University of California at Berkeley – <br />Haas School of Business / Columbia Business School<br />Advanced Entrepreneurship XMBA 296T<br />The Lean LaunchPad <br />Lead Instructor: Steve BlankCo-Instructor: Jon Feiber, Jim Hornthal<br />Class Format: Lecture and tens of hours of work talking to customers<br />Units of Credit: 2<br />Required Texts: <br /><ul><li>Steven Blank, Four Steps to the Epiphany </li></ul>http://www.stevenblank.com/books.html<br /><ul><li>Alexander Osterwalder & Yves Pigneur, Business Model Generation http://www.businessmodelgeneration.com/order.php
Jessica Livingston, Founders at Work http://www.amazon.com/gp/product/1590597141</li></ul>This class requires pre-class preparation and lots of out of the classroom work. Read http://steveblank.com/category/lean-launchpad/ from the bottom up to get an idea.<br />Prerequisite: interest/passion in discovering how an idea can become a real company. Ability to work insanely hard in a team environment and take critical feedback dispassionately. Build a product and get orders in a semester. <br />Goal: provide an experiential learning opportunity showing how startups really get built.<br />Course Description: <br />This course provides real world, hands-on learning on what it’s like to actually start a high-tech company. This class is not about how to write a business plan. It’s not an exercise on how smart you are in a classroom, or how well you use the research library to size markets. And the end result is not a PowerPoint slide deck for a VC presentation. And it is most definitely not an incubator where you come to build the “hot-idea” you. This is a practical class – essentially a lab, not a theory or “book” class. Our goal, within the constraints of a classroom and a limited amount of time, is to create an entrepreneurial experience for you with all of the pressures and demands of the real world in an early stage start up.<br />You will be getting your hands dirty talking to customers, partners, competitors, as you encounter the chaos and uncertainty of how a startup actually works. You’ll work in teams learning how to turn a great idea into a great company. You’ll learn how to use a business model to brainstorm each part of a company and customer development to get out of the classroom to see whether anyone other than you would want/use your product. Finally, based on the customer and market feedback you gathered, you would use agile development to rapidly iterate your product to build something customers would actually use and buy. Each block will be new adventure outside the classroom as you test each part of your business model and then share the hard earned knowledge with the rest of the class.<br />See http://steveblank.com/category/lean-launchpad/ for a week-by-week narrative of a past class.<br />Class Culture<br />Startups communicate much differently than inside a large company. It is dramatically different from a large company culture most of you are familiar with. At times it can feel brusque and impersonal, but in reality is focused and oriented to create immediate action in time- and cash-constrained environments. We have limited time and we push, challenge, and question you in the hope you will quickly learn. We will be direct, open, and tough – just like the real world. We hope you can recognize that these comments aren’t personal, but part of the process. <br />We also expect you to question us, challenge our point of view if you disagree, and engage in a real dialog with the teaching team. This approach may seem harsh or abrupt, but it is all part of our wanting you to learn to challenge yourselves quickly and objectively, and to appreciate that as entrepreneurs you need to learn and evolve faster than you ever imagined possible. <br />Amount of Work<br />This class requires a phenomenal amount of work on your part, certainly compared to many other classes. Projects are treated as real start-ups, so the workload will be intense. Teams have reported up to 20 hours of work each per week. Getting out of the classroom is what the effort is about. It’s not about the lectures. You will be spending a significant amount of time in between each of the lectures outside your lab talking to customers. If you can’t commit the time to talk to customers, this class is not for you.<br />This class is a simulation of what startups and entrepreneurship is like in the real world: chaos, uncertainly, impossible deadlines in insufficient time, conflicting input, etc. <br />This class pushes many people past their comfort zone. It's not about you, but it's also not about the class or the teaching team. This is what startups are like (and the class is just small part of what it is really like.) The pace and the uncertainty pick up as the class proceeds.<br />Team Organization: You will be admitted as a team. Teams must submit a proposal for entry before the class begins. Projects must be approved before the class.<br />Proposals can be software, physical product, or service of any kind. The teams will self-organize and establish individual roles on their own. There are no formal CEO/VP’s. Just the constant parsing and allocating of the tasks that need to be done.<br />Besides the instructors and TA’s, each team will be assigned a mentor (an experienced entrepreneur or VC) to provide assistance and support. <br />Suggested Projects: While your first instinct may be a web-based startup we suggest that you consider a subject in which you/a team member are a domain expert. In all cases, you should choose something for which you have passion, enthusiasm, and hopefully some expertise. Teams that select a web-based product will have to build the website for the class. Teams that select a physical product must have a bill of material and a prototype.<br />Deliverables: <br />1) if you’re a physical product you must show us a costed bill of materials and a prototype. If you’re a web product you need to build it and have customers using it. See http://steveblank.com/2011/09/22/how-to-build-a-web-startup-lean-launchpad-edition/2) Your weekly blog is an integral part of your deliverables. It’s how we measure your progress (along with your in-class Powerpoint presentations.)<br />Grading Criteria: this course is team-based and 85% of your grade will come from your team progress and final project. The grading criteria are broken down as follows:<br /><ul><li>15%Individual participation in class. You will be giving feedback to your peers.
40%out-of-the-building progress as measured by blog write-ups each week. </li></ul>Team members must:1) update business model canvas each block2) identify which team member did which portion of the work.3) detailed report on what the team did each week4) weekly email of team member participation<br /><ul><li>20%team “lesson learned” summaries (see appendix for format)
25%team final report (see Dec 1st class for format)</li></ul>The teaching team uses a shared Google doc during team presentations each week and has a running, on-line dialog about team presentation and grade. <br />Receiving Critical Feedback<br /><ul><li>For many of you this is the first time in your professional careers being critiqued and challenged publicly. To a few it may be a culture shock: a respect issue.
The comments and critiques provided by the teaching team is probably the kindest feedback you will ever hear in a startup or a boardroom. In our world this is considered constructive input. We want to provide you with an environment that feels safe to learn in.
Understand that the teaching team is your biggest fan and cheering for your success. However, startups communicate much differently than inside a large company. We hope you can recognize that these comments aren’t personal, but part of the process.
If this is not a style you feel comfortable with, and you cannot hear past what you are interpreting as personal affronts, we strongly suggest that you not apply to this class. </li></ul>Class Roadmap<br />Each blocks classes are organized around: <br /><ul><li>Student presentations on their “lessons learned” from getting out of the building and iterating or pivoting their business model.
Comments and suggestions from other teams, and teaching teams on the lessons learned.
A lecture on one of the 9 building blocks of a business model (see diagram below, taken from Business Model Generation).
Each team will capture their progression in learning by keeping an on-line journal/blog/wiki.
Test Hypotheses: Problem Customer User PayerTest Hypotheses: Demand CreationTest Hypotheses: ChannelTest Hypotheses: Product Market Type CompetitiveTest Hypotheses: Pricing Model / PricingTest Hypotheses: Size of Opportunity/Market Validate Business ModelTest Hypotheses: Channel (Customer) (Problem)Customer Development TeamAgile Development</li></ul>“Genius is the ability to make the most mistakes in the shortest amount of time.” Aspiring entrepreneurs need to become fast iterators.<br />Pre-class Preparation<br />Read:<br /><ul><li>pages 1-51 of Osterwalder’s Business Model Generation.
Review the prior class material http://steveblank.com/category/lean-launchpad/</li></ul>Teams:<br /><ul><li>Form teams of 4
Come up with a preliminary company/product idea</li></ul>Idea Approval<br /><ul><li>By Monday August 29th submit your team project for approval to the teaching team</li></ul>NO ONE WILL BE ADMITTED TO THE CLASS WITHOUT BEING PART OF A TEAM AND HAVING AN APPROVED PROJECT<br />Sept 1st 11:30-noon Speed Dating <br />Get additional quick feedback on your initial team business concept from the teaching team.<br />Block 1Sept 1st Intro/Business Model/Customer Development<br />Class Lecture/Out of the Building Assignment:<br />What’s a business model? What are the 9 parts of a business model? What are hypotheses? What is the Minimum Feature Set? What experiments are needed to run to test business model hypotheses? What is market size? How to determine whether a business model is worth doing?<br />Deliverable: Teams in place and projects approved by start of class.<br />Read:<br /><ul><li>Business Model Generation, pp. 118-119, 135-145, skim examples pp. 56-117
Steve Blank, “What’s a Startup? First Principles,” http://steveblank.com/2010/01/25/whats-a-startup-first-principles/
Steve Blank, “Make No Little Plans – Defining the Scalable Startup,” http://steveblank.com/2010/01/04/make-no-little-plans-–-defining-the-scalable-startup/
Steve Blank, “A Startup is Not a Smaller Version of a Large Company”, http://steveblank.com/2010/01/14/a-startup-is-not-a-smaller-version-of-a-large-company/</li></ul>Team Deliverable for tomorrow Sept 2nd :<br /><ul><li>Teams to present their first business model canvas hypotheses for each of the 9 parts of the business model.
Start your blog/wiki/journal</li></ul>Block 1Sept 2nd Testing Value Proposition and Customer Segment<br />Team Deliverable for Today: <br /><ul><li>Team presentations 10 minutes each
Business Model Canvas hypotheses</li></ul>Class Lecture:<br />Value Proposition:<br />What is your product or service? How does it differ from an idea? Why will people want it? Who’s the competition and how does your customer view these competitive offerings? Where’s the market? What’s the minimum feature set? What’s the Market Type? What was your inspiration or impetus? What assumptions drove you to this? What unique insight do you have into the market dynamics or into a technological shift that makes this a fresh opportunity?<br />Customer Segment:<br />Who’s the customer? User? Payer? How are they different? How can you reach them? How is a business customer different from a consumer?<br />Out of the Building Assignment for Sept 22nd:<br />Customer Segment and Value Proposition: <br /><ul><li>Market Size estimates (TAM, SAM, addressable.)
Get out of the building and talk to 10-15 customers face-to-face
Follow-up with Survey Monkey (or similar service) to get more data
Get a low-fidelity web site and running. Use a Minimum Viable Product to test the customer problem</li></ul>Read:<br /><ul><li>Business Model Generation, pp. 161-168 and 226-231
Four Steps to the Epiphany, pp. 30-42, 65-72 and 219-223</li></ul>Block 2Sept 22nd The Channel<br />Team Deliverable for Today: Teams presentations 10 minutes each<br /><ul><li>Update Business Model Canvas (show original, then show what you changed in new slide with changes in Red.) focus on customer segment and value proposition
So Here’s What we Are Going to Do</li></ul>Class Lecture<br />What’s a channel? Direct channels, indirect channels, OEM. Multi-sided markets. B-to-B versus B-to-C channels and sales (business to business versus business to consumer)<br />Block 2Sept 23rd Customer Relationships<br />Class Lecture/Out of the Building Assignment:<br />How do you create end user demand? How does it differ on the web versus other channels? Evangelism vs. existing need or category? General Marketing, Sales Funnel, etc<br />Action: <br />Read: <br /><ul><li>Four Steps to the Epiphany, pp. 52-53, 120-125 and 228-229
Dave McClure, “Startup Metrics for Pirates”,http://www.slideshare.net/dmc500hats/startup-metrics-for-pirates-seedcamp-2008-presentation</li></ul>Watch: Mark Pincus, “Quick and Frequent Product Testing and Assessment”, http://ecorner.stanford.edu/authorMaterialInfo.html?mid=2313 <br />Team Deliverable for Oct 13th:<br /><ul><li>For everyone:
Present and explain your marketing campaign. What worked best and why?
Submit interview notes, present results in class. </li></ul>Block 3Oct 13th The Revenue Model <br />Team Deliverable: Teams presentations 15 minutes each<br /><ul><li>Update Business Model Canvas (show original, then show what you changed in new slide with changes in Red.) focus on Channel and Customer Relationships
So Here’s What we Are Going to Do</li></ul>Class Lecture/Out of the Building Assignment:<br />What’s a revenue model? What types of revenue streams are there? How does it differ on the web versus other channels? What’s a multi-sided market? How does it effect revenue models?<br />Action: What’s your revenue model? <br /><ul><li>How will you package your product into various offerings if you have more than one?
What are your competitors doing?</li></ul>Block 3Oct 14th Key Resources & Key Activities<br />Class Lecture/Out of the Building Assignment:<br />What resources do you need to build this business? How many people? What kind? Any hardware or software you need to buy? Any IP you need to license? How much money do you need to raise? When? Why? Importance of cash flows? When do you get paid vs. when do you pay others?<br />Deliverable for Nov 11th : <br /><ul><li>Assemble an income statement for the your business model. Lifetime value calculation for customers.
Submit interview notes, present results in class.
Update your blog/wiki/journal</li></ul>Block 4 in New YorkNov 11th Cost Structure<br />Team Deliverable for Today: Teams presentations 15 minutes each<br /><ul><li>Update Business Model Canvas (show original, then show what you changed in new slide with changes in Red.) Focus on revenue model, resources and activities
So Here’s What we Are Going to Do</li></ul>Class Lecture:<br />Action: What’s your expense model? <br /><ul><li>What are the key financials metrics for costs in your business model?
Costs vs. ramp vs. product iteration? </li></ul>Block 4 in New York Nov 12th Fund Raising<br />Class Lecture/Out of the Building Assignment:<br />Raising Money and company building. Friends and family, Seed rounds, Series A. Scalable versus buyable startups. Web versus physical products.<br />Deliverable for December 1st <br /><ul><li>Prepare 30 –minute Team Lessons Learned Presentation
Final presentation format document (on class web site.
Steve Blank, “Lessons Learned – A New Type of Venture Capital Pitch”, http://steveblank.com/2009/11/12/“lessons-learned”-–-a-new-type-of-vc-pitch/
Steve Blank, “Raising Money Using Customer Development”, http://steveblank.com/2009/11/05/raising-money-with-customer-development/
Business Model Generation, pp. 216-224</li></ul>Block 5 Dec 1st Team Presentations of Lessons Learned (class starts at noon)<br /> Dec 2nd Team Presentations of Lessons Learned (in Pescadero)<br />Deliverable: Each team will present a 30 minute “Lessons Learned” presentation about their business.<br />Slide 1 – Team Name, with a few lines of what you initial idea was and the size of the opportunity <br />Slide 2 – Team members – name, background, expertise and your role for the team<br />Slide 3 - Business Model Canvas Version 1 (use the Osterwalder Canvas do not make up your own).<br />Here was our original idea. <br />Slide 4 - So here’s what we did (explain how you got out of the building)<br />Slide 5 – So here’s what we found (what was reality) so then, …<br />Slide 6 - Business Model Canvas Version 2 (use the Osterwalder Canvas do not make up your own).<br />We iterated or pivoted… explain why and what you found.<br />Slide 7 - So here’s what we did (explain how you got out of the building)<br />Slide 8 – So here’s what we found (what was reality) so then,<br />Slide 9 - Business Model Canvas Version 3 (use the Osterwalder Canvas do not make up your own).<br />We iterated or pivoted… explain why and what you found.<br />Etc. ,,, Every presentation requires at least three Business Model Canvas slides. <br />Side n – “So here’s where we ended up.” Talk about:<br /><ul><li>what did you learn
whether you want to purse it after the class, etc.</li></ul>Final Slides – Click through each one of your business model canvas slides.<br />Welcome to XMBA 296T<br />This course provides real world, hands-on learning on what it’s like to actually start a high-tech company. This class is not about how to write a business plan. It’s not an exercise on how smart you are in a classroom, or how well you use the research library to size markets. And the end result is not a PowerPoint slide deck for a VC presentation. Instead you will be getting your hands dirty talking to customers, partners, competitors, as you encounter the chaos and uncertain of how a startup actually works. You’ll work in teams learning how to turn a great idea into a great company. You’ll learn how to use a business model to brainstorm each part of a company and customer development to get out of the classroom to see whether anyone other than you would want/use your product. Finally, you’ll see how agile development can help you rapidly iterate your product to build something customers will use and buy. Each week will be new adventure outside the classroom as you test each part of your business model and then share the hard earned knowledge with the rest of the class.<br />The instructors, entrepreneurs and venture capitalists with decades of experience in building and funding startups, teach you how to be efficient with your time, and others money. The class must be taken for credit. <br />Students<br />Each team must have 4 Berkeley/Columbia students. <br /> Non graduates and non students can serve as extra members of the teams but our priority is providing a learning environment for Berkeley/Columbia students. <br />Exceptions for team size and external members will be made on a case-by-case basis. Note your special team needs on your application form. We will let you know on Day one of the class.<br />You must take the course for credit. You may not audit XMBA 296T.<br />This is very intense class with a very high workload. <br />You cannot miss the first class.<br />Company Ideas<br />What Kind of Startups Can We Do for the Class?<br />Short answer - high potential, scalable startups with a bold vision.<br />Startups come in all flavors:<br />Small Business Startups - provide employment for you, family, friends. Example, retail store or website, consulting, single product website. Funding through friends, family, bank loans<br />Scalable Startups - Can grow to $100's of millions of dollars/year. May require $10's of millions of venture funding for scale. Can return venture-scale returns 10 -100x<br />Buyable Startups - Can grow to $10's of millions of dollars/year. Typically a web/mobile app. Funded by angels with $100's of thousands . Happy to flip it to Facebook/Google, et al for 2-10x investment<br />Social Entrepreneurship Startups - either a new type of NGO or a for profit with a social brand (i.e. 7th generation)<br />Corporate Disruptive Innovation - the type Clayton Christenson wrote about in the The Innovators Dilemma<br />For the purpose of the class we are going to accept teams doing scalable or buyable startups. You need to ask yourself "can this scale past a nice business that supports me and my family?"<br />Do They Have to Be Technology Startups?<br />No. But they have to be able to pass the "can this massively scale" test.<br />Can They be Web/Mobile Startups?<br />Yes, but remember you need to get the site and/or app built, up and running, and have customers using it by the end of the class.<br />If It's a Hardware Idea to I Have to Build It?<br />At a minimum you need:<br />1) a costed bill of materials<br />2) proof that it is buildable (it's your research or someone else's technology, etc.) <br />Team Formation<br />Do I need to be part of a team before I enroll in class? <br />Yes. If you have a partial/complete team you are welcome to apply for enrollment. However, we do not guarantee all members will be admitted. <br /><ul><li>Do I need to have a business idea to enroll in XMBA 296T? </li></ul>Yes. <br />How do teams form? Will I be assigned to a team? <br />We do not assign members to teams. You need to find potential team members. <br /><ul><li>How many people compose a team? </li></ul>FOUR unless (rare) exception is applied for and approved in advance. <br />Attendance and Participation<br />You cannot miss the first class <br />If you anticipate missing more than one class, we recommend that you take another course and wait on this one. More than one unexcused absence may result in a full letter grade penalty.<br />If you expect to miss a class, please let the TA’s and your team members know ahead of time via email.<br />We cold call. However we don’t want to embarrass you -- if you are not prepared, let one of us know before class and we will not call on you.<br />We expect your attention. If you’re getting bored, tired or inattentive step outside for some air. If we see reading email or browsing the web we will ask you to leave the class.<br />We start and end on time. TA’s take attendance in the first five minutes of the class. Do not take this class if you are habitually late!<br />We ask that you use a name card during every session of the quarter. <br />Help!<br /><ul><li>What kind of support will our team have? </li></ul>The teaching team consists of three professors, two TA’s. In addition each team will be assigned a “Mentor.” A mentor is an experienced entrepreneur or venture capitalist assigned to your team. They’ve volunteered to help with the class and your team because they love startups. Their job is to guide you as you get out of the building. <br /><ul><li>How often can we/should we meet with our mentors?</li></ul>Your mentor is expecting to meet with you at least every three weeks face-to-face. You can email them or meet with them more often as they have time for.<br /><ul><li>Can I talk to a mentor not assigned to my team?</li></ul> By all means, do so. All the mentors are happy to help. However they cannot support your team full time unless your mentor decides to swap places with them.<br /><ul><li>I have a busy schedule and my mentor can’t meet when I want them to.</li></ul>Mentors have day jobs. Asking them to meet or reply to you ASAP is not acceptable. So plan ahead to allow for a reasonable amount of time for a reply or meeting. Be concise with your request and be respectful of their time.<br /><ul><li>I need help now.</li></ul>You first stop are your TA’s. Email or sit down with them during the block if you have a problem. Your professors have office hours TBD. If you need something resolved sooner, email us.<br /><ul><li>Who are the Mentors?</li></ul>See the mentor list at the end of this document and on the class website.<br />Team Dynamics<br /><ul><li>What roles are in each team? </li></ul>Traditionally, each team member is part of the “customer development team”. You have to figure out how to allocate the work.<br /><ul><li>What if my team becomes dysfunctional? </li></ul>Prepare to work through difficult issues. If the situation continues, approach the teaching team. Do not wait until the end of the semester to raise the issue. <br /><ul><li>What if one of my teammates is not "pulling his/her weight"? </li></ul>Try to resolve it within your team. If the situation continues longer than a week, please approach the teaching team. Final grades will also reflect individual participation and contribution. <br />Grading<br />How do you determine our grade?<br /><ul><li>15%Individual participation in class. You will be giving feedback to your peers.
40%out-of-the-building progress as measured by blog write-ups each week. </li></ul>Team members must:1) update business model canvas weekly2) identify which team member did which portion of the work.3) detailed report on what the team did each week4) weekly email of team member participation<br /><ul><li>20%team weekly “lesson learned” summaries (see appendix for format)
25%team final report (see Dec 1st class for format)
Does everyone in the team get the same grade? </li></ul>No. Individual participation and contribution is also considered. You get to grade your team members on their contribution.<br /><ul><li>What kind of feedback can I expect? </li></ul>Continual feedback as you blog your progress. Substandard quality work will be immediately brought to your attention.<br /><ul><li>Can I take this class Pass/NoCredit? </li></ul>No. Letter grade only. <br />Intellectual Property<br />Who owns the intellectual property tested in the Business Model? <br />1. You own what Intellectual Property (patents, hardware, algorithms, etc.) you brought to class with you. No one has claim to anything you brought to class.<br />2. You all own any intellectual property developed for the class (such as code for a web-based project) developed during class – regardless of which team member developed it. If a team is working with a Berkeley or Columbia related-technology (i.e. either research from one of the team members or a Berkeley or Columbia patent), you must check with the appropriate Technology & Licensing (OTL) offices to better understand any licensing and royalties issues. <br />3. However, you and your team members need to disclose to each other what IP/Licensing rights your company has to inventions you make at school.<br />4. If any of you decide to start a company based on the class, you own only what was written and completed in the class. You have no claim for work done before or after the class quarter.<br />5. If a subset of the team decides to start a company they do NOT “owe” anything to any other team members for work done in and during the class. All team members are free to start the same company, without permission of the others. (We would hope that a modicum of common sense and fairness would apply.)<br /><ul><li>I feel my idea / Business Model may become a real company and the "next killer app" and I want to own it myself - what should I do? </li></ul>This is more than likely the wrong class to take. Your slides, notes and findings will be publically shared. Your team owns everything done in class. Discuss Intellectual Property rights with your team from the beginning. If you can’t come to agreement with the team, join another team, pick another project, or drop the class. Remember anything you do and learn in the class is public.<br /><ul><li> Will my Intellectual Property rights (or my company’s) be protected when I discuss my ideas with the class? </li></ul>NO. This is an open class. There are no non-disclosures. All your presentations and Customer Discovery and Validation notes, business model canvas, blogs and slides can, and more likely will, be made public.<br />This class is not an incubator. At times you will learn by seeing how previous classes solved the same class of problem by looking at their slides, notes and blogs.<br />Keep in mind that successful companies are less about the original idea and more about the learning, discovery and execution. (That’s the purpose of this class.) Therefore you must be prepared to share your ideas openly with the class. It is a forum for you to "bounce" your ideas off your peers. <br /><ul><li>I’m not comfortable sharing what I learn with others what should I do? </li></ul>Don’t take this class. <br />XMBA 296T Application Form <br />This application is how we choose the students who make it into the class. We’re interested in your background and why you want to take the class.<br />Who are you?<br /><ul><li>First Name, Last Name
What unique talent or expertise do you bring to the class?</li></ul>Why This Class?<br /><ul><li>How did you hear about this course?
Why do want to take this class?</li></ul>Team/Company Idea?<br /><ul><li>Do you have a pre-formed team?
If so, who are the members, and what’s the idea?
List two business ideas you’d like to work on during this class. Be as specific as you can. (First Idea)
Second Idea </li></ul>Why You?<br />If there was one spot left in the class and we were choosing between you and another applicant, tell us why you should be the person in the class.<br />Mentor List (as of July 4th 2011)<br /><ul><li>TBD