Six Ways to Fail at a Startup<br />Steve Blank<br />www.steveblank.com<br />Twitter: @sgblank<br />
Six Ways to Fail at a StartupAnd How to Get it Right<br />Steve Blank<br />www.steveblank.com<br />Twitter: @sgblank<br />
This Talk is Based On<br />Business Model Generation<br />Four Steps to the Epiphany<br />Lean Startup<br />
I Have a Vision<br />
I Know What Needs to Be Done<br />
Lets Start A Company!<br />
Six Ways to Fail<br />
#1I Know Who The Customer Is<br />
#2I Know Exactly the Product They Need<br />
#3I Know the Problem They Have<br />
#4We Can Fix It After We Ship It All<br />
#5<br />All I Need to Do is Execute the Plan<br />
#6<br />Let’s Use Large Company Tools <br />
Product Introduction Model<br />Concept/Seed Round<br />Product Dev.<br />Alpha/Beta Test<br />Launch/<br />1st Ship<br />
Product Introduction Model<br />The Leading Cause of Startup Death<br />Concept/Seed Round<br />Product Dev.<br />Alpha/Be...
Product Introduction Model:Two Implicit Assumptions<br />Customer Problem: known<br />Concept/Seed Round<br />Product Dev....
Tradition – Hire Marketing<br />Concept/Seed Round<br />Product Dev.<br />Alpha/Beta Test<br />Launch/<br />1st Ship<br />...
Tradition – Hire Sales<br />Concept/Seed Round<br />Product Dev.<br />Alpha/Beta Test<br />Launch/<br />1st Ship<br />- Cr...
 Hire Sales VP
 Hire 1st  Sales Staff</li></ul>Sales<br />
Tradition – Hire Bus Development<br />Concept<br />Product Dev.<br />Alpha/Beta Test<br />Launch/<br />1st Ship<br />- Cre...
 Hire Sales VP
 Pick distribution   Channel</li></ul>Sales<br />Business <br />Development<br /><ul><li> Hire First   Bus Dev
 Do deals for FCS</li></li></ul><li>Tradition – Hire Engineering<br />Concept<br />Product Dev.<br />Alpha/Beta Test<br />...
 Hire Sales VP
 Pick distribution   Channel</li></ul>Sales<br />Business <br />Development<br /><ul><li> Hire First   Bus Dev
 Do deals for FCS</li></ul>Engineering<br /><ul><li> Write MRD
 Waterfall
 Q/A
Tech Pubs</li></li></ul><li>Startups Are Not Smaller Versions of Large Companies<br />
A Startup is a temporary organization<br />
A Startup is a temporary organization designed to search<br />
A Startup is a temporary organization designed to search for a repeatable and scalable business model<br />
Startups need their own tools, different from those used in existing companies<br />
Startups need their own tools, different from those used in existing companies<br />
Startups Are Not Smaller Versions of Large Companies<br />Large Companies Execute Known Business Models<br />
Startups Are Not Smaller Versions of Large Companies<br />Startups Search for Unknown Business Models<br />
So Search for a Business Model<br />
The Business Model:<br />Any company can be described in 9 building blocks<br />
CUSTOMER SEGMENTS<br />which customers and users are you serving? <br />which jobs do they really want to get done?<br />
VALUE PROPOSITIONS<br />what are you offering them? what is that <br />getting done for them? do they care?<br />
CHANNELS<br />how does each customer segment want to be reached? through which interaction points?<br />
CUSTOMER RELATIONSHIPS<br />what relationships are you establishing with each segment? personal? automated? acquisitive? r...
REVENUE STREAMS<br />what are customers really willing to pay for? how? <br />are you generating transactional or recurrin...
KEY RESOURCES<br />which resources underpin your business model? which assets are essential?<br />
KEY ACTIVITIES<br />which activities do you need to perform well in your business model? what is crucial?<br />37<br />
KEY PARTNERS<br />which partners and suppliers leverage your model? <br />who do you need to rely on?<br />
COST STRUCTURE<br />what is the resulting cost structure? <br />which key elements drive your costs?<br />
value proposition<br />customer relationships<br />key activities<br />customer segments<br />key partners<br />cost struc...
sketch out your business model<br />
But,Realize They’re Hypotheses<br />
But,Realize They’re HypothesesGuesses<br />
9 Guesses<br />Guess<br />Guess<br />Guess<br />Guess<br />Guess<br />Guess<br />Guess<br />Guess<br />Guess<br />
How Do Startups Search For A Business Model?<br />
There are no facts inside your building<br />
There are no facts inside your building<br />So Get Outside<br />
Customer Development = process to searchBusiness Model Canvas is the ScorecardAgile Engineering is How We Build Startups<b...
Customer Development =process to searchBusiness Model Canvas =the ScorecardAgile Engineering is How We Build Startups<br /...
Demo, demo, and demo!!
Proximity is paramount
Technology Design
Marketing
Demo and customer feedback
Research Labs
Equipment Manufacturers
Distribution Network
Service Providers
Cost Reduction
Remove labor force pains
Eliminate bio-waste hazards
Organic Farmers
Weeding Service Providers
Conventional Farmers
IP – Patents
Video Classifier Files
Robust Technology
Dealers
Direct Service
Indirect Service
 … then Dealers
Asset Sale
Direct Service with equipment rental
… then Asset Sale</li></ul>Value-Driven<br />
Customer Development is the process used to searchBusiness Model Canvas is the ScorecardAgile Development is How We Build ...
Customer Development<br />The founders<br />^<br />Get Out of the Building<br />
Customer DevelopmentThe Search For the Business Model<br />Company<br />Building<br />CustomerDiscovery<br />CustomerValid...
Customer Discovery<br />CustomerDiscovery<br />CustomerValidation<br />Company<br />Building<br />CustomerCreation<br />St...
Test Hypotheses:<br /><ul><li>Product
 Market Type
 Competition</li></ul>Turning Hypotheses to Facts<br />
Test Hypotheses:<br /><ul><li>Problem
 Customer
 User
 Payer</li></li></ul><li>Test Hypotheses:<br /><ul><li>Channel</li></li></ul><li>Test Hypotheses:<br /><ul><li>Demand Crea...
 Customer
 User
 Payer</li></ul>Test Hypotheses:<br /><ul><li>Product
 Market Type
 Competitive</li></ul>Test Hypotheses:<br /><ul><li>Channel
 (Customer)
 (Problem)</li></ul>Test Hypotheses:<br /><ul><li>Channel</li></ul>Test Hypotheses:<br /><ul><li>Pricing Model / Pricing</...
 Validate Business Model</li></li></ul><li>Test Hypotheses:<br /><ul><li>Demand Creation</li></ul>Test Hypotheses:<br /><u...
 Customer
 User
 Payer</li></ul>Agile Development<br />Test Hypotheses:<br /><ul><li>Product
 Market Type
 Competitive</li></ul>Test Hypotheses:<br /><ul><li>Channel
 (Customer)
 (Problem)</li></ul>Customer Development Team<br />Test Hypotheses:<br /><ul><li>Channel</li></ul>Test Hypotheses:<br /><u...
 Validate Business Model</li></li></ul><li>The Minimum Viable Product (MVP)<br /><ul><li> Smallest feature set that gets y...
Iteration without crisis
Fast, agile and opportunistic</li></li></ul><li>How Does This Really Work?Lean LaunchPad Class<br />
How Does This Really Work?Lean LaunchPad Class<br />8 Weeks From an Idea to a Business<br />
Pivot ExampleRobotic Weeding<br />Talked 75 Customers in 8 Weeks<br />
Our initial plan<br />
20 interviews, 6 site visits…We got OUR Boots dirty<br />Weeding<br />Visited farms in Salinas Valley to better understand...
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</li></ul>Mowing<br />Interviewed:<br /><ul><li>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)</li></li></ul><li>Business Plan Autonomous Vehicles for Mowing & Weeding<...
Autonomous vehiclesWEEDING<br />Dealers sell, installs and supports customer<br />Co. trains dealers, supports dealers<br ...
1 Week – 1 CarrotBot<br />Confidential<br />
The Business Plan Canvas Updated<br /><ul><li>Technology Design
Marketing
Demo and customer feedback
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Biz barcelona 061511

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Biz barcelona 061511

  1. 1. Six Ways to Fail at a Startup<br />Steve Blank<br />www.steveblank.com<br />Twitter: @sgblank<br />
  2. 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. 3. This Talk is Based On<br />Business Model Generation<br />Four Steps to the Epiphany<br />Lean Startup<br />
  4. 4. I Have a Vision<br />
  5. 5. I Know What Needs to Be Done<br />
  6. 6. Lets Start A Company!<br />
  7. 7. Six Ways to Fail<br />
  8. 8. #1I Know Who The Customer Is<br />
  9. 9. #2I Know Exactly the Product They Need<br />
  10. 10. #3I Know the Problem They Have<br />
  11. 11. #4We Can Fix It After We Ship It All<br />
  12. 12. #5<br />All I Need to Do is Execute the Plan<br />
  13. 13. #6<br />Let’s Use Large Company Tools <br />
  14. 14. Product Introduction Model<br />Concept/Seed Round<br />Product Dev.<br />Alpha/Beta Test<br />Launch/<br />1st Ship<br />
  15. 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. 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. 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. 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. 19. Hire Sales VP
  20. 20. Hire 1st Sales Staff</li></ul>Sales<br />
  21. 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. 22. Hire Sales VP
  23. 23. Pick distribution Channel</li></ul>Sales<br />Business <br />Development<br /><ul><li> Hire First Bus Dev
  24. 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. 25. Hire Sales VP
  26. 26. Pick distribution Channel</li></ul>Sales<br />Business <br />Development<br /><ul><li> Hire First Bus Dev
  27. 27. Do deals for FCS</li></ul>Engineering<br /><ul><li> Write MRD
  28. 28. Waterfall
  29. 29. Q/A
  30. 30. Tech Pubs</li></li></ul><li>Startups Are Not Smaller Versions of Large Companies<br />
  31. 31. A Startup is a temporary organization<br />
  32. 32. A Startup is a temporary organization designed to search<br />
  33. 33. A Startup is a temporary organization designed to search for a repeatable and scalable business model<br />
  34. 34. Startups need their own tools, different from those used in existing companies<br />
  35. 35. Startups need their own tools, different from those used in existing companies<br />
  36. 36. Startups Are Not Smaller Versions of Large Companies<br />Large Companies Execute Known Business Models<br />
  37. 37. Startups Are Not Smaller Versions of Large Companies<br />Startups Search for Unknown Business Models<br />
  38. 38. So Search for a Business Model<br />
  39. 39. The Business Model:<br />Any company can be described in 9 building blocks<br />
  40. 40. CUSTOMER SEGMENTS<br />which customers and users are you serving? <br />which jobs do they really want to get done?<br />
  41. 41. VALUE PROPOSITIONS<br />what are you offering them? what is that <br />getting done for them? do they care?<br />
  42. 42. CHANNELS<br />how does each customer segment want to be reached? through which interaction points?<br />
  43. 43. CUSTOMER RELATIONSHIPS<br />what relationships are you establishing with each segment? personal? automated? acquisitive? retentive?<br />
  44. 44. REVENUE STREAMS<br />what are customers really willing to pay for? how? <br />are you generating transactional or recurring revenues?<br />
  45. 45. KEY RESOURCES<br />which resources underpin your business model? which assets are essential?<br />
  46. 46. KEY ACTIVITIES<br />which activities do you need to perform well in your business model? what is crucial?<br />37<br />
  47. 47. KEY PARTNERS<br />which partners and suppliers leverage your model? <br />who do you need to rely on?<br />
  48. 48. COST STRUCTURE<br />what is the resulting cost structure? <br />which key elements drive your costs?<br />
  49. 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. 50. sketch out your business model<br />
  51. 51. But,Realize They’re Hypotheses<br />
  52. 52. But,Realize They’re HypothesesGuesses<br />
  53. 53. 9 Guesses<br />Guess<br />Guess<br />Guess<br />Guess<br />Guess<br />Guess<br />Guess<br />Guess<br />Guess<br />
  54. 54. How Do Startups Search For A Business Model?<br />
  55. 55. There are no facts inside your building<br />
  56. 56. There are no facts inside your building<br />So Get Outside<br />
  57. 57. Customer Development = process to searchBusiness Model Canvas is the ScorecardAgile Engineering is How We Build Startups<br />
  58. 58. Customer Development =process to searchBusiness Model Canvas =the ScorecardAgile Engineering is How We Build Startups<br /><ul><li>Farming conventions.
  59. 59. Demo, demo, and demo!!
  60. 60. Proximity is paramount
  61. 61. Technology Design
  62. 62. Marketing
  63. 63. Demo and customer feedback
  64. 64. Research Labs
  65. 65. Equipment Manufacturers
  66. 66. Distribution Network
  67. 67. Service Providers
  68. 68. Cost Reduction
  69. 69. Remove labor force pains
  70. 70. Eliminate bio-waste hazards
  71. 71. Organic Farmers
  72. 72. Weeding Service Providers
  73. 73. Conventional Farmers
  74. 74. IP – Patents
  75. 75. Video Classifier Files
  76. 76. Robust Technology
  77. 77. Dealers
  78. 78. Direct Service
  79. 79. Indirect Service
  80. 80. … then Dealers
  81. 81. Asset Sale
  82. 82. Direct Service with equipment rental
  83. 83. … then Asset Sale</li></ul>Value-Driven<br />
  84. 84. Customer Development is the process used to searchBusiness Model Canvas is the ScorecardAgile Development is How We Build Startups<br />
  85. 85. Customer Development<br />The founders<br />^<br />Get Out of the Building<br />
  86. 86. Customer DevelopmentThe Search For the Business Model<br />Company<br />Building<br />CustomerDiscovery<br />CustomerValidation<br />Customer Creation<br />Pivot<br />
  87. 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. 88. Test Hypotheses:<br /><ul><li>Product
  89. 89. Market Type
  90. 90. Competition</li></ul>Turning Hypotheses to Facts<br />
  91. 91. Test Hypotheses:<br /><ul><li>Problem
  92. 92. Customer
  93. 93. User
  94. 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. 95. Customer
  96. 96. User
  97. 97. Payer</li></ul>Test Hypotheses:<br /><ul><li>Product
  98. 98. Market Type
  99. 99. Competitive</li></ul>Test Hypotheses:<br /><ul><li>Channel
  100. 100. (Customer)
  101. 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. 102. Validate Business Model</li></li></ul><li>Test Hypotheses:<br /><ul><li>Demand Creation</li></ul>Test Hypotheses:<br /><ul><li>Problem
  103. 103. Customer
  104. 104. User
  105. 105. Payer</li></ul>Agile Development<br />Test Hypotheses:<br /><ul><li>Product
  106. 106. Market Type
  107. 107. Competitive</li></ul>Test Hypotheses:<br /><ul><li>Channel
  108. 108. (Customer)
  109. 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. 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. 111. Iteration without crisis
  112. 112. Fast, agile and opportunistic</li></li></ul><li>How Does This Really Work?Lean LaunchPad Class<br />
  113. 113. How Does This Really Work?Lean LaunchPad Class<br />8 Weeks From an Idea to a Business<br />
  114. 114. Pivot ExampleRobotic Weeding<br />Talked 75 Customers in 8 Weeks<br />
  115. 115. Our initial plan<br />
  116. 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. 117. White Farms, Large Peanut farmer in Georgia
  118. 118. REFCO Farms, large grower in Salinas Valley
  119. 119. Rincon Farms, large grower in Salinas Valley
  120. 120. Small Organic Corn/Soy grower in Nebraska
  121. 121. Heirloom Organics, small owner/operator, Santa Cruz Mts
  122. 122. Two small organic farmers at farmers market
  123. 123. Ag Services of Salinas, Fertilizer applicator</li></ul>Mowing<br />Interviewed:<br /><ul><li>Golf: Stanford Golf course
  124. 124. Parks: Stanford Grounds Supervisor, head of maintenance and lead operator (has crew of 6)
  125. 125. Toro dealer (large mower manufacturer)
  126. 126. User of back-yard mowing system
  127. 127. Maintenance Services for City of Los Altos
  128. 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. 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. 130. 1 Week – 1 CarrotBot<br />Confidential<br />
  131. 131. The Business Plan Canvas Updated<br /><ul><li>Technology Design
  132. 132. Marketing
  133. 133. Demo and customer feedback
  134. 134. Farming conventions.
  135. 135. Demo, demo, and demo!!
  136. 136. Proximity is paramount
  137. 137. Organic Farmers
  138. 138. Weeding Service Providers
  139. 139. Conventional Farmers
  140. 140. Cost Reduction
  141. 141. Remove labor force pains
  142. 142. Eliminate bio-waste hazards
  143. 143. Research Labs
  144. 144. Equipment Manufacturers
  145. 145. Distribution Network
  146. 146. Service Providers
  147. 147. IP – Patents
  148. 148. Video Classifier Files
  149. 149. Robust Technology
  150. 150. Dealers
  151. 151. Direct Service
  152. 152. Indirect Service
  153. 153. … then Dealers
  154. 154. Asset Sale
  155. 155. Direct Service with equipment rental
  156. 156. … then Asset Sale</li></ul>Value-Driven<br />
  157. 157. The Business Plan Canvas Updated<br /><ul><li>Technology Design
  158. 158. Marketing
  159. 159. Demo and customer feedback
  160. 160. Farming conventions.
  161. 161. Demo, demo, and demo!!
  162. 162. Proximity is paramount
  163. 163. Mid/Large Organic Farmers
  164. 164. Agricultural corporations
  165. 165. Weeding Service Providers
  166. 166. Mid/Large Conventional Farmers
  167. 167. Cost Reduction
  168. 168. Remove labor force pains
  169. 169. Eliminate bio-waste hazards
  170. 170. Research Labs
  171. 171. Equipment Manufacturers
  172. 172. Distribution Network
  173. 173. Service Providers
  174. 174. IP – Patents
  175. 175. Video Classifier Files
  176. 176. Robust Technology
  177. 177. Direct Service
  178. 178. Indirect Service
  179. 179. … then Dealers
  180. 180. Direct Service with equipment rental
  181. 181. ($1,500/d; 120d/yr )
  182. 182. Low density: $1,500/d
  183. 183. High density: $6,000/d</li></ul>Value-Driven<br />
  184. 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. 185. The Business Plan Canvas Updated<br /><ul><li>Technology Design
  186. 186. Marketing
  187. 187. Demo and customer feedback
  188. 188. Farming conventions.
  189. 189. Demo, demo, and demo!!
  190. 190. Proximity is paramount
  191. 191. Mid/Large Organic Farmers
  192. 192. Agricultural corporations
  193. 193. Weeding Service Providers
  194. 194. Mid/Large Conventional Farmers
  195. 195. Research Labs
  196. 196. Equipment Manufacturer
  197. 197. Distribution Network
  198. 198. Service Providers
  199. 199. 2 or 3 Key Farms
  200. 200. Cost Reduction
  201. 201. Remove labor force pains
  202. 202. Eliminate bio-waste hazards
  203. 203. IP – Patents
  204. 204. Video Classifier Files
  205. 205. Robust Technology
  206. 206. Direct Service
  207. 207. Indirect Service
  208. 208. … then Dealers
  209. 209. Direct Service with equipment rental
  210. 210. Low density: $1,500/d
  211. 211. High density: $6,000/d</li></ul>Value-Driven<br /><ul><li> R&D
  212. 212. Bill of Materials
  213. 213. Training & Service
  214. 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. 215. Thanks<br />www.steveblank.com<br />
  216. 216. I Write a Blog <br />www.steveblank.com<br />
  217. 217. Personal Libraries<br />
  218. 218. Insight: No more bookshelves<br />eBooks+150% YoY ‘10<br />Printed Books <br />-20% YoY ‘10<br />
  219. 219. Version 1.0: Personal Libraries<br />
  220. 220. Original Idea: Personal Digital Libraries<br />Import, organize and share thousands of digital papers<br />
  221. 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. 222. Here’s What We Did<br />Version 1.0: Personal Libraries<br />
  223. 223. Got out of the building<br />
  224. 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. 225. Got out of the building<br /><ul><li>100+ Interviews
  226. 226. Extensive Surveys</li></li></ul><li>Got out of the building<br /><ul><li>100+ Interviews
  227. 227. Extensive Surveys
  228. 228. 33,000+ Adwords</li></li></ul><li>Got out of the building<br /><ul><li>100+ Interviews
  229. 229. Extensive Surveys
  230. 230. 33,000+ Adwords
  231. 231. Compete Review</li></li></ul><li>Got out of the building<br /><ul><li>100+ Interviews
  232. 232. Extensive Surveys
  233. 233. 33,000+ Adwords
  234. 234. Compete Review
  235. 235. Market Sizing</li></li></ul><li>Got out of the building<br /><ul><li>100+ Interviews
  236. 236. Extensive Surveys
  237. 237. 33,000+ Adwords
  238. 238. Compete Review
  239. 239. Market Sizing
  240. 240. 50 bloggers</li></li></ul><li>Got out of the building<br /><ul><li>100+ Interviews
  241. 241. Extensive Surveys
  242. 242. 33,000+ Adwords
  243. 243. Compete Review
  244. 244. Market Sizing
  245. 245. 50 bloggers
  246. 246. 6 Social Networks</li></li></ul><li>Got out of the building<br /><ul><li>100+ Interviews
  247. 247. Extensive Surveys
  248. 248. 33,000+ Adwords
  249. 249. Compete Review
  250. 250. Market Sizing
  251. 251. 50 bloggers
  252. 252. 6 Social Networks
  253. 253. Usability Tests</li></li></ul><li>Got out of the building<br /><ul><li>100+ Interviews
  254. 254. Extensive Surveys
  255. 255. 33,000+ Adwords
  256. 256. Compete Review
  257. 257. Market Sizing
  258. 258. 50 bloggers
  259. 259. 6 Social Networks
  260. 260. Usability Tests
  261. 261. Rapid Iteration</li></li></ul><li>Here’s What We Found<br />Version 1.0: Personal Libraries<br />
  262. 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. 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. 264. Pipelines Optimize
  265. 265. The Web Listens</li></li></ul><li>Here's what we found: Version 1.0<br />GOOD<br /><ul><li>Subscriptions Rock
  266. 266. Pipelines Optimize
  267. 267. The Web Listens</li></ul>BAD<br /><ul><li>Academics = Cheap</li></ul>Teaching team saw pattern in our data<br />
  268. 268. Run away from this customer as fast as possible. <br />
  269. 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. 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. 271. Pipelines Optimize
  272. 272. The Web Listens</li></ul>BAD<br /><ul><li>Academics = Cheap
  273. 273. Negative Margins</li></li></ul><li>Here's what we found: Version 1.0<br />GOOD<br /><ul><li>Subscriptions Rock
  274. 274. Pipelines Optimize
  275. 275. The Web Listens</li></ul>BAD<br /><ul><li>Academics = Cheap
  276. 276. Negative Margins
  277. 277. ECM = Boring</li></ul>No adjacent pivots worked for the team<br />
  278. 278. Version 2.0: Trusted Advice<br />
  279. 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. 280. New Hypotheses<br />
  281. 281. Here’s What We Did<br />Version 2.0: Trusted Advice<br />
  282. 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. 283. Extensive Surveys</li></li></ul><li>Got out of the building, again<br /><ul><li>40+ Interviews
  284. 284. Extensive Surveys
  285. 285. Landing Page Tests</li></ul>Landing pages tested on affluent, career aged professionals, approximately 70/30 male/female, N=800+<br />
  286. 286. Got out of the building, again<br /><ul><li>40+ Interviews
  287. 287. Extensive Surveys
  288. 288. Landing Page Tests
  289. 289. Market Research</li></li></ul><li>Got out of the building, again<br /><ul><li>40+ Interviews
  290. 290. Extensive Surveys
  291. 291. Landing Page Tests
  292. 292. Market Research
  293. 293. Compete Research</li></li></ul><li>Got out of the building, again<br /><ul><li>40+ Interviews
  294. 294. Extensive Surveys
  295. 295. Landing Page Tests
  296. 296. Market Research
  297. 297. Compete Research
  298. 298. Revenue Analysis</li></li></ul><li>Got out of the building, again<br /><ul><li>40+ Interviews
  299. 299. Extensive Surveys
  300. 300. Landing Page Tests
  301. 301. Market Research
  302. 302. Compete Research
  303. 303. Revenue Analysis
  304. 304. Two Prototypes</li></ul>Insidely.com<br />wantio.com<br />
  305. 305. Got out of the building, again<br /><ul><li>40+ Interviews
  306. 306. Extensive Surveys
  307. 307. Landing Page Tests
  308. 308. Market Research
  309. 309. Compete Research
  310. 310. Revenue Analysis
  311. 311. Two Prototypes
  312. 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. 313. Minimum bachelors from expensive school</li></ul>Traits:<br /><ul><li>Ideas from blogs & shopping websites
  314. 314. Values celebrity trends & friends’ opinions
  315. 315. Wants high ticket items at lowest price
  316. 316. Event-driven shopper—new release or sale</li></ul>Motivation<br /><ul><li>Craves new products
  317. 317. Hates tedious work
  318. 318. Identifies as influencer among friends
  319. 319. Fears being cheated online</li></ul>Behavior<br /><ul><li>Spends 5 hour+ monthly hearing about products
  320. 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. 321. Version 2.0: Trusted Advice<br />Top ~6M US Influentials (~$9B/year)<br />
  322. 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. 323. Here’s What We Found<br />Version 2: Trusted Advice<br />
  324. 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. 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. 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. 327. Findings on "Trusted Advice"<br />Positive results on “Trusted Advice” Shopping Add-in testing<br />GOOD<br /><ul><li>Fast Interest
  328. 328. High Conversion
  329. 329. Needs Addressed </li></ul>See videos at http://factnote.com/c/e245<br />
  330. 330. Findings on "Trusted Advice"<br />Positive results on “Trusted Advice” Shopping Add-in testing<br />GOOD<br /><ul><li>Fast Interest
  331. 331. High Conversion
  332. 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. 333. Findings on "Trusted Advice"<br />Some negative results on “Trusted Advice” Shopping Add-in testing<br />GOOD<br /><ul><li>Fast Interest
  334. 334. High Conversion
  335. 335. Needs Addressed </li></ul>BAD<br /><ul><li>Missing Features</li></ul>See videos at http://factnote.com/c/e245<br />
  336. 336. Findings on "Trusted Advice"<br />Some negative results on “Trusted Advice” Shopping Add-in testing<br />GOOD<br /><ul><li>Fast Interest
  337. 337. High Conversion
  338. 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. 339. Findings on "Trusted Advice"<br />MBA Exchange spams us out of Google<br />GOOD<br /><ul><li>Fast Interest
  340. 340. High Conversion
  341. 341. Needs Addressed </li></ul>BAD<br /><ul><li>Missing Features
  342. 342. SEO Battle</li></li></ul><li>Here’s Where We Ended Up <br />Version 2.1: Trusted Advice<br />
  343. 343. The adventure continuesTrusted Advice 2.0<br />Protection against SEO-spammers<br />Next Experiments: <br /><ul><li>Trusted Lead Gen
  344. 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. 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. 346. Life is short, focus on big markets</li></li></ul><li>What We Learned<br /><ul><li>Potential for disruption abounds
  347. 347. Life is short, focus on big markets
  348. 348. All we need is to be relentless</li></li></ul><li>Thanks<br />www.steveblank.com<br />
  349. 349. I Write a Blog <br />www.steveblank.com<br />
  350. 350. Carpe Diem<br />www.steveblank.com<br />
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