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How to Build a Startup        Steve Blank     www.steveblank.com      Twitter: @sgblank
This Talk is Based On• Business Model Generation • Four Steps to to Epiphany•The Four Stepsthe Epiphany
This Talk is Based On• Business Model Generation • Four Steps Owners Manual•The Startup to the Epiphany
But First,…
Lesson 1  WHAT’S A STARTUP?
Lifestyle Startups               Work to Live their Passion     Startup• Serve known customer with  known product• Work fo...
Small Business Startups               Work to Feed the Family                                          Small     Startup  ...
Small Business Startups                    Work to Feed the Family                                                 Small  ...
Social Entrepreneurship Startups      Social                            Large     Startup                          Non-Pro...
Scalable Startup    Search                        Execute    Scalable                        Large    Startup             ...
Scalable Startup    Search                              Execute    Scalable                              Large    Startup ...
Buyable Startup                    Born to Be Big     Search                                Sell     Scalable             ...
Lesson 2  THE DELUSIONS OF  ENTREPRENEURSHIP
I Have a Vision
I Have the “Right Stuff”
I Know What Needs to Be Done
Lets Start A Company!
#1I Know Who The Customer Is
#2I Know Exactly the Product They Need
#3I Know the Problem They Have
#4All I Need to Do is Execute the Plan
#5Now Let’s Raise Money
#6Let’s Do It Like a Large Company
#7We Can Fix It After We Ship It All
Lesson 3  HOW TO GET STARTUPS  WRONG
Large Company    Product Introduction Model Concept/    Product   Alpha/Beta   Launch/Seed Round    Dev.        Test      ...
When Adopted by Startups =The Leading Cause of Startup Death Concept/    Product   Alpha/Beta   Launch/Seed Round    Dev. ...
Product Introduction Model:             Two Implicit Assumptions  Customer Problem: known Concept/        Product     Alph...
Execute the Business Plan
Large Company Method –                 Hire Marketing     Concept/          Product             Alpha/Beta         Launch/...
Large Company Method –                   Hire Sales     Concept/          Product               Alpha/Beta              La...
Large Company Method –             Hire Business Development      Concept         Product                 Alpha/Beta      ...
Large Company Method –                  Hire Engineering      Concept             Product                 Alpha/Beta      ...
Lesson 4  WHAT DO WE NEED TO GET  STARTUPS RIGHT?
Is It Big Enough?
Is It Big Enough?How Do You Know?
Do You Have What it Takes?
Do You Have What it Takes?         Resilient        Relentless          Agile         Curious        Passionate          D...
Do You Know Why Startups Fail?
More startups fail froma lack of customers than from afailure of product development
Do You Know What a Startup Is?
A Startup is a temporary organization
A Startup is a temporary organization         designed to search
A Startup is a temporary organizationdesigned to search for a repeatable and       scalable business model
Startups Are Not Smaller Versions       of Large Companies
Startups Are Not Smaller Versions       of Large Companies
Startups Are Not Smaller Versions       of Large Companies    Large Companies Execute     Known Business Models
Startups Are Not Smaller Versions       of Large Companies   Startups Search for Unknown         Business Models
Startups Fail Because TheyConfuse Search with Execute
Startups need their own tools,  different from those used    in existing companies
Startups need their own tools,  different from those used    in existing companies
Lesson 5  THE 3 TOOLS FOR STARTUPS
Startup Tool #1:The Business Model
All I Need to Do is Execute the Plan
No Business Plan Survives First   Contact With Customers
CUSTOMER SEGMENTS which customers and users are you serving? which jobs do they really want to get done?
VALUE PROPOSITIONS what are you offering them? what is that  getting done for them? do they care?
CHANNELShow does each customer segment want to be reached?          through which interaction points?
CUSTOMER RELATIONSHIPSwhat relationships are you establishing with each segment?       personal? automated? acquisitive? r...
REVENUE STREAMS   what are customers really willing to pay for? how?are you generating transactional or recurring revenues?
KEY RESOURCESwhich resources underpin your business model? which                assets are essential?
KEY ACTIVITIESwhich activities do you need to perform well in your        business model? what is crucial?                ...
KEY PARTNERSwhich partners and suppliers leverage your model?           who do you need to rely on?
COST STRUCTURE what is the resulting cost structure?which key elements drive your costs?
key activities   value             customer                         proposition       relationships     key               ...
sketch out yourbusiness model
Business Model Canvas – Any BusinessKEY          KEY             OFFER                      CUSTOMER        CUSTOMERPARTNE...
9 Guesses                            GuessGuess    Guess                                     Guess                  Guess ...
Startup Tool #2:The Agile Development
Agile Development is How    We Build Startups
Startup Tool #3:Customer Development
Customer Development is How We Search for the Business Model
Lesson 5  CUSTOMER DEVELOPMENT
Customer DevelopmentThere are no facts inside your building         So get the heck out
Customer Development is   how you search for the model        Search                          ExecutionCustomer           ...
Customer Development     The Search For the Business Model            SearchCustomer             CustomerDiscovery        ...
Customer Development                                        ExecutionCustomer            Customer     Customer      Compan...
Customer Discovery           Search    Customer            Customer     Customer         Company    Discovery           Va...
Discovery• How big is the market?• Who’s the customer?  – What’s their problem/need• What’s the product/service/need?  – D...
Customer Development =     process to searchBusiness Model Canvas =     the ScorecardAgile Engineering is How•ResearchLabs...
Customer Validation           Search      Customer            Customer     Customer     Company      Discovery           V...
The Minimum Viable Product (MVP) •Smallest feature set that gets you the most …    - orders, learning, feedback, failure… ...
Hypotheses Testing and Insight
The Pivot                       Search           Customer             Customer           Discovery            Validation  ...
Pivot Cycle Time Matters        Search                     ExecutionCustomer        Customer     Customer     CompanyDisco...
Web/Mobile Versus Physical                 Customer            Customer                 Discovery           Validation    ...
Customer Discovery Phase 1 & 2
Customer Relationships
Customer RelationshipsPhysical Products – Get Customers
Customer RelationshipsPhysical Products – Keep Customers
Customer RelationshipsPhysical Products – Grow Customers
Customer RelationshipsPhysical Products – Get/Keep/Grow
Customer RelationshipsWeb/Mobile Products– Get Customers
Customer RelationshipsWeb/Mobile Products– Keep Customers
Customer RelationshipsWeb/Mobile Products– Grow Customers
Customer RelationshipsWeb/Mobile Products Get/Keep/Grow
Customer RelationshipsPhysical & Web Mobile Are Different
Lesson 6 HOW DOES THIS REALLY WORK? LEAN LAUNCHPAD CLASS
How Does This Really Work?    Lean LaunchPad Class National Science Foundation
Pivot Example    Robotic WeedingTalked 75 Customers in 8 Weeks
Our initial plan                   Confidential
20 interviews, 6 site visits…                                We got OUR Boots dirtyMowingInterviewed:• Golf: Stanford Golf...
Business Plan      Autonomous Vehicles for Mowing & Weeding                   - Innovation                            Deal...
Found weeding in organic crops is HUGE      problem; 50 - 75% of costs                        Crews of 100s-1000          ...
Decision to make – mowing vs weedingApplication     If ROI is < 1   Labor costs     Autonomous             TAM            ...
Autonomous vehiclesWEEDING                  - Innovation                            Dealers              - Low density- Ag...
1 Week – 1 CarrotBot        Confidential
CarrotBot• Machine Vision data  collection platform  – Monochrome & Color    Cameras  – Laser-line sweep (depth    measure...
The Business Plan Canvas Updated                 •Technology                            •Farming                 Design   ...
Visit Highlights                    Carrot vs. WeedsDue to small root systems, carrots have no chance against weeds
Visit HighlightsOrganic Broccoli, closelycultivated. Weeds close toplants are hand-picked
Visit HighlightsState of the Art in Weeding Technology for OrganicCrops
Customer HypothesisPre-Test                                               Large                                           ...
Customer Map #1 – Industrial GrowersExample: Bolthouse Farms – Large Industrial Carrot Producer – 8K acres/yr      End Use...
Customer Map #2 – Service ProvidersExample: Ag Services – Service Provider, Salinas Valley  End User       • Equipment Ope...
The Business Plan Canvas Updated                 •Technology                            •Farming                 Design   ...
World Ag Expo interviews:the need is real and wide spread                    • 10+ interviews at show                     ...
The Business Plan Canvas Updated                 •Technology                              •Farming                 Design ...
Autonomous weeding - Final                  - Innovation                            Direct               - Low density- Ag...
Pivot Example   Autonomous RobotTalked 75 Customers in 8 Weeks
Our initial plan
Business Plan                  Autonomous Vehicles for Mowing                   - Innovation                            De...
20 interviews, 6 site visits…                                We got OUR Boots dirtyMowingInterviewed:• Golf: Stanford Golf...
Decision to make – mowing vs weedingApplication     If ROI is < 1   Labor costs     Autonomous             TAM            ...
Autonomous vehiclesWEEDING                  - Innovation                            Dealers              - Low density- Ag...
1 Week – 1 CarrotBot        Confidential
CarrotBot• Machine Vision data  collection platform  – Monochrome & Color    Cameras  – Laser-line sweep (depth    measure...
Visit Highlights                    Carrot vs. WeedsDue to small root systems, carrots have no chance against weeds
Visit HighlightsOrganic Broccoli, closelycultivated. Weeds close toplants are hand-picked
The Business Plan Canvas Updated                 •Technology                            •Farming                 Design   ...
Customer HypothesisPre-Test                                               Large                                           ...
Customer Map #1 – Industrial GrowersExample: Bolthouse Farms – Large Industrial Carrot Producer – 8K acres/yr      End Use...
Customer Map #2 – Service ProvidersExample: Ag Services – Service Provider, Salinas Valley  End User       • Equipment Ope...
The Business Plan Canvas Updated                 •Technology                            •Farming                 Design   ...
World Ag Expo interviews:the need is real and wide spread                 • 10+ interviews at show                    – Ev...
The Business Plan Canvas Updated                 •Technology                              •Farming                 Design ...
Autonomous weeding - Final                  - Innovation                            Direct               - Low density- Ag...
Genesis of the Idea
Business Model Canvas
Assumption of Customer Pain                       200+                                              People wereParking is ...
Business Model Canvas
Assumption of Customer Pain                        200+                                           People wereParking is a ...
Business Model Canvas
Customer Survey/Validation• How much more would you be willing to pay  to have a guaranteed close parking spot in the  are...
Assumption of Pain                        200+                                             People wereParking is a pain!  ...
Expert Validation• Tom Lombardi and Greg Bessoni  – Online parking reservation experts     Partnered    with me and       ...
Business Model Canvas
New Assumptions                    30+ ParkingParking lots will      Lots           Yes! Lots have      Bigger Painpost sp...
Industry Validation
Business Model Canvas
Business Model Canvas
MVP Validation                         All Pro                         Parking                      30+ personStarted with...
Business Model Canvas
Business Model Canvas
Our Model                                                     15% of Price$5 Reservation                                  ...
Go to Market Strategy & Validation                    25+ years Talked to TomLombardi, indust   experience   ry expert.   ...
Go to Market Strategy & Validation Tom and Greg’sAffilate Networks                               3,000 Affiliates
Go to Market Strategy & Validation                     Focus                    group of                   30+ people   Cu...
Market Size               $8.2 Billion USA Parking IndustryTAMSAM                $4.5 Billion Parking                   Fa...
Competitors      High                   ParkingCarma                                   ClickandParkUsability              ...
Revenue Projections                               Revenue           $20           $18           $16           $14         ...
•2 Partners      •30+ Parking lots     •50+ Reservations     •Working Website•Validated Revenue Model
How Does This Really Work?The National Science Foundation  8 Weeks From an Idea to a Business
I Write a Blogwww.steveblank.com
Thankswww.steveblank.com
Maine "Top Gun" Customer Development Broadcast  021512
Maine "Top Gun" Customer Development Broadcast  021512
Maine "Top Gun" Customer Development Broadcast  021512
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  • Transcript of "Maine "Top Gun" Customer Development Broadcast 021512"

    1. 1. How to Build a Startup Steve Blank www.steveblank.com Twitter: @sgblank
    2. 2. This Talk is Based On• Business Model Generation • Four Steps to to Epiphany•The Four Stepsthe Epiphany
    3. 3. This Talk is Based On• Business Model Generation • Four Steps Owners Manual•The Startup to the Epiphany
    4. 4. But First,…
    5. 5. Lesson 1 WHAT’S A STARTUP?
    6. 6. Lifestyle Startups Work to Live their Passion Startup• Serve known customer with known product• Work for their passion
    7. 7. Small Business Startups Work to Feed the Family Small Startup Business• Serve known customer with known product• Feed the family
    8. 8. Small Business Startups Work to Feed the Family Small Startup Business Exit Criteria• known customer - Business Model found known product - Profitable business• Feed the family - Existing team < $500K in revenue
    9. 9. Social Entrepreneurship Startups Social Large Startup Non-Profit• Solve pressing social problems• Social Enterprise: Profitable• Social Innovation: New Strategies
    10. 10. Scalable Startup Search Execute Scalable Large Startup CompanyGoal is to solve for: unknown customer and unknown features
    11. 11. Scalable Startup Search Execute Scalable Large Startup CompanyGoal is to solve for: Exit Criteria unknown customer and - Business model found unknown features - Total Available Market > $500m - Can grow to $100m/year
    12. 12. Buyable Startup Born to Be Big Search Sell Scalable $2 to $50M Startup AcquisitionGoal is to solve for: Sell to larger company Internet, Mobile, Gaming Apps
    13. 13. Lesson 2 THE DELUSIONS OF ENTREPRENEURSHIP
    14. 14. I Have a Vision
    15. 15. I Have the “Right Stuff”
    16. 16. I Know What Needs to Be Done
    17. 17. Lets Start A Company!
    18. 18. #1I Know Who The Customer Is
    19. 19. #2I Know Exactly the Product They Need
    20. 20. #3I Know the Problem They Have
    21. 21. #4All I Need to Do is Execute the Plan
    22. 22. #5Now Let’s Raise Money
    23. 23. #6Let’s Do It Like a Large Company
    24. 24. #7We Can Fix It After We Ship It All
    25. 25. Lesson 3 HOW TO GET STARTUPS WRONG
    26. 26. Large Company Product Introduction Model Concept/ Product Alpha/Beta Launch/Seed Round Dev. Test 1st Ship
    27. 27. When Adopted by Startups =The Leading Cause of Startup Death Concept/ Product Alpha/Beta Launch/Seed Round Dev. Test 1st Ship
    28. 28. Product Introduction Model: Two Implicit Assumptions Customer Problem: known Concept/ Product Alpha/Beta Launch/Seed Round Dev. Test 1st Ship Product Features: known
    29. 29. Execute the Business Plan
    30. 30. Large Company Method – Hire Marketing Concept/ Product Alpha/Beta Launch/ Seed Round Dev. Test 1st Ship - Create Marcom - Hire PR Agency - Create DemandMarketing Materials - Early Buzz - Launch Event - Create Positioning - “Branding”
    31. 31. Large Company Method – Hire Sales Concept/ Product Alpha/Beta Launch/ Seed Round Dev. Test 1st Ship - Create Marcom - Hire PR Agency - Create DemandMarketing Materials - Early Buzz - Launch Event - Create Positioning - “Branding” • Hire Sales VP • Build SalesSales • Hire 1st Sales Staff Organization
    32. 32. Large Company Method – Hire Business Development Concept Product Alpha/Beta Launch/ Dev. Test 1st Ship - Create Marcom - Hire PR Agency - Create Demand Marketing Materials - Early Buzz - Launch Event - Create Positioning - “Branding” • Hire Sales VP • Build Sales Channel / Sales • Pick distribution Distribution Channel Business • Hire First • Do deals for FCSDevelopment Bus Dev
    33. 33. Large Company Method – Hire Engineering Concept Product Alpha/Beta Launch/ Dev. Test 1st Ship - Create Marcom - Hire PR Agency - Create Demand Marketing Materials - Early Buzz - Launch Event - Create Positioning - “Branding” • Hire Sales VP • Build Sales Channel / Sales • Pick distribution Distribution Channel Business • Hire First • Do deals for FCSDevelopment Bus DevEngineering • Write MRD • Waterfall • Q/A •Tech Pubs
    34. 34. Lesson 4 WHAT DO WE NEED TO GET STARTUPS RIGHT?
    35. 35. Is It Big Enough?
    36. 36. Is It Big Enough?How Do You Know?
    37. 37. Do You Have What it Takes?
    38. 38. Do You Have What it Takes? Resilient Relentless Agile Curious Passionate Driven
    39. 39. Do You Know Why Startups Fail?
    40. 40. More startups fail froma lack of customers than from afailure of product development
    41. 41. Do You Know What a Startup Is?
    42. 42. A Startup is a temporary organization
    43. 43. A Startup is a temporary organization designed to search
    44. 44. A Startup is a temporary organizationdesigned to search for a repeatable and scalable business model
    45. 45. Startups Are Not Smaller Versions of Large Companies
    46. 46. Startups Are Not Smaller Versions of Large Companies
    47. 47. Startups Are Not Smaller Versions of Large Companies Large Companies Execute Known Business Models
    48. 48. Startups Are Not Smaller Versions of Large Companies Startups Search for Unknown Business Models
    49. 49. Startups Fail Because TheyConfuse Search with Execute
    50. 50. Startups need their own tools, different from those used in existing companies
    51. 51. Startups need their own tools, different from those used in existing companies
    52. 52. Lesson 5 THE 3 TOOLS FOR STARTUPS
    53. 53. Startup Tool #1:The Business Model
    54. 54. All I Need to Do is Execute the Plan
    55. 55. No Business Plan Survives First Contact With Customers
    56. 56. CUSTOMER SEGMENTS which customers and users are you serving? which jobs do they really want to get done?
    57. 57. VALUE PROPOSITIONS what are you offering them? what is that getting done for them? do they care?
    58. 58. CHANNELShow does each customer segment want to be reached? through which interaction points?
    59. 59. CUSTOMER RELATIONSHIPSwhat relationships are you establishing with each segment? personal? automated? acquisitive? retentive?
    60. 60. REVENUE STREAMS what are customers really willing to pay for? how?are you generating transactional or recurring revenues?
    61. 61. KEY RESOURCESwhich resources underpin your business model? which assets are essential?
    62. 62. KEY ACTIVITIESwhich activities do you need to perform well in your business model? what is crucial? 62
    63. 63. KEY PARTNERSwhich partners and suppliers leverage your model? who do you need to rely on?
    64. 64. COST STRUCTURE what is the resulting cost structure?which key elements drive your costs?
    65. 65. key activities value customer proposition relationships key customerpartners segments cost revenuestructure key streams resources channels 65 images by JAM
    66. 66. sketch out yourbusiness model
    67. 67. Business Model Canvas – Any BusinessKEY KEY OFFER CUSTOMER CUSTOMERPARTNERS ACTIVITIES RELATIONSHIPS SEGMENTS KEY CHANNELS RESOURCESCOST STRUCTURE REVENUE STREAMS (c)2010 K+S Ranch Consulting Inc. 67 67 www.steveblank.com
    68. 68. 9 Guesses GuessGuess Guess Guess Guess Guess Guess Guess Guess
    69. 69. Startup Tool #2:The Agile Development
    70. 70. Agile Development is How We Build Startups
    71. 71. Startup Tool #3:Customer Development
    72. 72. Customer Development is How We Search for the Business Model
    73. 73. Lesson 5 CUSTOMER DEVELOPMENT
    74. 74. Customer DevelopmentThere are no facts inside your building So get the heck out
    75. 75. Customer Development is how you search for the model Search ExecutionCustomer Customer Customer CompanyDiscovery Validation Creation Building Pivot
    76. 76. Customer Development The Search For the Business Model SearchCustomer CustomerDiscovery Validation Pivot
    77. 77. Customer Development ExecutionCustomer Customer Customer CompanyDiscovery Validation Creation Building Pivot
    78. 78. Customer Discovery Search Customer Customer Customer Company Discovery Validation Creation Building Pivot Execution• Articulate and Test your hypotheses• Design experiments, start listening• Continuous Discovery• Done by founders
    79. 79. Discovery• How big is the market?• Who’s the customer? – What’s their problem/need• What’s the product/service/need? – Does it solve the customers problem?• How do you create demand?• How do you deliver the product?• How do you make money?
    80. 80. Customer Development = process to searchBusiness Model Canvas = the ScorecardAgile Engineering is How•ResearchLabs •Technology Design •Marketing •Cost •Farming conventions. •Demo, dem o, and •Organic •Demo and Reduction We Build Startups•EquipmentManufacturers customer feedback •Remove labor force demo!! •Proximity is paramount Farmers •Weeding Service•Distributio pains •IP – Providersn Network •Eliminate Patents •Conventio•Service •Video bio-waste •Dealers nal FarmersProviders Classifier hazards •Direct Service Files •Indirect Service • … then Dealers •Robust Technology Value- •Asset Sale Driven •Direct Service with equipment rental •… then Asset Sale
    81. 81. Customer Validation Search Customer Customer Customer Company Discovery Validation Creation Building Pivot Execution• Repeatable and scalable business model?• Passionate earlyvangelists?• Pivot back to Discovery if no customers
    82. 82. The Minimum Viable Product (MVP) •Smallest feature set that gets you the most … - orders, learning, feedback, failure… - incremental and iterative
    83. 83. Hypotheses Testing and Insight
    84. 84. The Pivot Search Customer Customer Discovery Validation Pivot•The heart of Customer Development•Iteration without crisis•Fast, agile and opportunistic
    85. 85. Pivot Cycle Time Matters Search ExecutionCustomer Customer Customer CompanyDiscovery Validation Creation Building Pivot•Speed of cycle minimizes cash needs•Minimum feature set speeds up cycle time• Near instantaneous customer feedback drives feature set
    86. 86. Web/Mobile Versus Physical Customer Customer Discovery Validation Pivot•Web/Mobile startups run faster•Different process steps for web vs. physical•Customer Relationships are radically different
    87. 87. Customer Discovery Phase 1 & 2
    88. 88. Customer Relationships
    89. 89. Customer RelationshipsPhysical Products – Get Customers
    90. 90. Customer RelationshipsPhysical Products – Keep Customers
    91. 91. Customer RelationshipsPhysical Products – Grow Customers
    92. 92. Customer RelationshipsPhysical Products – Get/Keep/Grow
    93. 93. Customer RelationshipsWeb/Mobile Products– Get Customers
    94. 94. Customer RelationshipsWeb/Mobile Products– Keep Customers
    95. 95. Customer RelationshipsWeb/Mobile Products– Grow Customers
    96. 96. Customer RelationshipsWeb/Mobile Products Get/Keep/Grow
    97. 97. Customer RelationshipsPhysical & Web Mobile Are Different
    98. 98. Lesson 6 HOW DOES THIS REALLY WORK? LEAN LAUNCHPAD CLASS
    99. 99. How Does This Really Work? Lean LaunchPad Class National Science Foundation
    100. 100. Pivot Example Robotic WeedingTalked 75 Customers in 8 Weeks
    101. 101. Our initial plan Confidential
    102. 102. 20 interviews, 6 site visits… We got OUR Boots dirtyMowingInterviewed:• 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)WeedingVisited two farms in Salinas Valley to better understand problemInterviewed:• Bolthouse Farms, Large Agri-Industry in Bakersfield• 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
    103. 103. Business Plan Autonomous Vehicles for Mowing & Weeding - Innovation Dealers Mowing- Dealers - Customer We reduce sell, installs and - Owners of(Mowing and Education operating cost supports public orAg) - Dealer training - Labor reduction customer commercially- Vehicle OEMs - Better used green(John utilization of Co. trains spaces (e.g. golfDeere, Toro, Jac assets (eg mow dealers, supports courses)obsen, etc) or weed at dealers - Landscaping Engineers on nights) - Mowing service provider- Research labs Autonomous - Improved Dealers vehicles, GPS, performance - Ag Dealers Weeding path-planning (less - Farmers with rework, food manual weeding safety) operationsDealer discount Asset saleCOGS seek a 50-60% Gross Margin Our revenue stream derives from selling theHeavy R&D investment equipment
    104. 104. Found weeding in organic crops is HUGE problem; 50 - 75% of costs Crews of 100s-1000 Back-breaking task (Ilegal) labor harder to get 1-5 weedings per year/field $250-3,500 per acre and increasing Food contamination risk
    105. 105. Decision to make – mowing vs weedingApplication If ROI is < 1 Labor costs Autonomous TAM yr they will significant? would solve buy problem?Mowing of Yes. Yes Yes Adjusted up to Professionally xxxlarge fields run organizationsWeeding in Agri Industry: YES! for TAM increased YES! organic crops Not necessarily to $2.6 B (TotalAgriculture organic) Large They are Key need is Growers: Yes spending weed vs. crop Target Market $500/ac! differentiation (organic Small specialty) Growers: No 162 M/yr 18%/yr growth
    106. 106. Autonomous vehiclesWEEDING - Innovation Dealers - Low density- Ag Dealers - Customer We reduce sell, installs and vegetable- Ag Service Education operating cost supports growersproviders - Dealer training - Labor reduction customer - High density (100 to 1) vegetable- Research labs - Reduced risk of Co. trains growers contamination dealers, supports - Thinning - Mitigate labor dealers operations Engineers on availability - Ag Dealers - Conventional Machine Vision concerns - Ag Service vegetables Two problems: providers - Identification - EliminationDealer discount Asset saleCOGS seek a 50-60% Gross Margin Our revenue stream derives from selling theHeavy R&D investment equipment
    107. 107. 1 Week – 1 CarrotBot Confidential
    108. 108. CarrotBot• Machine Vision data collection platform – Monochrome & Color Cameras – Laser-line sweep (depth measurement) – Encoders CarrotBot 1.0 (position/velocity) – Onboard data acquisition & power
    109. 109. The Business Plan Canvas Updated •Technology •Farming Design conventions. •Marketing •Demo, demo, a •Demo and nd demo!! customer •Cost •Proximity is •Organic•Research Labs feedback paramount Farmers Reduction•Equipment •Weeding •Remove laborManufacturers Service force pains•Distribution Providers •Eliminate bio-Network •Conventional waste hazards•Service •IP – Patents FarmersProviders •Video •Dealers Classifier Files •Direct Service •Robust •Indirect Service Technology • … then Dealers •Asset Sale Value-Driven •Direct Service with equipment rental •… then Asset Sale
    110. 110. Visit Highlights Carrot vs. WeedsDue to small root systems, carrots have no chance against weeds
    111. 111. Visit HighlightsOrganic Broccoli, closelycultivated. Weeds close toplants are hand-picked
    112. 112. Visit HighlightsState of the Art in Weeding Technology for OrganicCrops
    113. 113. Customer HypothesisPre-Test Large Growers Us Dealer Industrial Growers Hypothesis Confirmed • Growers interested in own Industrial equipment Growers • Industrial (10,000s of acres) Post-Test • Large (1,000s of acres) Large • Willing to pay $100k for one unit Growers Us Dealer • Smaller growers (100s of acres) Service usually subcontract the labor Providers services or rent equipment Equipment • All purchases through local dealers Rental •Customer service is essential
    114. 114. Customer Map #1 – Industrial GrowersExample: Bolthouse Farms – Large Industrial Carrot Producer – 8K acres/yr End User • Equipment Operator Influencer • Local Farm Mgr • Cliff Kirkpatrick, visited Recommender • Director, Ag Equipment Operator Technology • Justin Grove, interviewed Decision • VP, Growing Maker Operations Approver • CFO, CEO (Jeff Dunn) Cliff, Farm Mgr
    115. 115. Customer Map #2 – Service ProvidersExample: Ag Services – Service Provider, Salinas Valley End User • Equipment Operator Influencer • GrowerRecommender • Service Mgr Me (left), Marty (middle, Service Mgr), Doug (right, Grower)Decision Maker • ?? (service mgr’s & Approver boss)
    116. 116. The Business Plan Canvas Updated •Technology •Farming Design conventions. •Marketing •Demo, demo, a •Mid/Large •Demo and nd demo!! Organic Farmers customer •Cost •Proximity is •Agricultural•Research Labs feedback paramount Reduction corporations•Equipment •Remove labor •Weeding ServiceManufacturers force pains Providers•Distribution •Eliminate bio-Network•Service •IP – Patents waste hazards •Mid/LargeProviders •Video •Direct Service Conventional Classifier Files •Indirect Service Farmers •Robust • … then Dealers Technology •Direct Service with equipment rental Value-Driven •($1,500/d; 120d/yr ) •Low density: $1,500/d •High density: $6,000/d
    117. 117. World Ag Expo interviews:the need is real and wide spread • 10+ interviews at show – Everyone confirmed the need – Robocrop, UK based, crude competitor sells for $171 K • Revenue Stream – Mid to small growers prefer a service – Large growers prefer to buy, but OK with service until technology is proven – Charging for labor cost saved is OK, as we provide other benefits (food safety, labor availability) Confidential
    118. 118. The Business Plan Canvas Updated •Technology •Farming Design conventions. •Marketing •Demo, demo, a •Mid/Large•Research Labs •Demo and nd demo!! Organic Farmers•Equipment customer •Cost •Proximity is •AgriculturalManufacturer feedback Reduction paramount corporations•Distribution •Remove labor •Weeding ServiceNetwork force pains Providers•Service •Eliminate bio-Providers •IP – Patents waste hazards •Mid/Large•2 or 3 Key •Video •Direct Service ConventionalFarms Classifier Files •Indirect Service Farmers •Robust • … then Dealers Technology Value-Driven •Direct Service with • R&D equipment rental • Bill of Materials •Low density: $1,500/d • Training & Service •High density: $6,000/d • Sales
    119. 119. Autonomous weeding - Final - Innovation Direct - Low density- Ag Service - Customer We reduce - Provide high vegetableproviders Education operating cost quality service at growers - Dealer training - Labor reduction competitive price - High density- Research (100 to 1) vegetableInstitutes (eg - Reduced risk of growersUC Davis, Laser contamination - ThinningZentrum - Mitigate labor operationsHannover) Engineers on availability Direct - Conventional Machine Vision concerns - Alliance with vegetables- 3-4 key farms Two problems: service - Identification providers - Elimination - Eventually sell through dealersCosts for service provision Service provisionCOGS seek a 50-60% Gross Margin - Charge by the acre with modifier according toHeavy R&D investment weed density - Eventually move to asset sale
    120. 120. Pivot Example Autonomous RobotTalked 75 Customers in 8 Weeks
    121. 121. Our initial plan
    122. 122. Business Plan Autonomous Vehicles for Mowing - Innovation Dealers Mowing- Dealers (Mowing - Customer We reduce sell, installs and - Owners ofand Ag) Education operating cost supports customer public or- Vehicle OEMs - Dealer training - Labor reduction commercially(John - Better Co. trains used greenDeere, Toro, Jacob utilization of dealers, supports spaces (e.g. golfsen, etc) assets (eg mow dealers courses) or weed at - Landscaping- Research labs Engineers on nights) - Mowing service provider Autonomous - Improved Dealers vehicles, GPS, performance - Ag Dealers Weeding path-planning (less - Farmers with rework, food manual weeding safety) operationsDealer discount Asset saleCOGS seek a 50-60% Gross Margin Our revenue stream derives from selling theHeavy R&D investment equipment
    123. 123. 20 interviews, 6 site visits… We got OUR Boots dirtyMowingInterviewed:• 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)WeedingVisited two farms in Salinas Valley to better understand problemInterviewed:• Bolthouse Farms, Large Agri-Industry in Bakersfield• 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
    124. 124. Decision to make – mowing vs weedingApplication If ROI is < 1 Labor costs Autonomous TAM yr they will significant? would solve buy problem?Mowing of Yes. Yes Yes Adjusted up to Professionally xxxlarge fields run organizationsWeeding in Agri Industry: YES! for TAM increased YES! organic crops Not necessarily to $2.6 B (TotalAgriculture organic) Large They are Key need is Growers: Yes spending weed vs. crop Target Market $500/ac! differentiation (organic Small specialty) Growers: No 162 M/yr 18%/yr growth
    125. 125. Autonomous vehiclesWEEDING - Innovation Dealers - Low density- Ag Dealers - Customer We reduce sell, installs and vegetable- Ag Service Education operating cost supports customer growersproviders - Dealer training - Labor reduction - High density (100 to 1) Co. trains vegetable- Research labs - Reduced risk of dealers, supports growers contamination dealers - Thinning - Mitigate labor operations Engineers on availability - Ag Dealers - Conventional Machine Vision concerns - Ag Service vegetables Two problems: providers - Identification - EliminationDealer discount Asset saleCOGS seek a 50-60% Gross Margin Our revenue stream derives from selling theHeavy R&D investment equipment
    126. 126. 1 Week – 1 CarrotBot Confidential
    127. 127. CarrotBot• Machine Vision data collection platform – Monochrome & Color Cameras – Laser-line sweep (depth measurement) – Encoders CarrotBot 1.0 (position/velocity) – Onboard data acquisition & power
    128. 128. Visit Highlights Carrot vs. WeedsDue to small root systems, carrots have no chance against weeds
    129. 129. Visit HighlightsOrganic Broccoli, closelycultivated. Weeds close toplants are hand-picked
    130. 130. The Business Plan Canvas Updated •Technology •Farming Design conventions. •Marketing •Demo, demo, a •Demo and nd demo!! customer •Cost •Proximity is •Organic•Research Labs feedback paramount Farmers Reduction•Equipment •Weeding •Remove laborManufacturers Service force pains•Distribution Providers •Eliminate bio-Network •Conventional waste hazards•Service •IP – Patents FarmersProviders •Video •Dealers Classifier Files •Direct Service •Robust •Indirect Service Technology • … then Dealers •Asset Sale Value-Driven •Direct Service with equipment rental •… then Asset Sale
    131. 131. Customer HypothesisPre-Test Large Growers Us Dealer Industrial Growers Hypothesis Confirmed • Growers interested in own Industrial equipment Growers • Industrial (10,000s of acres) Post-Test • Large (1,000s of acres) Large • Willing to pay $100k for one unit Growers Us Dealer • Smaller growers (100s of acres) Service usually subcontract the labor Providers services or rent equipment Equipment • All purchases through local dealers Rental •Customer service is essential
    132. 132. Customer Map #1 – Industrial GrowersExample: Bolthouse Farms – Large Industrial Carrot Producer – 8K acres/yr End User • Equipment Operator Influencer • Local Farm Mgr • Cliff Kirkpatrick, visited Recommender • Director, Ag Equipment Operator Technology • Justin Grove, interviewed Decision • VP, Growing Maker Operations Approver • CFO, CEO (Jeff Dunn) Cliff, Farm Mgr
    133. 133. Customer Map #2 – Service ProvidersExample: Ag Services – Service Provider, Salinas Valley End User • Equipment Operator Influencer • GrowerRecommender • Service Mgr Me (left), Marty (middle, Service Mgr), Doug (right, Grower)Decision Maker • ?? (service mgr’s & Approver boss)
    134. 134. The Business Plan Canvas Updated •Technology •Farming Design conventions. •Marketing •Demo, demo, a •Mid/Large •Demo and nd demo!! Organic Farmers customer •Cost •Proximity is •Agricultural•Research Labs feedback paramount Reduction corporations•Equipment •Remove labor •Weeding ServiceManufacturers force pains Providers•Distribution •Eliminate bio-Network•Service •IP – Patents waste hazards •Mid/LargeProviders •Video •Direct Service Conventional Classifier Files •Indirect Service Farmers •Robust • … then Dealers Technology •Direct Service with equipment rental Value-Driven •($1,500/d; 120d/yr ) •Low density: $1,500/d •High density: $6,000/d
    135. 135. World Ag Expo interviews:the need is real and wide spread • 10+ interviews at show – Everyone confirmed the need – Robocrop, UK based, crude competitor sells for $171 K • Revenue Stream – Mid to small growers prefer a service – Large growers prefer to buy, but OK with service until technology is proven – Charging for labor cost saved is OK, as we provide other benefits (food safety, labor availability)
    136. 136. The Business Plan Canvas Updated •Technology •Farming Design conventions. •Marketing •Demo, demo, a •Mid/Large•Research Labs •Demo and nd demo!! Organic Farmers•Equipment customer •Cost •Proximity is •AgriculturalManufacturer feedback Reduction paramount corporations•Distribution •Remove labor •Weeding ServiceNetwork force pains Providers•Service •Eliminate bio-Providers •IP – Patents waste hazards •Mid/Large•2 or 3 Key •Video •Direct Service ConventionalFarms Classifier Files •Indirect Service Farmers •Robust • … then Dealers Technology Value-Driven •Direct Service with • R&D equipment rental • Bill of Materials •Low density: $1,500/d • Training & Service •High density: $6,000/d • Sales
    137. 137. Autonomous weeding - Final - Innovation Direct - Low density- Ag Service - Customer We reduce - Provide high vegetableproviders Education operating cost quality service at growers - Dealer training - Labor reduction competitive price - High density- Research (100 to 1) vegetableInstitutes (eg - Reduced risk of growersUC Davis, Laser contamination - ThinningZentrum - Mitigate labor operationsHannover) Engineers on availability Direct - Conventional Machine Vision concerns - Alliance with vegetables- 3-4 key farms Two problems: service - Identification providers - Elimination - Eventually sell through dealersCosts for service provision Service provisionCOGS seek a 50-60% Gross Margin - Charge by the acre with modifier according toHeavy R&D investment weed density - Eventually move to asset sale
    138. 138. Genesis of the Idea
    139. 139. Business Model Canvas
    140. 140. Assumption of Customer Pain 200+ People wereParking is a pain! customers People DO want Bigger Pain even more People want a a guaranteed frustrated with guaranteed spot & would parking at big parking spot. reserve online. events. 80% positive response
    141. 141. Business Model Canvas
    142. 142. Assumption of Customer Pain 200+ People wereParking is a pain! customers People DO want Bigger Pain even more People want a a guaranteed frustrated with guaranteed spot & would parking at big parking spot. reserve online. events. People will pay Surveyed 75+ extra to have a Customers People will not great, only pay more, they will Validated! guaranteed parking spot. pay a lot more! ($9+)
    143. 143. Business Model Canvas
    144. 144. Customer Survey/Validation• How much more would you be willing to pay to have a guaranteed close parking spot in the arenas lot or near the arena? – On average- $9.33 – Max of $27.00 145
    145. 145. Assumption of Pain 200+ People wereParking is a pain! customers People DO want Bigger Pain even more People want a a guaranteed frustrated with guaranteed spot & would parking at big parking spot. reserve online. events. People will pay Surveyed 75+ extra to have a Customers People will notgreat, guarantee only pay more, they will Validated! d parking spot. pay a lot more! ($9+) 30+ People It is difficult toPeople who have get a mass We needed toextra spaces will number of find a new post spots and people to post solution. make money. enough parking spots.
    146. 146. Expert Validation• Tom Lombardi and Greg Bessoni – Online parking reservation experts Partnered with me and put up capital.
    147. 147. Business Model Canvas
    148. 148. New Assumptions 30+ ParkingParking lots will Lots Yes! Lots have Bigger Painpost spots online been looking for so that people ways to increase can reserve revenue and fill them. up lots. 75% positive response 20% of cash goes missing. Electronic 30+ Parking payments in Lotsadvance through Loved it! Would an online pay about 15% of Validated! reservation posted price. system.
    149. 149. Industry Validation
    150. 150. Business Model Canvas
    151. 151. Business Model Canvas
    152. 152. MVP Validation All Pro Parking 30+ personStarted with a Easier ways to Search process very basic (30 lots) focus group post parking & was too hard. reservation track Wanted mobile system. reservations. site as well. All Pro Parking’s Customers With no marketing- Made it even Fixed 50 reservations easier to post search, cleaned in just a few and track up site, mobile months. parking. site in the works.
    153. 153. Business Model Canvas
    154. 154. Business Model Canvas
    155. 155. Our Model 15% of Price$5 Reservation Paid Fee XoomPark We estimate being able to collect about $8 per reservation
    156. 156. Go to Market Strategy & Validation 25+ years Talked to TomLombardi, indust experience ry expert. Over 250 lots throughout Lots located all over West Eastern US. Coast and Texas Lots located throughout Parking lots in all 50 states Florida and in Dallas,TX
    157. 157. Go to Market Strategy & Validation Tom and Greg’sAffilate Networks 3,000 Affiliates
    158. 158. Go to Market Strategy & Validation Focus group of 30+ people Customer’srecommendations for the future
    159. 159. Market Size $8.2 Billion USA Parking IndustryTAMSAM $4.5 Billion Parking Facility/ManagementTargetMarket $1.4 Billion Event ParkingApex $240,000 Buffalo and Atlanta
    160. 160. Competitors High ParkingCarma ClickandParkUsability GottaPark Parkwhiz Low Low High Reliability
    161. 161. Revenue Projections Revenue $20 $18 $16 $14 $12Revenue in $10 Millions $8 $6 $4 $2 $0 Year 1 Year 2 Year 3 Year 4 70% Gross Profit Margin
    162. 162. •2 Partners •30+ Parking lots •50+ Reservations •Working Website•Validated Revenue Model
    163. 163. How Does This Really Work?The National Science Foundation 8 Weeks From an Idea to a Business
    164. 164. I Write a Blogwww.steveblank.com
    165. 165. Thankswww.steveblank.com
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