NCIIA Steve Blank Keynote 032312

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  • ----- Meeting Notes (3/6/12 10:38) -----what the dentist makes for a perio procedure
  • NCIIA Steve Blank Keynote 032312

    1. Crossing the Rubicon:Entrepreneurial education at the crossroads Steve Blank www.steveblank.com @sgblank
    2. We’ve learned a lot about entrepreneurship
    3. Perhaps our curriculums should reflect what we’ve learned?
    4. Agenda1. What we used to believe / What we now know2. Business Models and Customer Development3. Class Example4. The Evolution of the Curriculum
    5. Part 1What We Used to Believe What We Now Know
    6. What We Used to Believe
    7. There is one type of startup and entrepreneur
    8. What We Now Know
    9. Lifestyle Startups Work to Live their Passion Startup• Serve known customer with known product• Work for their passion
    10. Small Business Startups Work to Feed the Family Small Startup Business• Serve known customer with known product• Feed the family
    11. 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 - Not venture-backable
    12. Social Entrepreneurship Startups Social Large Startup Non-Profit• Solve pressing social problems• Social Enterprise: Profitable• Social Innovation: New Strategies • Not venture-backable
    13. Scalable Startup Born to Be Big Search Execute Scalable Large Startup CompanyGoal is to solve for: unknown customer and unknown features
    14. 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 - Can be Venture capital funded
    15. Buyable Startup Search Sell Scalable $2 to $50M Startup AcquisitionGoal is to solve for: - Sell to larger company Internet, Mobile, Gaming Apps - Angel or early stage VC
    16. Large Company Sustaining Innovation Innovate or Evaporate Sustaining Innovation Scalable Large Transition Startup Company • Existing Market / Known customer •Known product feature needs
    17. Large Company Disruptive Innovation New Large Transition Division Company Disruptive Innovation•New Market•New tech, customers, channels
    18. Large Company Disruptive Innovation Large New Division Transition Company Disruptive Innovation •Build •Partner •Acquire - IP - Talent - Product - Customers - Business
    19. What We Used to Believe
    20. Startups are About Vision & Ideas
    21. What We Now Know
    22. Most visions are hallucinations
    23. What We Used to Believe
    24. Startups are a Smaller Version of a Large Company
    25. What We Now Know
    26. Startups SearchCompanies Execute
    27. What We Used to Believe Strategy
    28. Start With an Operating Plan and Financial Model
    29. All I Need to Do is Execute the Plan
    30. All I Need to Do is and Make the Forecast
    31. All I Need to Do is Execute the Plan
    32. What We Now Know Strategy
    33. No Business Plan survives first contact with customers
    34. Planning comes before the plan
    35. Business Models
    36. Business Models
    37. Search Execution Business Model Operating Plan +Strategy Hypotheses Financial Model
    38. What We Used to Believe Process
    39. We Built Startups byManaging Processes Product Management + Waterfall Engineering
    40. Product Introduction Model Concept/ Product Alpha/Beta Launch/Seed Round Dev. Test 1st Ship
    41. Tradition – 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”
    42. Tradition – 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
    43. Tradition – Hire Bus 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
    44. Tradition – 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
    45. Waterfall / Product Management Execution on Two “Knowns” Requirements Product Features: known Design Implementation Verification Customer Problem: known MaintenanceSource: Eric Rieshttp://startuplessonslearned.blogspot.com
    46. Waterfall / Product Management Execution on Two “Knowns” Requirements Product Features: known Design Implementation Verification Customer Problem: known MaintenanceSource: Eric Rieshttp://startuplessonslearned.blogspot.com
    47. What We Now Know Strategy
    48. More startups fail froma lack of customers than from afailure of product development
    49. Startups go from failure to failure
    50. Startups go from failure to failureThe ones that win are those that learn from failure
    51. Customer Development
    52. Search ExecutionStrategy Business Model Operating Plan + Hypotheses Financial ModelProcess Customer & Product Management & Waterfall Agile Development Development
    53. What We Used to Believe Organization
    54. Hire and Build aFunctional Organization
    55. What We Now Know Organization
    56. Founders run a Customer Development TeamNo sales, marketing and business development
    57. Search Execution Strategy Business Model Operating Plan + Hypotheses Financial Model Customer Development, Product Management Process Agile Development Agile or Waterfall Development Customer Functional OrganizationOrganization Development Team, by Department Founder-driven
    58. What We Used to Believe Education
    59. Entrepreneurial Education was about execution
    60. Entrepreneurial Education was about execution
    61. What We Now Know Education
    62. Entrepreneurial Educationbegins with the Search for a business model
    63. Search ExecutionStrategy Business Model Operating Plan + Hypotheses Financial ModelProcess Customer Development, Product Management Agile Development Agile or Waterfall DevelopmentOrganization Customer Development Functional Organization Team, Founder-driven by DepartmentEducation Creativity/Innovation, Organizational Behavior, Business Model Design, HR Mgmt, Accounting, Customer Development, Modeling, Strategy, Operations, Leadership, Startup team building, Marketing, Manufacturing Entrepreneurial Finance, Agile Development, Customer Funnel: Get/Keep/Grow Market
    64. Putting Search first is a radical changeIt’s not just one more methodology
    65. What We Used to Believe Instructional Strategies
    66. Cases and a Business Plans weregood entrepreneurial teaching tools
    67. Cases and a Business Plan were good teaching tools
    68. What We Now KnowInstructional Strategies
    69. Experiential Immersion ~100 GOOTB connections
    70. Team-based Simulations
    71. Business Model Patterns Replace Cases Nespresso club production Nespresso machines Nespressopo ds distribution channels Nespresso .com productioncoffee facilites B2C 1 x machine distribution sales 73
    72. Business Model CompetitionsReplace Business Plan Competitions
    73. Business Model CompetitionsReplace Business Plan Competitions http://www.businessmodelcompetition.com/
    74. Now imagine these classes virtual and networked independent of location
    75. Search ExecutionStrategy Business Model Operating Plan + Hypotheses Financial ModelProcess Customer Development, Product Management Agile Development Agile or Waterfall DevelopmentOrganization Customer Development Functional Organization Team, Founder-driven by Department Education Business Model Design, Organizational Behavior, Customer Development, HR Mgmt, Accounting, Startup team building, Modeling, Strategy, Entrepreneurial Finance, Operations, Leadership, Agile Development, Marketing, Manufacturing MarketingInstructional Experiential, constructivist, Case, Lecture, SmallStrategies learner-centered, Group, Mentorship inquiry-based
    76. Classes on EntrepreneurialExecution Follows Search
    77. SearchStrategy Business Model HypothesesProcess Customer Development, Agile DevelopmentOrganization Customer Development Team, Founder-driven Education Business Model Design, Customer Development, Startup team building, Entrepreneurial Finance, Agile Development, MarketingInstructional Experiential, constructivist,Strategies learner-centered, inquiry- based
    78. Search ExecutionStrategy Business Model Operating Plan + Hypotheses Financial ModelProcess Customer Development, Product Management Agile Development Agile or Waterfall DevelopmentOrganization Customer Development Functional Organization Team, Founder-driven by Department Education Business Model Design, Organizational Behavior, Customer Development, HR Mgmt, Accounting, Startup team building, Modeling, Strategy, Entrepreneurial Finance, Operations, Leadership, Agile Development, Marketing, Manufacturing MarketingInstructional Experiential, constructivist, Case, Lecture, Small Group,Strategies learner-centered, inquiry- Mentorship based
    79. Part 2 Business Models andCustomer Development
    80. What’s A Company?
    81. What’s A Company? A business organization which sells aproduct or service in exchange for revenue and profit
    82. What’s A Startup?
    83. A temporary organization designed to searchfor a repeatable and scalable business model
    84. A temporary organization designed to searchfor a repeatable and scalable business model
    85. A temporary organization designed to searchfor a repeatable and scalable business model
    86. A temporary organization designed to searchfor a repeatable and scalable business model
    87. A temporary organization designed to searchfor a repeatable and scalable business modelA Startup aims to become a company
    88. How Are Companies Organized?
    89. How Are Companies Organized?Companies are organized around Business Models
    90. What’s a Business Model?
    91. What’s a Business Model?
    92. Value PropositionWhat Are You Building and For Who?
    93. What About MyIdea/Technology?
    94. What About My Idea/Technology?Your idea/ technology is one of the pieces necessary to build a company. It is part of the “Value Proposition”
    95. Customer Segments Who Are They? Why Would They Buy?What Job are They Trying to Get Done?
    96. ChannelsHow does your Product Get to Customers?
    97. Customer RelationshipsHow do you Get, Keep and Grow Customers?
    98. Revenue StreamsHow do you Make Money?
    99. Key ResourcesWhat are your most important Assets?
    100. Key PartnersWho are your Partners and Suppliers?
    101. Key ActivitiesWhat’s Most Important for the Business?
    102. Cost StructureWhat are the Costs and Expenses
    103. CANVAS OVERLAYKEY KEY OFFER CUSTOMER CUSTOMERPARTNERS ACTIVITIES RELATIONSHIPS SEGMENTS KEY CHANNELS RESOURCESCOST STRUCTURE REVENUE STREAMS images by JAM
    104. But,Realize They’re Hypotheses
    105. 9 Guesses GuessGuess Guess Guess Guess Guess Guess Guess Guess
    106. Business Model Canvas building block building building building block block building blockbuilding block block building building block building block building block block building building building building block block block block
    107. Customer Development
    108. Customer DevelopmentThe Process for Turning Hypotheses Into Facts
    109. The Four Steps – The Startup Path Customer Development
    110. Customer DevelopmentTest the Problem, Then the Solution
    111. Hypotheses Testing and Insight
    112. Customer Development The Pivot
    113. Customer Development is how you search for the model Search ExecutionCustomer Customer Customer CompanyDiscovery Validation Creation Building Pivot
    114. Customer Discovery
    115. 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
    116. Customer Discovery
    117. Customer Validation
    118. CustomerValidation
    119. Part 3How Does this Really Work?
    120. How Does This Really Work? Lean LaunchPad Class8 Weeks From an Idea to a Business
    121. SearchStrategy Business Model HypothesesProcess Customer Development, Agile DevelopmentOrganization Customer Development Team, Founder-driven This Class Education Business Model Design, Customer Development, Startup team building, Entrepreneurial Finance, Agile Development, MarketingInstructional Experiential, constructivist,Strategies learner-centered, inquiry-based
    122. dentalOpticsAmit Desai, Aaswath Raman,AshwinMadgavkar, AlokVasudevRevolutionizing dental diagnosticsthrough non-invasive imagingFinal PresentationInterviewed: 72 people
    123. The A-TeamAmit Desai AshwinMadgavkar Aaswath Raman AlokVasudevPh.D., Mat. Sci MBA/M.S. Ph.D., App. Physics Ph.D., EECambridge, BCG, UT Austin Microsoft, Harvard UT AustinNC StateMentor: Ethan Bloch dentalOptics
    124. Dental lighting isripe for innovation dentalOptics
    125. Original Idea : Inside-Out DentalLightingBring the light-sourceinside the mouthProvide better, moreconsistent illumination dentalOptics
    126. OverviewI. Understanding our CustomersII. Finding Customer & Value Proposition FitIII. Building the Business: Channels, Partners & RegulatorsIV. Introducing.. periOptics dentalOptics
    127. OverviewI. Understanding our CustomersII. Finding Customer & Value Proposition FitIII. Building the Business: Channels, Partners & RegulatorsIV. Introducing.. periOptics dentalOptics
    128. Version 0 The A-Team • Prototyping • • Personal• Manufacturers • Design Improved • Dentists • diagnostics service Manufacturing • Hygienists• Resellers • Marketing • Training & • Sales • Better • Specialists customization demos• Distributors • Service• Marketers • Superior patient • Chains• Trade • Stanford experience • Direct sales • Dental organizations • Trade schools • IP • Lower price shows • Hospitals • Human • Dental • Our network schools• Human resources • Compliance • Product sales• Manufacturing • Warranties &• Marketing support • Licensing (physical & IP)• Sales • Legal • Accessory sales dentalOptics
    129. Getting out of the building dentalOptics
    130. Three major dentist archetypes Most typical dentist • Primarily concerned with patient care Care • Worried about costs providers • Optimizes lifestyle and income Uses technology to up-sell additional procedures • Typically in high-income areas “Bentley” • State-of-the-art facilities and technologies dentists • Early adopter of dental devices Equipment handled by purchasing department • Uses financial metrics to make decisions “Chain” • Technologies standardized across all offices dentists dentalOptics
    131. Version 0 The A-Team • Prototyping • • Personal• Manufacturers • Design Improved • Dentists • Manufacturing diagnostics service • Hygienists• Hypotheses Resellers Tested: • Marketing • Training & • Sales • Better • Specialists customization demos• Distributors • Service • Intra-oral lighting• provides value for all Marketers • Superior patient • Chains dental professionals• Trade experience • Direct sales • Dental • Channels • Stanford organizations • Trade • IP • Lower price schools shows • Hospitals • Human • Dental • Our network schools• Human resources • Compliance • Product sales• Manufacturing • Warranties &• Marketing support • Licensing (physical & IP)• Sales • Legal • Accessory sales dentalOptics
    132. Immediate changes• Current lighting was satisfactory for most uses• However dentists expressed interest in better lighting for particular sets of procedures dentalOptics
    133. Immediate changes• Current lighting was satisfactory for most uses• However dentists expressed interest in better lighting for particular sets of procedures• Redid customer segmentation: Segment by Procedure Length dentalOptics
    134. Version 0 The A-Team • Prototyping • • Personal• Manufacturers • Design Improved • Dentists • diagnostics service Manufacturing • Hygienists• Resellers • Marketing • Training & • Sales • Better • Specialists customization demos• Distributors • Service• Marketers • Superior patient • Chains• Trade • Stanford experience • Direct sales • Dental organizations • Trade schools • IP • Lower price shows • Hospitals • Human • Dental • Our network schools• Human resources • Compliance • Product sales• Manufacturing • Warranties &• Marketing support • Licensing (physical & IP)• Sales • Legal • Accessory sales dentalOptics
    135. Version 0+ The A-Team • Prototyping • Personal• Manufacturers • Design • Improved service • Procedure • Manufacturing diagnostics • Training & length• Resellers • Marketing demos • Sales • Better • Continuing• Distributors • Service customization education - Short - Medium• Marketers • Superior patient - Long• Trade experience • • Stanford Direct sales organizations • IP • Lower price • Trade • Human shows • Our network • Reduced time • Distributor• Human resources • Compliance • Product sales• Manufacturing • Warranties &• Marketing support • Licensing (physical & IP)• Sales • Legal • Accessory sales dentalOptics
    136. Version 1 The A-Team • Prototyping • Personal• Manufacturers • Design • Improved service • Procedure • Manufacturing diagnostics • Training & length• Hypothesis Resellers Tested: • Marketing demos • Sales • Better • Continuing• Distributors • Service customization education - Short • Lighting needs differ - Medium• Marketers on procedure based • Superior patient - Long• length Trade experience organizations • Stanford • Direct sales • IP • Lower price • Trade • Human shows • Our network • Reduced time • Distributor• Human resources • Compliance • Product sales• Manufacturing • Warranties &• Marketing support • Licensing (physical & IP)• Sales • Legal • Accessory sales dentalOptics
    137. Procedure length learningsProcedure length Short (< 1 hr) Moderate (1-2 hrs) Long (> 2 hrs) dentalOptics
    138. Procedure length learningsProcedure length Short (< 1 hr) Moderate (1-2 hrs) Existing lighting solutions Long (> 2 hrs)  Surgical microscope  Loupe light  Clamps Anesthesia Patient comfort / movement no longer an issue dentalOptics
    139. Procedure length learningsProcedure length Short (< 1 hr) Identified key procedures:  Root canals  Crack detection Moderate  Color matching (1-2 hrs)  Done by all dentists Long (> 2 hrs)  Lighting critical Segment by Procedure Type dentalOptics
    140. Version 1 The A-Team • Prototyping • Personal• Manufacturers • Design • Improved service • Procedure • Manufacturing diagnostics • Training & length• Resellers • Marketing demos • Sales • Better • Continuing• Distributors • Service customization education - Short - Medium• Marketers • Superior patient - Long• Trade experience organizations • Stanford • Direct sales • IP • Lower price • Trade • Human shows • Our network • Reduced time • Distributor• Human resources • Compliance • Product sales• Manufacturing • Warranties &• Marketing support • Licensing (physical & IP)• Sales • Legal • Accessory sales dentalOptics
    141. Version 1 The A-Team • Prototyping • Improved • Personal• Manufacturers • Design diagnostics service • Procedure • Manufacturing • Training & type• Resellers • Marketing demos • Superior - Root canal • Sales • Continuing patient• Distributors • Service education - Crack experience detection• Marketers • Reduced - Color• Trade procedure matching organizations • Stanford time • Direct sales • IP • Trade • Human shows • Our network • Distributor• Human resources • Compliance • Product sales• Manufacturing • Warranties &• Marketing support • Licensing (physical & IP)• Sales • Legal • Accessory sales dentalOptics
    142. $200 MM/yr US market size $25 B dental equipment industry • 180,000 dentists • 2300 visits per year average • Consumable for each patient TAM: $2B • ~$5 cost per consumable • 10% of visits • $0-100 cost per tool $200 M serviceable • 20% of dentists diagnostic tool marketSource: US BLS, ADA, dentist interviews, industry research dentalOptics
    143. $200 MM/yr US market size $25 B dental equipment industry • 180,000 dentists • 2300 visits per year average • Consumable for each patient TAM: $2B • ~$5 cost per consumable • 10% of visits • $0-100 cost per tool $200 M serviceable • 20% of dentists diagnostic tool market Consumables are keySource: US BLS, ADA, dentist interviews, industry research dentalOptics
    144. Version 1 The A-Team • Prototyping • Improved • Personal• Manufacturers • Design diagnostics service • Procedure • Manufacturing • Training & type• Resellers • Marketing demos • Superior - Root canal • Sales • Continuing patient• Distributors • Service education - Crack experience detection• Marketers • Reduced - Color• Trade procedure matching organizations • Stanford time • Direct sales • IP • Trade • Human shows • Our network • Distributor Key Learning:•• Human resources component drastically Consumable • Compliance • Product sales• improves revenue potential & Manufacturing • Warranties • Licensing (physical & IP)• Marketing support • Accessory sales• Sales • Legal • Consumable sales dentalOptics
    145. OverviewI. Understanding our CustomersII. Finding Customer & Value Proposition FitIII. Building the Business: Channels, Partners & RegulatorsIV. Introducing.. periOptics dentalOptics
    146. Version 2+ The A-Team • Prototyping • Improved • Personal• Manufacturers • Design diagnostics service • Procedure • Manufacturing • Training & type• Hypothesis Tested: Resellers • Marketing • Superior demos • Sales • Continuing - Root canal patient• Distributors • Service education - Crack • Lighting needs differ experience detection• Marketers on procedure type based • Reduced - Color• Trade procedure matching organizations • Stanford time • Direct sales • IP • Trade • Human shows • Our network • Distributor• Human resources • Compliance • Product sales• Manufacturing • Warranties & • Licensing (physical & IP)• Marketing support • Accessory sales• Sales • Legal • Consumable sales dentalOptics
    147. Segmenting by Procedure Types Intra-oral light benefit Procedure  Increased visibility in  Root canal tight spaces Reduce procedure time  Multiple teeth  Crack  Dentists at once detection Improve Diagnostic Capability  More natural  Color light matching dentalOptics
    148. Best response: Transillumination Intra-oral light + imaging benefit Procedure  Track crack/defect  Root canal Reduce progress procedure time  Multiple teeth  Transillumination  Dentists Improve at once for Cracks Preventative Diagnostic Capability  Proactive  Color detection vs. Drive patient waiting for matching loyalty and patient pain return visits dentalOptics
    149. Prototyping Transilluminated tooth using fiber or LED source dentalOptics
    150. Prototypes dentalOptics
    151. Form & Function function form dentalOptics
    152. Physical prototypes help!• Handing dentists a crude clay mockup got us better, more actionable feedback• A great way of gauging whether new functionality satisfies a need dentalOptics
    153. Interest, but not excitement Dentists generally liked the prototype Key TakeawaysDentist # Imaging back teeth is essential 5 Market would be somewhat 4 limited / niche 3 2 1 None Neutral Very Positive Interest in prototype dentalOptics
    154. Version 2+ The A-Team • Prototyping • Improved • Personal• Manufacturers • Design diagnostics service • Procedure • Manufacturing • Training & type• Hypothesis Tested: Resellers • Marketing • Superior demos • Sales • Continuing - Root canal patient• Distributors • Service education - Crack • Lighting needs differ experience detection• Marketers on procedure type based • Reduced - Color• Trade procedure matching organizations • Stanford time • Direct sales • IP • Trade • Human shows • Our network • Distributor• Human resources • Compliance • Product sales• Manufacturing • Warranties & • Licensing (physical & IP)• Marketing support • Accessory sales• Sales • Legal • Consumable sales dentalOptics
    155. Version 2+ The A-Team • Prototyping • Personal • • Reduced service • Crack• Manufacturers Design • Manufacturing procedure • Training & time detection• Resellers • Marketing demos • Sales • Continuing• Distributors • Service • Improve education preventative• Marketers diagnostics• Trade • Increase # of organizations • Stanford • Direct sales procedures • IP • Trade • Human • Provide a shows • Our network patient record • Distributor• Human resources • Compliance • Product sales• Manufacturing • Warranties & • Licensing (physical & IP)• Marketing support • Accessory sales• Sales • Legal • Consumable sales dentalOptics
    156. Keeping our ear to the ground..We were tipped off to a potentially larger diagnostic market: dentalOptics
    157. Keeping our ear to the ground..We were tipped off to a potentially larger diagnostic market: Non-invasive gum disease detection “This would be a game changer!” “A new standard of care” dentalOptics
    158. This should get poked into yourgums 192 times during a dentalvisit …there must be a better way dentalOptics
    159. Version 2+ The A-Team • Prototyping • Personal • • Reduced service • Crack• Manufacturers Design • Manufacturing procedure • Training & time detection• Resellers • Marketing demos • Sales • Continuing• Distributors • Service • Improve education preventative • Periodontal• Marketers diagnostics imaging• Trade • Increase # of organizations • Stanford • Direct sales procedures • IP • Trade • Human • Provide a showsCustomer Insight: • Our network patient record • Distributor • Periodontal imaging could be• Human resources • Compliance • Product sales larger market a• Manufacturing • Warranties & • Licensing (physical & IP)• Marketing support • Accessory sales• Sales • Legal • Consumable sales dentalOptics
    160. Periodontal care right now Considerable undertreatment 70% of offices don’t regularly do a full probe test of all teeth! Time & effort 50% of US population has mild-severe periodontitis, only 5-10% of are treated “The number-one reason dentists are sued is failure to diagnose periodontal disease”* 30% of patients don’t feel the need for the recommended treatment* Increases with aging population dentalOptics *K. Esler, Sidekick (2009)
    161. Version 3+ The A-Team • Prototyping • Personal • Design • Reduced service • Crack• Manufacturers • Manufacturing procedure • Training & time detection• Hypothesis Tested: Resellers • Marketing demos • Sales • Continuing• Distributors • Service • Improve education • Periodontal imaging is of preventative • Periodontal• Marketers interest to greater diagnostics imaging• dentists Trade • Increase # of organizations • Stanford • Direct sales procedures • IP • Trade • Human • Provide a shows • Our network patient record • Distributor• Human resources • Compliance • Product sales• Manufacturing • Warranties & • Licensing (physical & IP)• Marketing support • Accessory sales• Sales • Legal • Consumable sales dentalOptics
    162. Version 3+ The A-Team • Prototyping • Personal • Accuracy• Manufacturers • Design service • Crack • Manufacturing • Reduced time • Training & detection• Resellers • Marketing demos • Sales • Patient comfort • Continuing• Distributors • Service education ✔ • Increase # of procedures • Periodontal• Marketers imaging • Improve records• Trade organizations • Stanford • Direct sales • Patient • IP education • Trade • Human shows • Our network • Reduced • Distributor malpractice• Human resources • Compliance • Product sales• Manufacturing • Warranties & • Licensing (physical & IP)• Marketing support • Accessory sales• Sales • Legal • Consumable sales dentalOptics
    163. Version 3+ The A-Team • Prototyping • Personal• Manufacturers • Accuracy• • Design service Manufacturers • Manufacturing • Training & • Periodontal • Reduced time• Resellers • imaging• Resellers Marketing demos • Sales • Patient comfort • Continuing•• Distributors Distributors • Service education • Increase # of•• Marketers Marketers New hypothesis: procedures • Improve records• Trade Trade organizations organizations •• Stanford Insurance companies • Direct sales • Patient • IP • Trade could be strategic partners education• Insurance • Human shows companies • Our network • Reduced • Distributor malpractice• Human resources • Compliance • Product sales• Manufacturing • Warranties & • Licensing (physical & IP)• Marketing support • Accessory sales• Sales • Legal • Consumable sales dentalOptics
    164. OverviewI. Understanding our CustomersII. Finding Customer & Value Proposition FitIII. Building the Business: Channels, Partners & RegulatorsIV. Introducing.. periOptics dentalOptics
    165. Version 4+ The A-Team • Prototyping • Personal• Manufacturers • Accuracy • Design service • Manufacturing • Training & • Periodontal • Reduced time Hypotheses Tested:• Resellers • Marketing imaging demos • Sales • Patient comfort • Continuing• Distributors • • Service Insurance companies • Increase # of education• Marketers would embrace this procedures technology • Improve records• Trade • FDA compliance is not • Direct sales organizations • Stanford • Patient prohibitive • IP education • Trade• Insurance • Human shows companies • Our network • Reduced • Distributor malpractice• Human resources • Compliance • Product sales• Manufacturing • Warranties & • Licensing (physical & IP)• Marketing support • Accessory sales• Sales • Legal • Consumable sales dentalOptics
    166. Key Partner: Insurance Largest dental insurance provider in California“Periodontal probing is the single most inaccurate piece of datawe get from dentists. Fraud and abuse are common” dentalOptics
    167. Key Partner: Insurance Largest dental insurance provider in California“Periodontal probing is the single most inaccurate piece of datawe get from dentists. Fraud and abuse are common”Dental Policy Committee• Meets regularly to evaluate new technologies• Determines which technologies will be added to annual contracts based on efficacy and cost savings to insurance companyWilling to recommend use of new technologyNeed more clinical data, but are enthusiastic about the idea! dentalOptics
    168. What we make Device cost (one time) ~$2000Dental DentistOptics Disposables ~$2.50 per patient dentalOptics
    169. What the dentist normally makes $250 Insurance Membership $250 Co-pay Dentist Patient Equipment / Variable CostsNote: Assumes 50/50 copay-insurance split dentalOptics
    170. What we’d add for the dentist Device creates $250 additional Insurance periodontal procedures Device cost (one time) Membership ~$2000 $250 Co-pay Dental Dentist Patient Optics Disposables ~$2.50 per patient Equipment / Variable CostsNote: Assumes 50/50 copay-insurance split dentalOptics
    171. Three classes of FDA Devices Criteria FDA Requirements Minimal health and safety Need to register with FDA but Class I risks, established precedent not get approval before putting it (eg, dental on the marketpick, gloves, toothbru sh) Presents safety and health risks Submit 510-K application to Class II that arent completely controlled FDA, include detail about (eg, dental by GMP (good manufacturing device, marketingfillings, ceramics, drill processes) materials, device safety s) features, and other paperwork Invasive, inflammable, or Very thorough process similar to presents other significant drug approval. Requires clinical Class III significant safety risks. Often trails and mountains of(eg, stent, implantabl times a new type of device paperwork e pacemaker) dentalOptics
    172. Some regulatory risk Device key risk: Proxy suggests our device misdiagnosis will be class IIDevice carries little direct risk Intra-oral, non-invasive laser light• Intra-oral, non-invasive probe caries (tooth decay) detector• Uses non-harmful wavelengths of radiation Approved as class II medical device. Clinical tests conducted to prove accuracyKey risk: misdiagnosis• Clinical evidence required to establish efficacySource: Iowa Dental Supply dentalOptics
    173. Class II FDA approval processMonth 0 3 6 9 12 15 18 Feasibility study Class II device FDA trials and approval • Construct device • Determine predicate device(s) prototype • Enroll 4-7 sites and 10+ periodontists in study • Determine device • Fix critical end-points based on device capability (eg, diagnostic capabilities 1 mm measurement error) • Begin FDA 510(k) • Submit 510(k) to FDA and obtain approval documentation • Enroll 1-2 periodontists in preliminary efficacy study Without a predicateTrial Size 30 patients 200-400 patients 1000-2000 patientsCosts $200 K $200 - 400 K dentalOptics $1,000 – 2,000 K
    174. Version 4+ The A-Team • Prototyping • Personal• Manufacturers • Accuracy• • Design service Manufacturers • Manufacturing • Training & • Periodontal • Reduced time Hypotheses Tested:• Resellers • imaging• Resellers Marketing demos • Sales • Patient comfort • Continuing• Distributors •• Distributors • Service Insurance companies • Increase # of education•• Marketers Marketers would embrace this procedures technology • Improve records• Trade Trade • FDA compliance is not • Direct sales organizations organizations • Stanford • Patient prohibitive • IP • Trade ✔ education• Insurance • Human shows companies • Our network • Reduced • Distributor malpractice••• Human resources Manufacturing • • Compliance Warranties & ✔ • • Product sales Licensing (physical & IP) Marketing support • Accessory sales• Sales • Legal • Consumable sales dentalOptics
    175. Version 4+ The A-Team • Prototyping • Personal• Manufacturers • Accuracy • Design service • Manufacturing • Training & • Periodontal • Reduced time• Resellers • Marketing imaging demos • Sales • Patient comfort • Continuing• Distributors • Question asked: Service education • Increase # of• Marketers procedures • How do we sell our • Improve records• Trade product? organizations • Stanford • Direct sales • Patient • IP education • Trade• Insurance • Human shows companies • Our network • Reduced • Distributor malpractice• Human resources • Compliance • Product sales• Manufacturing • Warranties & • Licensing (physical & IP)• Marketing support • Accessory sales• Sales • Legal • Consumable sales dentalOptics
    176. Channels Direct Sales Big Distributors Private Practice Institutional Purchasing Dentist Dentist Department dentalOptics
    177. Channels Direct Sales Big Distributors 80% Market Share 30% Margin Private Practice Institutional Purchasing Dentist Dentist Department dentalOptics
    178. Channels Continuing Education Magazines Trade Courses & Email Shows Direct Sales Big Distributors 80% Market Share 30% Margin Private Practice Institutional Purchasing Dentist Dentist Department dentalOptics
    179. Version 4+ The A-Team • Prototyping • Personal• Manufacturers • Accuracy • Design service • Manufacturing • Training & • Periodontal • Reduced time• Resellers • Marketing imaging demos • Sales • Patient comfort • Continuing• Schein/Patt. • Service education • Increase # of• Marketers procedures • Improve records• Trade • Stanford • Direct sales organizations • • IP Patient • Trade education• Insurance • Human shows companies • Our network • Reduced • Patterson/S malpractice chein• Human resources • Compliance • Product sales• Manufacturing • Warranties & • Licensing (physical & IP)• Marketing support • Accessory sales• Sales • Legal • Consumable sales dentalOptics
    180. Version 4+ The A-Team • Prototyping • Personal• Manufacturers • Accuracy • Design service • Manufacturing • Training & • Periodontal • Reduced time• Resellers • Marketing imaging demos • Sales • Patient comfort • Hypothesis Continuing Tested:• Distributors • Service education • Increase # of• Marketers procedures • Value Propositions are• Trade • Improve records strong enough to sell • Stanford • Direct sales products organizations • • IP Patient • Trade education• Insurance • Human shows companies • Our network • Reduced • Patterson/S malpractice chein• Human resources • Compliance • Product sales• Manufacturing • Warranties & • Licensing (physical & IP)• Marketing support • Accessory sales• Sales • Legal • Consumable sales dentalOptics
    181. Our Sales Pitch dentalOptics
    182. Patient experience is key • Accuracy  • Reduced time ☐ • Patient comfort Value Props • Patient education  • Reduced malpractice exposure  • Up-sell procedures  • Improved record keeping  “This seems reasonable” “I’d write you a “We would have “It would be cost check today!” the discussion” prohibitive”Cost Props $1000 $2000 $8000 Per patient consumable cost < $5 dentalOptics
    183. Version 4+ The A-Team • Prototyping • Personal• Manufacturers • Accuracy• • Design service Manufacturers • Manufacturing • Training & • Periodontal • Reduced time• Resellers • imaging• Resellers Marketing demos • Sales • Patient comfort • Continuing•• Distributors Distributors • Service education • Increase # of•• Marketers Marketers procedures • Improve records• Trade Trade • Stanford • Direct sales organizations organizations • • IP Patient • Trade education• Insurance • Human shows companies • Our network • Reduced • Patterson/S malpractice chein• Human resources • Compliance • Product sales• Manufacturing • Warranties & • Licensing (physical & IP)• Marketing support • Accessory sales• Sales • Legal • Consumable sales dentalOptics
    184. Version 4+ The A-Team • Prototyping • Personal• Manufacturers • Accuracy• • Design service Manufacturers • Manufacturing • Training & • Periodontal• Resellers • • Reduced time imaging• Resellers Marketing demos • Sales • Continuing•• Distributors Distributors • Service • Patient education comfort•• Marketers Marketers • Improved• Trade Trade records • Stanford • Direct sales organizations organizations • IP • Patient • Trade• Insurance • Human education shows companies • Our network • Patterson/S chein• Human resources • Compliance • Product sales• Manufacturing • Warranties & • Licensing (physical & IP)• Marketing support • Accessory sales• Sales • Legal • Consumable sales dentalOptics
    185. Version 5 The A-Team • Prototyping • Personal• Manufacturers • Accuracy• • Design service Manufacturers • Manufacturing • Training & • Periodontal• Resellers • • Reduced time imaging• Resellers Marketing demos • Sales • Continuing•• Distributors Distributors • Service • Patient education comfort•• Marketers Marketers • Improved• Trade Trade records • Stanford • Direct sales organizations organizations • IP • Patient • Trade• Insurance • Human education shows companies • Our network • Patterson/S chein• Human resources • Compliance • Product sales• Manufacturing • Warranties & • Licensing (physical & IP)• Marketing support • Accessory sales• Sales • Legal • Consumable sales dentalOptics
    186. dentalOptics dentalOptics
    187. dentalOptics periOptics dentalOptics
    188. Our Product: periOptics dentalOptics
    189. Our Product: periOptics $2000 per unit $2.50 per silicone sleeve Distributed through: Patterson Dental & Direct Imaging Resolution: < 1mm dentalOptics
    190. $400 MM annual total addressable marketfor Periodontal Diagnostic Device Total addressable market ($MM) 450 $320 MM $400 MM 400 350 300 250 200 150 100 $75 MM 50 0 Device sales Consumables Total • Device cost - $2000 • $2.5 consumables per • Amortized over 4 years patient • 128 MM patients per year dentalOpticsSource: Department of Health and Human Services
    191. Growth PlanMonth 0 6 12 18 24Regulatory Feasibility study Class II device FDA trials and approvalProduct Early Prototype Dev. Product Cycle I Product Cycle IIDevelopmentScale-up Planning with ManufacturersPreparationCosts $300 K $1.5-2 M dentalOptics
    192. Growth PlanMonth 0 6 12 18 24Regulatory Feasibility study Class II device FDA trials and approvalProduct Early Prototype Dev. Product Cycle I Product Cycle IIDevelopmentScale-up Planning with ManufacturersPreparationCosts $300 K $1.5-2 MUnit Economics Cost to Dentist: $2000 Cost of Goods Margin Distributor $500* $900 $600 Revenue *At scale: 10K units dentalOptics
    193. Next Step: Evaluate Technical OptionsOptical Acoustic J Clin Periodontol 2003; 30: 849–854 Printed in Denmark. All rights reserved function dentalOptics Periodontal ultrasonogra
    194. Lessons LearnedPhysical prototypes engage potential customersConsumables are key to revenue models in dental devicesListen to your customers for new directionsCaregivers don’t think exclusively like businesspeople: thepatient experience is paramount“Hi, I’m a Stanford student…” gets you a conversation withpretty much anyone dentalOptics
    195. Lean LaunchPad – Student Selection• Students apply as a team – Their application is their business model canvas – Interdisciplinary business and engineering teams• We select for teams, notideas
    196. Lean LaunchPad - Class Organization• Teams present every week – Teaching team critiques• Teams spend tens of hours outside the classroom – They keep a blog of their customer discovery• Lectures are minimalist• Syllabus and slides on-line
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