of Labor Statistics<br />
  • 321. Version 2.0: Trusted Advice<br />Top ~6M US Influentials (~$9B/year)<br />
  • 322. something-something-something.com<br />Original idea<br />Invincible Business Model: Version 2.0<br />Upwardly mobile young professionals making $2-10K of discretionary online purchases a year (excluding travel)<br />FB/TW posts from users you know<br />Company blog, FB, TW accounts<br />Discover online goods recommended by friends at the lowest possible price from trusted vendors<br />Developing trusted advice and advisors<br />Web marketing <br />Affiliate partnerships<br />Constant iteration & testing<br />Bloggers and Media targeting customer segment<br />Retail marketing partners<br />IE/FF/Chrome teams<br />Affiliate Program Providers<br />Affiliate program<br />SEO/SEM/SM<br />IE/FF/Chrome App Stores<br />Developers<br />Marketers<br />Content Library<br />Install base<br />Readership base<br />Affiliate program fees<br />Licensing<br />Subscription fees<br />Ad revenue<br />AWS Infrastructure<br />SEM<br />Eng & Marketing OpEx<br />
  • 323. Here’s What We Found<br />Version 2: Trusted Advice<br />
  • 324. Findings on "Trusted Advice"<br />GOOD<br /><ul><li>Fast Interest</li></ul>Insidely.com<br />Trusted advice site for <br />Silicon Valley/Stanford MBAs<br />Launched 2/15<br />425 visitors by 2/28<br />
  • 325. Findings on "Trusted Advice"<br />Ranked #6 by Google for “Stanford Admissions Books”<br />GOOD<br /><ul><li>Fast Interest</li></li></ul><li>Findings on "Trusted Advice"<br />GOOD<br /><ul><li>Fast Interest
  • 326. High Conversion</li></ul>43% clickthrough<br />on Top Admissions Books for Stanford MBAs article<br />Compare to 0.5% clickthrough on ads<br />~100x difference<br />
  • 327. Findings on "Trusted Advice"<br />Positive results on “Trusted Advice” Shopping Add-in testing<br />GOOD<br /><ul><li>Fast Interest
  • 328. High Conversion
  • 329. Needs Addressed </li></ul>See videos at http://factnote.com/c/e245<br />
  • 330. Findings on "Trusted Advice"<br />Positive results on “Trusted Advice” Shopping Add-in testing<br />GOOD<br /><ul><li>Fast Interest
  • 331. High Conversion
  • 332. Needs Addressed </li></ul>Super easy to install and use.<br />I really did enjoy it! <br />Great idea! I will keep the extension installed because I do think this is practical!<br />I could see myself using this regularly<br />
  • 333. Findings on "Trusted Advice"<br />Some negative results on “Trusted Advice” Shopping Add-in testing<br />GOOD<br /><ul><li>Fast Interest
  • 334. High Conversion
  • 335. Needs Addressed </li></ul>BAD<br /><ul><li>Missing Features</li></ul>See videos at http://factnote.com/c/e245<br />
  • 336. Findings on "Trusted Advice"<br />Some negative results on “Trusted Advice” Shopping Add-in testing<br />GOOD<br /><ul><li>Fast Interest
  • 337. High Conversion
  • 338. Needs Addressed </li></ul>BAD<br /><ul><li>Missing Features</li></ul>I was a little frustrated when it didn’t find the item I was looking for<br />I can find more thorough price comparisons elsewhere…<br />I usually don’t shop in Chrome, so that’s an inconvenience.<br />
  • 339. Findings on "Trusted Advice"<br />MBA Exchange spams us out of Google<br />GOOD<br /><ul><li>Fast Interest
  • 340. High Conversion
  • 341. Needs Addressed </li></ul>BAD<br /><ul><li>Missing Features
  • 342. SEO Battle</li></li></ul><li>Here’s Where We Ended Up <br />Version 2.1: Trusted Advice<br />
  • 343. The adventure continuesTrusted Advice 2.0<br />Protection against SEO-spammers<br />Next Experiments: <br /><ul><li>Trusted Lead Gen
  • 344. Trusted Advice website powered by Shopping Add-in</li></li></ul><li>something-something-something.com<br />Original idea<br />Invincible Business Model: Version 3.0<br />PAT THE PROFESSIONALUpwardly mobile young professionals making $2-10K of discretionary online purchases a year (excluding travel)<br />FB/TW posts from users you know<br />Company blog, FB, TW accounts<br />TRUSTED ADVICE Discover online goods recommended by friends at the lowest possible price from trusted vendors<br />Foil advertorial spammers polluting the Interweb with toxic pseudo-content<br />Developing trusted advice and advisors<br />Web marketing <br />Affiliate partnerships<br />Constant iteration & testing<br />Bloggers and Media targeting customer segment<br />Retail marketing partners<br />IE/FF/Chrome teams<br />Affiliate Program Providers<br />Affiliate program<br />SEO/SEM/SM<br />IE/FF/Chrome App Stores<br />Developers<br />Marketers<br />Content Library<br />Install base<br />Readership base<br />Affiliate program fees<br />Licensing<br />Subscription fees<br />Ad revenue<br />AWS Infrastructure<br />SEM<br />Eng & Marketing OpEx<br />
  • 345. What We Learned<br /><ul><li>Potential for disruption abounds</li></li></ul><li>What We Learned<br /><ul><li>Potential for disruption abounds
  • 346. Life is short, focus on big markets</li></li></ul><li>What We Learned<br /><ul><li>Potential for disruption abounds
  • 347. Life is short, focus on big markets
  • 348. All we need is to be relentless</li></li></ul><li>Thanks<br />www.steveblank.com<br />
  • 349. I Write a Blog <br />www.steveblank.com<br />
  • 350. Carpe Diem<br />www.steveblank.com<br />

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