NCIIA Steve Blank Keynote 032312
 

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 NCIIA Steve Blank Keynote 032312 Presentation Transcript

  • Crossing the Rubicon:Entrepreneurial education at the crossroads Steve Blank www.steveblank.com @sgblank
  • We’ve learned a lot about entrepreneurship
  • Perhaps our curriculums should reflect what we’ve learned?
  • Agenda1. What we used to believe / What we now know2. Business Models and Customer Development3. Class Example4. The Evolution of the Curriculum
  • Part 1What We Used to Believe What We Now Know
  • What We Used to Believe
  • There is one type of startup and entrepreneur
  • What We Now Know
  • Lifestyle Startups Work to Live their Passion Startup• Serve known customer with known product• Work for their passion
  • Small Business Startups Work to Feed the Family Small Startup Business• Serve known customer with known product• Feed the family
  • 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
  • Social Entrepreneurship Startups Social Large Startup Non-Profit• Solve pressing social problems• Social Enterprise: Profitable• Social Innovation: New Strategies • Not venture-backable
  • Scalable Startup Born to Be Big Search Execute Scalable Large Startup CompanyGoal is to solve for: unknown customer and unknown features
  • 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
  • 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
  • Large Company Sustaining Innovation Innovate or Evaporate Sustaining Innovation Scalable Large Transition Startup Company • Existing Market / Known customer •Known product feature needs
  • Large Company Disruptive Innovation New Large Transition Division Company Disruptive Innovation•New Market•New tech, customers, channels
  • Large Company Disruptive Innovation Large New Division Transition Company Disruptive Innovation •Build •Partner •Acquire - IP - Talent - Product - Customers - Business
  • What We Used to Believe
  • Startups are About Vision & Ideas
  • What We Now Know
  • Most visions are hallucinations
  • What We Used to Believe
  • Startups are a Smaller Version of a Large Company
  • What We Now Know
  • Startups SearchCompanies Execute
  • What We Used to Believe Strategy
  • Start With an Operating Plan and Financial Model
  • All I Need to Do is Execute the Plan
  • All I Need to Do is and Make the Forecast
  • All I Need to Do is Execute the Plan
  • What We Now Know Strategy
  • No Business Plan survives first contact with customers
  • Planning comes before the plan
  • Business Models
  • Business Models
  • Search Execution Business Model Operating Plan +Strategy Hypotheses Financial Model
  • What We Used to Believe Process
  • We Built Startups byManaging Processes Product Management + Waterfall Engineering
  • Product Introduction Model Concept/ Product Alpha/Beta Launch/Seed Round Dev. Test 1st Ship
  • 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”
  • 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
  • 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
  • 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
  • Waterfall / Product Management Execution on Two “Knowns” Requirements Product Features: known Design Implementation Verification Customer Problem: known MaintenanceSource: Eric Rieshttp://startuplessonslearned.blogspot.com
  • Waterfall / Product Management Execution on Two “Knowns” Requirements Product Features: known Design Implementation Verification Customer Problem: known MaintenanceSource: Eric Rieshttp://startuplessonslearned.blogspot.com
  • What We Now Know Strategy
  • More startups fail froma lack of customers than from afailure of product development
  • Startups go from failure to failure
  • Startups go from failure to failureThe ones that win are those that learn from failure
  • Customer Development
  • Search ExecutionStrategy Business Model Operating Plan + Hypotheses Financial ModelProcess Customer & Product Management & Waterfall Agile Development Development
  • What We Used to Believe Organization
  • Hire and Build aFunctional Organization
  • What We Now Know Organization
  • Founders run a Customer Development TeamNo sales, marketing and business development
  • 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
  • What We Used to Believe Education
  • Entrepreneurial Education was about execution
  • Entrepreneurial Education was about execution
  • What We Now Know Education
  • Entrepreneurial Educationbegins with the Search for a business model
  • 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
  • Putting Search first is a radical changeIt’s not just one more methodology
  • What We Used to Believe Instructional Strategies
  • Cases and a Business Plans weregood entrepreneurial teaching tools
  • Cases and a Business Plan were good teaching tools
  • What We Now KnowInstructional Strategies
  • Experiential Immersion ~100 GOOTB connections
  • Team-based Simulations
  • 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
  • Business Model CompetitionsReplace Business Plan Competitions
  • Business Model CompetitionsReplace Business Plan Competitions http://www.businessmodelcompetition.com/
  • Now imagine these classes virtual and networked independent of location
  • 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
  • Classes on EntrepreneurialExecution Follows Search
  • 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
  • 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
  • Part 2 Business Models andCustomer Development
  • What’s A Company?
  • What’s A Company? A business organization which sells aproduct or service in exchange for revenue and profit
  • What’s A Startup?
  • A temporary organization designed to searchfor a repeatable and scalable business model
  • A temporary organization designed to searchfor a repeatable and scalable business model
  • A temporary organization designed to searchfor a repeatable and scalable business model
  • A temporary organization designed to searchfor a repeatable and scalable business model
  • A temporary organization designed to searchfor a repeatable and scalable business modelA Startup aims to become a company
  • How Are Companies Organized?
  • How Are Companies Organized?Companies are organized around Business Models
  • What’s a Business Model?
  • What’s a Business Model?
  • Value PropositionWhat Are You Building and For Who?
  • What About MyIdea/Technology?
  • 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”
  • Customer Segments Who Are They? Why Would They Buy?What Job are They Trying to Get Done?
  • ChannelsHow does your Product Get to Customers?
  • Customer RelationshipsHow do you Get, Keep and Grow Customers?
  • Revenue StreamsHow do you Make Money?
  • Key ResourcesWhat are your most important Assets?
  • Key PartnersWho are your Partners and Suppliers?
  • Key ActivitiesWhat’s Most Important for the Business?
  • Cost StructureWhat are the Costs and Expenses
  • CANVAS OVERLAYKEY KEY OFFER CUSTOMER CUSTOMERPARTNERS ACTIVITIES RELATIONSHIPS SEGMENTS KEY CHANNELS RESOURCESCOST STRUCTURE REVENUE STREAMS images by JAM
  • But,Realize They’re Hypotheses
  • 9 Guesses GuessGuess Guess Guess Guess Guess Guess Guess Guess
  • 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
  • Customer Development
  • Customer DevelopmentThe Process for Turning Hypotheses Into Facts
  • The Four Steps – The Startup Path Customer Development
  • Customer DevelopmentTest the Problem, Then the Solution
  • Hypotheses Testing and Insight
  • Customer Development The Pivot
  • Customer Development is how you search for the model Search ExecutionCustomer Customer Customer CompanyDiscovery Validation Creation Building Pivot
  • Customer Discovery
  • 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
  • Customer Discovery
  • Customer Validation
  • CustomerValidation
  • Part 3How Does this Really Work?
  • How Does This Really Work? Lean LaunchPad Class8 Weeks From an Idea to a Business
  • 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
  • dentalOpticsAmit Desai, Aaswath Raman,AshwinMadgavkar, AlokVasudevRevolutionizing dental diagnosticsthrough non-invasive imagingFinal PresentationInterviewed: 72 people
  • 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
  • Dental lighting isripe for innovation dentalOptics
  • Original Idea : Inside-Out DentalLightingBring the light-sourceinside the mouthProvide better, moreconsistent illumination dentalOptics
  • OverviewI. Understanding our CustomersII. Finding Customer & Value Proposition FitIII. Building the Business: Channels, Partners & RegulatorsIV. Introducing.. periOptics dentalOptics
  • OverviewI. Understanding our CustomersII. Finding Customer & Value Proposition FitIII. Building the Business: Channels, Partners & RegulatorsIV. Introducing.. periOptics dentalOptics
  • 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
  • Getting out of the building dentalOptics
  • 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
  • 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
  • Immediate changes• Current lighting was satisfactory for most uses• However dentists expressed interest in better lighting for particular sets of procedures dentalOptics
  • 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
  • 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
  • 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
  • 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
  • Procedure length learningsProcedure length Short (< 1 hr) Moderate (1-2 hrs) Long (> 2 hrs) dentalOptics
  • 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
  • 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
  • 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
  • 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
  • $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
  • $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
  • 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
  • OverviewI. Understanding our CustomersII. Finding Customer & Value Proposition FitIII. Building the Business: Channels, Partners & RegulatorsIV. Introducing.. periOptics dentalOptics
  • 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
  • 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
  • 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
  • Prototyping Transilluminated tooth using fiber or LED source dentalOptics
  • Prototypes dentalOptics
  • Form & Function function form dentalOptics
  • 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
  • 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
  • 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
  • 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
  • Keeping our ear to the ground..We were tipped off to a potentially larger diagnostic market: dentalOptics
  • 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
  • This should get poked into yourgums 192 times during a dentalvisit …there must be a better way dentalOptics
  • 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
  • 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)
  • 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
  • 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
  • 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
  • OverviewI. Understanding our CustomersII. Finding Customer & Value Proposition FitIII. Building the Business: Channels, Partners & RegulatorsIV. Introducing.. periOptics dentalOptics
  • 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
  • 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
  • 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
  • What we make Device cost (one time) ~$2000Dental DentistOptics Disposables ~$2.50 per patient dentalOptics
  • What the dentist normally makes $250 Insurance Membership $250 Co-pay Dentist Patient Equipment / Variable CostsNote: Assumes 50/50 copay-insurance split dentalOptics
  • 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
  • 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
  • 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
  • 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
  • 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
  • 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
  • Channels Direct Sales Big Distributors Private Practice Institutional Purchasing Dentist Dentist Department dentalOptics
  • Channels Direct Sales Big Distributors 80% Market Share 30% Margin Private Practice Institutional Purchasing Dentist Dentist Department dentalOptics
  • 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
  • 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
  • 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
  • Our Sales Pitch dentalOptics
  • 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
  • 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
  • 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
  • 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
  • dentalOptics dentalOptics
  • dentalOptics periOptics dentalOptics
  • Our Product: periOptics dentalOptics
  • Our Product: periOptics $2000 per unit $2.50 per silicone sleeve Distributed through: Patterson Dental & Direct Imaging Resolution: < 1mm dentalOptics
  • $400 MM annual total addressable marketfor Periodontal Diagnostic Device Total addressable market ($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
  • 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
  • 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
  • Next Step: Evaluate Technical OptionsOptical Acoustic J Clin Periodontol 2003; 30: 849–854 Printed in Denmark. All rights reserved function dentalOptics Periodontal ultrasonogra
  • 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
  • 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
  • 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
  • Example of aLean LaunchPad Team Blog
  • Lean LaunchPad Class National Science Foundation
  • Lean LaunchPad ClassWe’ll Teach ~175 Teams in 2012 National Science Foundation
  • Part 4The New Entrepreneurship Curriculum
  • This is Not about One Class
  • It Changes Everything
  • It Changes Everything Undergraduate/Graduate Technology Startups, Small BusinessStartups, Corporate Entrepreneurship
  • How?
  • Building the New Curriculum
  • Step 1: Decide what type ofEntrepreneurship you’re teaching
  • Step 1: Decide what type ofEntrepreneurship you’re teaching Small business? Social? Scalable? Buyable? Corporate?
  • Step 2:Embrace Search Versus Execute
  • Step 2:Embrace Search Versus Execute It drives the new curriculum
  • Step 3: Start By Teaching theBusiness Model Canvas
  • Step 3:Start Teaching the Canvas It’s the basics for “hypotheses”
  • Step 3:Start Teaching the Canvas Undergrads to graduates
  • Step 4:Start Teaching Customer Development
  • Step 4:Start Teaching Customer Development It’s the basics for “search”
  • Step 4:Start Teaching Customer Development Level of intensity can vary – but getting out of the classroom is the key
  • Step 5:Move Teaching the Plan
  • Step 5: Move Teaching the PlanOperating Plans come after the search
  • Step 5:Move Teaching the Plan Business Plan competitions do not teach real-world skills
  • Step 6:Teams are more important then the idea
  • Step 6:Teams are more important then the idea Teach Teamwork via immersion and simulation
  • Step 7:Get Your Classes On-line
  • Step 7:Get Your Classes On-Line This is the year this stuff works
  • Step 8:Once On-line – Network the Students
  • We’re Building an E-School
  • We’re Building an E-School Our Own Entrepreneurship Curriculum, not a derivative
  • Business School Versus Entrepreneurship School Business SchoolScalable Large TransitionStartup Company Courses -Managerial Finance/Accounting - Managing Groups and Teams - Financial Accounting -Operations - Modeling for Optimization - Global Value Chain Strategies
  • Business School Versus Entrepreneurship SchoolEntrepreneurship School Business School Scalable Large Transition Startup Company-Creativity and Innovation-Business Model testing -Managerial Finance/Accounting - Managing Groups and Teams- Customer Development - Financial Accounting- Agile Development -Operations- Startup Metrics - Modeling for Optimization - Global Value Chain Strategies- Operating plans & Financial Models
  • Why Do We Do This?
  • Make Your Lives Extraordinary