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Chile 1208 generating innovation hubs 2010
Chile 1208 generating innovation hubs 2010
Chile 1208 generating innovation hubs 2010
Chile 1208 generating innovation hubs 2010
Chile 1208 generating innovation hubs 2010
Chile 1208 generating innovation hubs 2010
Chile 1208 generating innovation hubs 2010
Chile 1208 generating innovation hubs 2010
Chile 1208 generating innovation hubs 2010
Chile 1208 generating innovation hubs 2010
Chile 1208 generating innovation hubs 2010
Chile 1208 generating innovation hubs 2010
Chile 1208 generating innovation hubs 2010
Chile 1208 generating innovation hubs 2010
Chile 1208 generating innovation hubs 2010
Chile 1208 generating innovation hubs 2010
Chile 1208 generating innovation hubs 2010
Chile 1208 generating innovation hubs 2010
Chile 1208 generating innovation hubs 2010
Chile 1208 generating innovation hubs 2010
Chile 1208 generating innovation hubs 2010
Chile 1208 generating innovation hubs 2010
Chile 1208 generating innovation hubs 2010
Chile 1208 generating innovation hubs 2010
Chile 1208 generating innovation hubs 2010
Chile 1208 generating innovation hubs 2010
Chile 1208 generating innovation hubs 2010
Chile 1208 generating innovation hubs 2010
Chile 1208 generating innovation hubs 2010
Chile 1208 generating innovation hubs 2010
Chile 1208 generating innovation hubs 2010
Chile 1208 generating innovation hubs 2010
Chile 1208 generating innovation hubs 2010
Chile 1208 generating innovation hubs 2010
Chile 1208 generating innovation hubs 2010
Chile 1208 generating innovation hubs 2010
Chile 1208 generating innovation hubs 2010
Chile 1208 generating innovation hubs 2010
Chile 1208 generating innovation hubs 2010
Chile 1208 generating innovation hubs 2010
Chile 1208 generating innovation hubs 2010
Chile 1208 generating innovation hubs 2010
Chile 1208 generating innovation hubs 2010
Chile 1208 generating innovation hubs 2010
Chile 1208 generating innovation hubs 2010
Chile 1208 generating innovation hubs 2010
Chile 1208 generating innovation hubs 2010
Chile 1208 generating innovation hubs 2010
Chile 1208 generating innovation hubs 2010
Chile 1208 generating innovation hubs 2010
Chile 1208 generating innovation hubs 2010
Chile 1208 generating innovation hubs 2010
Chile 1208 generating innovation hubs 2010
Chile 1208 generating innovation hubs 2010
Chile 1208 generating innovation hubs 2010
Chile 1208 generating innovation hubs 2010
Chile 1208 generating innovation hubs 2010
Chile 1208 generating innovation hubs 2010
Chile 1208 generating innovation hubs 2010
Chile 1208 generating innovation hubs 2010
Chile 1208 generating innovation hubs 2010
Chile 1208 generating innovation hubs 2010
Chile 1208 generating innovation hubs 2010
Chile 1208 generating innovation hubs 2010
Chile 1208 generating innovation hubs 2010
Chile 1208 generating innovation hubs 2010
Chile 1208 generating innovation hubs 2010
Chile 1208 generating innovation hubs 2010
Chile 1208 generating innovation hubs 2010
Chile 1208 generating innovation hubs 2010
Chile 1208 generating innovation hubs 2010
Chile 1208 generating innovation hubs 2010
Chile 1208 generating innovation hubs 2010
Chile 1208 generating innovation hubs 2010
Chile 1208 generating innovation hubs 2010
Chile 1208 generating innovation hubs 2010
Chile 1208 generating innovation hubs 2010
Chile 1208 generating innovation hubs 2010
Chile 1208 generating innovation hubs 2010
Chile 1208 generating innovation hubs 2010
Chile 1208 generating innovation hubs 2010
Chile 1208 generating innovation hubs 2010
Chile 1208 generating innovation hubs 2010
Chile 1208 generating innovation hubs 2010
Chile 1208 generating innovation hubs 2010
Chile 1208 generating innovation hubs 2010
Chile 1208 generating innovation hubs 2010
Chile 1208 generating innovation hubs 2010
Chile 1208 generating innovation hubs 2010
Chile 1208 generating innovation hubs 2010
Chile 1208 generating innovation hubs 2010
Chile 1208 generating innovation hubs 2010
Chile 1208 generating innovation hubs 2010
Chile 1208 generating innovation hubs 2010
Chile 1208 generating innovation hubs 2010
Chile 1208 generating innovation hubs 2010
Chile 1208 generating innovation hubs 2010
Chile 1208 generating innovation hubs 2010
Chile 1208 generating innovation hubs 2010
Chile 1208 generating innovation hubs 2010
Chile 1208 generating innovation hubs 2010
Chile 1208 generating innovation hubs 2010
Chile 1208 generating innovation hubs 2010
Chile 1208 generating innovation hubs 2010
Chile 1208 generating innovation hubs 2010
Chile 1208 generating innovation hubs 2010
Chile 1208 generating innovation hubs 2010
Chile 1208 generating innovation hubs 2010
Chile 1208 generating innovation hubs 2010
Chile 1208 generating innovation hubs 2010
Chile 1208 generating innovation hubs 2010
Chile 1208 generating innovation hubs 2010
Chile 1208 generating innovation hubs 2010
Chile 1208 generating innovation hubs 2010
Chile 1208 generating innovation hubs 2010
Chile 1208 generating innovation hubs 2010
Chile 1208 generating innovation hubs 2010
Chile 1208 generating innovation hubs 2010
Chile 1208 generating innovation hubs 2010
Chile 1208 generating innovation hubs 2010
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Chile 1208 generating innovation hubs 2010

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  • 1. Generating High Growth Innovation Hubs<br />Steve Blank<br />www.steveblank.com<br />Twitter: sgblank<br />
  • 2. A Few Short Stories<br />Silicon Valley History<br />All Startups Are Not the Same<br />Why Startups and Companies Differ<br />E- School Versus B-School<br />
  • 3. To predict the future you need to understand the past<br />
  • 4. Internet<br />PersonalComputers<br />IntegratedCircuits<br />FruitOrchards<br />FruitOrchards<br />FruitOrchards<br />The Popular View of Silicon Valley History<br />Marc Andreessen<br />Steve Jobs<br />Moore/Noyce<br />Hewlett & Packard<br />Innovation Networks<br />1910<br />1960<br />1970<br />1980<br />2000<br />1990<br />1930<br />1940<br />1950<br />1920<br />
  • 5. Internet<br />PersonalComputers<br />IntegratedCircuits<br />Microwaves/Defense<br />TestEquipment<br />VacuumTubes<br />The Real Story of Silicon Valley History<br />Venture Capital<br />Innovation Networks<br />1910<br />1960<br />1970<br />1980<br />2000<br />1990<br />1930<br />1940<br />1950<br />1920<br />
  • 6. Story 1: WWII The First Electronic War<br />
  • 7. <ul><li>The American’s by Day
  • 8. Precision Bombing
  • 9. B-17’s
  • 10. B-24’s
  • 11. Flew at 15 - 25 thousand feet</li></ul>Strategic Bombing of Germany The Combined Bomber Offensive<br />British bombed at Night<br />Area Bombing<br />Lancaster's<br />Halifax<br />Flew at 7 - 17 thousand feet<br />
  • 12. Math ChallengeFor every 100 bombers on a mission 4 - 20% would not return<br />Crews had to fly 25 mission to go home<br />
  • 13. Story 2: The Electronic Shield – Electronic Warfare<br />
  • 14. Harvard Radio Research Lab (RRL) Signals Intelligence and Electronic Warfare<br />Reduce losses to fighters and flak<br />Find/understand German Air Defense <br />Electronic and Signals Intelligence<br />Jam/confuse German Air Defense<br />Radar Order of Battle<br />Chaff<br />Jammers<br />Top Secret 800 person lab<br />
  • 15. Electronically Blind German RadarJam the Radars with Noise<br />MANDREL<br />Jammer<br />Put Jammers on Airplanes<br />Jam and shut down <br />Early Warning Radars<br />Anti-aircraft Radars<br />Fighter Radars<br />Ground Control Radars<br />Built over 30,000 jammers<br />DINA<br />Jammer<br />
  • 16. Who Ran this Secret Lab and became the Father of Electronic Warfare?<br />Harvard Radio Research Lab<br />Ran all electronic warfare in WWII <br />800 people<br />Director: Fredrick Terman - Stanford<br />
  • 17. Fredrick Terman“the Father of Silicon Valley”<br />Stanford Professor of engineering 1926<br />encouraged his students, William Hewlett and David Packard to start a company<br />Dean of Engineering 1946<br />Provost 1955<br />
  • 18. Story 3: Stanford And The Cold War<br />
  • 19. WWII Office of Scientific Research and Development (OSRD)<br />$450 million spent on weapons R&D <br />MIT $117 million<br />Caltech $83 million<br />Harvard and Columbia ~ $30 million<br />Stanford ~ $50K<br />
  • 20. Terman’s PostwarStrategy<br />Focus on microwaves and electronics<br />Not going to be left out of gov’t $’s this time<br />Recruits 11 members of war lab as faculty<br />By 1950 Stanford was the MIT of the West<br />Students came from all over the U.S. <br />
  • 21. Stanford Spinouts - Microwave Components<br />Microwave Tube Startups:Klystrons, BWO’s, & TWT’s<br />Eitel-McCullough (1934)<br />Varian Associates (1948)<br />Litton Industries (1946)<br />Huggins Laboratories (1948)<br />Stewart Engineering (1952) <br />Watkins-Johnson (1957)<br />Microwave Electronics Co. (1959)<br />
  • 22. The Cold War and Stanford<br />The Cold War battlefield moves 500 miles east<br />Countermeasures, ELINT become critical<br />Stanford becomes a center of excellence for the CIA, NSA, Navy, Air Force<br />400-person weapons lab in engineering department<br />
  • 23. Lockheed Comes to Town - 1956<br />Polaris missile SLBM<br />Built by Lockheed Missiles Division in Sunnyvale<br />20,000 employees by 1960 <br />From 0 in 4 years<br />HP: 3,000 employees 1960<br />
  • 24. Stanford Spinouts - Military Systems <br />Sylvania Electronics Defense Laboratory (1953)<br />GE Microwave Laboratory (1956)<br />Granger Associates (1956)<br />Applied Technology (1959)<br />Electronic Systems Laboratories (ESL) (1964)<br />Argo Systems (1969)<br />Advent Systems (1972)<br />
  • 25. Terman Changes the Startup/University RulesSilicon Valley as We Know it Starts Here<br />Graduate students encouraged to start companies<br />Professors encouraged to consult for companies<br />Terman and other professors take board seats<br />Technology transfer/IP licensing easy<br />Getting out in the real world was good for your academic career<br />Failure was accepted as part of the culture<br />
  • 26. Entrepreneurs<br />WeaponsFinance<br />Crisis<br />Profit<br />Motivation<br />Customer <br />Development<br />Mgmt Tools<br />Agile<br />Development<br />Business ModelDesign<br />Design Thinking<br />Stanford and the Cold War Silicon Valley’s 1st Wave<br />Risk Taking<br />Culture<br />Entrepreneurial<br />Outward-Facing<br />Tech Universities<br />Free flow of<br />People/Info<br />Infrastructure<br />24/7 Utilities<br />Predictable<br />Economic System<br />Stable<br />Legal System<br />Research<br />Universities<br />
  • 27. Story 4: 1956 - The Year it Becomes Silicon Valley<br />
  • 28. Meanwhile, on the Other Side of Town…<br />The Head of Radar Bombing training for Air Force starts a Company<br />
  • 29. Internet<br />PersonalComputers<br />IntegratedCircuits<br />Microwaves/Defense<br />TestEquipment<br />VacuumTubes<br />The Real Story of Silicon Valley History<br />Venture Capital<br />Innovation Networks<br />1910<br />1960<br />1970<br />1980<br />2000<br />1990<br />1930<br />1940<br />1950<br />1920<br />
  • 30. William Shockley“The Other Father of Silicon Valley”<br />Director of Navy anti-submarine warfare<br />Head of Radar Bombing training for Air Force<br />Co-inventor of the transistor <br />Nobel Prize in 1956<br />Founded Shockley Semiconductor 1956<br />
  • 31. William Shockley“Great Researcher, Awesome Talent Spotter, Horrible Manager”<br />Unintended consequences: “The traitorous 8” leave Shockley <br /> found Fairchild Semiconductor<br />1st VC-backed startup<br />Noyce & Moore leave Fairchild to start Intel<br />65 other chip companies in the next 20 years<br />
  • 32. Semiconductor Genealogy: 1955 - 1976<br />
  • 33. Story 5: The Rise of VentureCapital<br />
  • 34. Internet<br />PersonalComputers<br />IntegratedCircuits<br />Microwaves/Defense<br />TestEquipment<br />VacuumTubes<br />The Real Story of Silicon Valley History<br />Venture <br />Capital<br />Innovation Networks<br />1910<br />1960<br />1970<br />1980<br />2000<br />1990<br />1930<br />1940<br />1950<br />1920<br />
  • 35. The Rise of Risk CapitalFamily Money 1940’s - 1960’s<br />J.H. Whitney <br />1st family office 1946<br />Laurance Rockefeller<br />Draper Gaither & Anderson (1st limited Partnership) 1958<br />Spun out as Venrock in 1969<br />Bessemer<br />East Coast focus<br />Wide variety of industries<br />
  • 36. The Valley Attracts Financial AttentionThe 1st West Coast IPO’s<br />1956 Varian <br />1957 Hewlett Packard<br />1958 Ampex <br />
  • 37. The Rise of Risk CapitalSBIC Act of 1958<br />Cold war program – Sputnik motivated<br />Gov’tmatch of private investments 3:1<br />700 SBIC funds by 1965 <br />75% of all VC funding in 1968<br />7% in 1988<br />Replaced by the Limited Partnership<br />
  • 38. The Rise of Venture CapitalThe Limited Partnership<br />Raise money from pension funds, private universities, wealthy individuals – the limited partners<br />Investment professionals manage the fund – the general partners i.e. the VC’s<br />Compensate the general partners via the “2 and 20”<br />2% management fee, 20% carried interest (i.e. of the profits)<br /><ul><li>Draper Gaither & Anderson 1958
  • 39. Rock and Davis 1961
  • 40. Sutter Hill 1964
  • 41. Patricof & Co. 1969
  • 42. Kleiner Perkins 1972
  • 43. Sequoia Capital 1972</li></li></ul><li>The Rise of Risk Capital1978/1979 - A Watershed<br />Capital gains slashed (1978)<br />49.5% to 28%<br />Employee Retirement Income Security Act (1979) <br />Pension funds can invest <br />
  • 44. Entrepreneurs<br />VentureFinance<br />Crisis<br />Profit<br />Motivation<br />Customer <br />Development<br />Mgmt Tools<br />Agile<br />Development<br />Business ModelDesign<br />Design Thinking<br />Venture CapitalSilicon Valley’s 2nd Wave<br />Risk Taking<br />Culture<br />Entrepreneurial<br />Outward-Facing<br />Tech Universities<br />Free flow of<br />People/Info<br />Infrastructure<br />24/7 Utilities<br />Predictable<br />Economic System<br />Stable<br />Legal System<br />Research<br />Universities<br />
  • 45. Story 6:Entrepreneurship as a Management Science<br />Not All Startups Are Equal<br />
  • 46. Companies Get Educated<br />Gov’t charted companies ~1600’s<br />Modern corporations ~1800’s<br />Business Schools to educate corporate execs<br />Organize body of knowledge<br />First Harvard MBA – 1908<br />
  • 47. Startups Get Educated<br />Every company began as a startup<br />Modern startups ~ 1950’s<br />Venture funded startups ~1970’s<br />Entrepreneurship Schools to educate founders<br />Organize body of knowledge<br />Emerging now<br />
  • 48. Wait a Minute…Aren’t Startups Small Versions of Large Companies?<br />50 Years of Experience Says NO<br />
  • 49. Story 7:Not All Startups Are Equal<br />Small Business<br />Scalable Startups<br />Large Company Innovation<br />
  • 50. Small Business<br />Startup<br />Exit Criteria<br /><ul><li> Business Model found</li></ul>- Profitable business<br /><ul><li> Existing team</li></ul>< $1M in revenue<br />Small Business Startups<br /><ul><li>known customer known product
  • 51. Feed the family</li></li></ul><li>Small Business Startup:Internet Edition<br />Small Business<br />Startup<br />- Business Model found<br />- Profitable business<br /><ul><li> Existing team</li></ul>< $10M in revenue<br /><ul><li>The Internet allows a new class of Small Businesses
  • 52. Not all businesses on the Internet are “Scalable Startups”</li></li></ul><li>Scalable<br />Startup<br />Large Company<br />>$100M/year<br />Exit Criteria<br /><ul><li>Total Available Market > $500m
  • 53. Can grow to $100m/year
  • 54. Business model found
  • 55. Focused on execution and process</li></ul>Scalable Startup<br />Execute<br />Search<br />A Startup is a temporary organization used tosearch for a scalable business model <br />
  • 56. Scalable<br />Startup<br />Large Company<br />>$100M/year<br /><ul><li>Total Available Market > $500m
  • 57. Can grow to $100m/year
  • 58. Business model found
  • 59. Focused on execution and process
  • 60. Typically requires “risk capital”</li></ul>Scalable Startup<br />Execute<br />Search<br /><ul><li> In contrast a scalable startup is designed to grow big
  • 61. Typically needs risk capital
  • 62. What Silicon Valley means when they say “Startup”</li></li></ul><li>What VC’s Don’t Tell You:The Transition – Founders Leave<br />Build<br />Execute<br />Search<br />Scalable<br />Startup<br />Transition<br />Large Company<br /><ul><li>Founders depart
  • 63. Professional Mgmt
  • 64. Process
  • 65. Beginning of scale</li></li></ul><li>Large Company Sustaining Innovation<br />Sustaining Innovation<br />Transition<br />Scalable<br />Startup<br />Large Company<br /><ul><li>Existing Market / Known customer
  • 66. Known product feature needs</li></li></ul><li>Large Company Disruptive Innovation<br />New Division<br />Transition<br />Large Company<br />Disruptive Innovation<br /><ul><li> New Market / Unknown customer needs
  • 67. New tech / Unknown product features
  • 68. Looks like a scalable startup</li></li></ul><li>Story 8:Why Startups Are Not Small Versions of Large Companies<br />
  • 69. Startups Search, Companies Execute<br />The Search for the Business Model<br />Scalable<br />Startup<br />Transition<br />Large Company<br />Business Model found<br /><ul><li> customer needs/product features found</li></ul> i.e. Product/Market fit<br /><ul><li> Found by founders, not employees
  • 70. Repeatable sales model</li></ul>- Managers hired<br />
  • 71. Startups Search, Companies Execute<br />The Execution of the Business Model<br />The Search for the Business Model<br />Scalable<br />Startup<br />Transition<br />Large Company<br />- Cash-flow breakeven<br />- Profitable<br />- Rapid scale<br />- New Senior Mgmt<br />~ 150 people<br /><ul><li>Business Model found
  • 72. Product/Market fit</li></ul>- Repeatable sales model<br />- Managers hired<br />
  • 73. Customer Validation Versus Sales<br />The Execution of the Business Model<br />Scalable<br />Startup<br />Transition<br />Large<br />Company<br />Sales<br /><ul><li>Sales Organization
  • 74. Scalable
  • 75. Price List/Data Sheets
  • 76. Revenue Plan</li></li></ul><li>Customer Validation Versus Sales<br />The Search for the Business Model<br />The Execution of the Business Model<br />Scalable<br />Startup<br />Transition<br />Large<br />Company<br />Customer Validation<br /><ul><li> Early Adopters
  • 77. Pricing/Feature unstable
  • 78. Not yet repeatable
  • 79. “One-off’s”
  • 80. Done by founders</li></ul>Sales<br /><ul><li> Sales Organization
  • 81. Scalable
  • 82. Price List/Data Sheets
  • 83. Revenue Plan</li></li></ul><li>Engineering Versus Agile Development<br />The Execution of the Business Model<br />Scalable<br />Startup<br />Transition<br />Large Company<br />Engineering<br /><ul><li> Requirements Docs.
  • 84. Waterfall Development
  • 85. QA
  • 86. Tech Pubs</li></li></ul><li>Engineering Versus Agile Development<br />The Search for the Business Model<br />The Execution of the Business Model<br />Scalable<br />Startup<br />Transition<br />Large Company<br />Engineering<br /><ul><li> Requirements Docs.
  • 87. Waterfall Development
  • 88. QA
  • 89. Tech Pubs</li></ul>Agile Development<br /><ul><li> Continuous Deployment
  • 90. Continuous Learning
  • 91. Self Organizing Teams
  • 92. Minimum Feature Set
  • 93. Pivots</li></li></ul><li>Metrics Versus Accounting<br />The Execution of the Business Model<br />Scalable<br />Startup<br />Transition<br />Large<br />Company<br />Traditional Accounting<br /><ul><li>Balance Sheet
  • 94. Cash Flow Statement
  • 95. Income Statement</li></li></ul><li>Metrics Versus Accounting<br />The Search for the Business Model<br />The Execution of the Business Model<br />Scalable<br />Startup<br />Transition<br />Large<br />Company<br />Startup Metrics<br /><ul><li> Customer Acquisition Cost
  • 96. Viral coefficient
  • 97. Customer Lifetime Value
  • 98. Average Selling Price/Order Size
  • 99. Monthly burn rate
  • 100. etc. </li></ul>Traditional Accounting<br /><ul><li> Balance Sheet
  • 101. Cash Flow Statement
  • 102. Income Statement</li></li></ul><li>Risk Versus Safety<br />The Execution of the Business Model<br />Scalable<br />Startup<br />Transition<br />Large Company<br /><ul><li>Lots to Lose
  • 103. Reduce risk
  • 104. Optimize certainty
  • 105. Protect profits</li></li></ul><li>Risk Versus Safety<br />The Search for the Business Model<br />The Execution of the Business Model<br />Scalable<br />Startup<br />Transition<br />Large Company<br /><ul><li> Nothing to lose
  • 106. No profits to risk
  • 107. Searching equals risk
  • 108. Pains in the butt
  • 109. Always looking at something different
  • 110. Doesn’t get with the program</li></li></ul><li>Learning Versus Failure<br />The Execution of the Business Model<br />Scalable<br />Startup<br />Transition<br />Large Company<br /><ul><li>Failure impedes execution
  • 111. Affects revenue/profit
  • 112. Reflects on individual/organization
  • 113. Covered up</li></li></ul><li>Learning Versus Failure<br />The Search for the Business Model<br />The Execution of the Business Model<br />Scalable<br />Startup<br />Transition<br />Large Company<br /><ul><li> Failure = learning
  • 114. Normal part of startups
  • 115. Not a crisis
  • 116. Shared, lessons learned
  • 117. Iterations and Pivots
  • 118. Pains in the butt
  • 119. Always looking at something different
  • 120. Doesn’t get with the program</li></li></ul><li>Story 9:Plan versus Model<br />
  • 121. Business Plan<br />A document your investors make you write that they don’t read<br />A useful place for you to collect your guesses about your business<br /><ul><li>Size of Opportunity
  • 122. Customers
  • 123. Channel
  • 124. Demand Creation
  • 125. Revenue/Expenses/Profit</li></ul>The template to look like everyone else when you present to VC’s/Management <br />
  • 126. No Business Plan survives first contact with customers<br />
  • 127. So Search for a Business Model<br />
  • 128. What Is a Business Model?<br />Diagram of flows between company and customers<br />Scorecard of hypotheses testing<br />Rapid change with each iteration and pivot<br />Founder-driven<br />* Alex Osterwalder<br />
  • 129. 9 building blocks of a business model:<br />
  • 130. CUSTOMER SEGMENTS<br />which customers and users are you serving? <br />which jobs do they really want to get done?<br />
  • 131. VALUE PROPOSITIONS<br />what are you offering them? what is that <br />getting done for them? do they care?<br />
  • 132. CHANNELS<br />how does each customer segment want to be reached? through which interaction points?<br />
  • 133. CUSTOMER RELATIONSHIPS<br />what relationships are you establishing with each segment? personal? automated? acquisitive? retentive?<br />
  • 134. REVENUE STREAMS<br />what are customers really willing to pay for? how? <br />are you generating transactional or recurring revenues?<br />
  • 135. KEY RESOURCES<br />which resources underpin your business model? which assets are essential?<br />
  • 136. KEY ACTIVITIES<br />which activities do you need to perform well in your business model? what is crucial?<br />74<br />
  • 137. KEY PARTNERS<br />which partners and suppliers leverage your model? <br />who do you need to rely on?<br />
  • 138. COST STRUCTURE<br />what is the resulting cost structure? <br />which key elements drive your costs?<br />
  • 139. 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 />77<br />images by JAM<br />
  • 140. sketch out your business model<br />
  • 141. building<br />block<br />building<br />block<br />building<br />block<br />building<br />block<br />building<br />block<br />building<br />block<br />building<br />block<br />building<br />block<br />building<br />block<br />building<br />block<br />building<br />block<br />building<br />block<br />
  • 142. But,Realize They’re Hypotheses<br />
  • 143. 9 Guesses<br />Guess<br />Guess<br />Guess<br />Guess<br />Guess<br />Guess<br />Guess<br />Guess<br />Guess<br />
  • 144. How Do Startups Search For A Business Model?<br /><ul><li> The Search is called Customer Development
  • 145. The Implementation is called Agile Development</li></li></ul><li>Customer Development<br />Solving For Customer Risk<br />
  • 146. Story 10:Why Startups Fail<br />
  • 147. Traditional Product Introduction Model:Two Implicit Assumptions<br />Customer Problem: known<br />Concept<br />Product Dev.<br />Alpha/Beta Test<br />Launch/<br />1st Ship<br /> Product Features: known<br />
  • 148. More startups fail from a lack of customers than from a failure of product development<br />
  • 149. Story 11:Customer Development<br />The founders<br />^<br />Get Out of the Building<br />
  • 150. Product Development<br />Concept/Bus. Plan<br />Product Dev.<br />Alpha/Beta Test<br />Launch/1st Ship<br />CustomerDevelopment<br />Company<br />Building<br />CustomerDiscovery<br />CustomerValidation<br />Customer Creation<br />Customer Development<br />Pivot<br />
  • 151. 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 />
  • 152. Test Hypotheses:<br /><ul><li>Product
  • 153. Market Type
  • 154. Competition</li></ul>Turning Hypotheses to Facts<br />
  • 155. Test Hypotheses:<br /><ul><li>Problem
  • 156. Customer
  • 157. User
  • 158. 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
  • 159. Customer
  • 160. User
  • 161. Payer</li></ul>Test Hypotheses:<br /><ul><li>Product
  • 162. Market Type
  • 163. Competitive</li></ul>Test Hypotheses:<br /><ul><li>Channel
  • 164. (Customer)
  • 165. (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
  • 166. Validate Business Model</li></li></ul><li>Test Hypotheses:<br /><ul><li>Demand Creation</li></ul>Test Hypotheses:<br /><ul><li>Problem
  • 167. Customer
  • 168. User
  • 169. Payer</li></ul>Agile Development<br />Test Hypotheses:<br /><ul><li>Product
  • 170. Market Type
  • 171. Competitive</li></ul>Test Hypotheses:<br /><ul><li>Channel
  • 172. (Customer)
  • 173. (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
  • 174. Validate Business Model</li></li></ul><li>Test Hypotheses:<br /><ul><li>Demand Creation</li></ul>Test Hypotheses:<br /><ul><li>Problem
  • 175. Customer
  • 176. User
  • 177. Payer</li></ul>Agile Development<br />Test Hypotheses:<br /><ul><li>Product
  • 178. Market Type
  • 179. Competitive</li></ul>Test Hypotheses:<br /><ul><li>Channel
  • 180. (Customer)
  • 181. (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
  • 182. Validate Business Model</li></li></ul><li>The Pivot<br /><ul><li>The heart of Customer Development
  • 183. Iteration without crisis
  • 184. Fast, agile and opportunistic</li></li></ul><li>Entrepreneurs<br />Angel / VentureFinance<br />Crisis<br />Profit<br />Motivation<br />Customer <br />Development<br />Mgmt Tools<br />Agile<br />Development<br />Business ModelDesign<br />Design Thinking<br />Entrepreneurship as A Mgmt ScienceSilicon Valley’s 3rd Wave<br />Risk Taking<br />Culture<br />Entrepreneurial<br />Outward-Facing<br />Tech Universities<br />Free flow of<br />People/Info<br />Infrastructure<br />24/7 Utilities<br />Predictable<br />Economic System<br />Stable<br />Legal System<br />Research<br />Universities<br />
  • 185. Story 12:Entrepreneurship as a Management Science<br />E-School instead of B-School<br />
  • 186. Business School Versus Entrepreneurship School<br />Business School<br />Scalable<br />Startup<br />Transition<br />Large Company<br /><ul><li>Execution
  • 187. Strategy
  • 188. Accounting
  • 189. Products
  • 190. Engineering
  • 191. Management
  • 192. Administration</li></li></ul><li>Business School Versus Entrepreneurship School<br />Entrepreneurship School<br />Business School<br />Scalable<br />Startup<br />Transition<br />Large Company<br /><ul><li>Hypothesis testing
  • 193. Business Model testing
  • 194. Customer Development
  • 195. Agile Development
  • 196. Metrics
  • 197. Venture Finance
  • 198. Design Thinking
  • 199. Execution
  • 200. Accounting
  • 201. Products
  • 202. Engineering
  • 203. Management
  • 204. Administrative</li></li></ul><li>Business School Courses Versus Entrepreneurship Courses<br />Business School<br />Scalable<br />Startup<br />Transition<br />Large Company<br />Courses<br /><ul><li>Managerial Finance/Accounting
  • 205. Managing Groups and Teams
  • 206. Financial Accounting
  • 207. Operations
  • 208. Modeling for Optimization
  • 209. Global Value Chain Strategies</li></li></ul><li>Business School Versus Entrepreneurship Courses<br />Business School<br />Entrepreneurship School<br />Scalable<br />Startup<br />Transition<br />Large Company<br />Courses<br /><ul><li> Lean Launchpad
  • 210. Customer/Agile Development
  • 211. Business Model Design
  • 212. Entrepreneurial Management
  • 213. Creativity and Innovation
  • 214. Entrepreneurial Finance</li></ul>Courses<br /><ul><li> Managerial Finance/Accounting
  • 215. Managing Groups and Teams
  • 216. Financial Accounting
  • 217. Operations
  • 218. Modeling for Optimization
  • 219. Global Value Chain Strategies</li></li></ul><li>E-School Will Emerge<br /><ul><li> Entrepreneurial Education will change radically
  • 220. E-School Students are not B-School Students
  • 221. Entrepreneurship as its own management science</li></li></ul><li>Story 13:Why Accountants Don’t Run Startups<br />
  • 222. Inventor of the Modern Corporation<br />Scalable<br />Startup<br />Transition<br />Large Company<br />
  • 223. Inventor of the Modern Corporation<br />Scalable<br />Startup<br />Transition<br />Large Company<br />Alfred P. Sloan<br />
  • 224. Alfred P. Sloan<br />Scalable<br />Startup<br />Transition<br />Large Company<br />General Motors, President/Chairman<br /><ul><li> Cost Accounting
  • 225. MIT Sloan School
  • 226. Sloan Foundation
  • 227. etc. </li></li></ul><li>Founder of General Motors<br />Scalable<br />Startup<br />Transition<br />Large Company<br />
  • 228. Founder of General Motors<br />Scalable<br />Startup<br />Transition<br />Large Company<br />Billy Durant<br />
  • 229. Billy Durant<br />Scalable<br />Startup<br />Transition<br />Large Company<br /><ul><li> Leader in horse-drawn buggy’s
  • 230. Fired by board, starts Chevrolet
  • 231. Regains control of GM
  • 232. Fired by board, GM ~$3.6 billion*</li></ul>* GM Net sales in 1921 $304.5M = $3.6 Billion today<br />
  • 233. Durant Versus Sloan<br />Scalable<br />Startup<br />Transition<br />Large Company<br />
  • 234. Durant Versus Sloan<br /><ul><li>Dies, rich, honored and famous</li></li></ul><li>Durant Versus Sloan<br /><ul><li>Dies managing a bowling alley
  • 235. Dies, rich, honored and famous</li></li></ul><li>Durant Versus Sloan<br />Accountant<br /><ul><li>Dies managing a bowling alley
  • 236. Dies, rich, honored and famous</li></li></ul><li>You are here<br />Scalable<br />Startup<br />Transition<br />Large Company<br />
  • 237. Entrepreneurs<br />Angel / VentureFinance<br />Crisis<br />Profit<br />Motivation<br />Customer <br />Development<br />Mgmt Tools<br />Agile<br />Development<br />Business ModelDesign<br />Design Thinking<br />Where is Chile?<br />Risk Taking<br />Culture<br />Entrepreneurial<br />Outward-Facing<br />Tech Universities<br />Free flow of<br />People/Info<br />Infrastructure<br />24/7 Utilities<br />Predictable<br />Economic System<br />Stable<br />Legal System<br />Research<br />Universities<br />
  • 238. Lessons Learned<br />Culture needs to support and encourage risk<br />Failure is integral to the startup process<br />Technology hubs must be magnets for engineers <br />But they cluster around industry specialties<br />In what area will Chile build a world-class hub?<br />E-School reduces early stage startup risk<br />Healthy Venture Capital industry = large profits<br />Chilean market not large enough <br />Teach startups how to go global early<br />
  • 239. I Write a Blog <br />www.steveblank.com<br />
  • 240. This Presentation Combines<br />www.businessmodelgeneration.com<br />www.steveblank.com<br />
  • 241. Thanks<br />www.steveblank.com<br />

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