Nsf teaching guide

The National ScienceFoundation Innovation Corps: The Lean LaunchPad Teaching Handbook Steve Blank & The I-Corps Teaching Team July 2012

Table of Contents1. The Lean LaunchPad Manifesto................................................................................................ 4Strategy ......................................................................................................................................................... 4Process .......................................................................................................................................................... 4Organization.................................................................................................................................................. 6Education ...................................................................................................................................................... 7Instructional Strategy.................................................................................................................................... 82. The NSF Lean LaunchPad – Goals ............................................................................................. 93. Lean LaunchPad Pedagogy – Experiential Learning and a Flipped Classroom ..... 11Experiential Learning .................................................................................................................................. 11The Flipped Classroom ................................................................................................................................ 114. Teams .............................................................................................................................................. 11Team Formation.......................................................................................................................................... 12Team Dynamics ........................................................................................................................................... 125. Course Logistics ........................................................................................................................... 14Classes ......................................................................................................................................................... 14Textbooks .................................................................................................................................................... 15Guidelines for team presentations ............................................................................................................. 186. Instructor Pre-Course Preparation ....................................................................................... 197. Student/Instructor Success Criteria ..................................................................................... 208. The Business Model Canvas ..................................................................................................... 219. Customer Development ............................................................................................................. 2310. Detailed Class Curriculum...................................................................................................... 23Before the Teams Show Up in Class............................................................................................................ 23Class 1: Intro &Business Models and Customer Development ............................................................ 27 Class 1 - 3: Presentation Agenda and Teaching Assistant Activities ...................................................... 31 Lecture 1: Key concept diagrams ............................................................................................................ 32Class 2: Value Proposition ......................................................................................................................... 34 Lecture 2: Key concept diagrams ............................................................................................................ 37Class 3: Customer Segments .................................................................................................................... 39 Lecture 3: Key concept diagrams ............................................................................................................ 42Class 4: Distribution Channels .................................................................................................................. 44 Class 4 - 8: Presentation Agenda and Teaching Assistant Activities ...................................................... 46 Lecture 4: Key concept diagrams ............................................................................................................ 48Class 5: Customer Relationships (Get/Keep/Grow)............................................................................... 50 Lecture 5: Key concept diagrams ............................................................................................................ 53Class 6: Revenue Streams ........................................................................................................................ 56 Lecture 6: Key concept diagrams ............................................................................................................ 58Class 7: Partners ........................................................................................................................................ 60 Lecture 7: Key concept diagrams ............................................................................................................ 62NSF I-Corps Teaching Handbook Revision 22 July 2012 page 2 of 114

Class 8: Resources, Activities and Costs ................................................................................................ 63 Lecture 8: Key concept diagrams ............................................................................................................ 6511. Course Agenda ............................................................................................................................ 7012. Course Operations .................................................................................................................... 7213. Appendices .................................................................................................................................. 73Example Teaching Assistant Communications............................................................................................ 77Instructions for WebEx Session for Participants ......................................................................................... 83I-Corps Sample Syllabus - March 2012 ……………………………………………………………….86NSF I-Corps Teaching Handbook Revision 22 July 2012 page 3 of 114

1. The Lean LaunchPad ManifestoOne of the things startups have lacked is a definition of who they were. For years we’vetreated startups like they are just smaller versions of large companies.However, we now know that a startup is a temporary organization designed to searchfor a repeatable and scalable business model. Within this definition, a startup can be anew venture or it can be a new division or business unit in an existing company.If your business model is unknown—that is, just a set of untested hypotheses—you area startup searching for a repeatable business model. Once your business model(market, customers, features, channels, pricing, Get/Keep/Grow strategy, etc.) isknown, you will be executing it. Search versus execution is what differentiates a newventure from an existing business unit. StrategyThe term ―business model‖ first appeared around 50 years ago, but the concept didn’tcatch on until the 1990’s. It became common vernacular to discuss business models,but without a standard framework and vernacular, confusion reigned. In 2010, whenAlexander Osterwalder published his book,Business Model Generation, he provided avisual ontology and a clear vernacular that was sorely needed, and it became clear thatthis was the tool to organize startup hypotheses.The primary objective of a startup is to validate its business model hypothesesuntil itfinds one that is repeatable and scalable (it continues to iterate and pivot until it does.)Then it moves into execution mode. It’s at this point the business needs an operatingplan, financial forecasts and other well-understood management tools. ProcessNSF I-Corps Teaching Handbook Revision 22 July 2012 page 4 of 114

Yet as powerful as the Business Model Canvas (a template with the nine blocks of abusiness model) is, at the end of the day it was a tool for brainstorming hypotheseswithout a formal way of testing them.The processes used to organize and implement the search for the business model areCustomer Developmentand Agile Development. A search for a business model can occurin any new business—in a brand new startup new or in a new division of an existingcompany.The Customer Development model breaks out all the customer-related activities of anearly-stage company into four easy-to-understand steps. The first two steps of theprocess outline the ―search‖ for the business model. Steps three and four ―execute‖ thebusiness model that’s been developed, tested, and proven in steps one and two. Thesteps: Customer discovery first captures the founders’ vision and turns it into a series of business model hypotheses. Then it develops a plan to test customer reactions to those hypotheses and turn them into facts. Customer validation tests whether the resulting business model is repeatable and scalable. If not, you return to customer discovery. Customer creation is the start of execution. It builds end-user demand and drives it into the sales channel to scale the business. Company-building transitions the organization from a startup to a company focused on executing a validated model.In the ―search‖ steps, you want a process designed to be dynamic, so you work with arough business model description knowing it will change. The business model changesbecause startups use customer development to run experiments to test the hypothesesthat make up the model. (First testing their understanding of the customer problem andthen solutions.) Most of the time these experiments fail. Search embraces failure as anatural part of the startup process. Unlike existing companies that fire executives whenthey fail to match a plan, we keep the founders and change the model.Once a company has found a business model (it knows its market, customers,product/service, channel, pricing, etc.), the organization moves from search toexecution.The product execution process—managing the lifecycle of existing products and thelaunch of follow-on products—is the job of the product management and engineeringorganizations. It results in a linear process where you make operating plans and refinethem into detail. The more granularity you add to a plan, the better people can executeit: a Business Requirement document (BRD) leads to a Market Requirements DocumentNSF I-Corps Teaching Handbook Revision 22 July 2012 page 5 of 114

(MRD) and then gets handed off to engineering as a Functional SpecificationsDocument (FSD) implemented via Agile or Waterfall development. OrganizationSearching for a business model requires a different organization than the one used toexecute a plan. Searching requires the company to be organized around a customerdevelopment team led by the founders.It’s only the founders who can make thestrategic decisions to iterate and/or pivot the business model, and to do that they needto hear customer feedback directly. In contrast, execution (which follows search)assumes that the job specifications for each of the senior roles in the company can betightly authored. Execution requires the company to be organized by function (productmanagement, sales, marketing, business development, etc.)Companies in execution suffer from a ―fear of failure culture,‖ quite understandablesince they were hired to execute a known job spec. Startups with CustomerDevelopment Teams have a ―learning and discovery‖ culture for search. The fear ofmaking a move before the last detail is nailed down is one of the biggest problemsexisting companies have when they need to learn how to search.The idea of not having a functional organization until the organization has found aproven business model is one of the hardest things for new startups to grasp. There areno sales, marketing or business development departments when you are searching fora business model. If you’ve organized your startup with those departments, you are notreally doing customer development. (It’s like trying to implement a startup usingWaterfall engineering.)NSF I-Corps Teaching Handbook Revision 22 July 2012 page 6 of 114

EducationEntrepreneurship curricula are only a few decades old. First taught as electives and nowpart of core business school curricula, the field is still struggling to escape from thebounds of the business plan-centric view that startups are ―smaller versions of a largecompany.‖ Venture capitalists who’ve watched as no startup business plan survived firstcontact with customers continue to insist that startups write business plans as the priceof entry to venture funding. This continues to be the case even as many of the best VCsunderstand that business ―planning,‖ and not the ―plan‖ itself, is what is important.The trouble is that over time, this key message has gotten lost. As business schoolprofessors, many of whom lack venture experience, studied how VCs made decisions,they observed the apparently central role of the business plan and proceeded to makethe plan,not the planning, the central framework for teaching entrepreneurship. As newgenerations of VCs with MBAs came into the business, they compounded theproblem (―that’s how we always done it‖ or ―that’s what I learned (or the seniorpartners learned) in business school.‖)Entrepreneurship educators have realized that a plan-centric curriculum may get by forteaching incremental innovation but won’t turn out students prepared for the realities ofbuilding new ventures. Educators are now beginning to build their own E-School curriculum with a new class of management tools built around ―search anddiscovery.‖ Business Model Design, Product/Service Development, CustomerNSF I-Corps Teaching Handbook Revision 22 July 2012 page 7 of 114

Development, Startup Team-Building, Entrepreneurial Finance, Marketing, FounderTransition, etc., all provide the startup equivalent of the management tools MBAs learnfor execution. Instructional StrategyEntrepreneurial education is also changing the focus of the class experience from casemethod to hands-on experience. Invented at Harvard, the case method approachassumes that knowledge is gained when students actively participate in a discussion ofa situation that may be faced by decision makers.But the search for a repeatable business model for a new product or service is not apredictable pattern. An entrepreneur must start with the belief that all her assumptionsare simply hypotheses that will undoubtedly be challenged by what she learns fromcustomers. Analyzing a case in the classroom removed from the realities of chaos andconflicting customer responses adds little to an entrepreneur’s knowledge. Cases can’tbe replicated because the world of a startup too chaotic and complicated. The casemethod is the antithesis of how entrepreneurs build startups—it teaches patternrecognition tools for the wrong patterns—and therefore has limited value as a tool forteaching entrepreneurship.NSF I-Corps Teaching Handbook Revision 22 July 2012 page 8 of 114

The replacement for the case method is not better cases written for startups. Instead, itwould be business model design; using the business model canvas as a way to 1)capture and visualize the evolution of business learning in a company, and 2) see whatpatterns match real world iterations and pivots. It is a tool that better matches the real-world search for the business model.In addition, teaching for the Lean LaunchPad class is typically done with a ―flippedclassroom.‖ Here, the lectures are homework (as interactive videos) and the homework(testing hypotheses in front of customers) is the classroom discussion as all teamspresent. To keep track of the students’ customer discovery progress, we use an on-linetool (LaunchPad Central) to record the week-by-week narrative of their journey.An entrepreneurial curriculum obviously will have some core classes based on theory,lecture and mentorship. There’s embarrassing little research on entrepreneurshipeducation and outcomes, but we do know that students learn best when they canconnect with the material in a hands-on way, personally making the mistakes andlearning from them directly.As much as possible, the emphasis ought to be on experiential, learner-centric andinquiry-based classes that help to develop the mindset, reflexes, agility and resiliencean entrepreneur needs to search for certainty in a chaotic world.Lessons Learned• The search for the business model is the front end of the startup process• This is true in the smallest startup or largest company• The goal is to find a repeatable/scalable business model, and then execute• Customer and Agile Development are the processes to search and build the model• Searching for the business model comes before executing it• Execution requires operating plans and financial forecasts• Product management is the process for executing the model• Entrepreneurial education is developing its own management stack o Starting with how to design and search for a business model o Adding all the other skills startups needs o The case method is the antitheses of an entrepreneurial teaching method2. The NSF Lean LaunchPad – GoalsTheI-Corps Lean LaunchPad has different goals then the same class taught in auniversity or incubator. In a university class, the goal of the Lean LaunchPad is toimpart a methodology the students can use for the rest of their careers. When taught inan incubator,the goal of the Lean LaunchPad is a series of investor-funded startups.NSF I-Corps Teaching Handbook Revision 22 July 2012 page 9 of 114

When taught for the NSF I-Corps,the goal of the Lean LaunchPad class is to teach NSF-funded researchers who want to move their technologies from university labs into thecommercial world. Unlike a traditional incubator where a successful outcome is an angelor venture-funded startup, for the I-Corps the expected outcomes for teams include: New startups funded via: a NSF SBIR Phase 1 grant (over 25% of the teams apply) Angel/VC funding (over 90% of the teams will seek additional funding) Patent or technology license to a U.S. companyIf the teams pursue a SBIR Phase 1 grant ($150K), the NSF looks at the I-Corpsstudent projects and asks: 1) is this teams product viable? Go/no go? 2) If it’s a go,what’s the transition plan to do so?, and 3) a technology demonstration for potentialpartners.Winners and LosersThe I-Corps doesn’t pick winners or losers. It doesn’t replace private capital withgovernment funds. Its goal is to get research the country has already paid for educatedto the pointwhere it can attract private capital. (It’s why we teach the class withexperienced venture capitalists.)While many government agencies use the Technology Readiness Levels to measure aproject’s technical maturity, there are no standards around business maturity levels.The output of the NSF I-Corps class provides a proxy for a minimum level of businessmaturity.Our goal is get the science out of the labs and into use by U.S. corporations. For thefirst time, private capital now can look at ―business ready‖ technology.We do this by rapidly helping the I-Corps student teams to personally discover thattheir idea is just a small part of what makes up a successful company.Here’s how we do it.NSF I-Corps Teaching Handbook Revision 22 July 2012 page 10 of 114

3. Lean LaunchPad Pedagogy – Experiential Learning and a Flipped ClassroomThe Lean LaunchPad is a hands-on program that immerses student teams in testingtheir business model hypotheses outside the classroom. Inside the classroom, itdeliberately trades off lecture time for student/teaching team interaction.The Lean LaunchPad uses the Customer Development process and the business modelcanvas to collapse the infinite possibilities of a startup into a solvable problem. Experiential LearningExperiential learning has been around forever. Think of the guilds, apprentices, etc.Mentors were the master craftsmen.That’s the core idea of this class.This class uses experiential learning as the paradigm for engaging the participants indiscovery and hypotheses testing of their business models. From the first day we meet,the teams get out of the classroom and learn by doing.This is very different from how abusiness school, ―how to write a business plan‖ classworks. There, itassumed a priori a valid business model. In this Lean LaunchPad class,the teams are not building a business (yet). Information they learn from customers willvalidate/invalidate their hypotheses (thesis), and the teams will modify the businessmodel (iterate or pivot). This results in the teams bringing market needs forward. Thenthey can decide if there’s a business to be built.What this class does not include is execution of the business model. In this course,implementation is all about discoveryoutside of the classroom. Once discovery hasresulted in a high degree of confidence that a viable business model exists, it is time tocreate an execution plan. If the student teams continue with their companies, they willassemble the appropriate operating plans (financial models, revenue plans, etc.) The Flipped ClassroomRather than classroom lectures by an instructor in the weeks we are remote and online,the lectures have now become homework.Students will watch a lecture on eachcomponent of the business model canvas, take a short quiz and have access to a classforum for questions. Their homework for that week assumestheywill use that newknowledge to test that specific part of the business model.4. TeamsThe National Science Foundation I-Corps teams consist of three members: the PrincipalNSF I-Corps Teaching Handbook Revision 22 July 2012 page 11 of 114

Investigator (PI), the Entrepreneurial Lead (EL) and the Mentor. The PI has to havereceived an NSF grant within the last 5 years. See requirements in the NSF GrantProposal Guide (GPG). Team FormationThe Principal Investigator (a professor who has hadan active NSF award within the last5 years) gets permission to submit a proposal from a NSF program director (ENG, CISE,BIO, GEO, EHR, MPS, SBE, and OCI.)Principal Investigators, average age of about 45, are tenured faculty. Most run theirown labs. The PI forms the team by selecting one of their graduate students to be theEntrepreneurial Lead (EL).The Entrepreneurial Lead is a graduate student or post doc (average age of 28) whoworkswithin the PI’s lab, and iswithin a year of graduating. If a commercial venturecomes out of the I-Corps it is more than likely that the Entrepreneurial Lead will take anactive role in the new company. ThePIs will stay on in their academic roles and typicallycontinue as advisors.Mentors, average age of 50,are not part of the PI’s school, but aretypically anexperienced or emerging entrepreneur near the institution and have experience intransitioning technology out of academic labs. Mentorsmay be recommended by the PI(they may have worked with the PI in the past) or theymay be a member of the NSF I-Corps Mentor network. Some mentors volunteer for the role because they are planningto be an active participant in the startup that comes out of the class.The proposal to the NSF includes the team background and history together, a projectplan, lineage of the proposed innovation, product/service concept and demo, potentialcommercial and market impact and time horizon to impact. It takes less than 45 daysfrom proposal submission to a decision.The team interviews with the NSF program managers. The final selection interviewsinclude the teaching team.The selected PIs are awarded a $50,000 I-Corps 6-month grants. Team DynamicsJust like in a startup, the demands and pressure of the class can at times createconflicts within teams. At times we’ve seen: PIs who won’t listen to mentors’ experience in how to talk to customers ELs who are afraid to contradict or speak up when they disagree with their PIs ELs who are ill-suited for entrepreneurship and avoid customer development Mentors who come in convinced they have ―the answer‖ and ignore the processNSF I-Corps Teaching Handbook Revision 22 July 2012 page 12 of 114

Mentor/PI conflict on direction and strategyAs the teaching team, your job is not to solve the teams’ problems but to help themdiagnose their own and facilitate solutions. At times, all it takes is a conversation aboutroles, expectations and desired outcomes from the class. If the problem is moreserious, make sure the cognizant NSF program manager is aware of the issue.Team Member Characteristics RolePrincipal Tenured researcher Creator of the science /Investigator professor. technology or research that is(PI) Average age: 45 within striking distance to Has an active NSF award product or process within the last 5 years in a demonstration. field relevant to the Technical lead and project proposed innovation manager ¼ - ½ have participated in a startup.Entrepreneurial Post-doc or student Selected by the PI to supportLead Average age: 28 the transition of the Typically, no prior technology, to leave the entrepreneurial experience. academic institution Relevant knowledge of the technology and a deep commitment to investigate the commercial landscape surrounding the innovation.Mentor A volunteer from the local Provide insight from the area with relevant domain private sector. (Downside is expertise. that most grew up with the Average age: 50 ―how to write a business plan‖ May be an experienced mentality. Almost all get this. entrepreneur and have A few don’t.) worked transiting The I-Corps Mentor will be technology out of academic responsible for guiding the labs. team forward and tracking May have worked with the progress through regular PI and/or the NSF in the communication with the past. cognizant NSF I-Corps program directorNSF I-Corps Teaching Handbook Revision 22 July 2012 page 13 of 114

5. Course Logistics In week 1, students attend 3 days of on-site training at a NSF-designated university. Half the days are team presentations and critiques plus in-person lectures, and the other half consists of getting out of the building and talking to customers. For the next 5 weeks, back at their universities, teams spend 10-15 hours a week talking to customers. o In addition, each week, teamsspend two hours on-line as they present their findings via WebEx and hear their peers’ presentations o During the week, they watch an interactive lecture on a portion of the business model canvas In Week 8,they reconvene at the same at a NSF-designated university for one day of presentation training, and another for the final ―Lessons Learned‖ presentations. ClassesFor each weekly class session, there are: a. Pre-class readings b. A pre-recorded on-line lecture with quizzes c. An in-class team 10-minute presentation d. Weeklyassignment to get out of the building and test one of the business model components with 10+ customersEach week’s class session is organized around: Team presentations on their ―lessons learned‖ from talking with customers and iterating or pivoting their business models. Lectures: o For the first week, three in-personbusiness model lectures; o Online, in weeks 2-6, lectures are assigned as homework with quizzesWeek Location Lecture TopicWeek 1 On-site Lecture1 Intro, Business Models, and Customer Development On-site Lecture2 Value Proposition On-site Lecture3 CustomersWeek 2 On-line, self paced Lecture4 ChannelsWeek 3 On-line, self paced Lecture5 Customer Relationships Get/Keep/GrowWeek 4 On-line, self paced Lecture6 Revenue ModelWeek 5 On-line, self paced Lecture7 PartnersWeek 6 On-line, self paced Lecture8 Resources and CostsWeek 8 On-Site Lecture9 Presentation Skills Training On-Site Lecture10 Lessons Learned PresentationsNSF I-Corps Teaching Handbook Revision 22 July 2012 page 14 of 114

The on-line lectures are delivered via the Udacity Web site LaunchPad CentralOne of the problems in managing classes of 25+ teams is that it is difficult to keeptrack of their progress. The problem is made worse when the teams are remote and theteaching is rotating between groups of 8 teams.Without some way of keeping track of all 25 teams’ progress, your critiques of theirpresentations sound misguided and misinformed.To solve this problem, we insist that each team blog their customer discovery progress.We force them to write a narrative each of week of customers they’ve visited,hypothesis they’ve tested, results they’ve found,photos of their meetings, and changesin their business model canvas. We have them do it all on-line using a tool calledLaunchPad Central.NSF I-Corps Teaching Handbook Revision 22 July 2012 page 15 of 114

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This software tool allows the teaching team to comment on each of the team’s progressposts and interactively follow their progress in between class sessions.This means that during the time between each class session, the teaching team needsto go online and read and comment on each of the 25 teams. You must do this eachweek. Then when each team presents, your comments and critiques are informed bytheir progress. TextbooksThere are 2 required textbooks for this course: BMG: Business Model Generation: A Handbook for Visionaries, Game Changers and Challengers (Alexander Osterwalder, Yves Pigneur, 2010) SOM: The Startup Owner’s Manual, The Step-by-Step Guide for Building a Great Company (Steve Blank and Bob Dorf, 2012) Lecture Slides can be found here: https://www.dropbox.com/sh/x26bdshi2gorbv0/WBFzHxL1tF Online lectures 4-8 can be found here Student Presentation Examples: http://www.slideshare.net/sblank/tagged/i- corpsfor examples of what’s needed in team presentationNSF I-Corps Teaching Handbook Revision 22 July 2012 page 17 of 114

Guidelines for team presentationsEach team is expected to speak to at least 10+ customers every week. The 10-minuteweekly team presentations are summaries of the team’s findings during that week.Slide 1 Cover slide (team name, university, team members/roles, number of customers spoken with, what the team does)Slide 2 Updated business model canvasSlide 3-n What did you learn about ―topic of the day‖ (Canvas block x)? - Hypothesis: Here is what we thought - Experiments: So here’s what we did - Results: So here’s what we found - Iterate: So here’s what we are going to do nextSlide 4 Diagram (if appropriate) of what you learned this week(e.g., customer workflow, payment flows, distribution channel diagram)Feedback from the teaching team during oral presentations is where the most learningoccurs. Due to the pace and tempo of the course, participants must be heldaccountable to the material for the specific class.NSF I-Corps Teaching Handbook Revision 22 July 2012 page 18 of 114

6. Instructor Pre-Course PreparationObjective: Have a basic understanding of the: a. The Lean LaunchPad b. Business Model Canvas c. Customer DevelopmentInstructor Reading Material:1. Textbooks Alexander Osterwalder & Yves Pigneur, Business Model Generation (BMG) http://www.businessmodelgeneration.com/order.php Steven Blank, The Startup Owners Manual (SOM) http://www.stevenblank.com/startup_index_qty.html Watch the Osterwalder video at: http://steveblank.files.wordpress.com/2012/04/osterwalder-guest-talk- 012912.mov2. Review the lectures All PowerPoint decks here: https://www.dropbox.com/sh/gkrf8a9axfwpod3/02- jatKz4y Online Lectures 4-8 here3. Review the Lean Launch Pad class background http://steveblank.com/category/lean-launchpad/ http://steveblank.com/2010/12/07/the-lean-launchpad-–-teaching- entrepreneurship-as-a-management-science/ http://steveblank.com/2011/05/10/the-lean-launchpad-at-stanford-–-the-final- presentations/ http://steveblank.com/2012/02/16/who-dares-wins-the-2nd-annual-international- business-model-competition/4. Look at Business Model Canvas http://www.businessmodelgeneration.com/downloads/businessmodelgeneration_ preview.pdf5. Read Customer Development Manifesto (Chapter 2, SOM)6. Previous I-Corp Weekly and Final Presentations http://www.slideshare.net/sblank/tagged/i-corps7. Official Lecture Slides https://www.dropbox.com/sh/x26bdshi2gorbv0/WBFzHxL1tFNSF I-Corps Teaching Handbook Revision 22 July 2012 page 19 of 114

7. Student/Instructor Success CriteriaThe success of this curriculum is dependent on a consistent set of beliefs and culture bythe students and instructors. The fundamental principles of the course are:Process 1. There are no facts inside your lab or building, so get the heck outside 2. Your idea/invention is not a company, it’s one of the 9 building blocks 3. We use the business model canvas to articulate our hypotheses 4. We use customer development to test those hypotheses 5. We use the business model canvas to keep track of what we learned 6. We expect that many of our initial hypotheses are wrong 7. Iterations and pivots are the expectationCulture 1. A mindset of hypotheses-testing,not execution 2. Active participation by all team members 3. All of you are held accountable for your team performance 4. High-speed pace and tempo 5. Teams average 100 customer contacts (not including focus groups and surveys) 6. Bring your sense of humor—without it, you will sufferNSF I-Corps Teaching Handbook Revision 22 July 2012 page 20 of 114

8. The Business Model CanvasOften there’s a lack of a shared and clear understanding of the business modelthroughout a company. This class uses the business model canvas to diagrammaticallyillustrate how a company intends to make money.The canvas represents any company in nine boxes, depicting the details of a company’sproduct, customers, channels, demand creation, revenue models, partners, resources,activities and cost structure.When teams first draft their initial hypotheses, their canvas begins to fill up, looking likethis: But in addition to using the business model canvas as a static snapshot of the business at a single moment, frozen in time, Customer Development—and this class—uses the canvas as a ―scorecard‖ to track progress in searching for a business model. Every week the teams update their canvas to reflect any pivots or iterations, highlighting in red thechanges from the last week.NSF I-Corps Teaching Handbook Revision 22 July 2012 page 21 of 114

Then, after the team agrees tothe business model changes, theyintegrate them into whatbecomes the new canvas for theweek (the accepted changes inred are then shown in black).During the next week any newchanges are again shown in red.Then the process repeats eachweek, with new changes showingup in red. Then a new canvasused for the week.By the end of the class, teamswill have at least 8 canvases.When clicked through one at a time they show something never captured before: theentrepreneurial process in motion. The Business Model Canvas as a Weekly Scorecard Week 1 Week 2 Week 3NSF I-Corps Teaching Handbook Revision 22 July 2012 page 22 of 114

9. Customer DevelopmentTheBusiness Model Canvas is, at the end of the day, a tool for brainstorminghypotheses without a formal way of testing them.The process used to organize and implement the search for the business modelisCustomer Development.The Customer Development model breaks out the customer-related activities into foursteps. The first two steps of the process outline the ―search‖ for the business model.Steps three and four ―execute‖ the business model that’s been developed, tested, andproven in steps one and two.The Lean LaunchPad class focuses on the two ―search‖ steps. Customer discovery first captures the founders’ vision and turns it into a series of business model hypotheses. Then it develops a plan to test customer reactions to those hypotheses and turn them into facts. Customer validation tests whether the resulting business model is repeatable andscalable. If not, you return to customer discovery.10. Detailed Class CurriculumBefore the Teams Show Up in Class Learning Students should come to class able to answer the following questions: Objectives What’s the difference between search and execution? What is a business model versus business plan? What is the business model canvas? What are the 9 components of the business model canvas? What is a hypothesis? What is Customer Development? What are the key tenets of Customer Development? Why? These are the fundamental principles of the course. Having the students prep on their own time allows us to go into full-immersion on day one, first lecture.NSF I-Corps Teaching Handbook Revision 22 July 2012 page 23 of 114

How? Assign readings before the class starts. Inform students knowing these concepts are required. To test their knowledge, we have each team prepare its first pass of its Business model canvas prior to the first class (see section 10 for description and figures) Teams will present their canvas as the introduction to their cohort. But more importantly so that the teaching team can assess how adequately they prepared for the course. Reading Watch the Osterwalder video at: Assignment http://steveblank.files.wordpress.com/2012/04/osterwalder-guest-talk- for day 1 of 012912.mov the class Read: Business Model Generation: pp. 14-49 Startup Owners Manual: 1-50 intro to customer development Course Strategy: http://steveblank.com/category/lean-launchpad/ I-Corps team presentations:http://www.slideshare.net/sblank/tagged/i-corps. Team Prepare your team’s business model using the business model canvas Assignment Come prepared with a customer contact/visit list that will last 3 days for day 1 Assignment We don’t expect teams to get the canvas right. We just want them thinking Objective hard about what it means. They will be living with the canvas for the next few months. Get the teams accustomed to a cover-slide that provides us with a 1-page summary of who they are, number of customers talked to that week, what their team does. Presentation Prepare a 2-slide presentation to present your team to the cohort: Guidelines Slide 1: Title Slide Slide 2: Business Model Canvas See below for the presentation formatNSF I-Corps Teaching Handbook Revision 22 July 2012 page 24 of 114

Team Cover Slide for Weekly PresentationsTeam Name University Number of Customers this What your team does Week (2 lines or less ) 0 TOTAL 0 Number of customers talked to this week. Total number to date Team Members and Roles NSF I-Corps Teaching Handbook Revision 22 pages 25 of 114

NSF I-Corps Teaching Handbook Revision 22 page 26 of 114

Class 1: Intro &Business Models and Customer Development 1st Team Presentation based on Pre-class reading In Person Lecture0: Class Introduction In Person Lecture 1: Business Models and Customer DevelopmentTeaching Objective Assess each team’s level of preparation and understanding. Introduce the business model canvas development principles.Student Presentations ―Shock and Awe‖ immersion in the ―present/critique‖ teaching method.Instructor Critiques Fast-paced, in-depth instructor critique and analysis of each team’sinitial business models is critical during this session to emphasize the level of preparation necessary by the students. Have students understand that there is no such thing as ―spare time‖ and they need to be out of the building talking to customers.Why? These are the fundamental principles of the course. The format of all the classes will be: o Teams present in front of their peers o Teaching team critiques each team o Instructors lecture on a component of the business model canvas Having the students present on day one gives them full- immersion on day one, first lecture. It also gives the teaching team the ability to provide a remedial help for any team after the first day of class o In almost every class, one or two need coachingHow? Have teams start by presenting their business model canvases as their introduction to the class 1. Have the teaching team immediately start offering critiques of the models and team members. An interactive dialogue is encouraged 2. These first critiques should focus on value prop, customers, channels, customer relations and revenue model. a. They’re usually wrong. b. Don’t go deep on one team. It’s the sum of the comments across the teams that is important. c. When you see a common error, announce, ―This is a big idea. It’s one you will all encounter.‖ d. Have teaching team & T/A start by grading and offering first impressions of each team’s business model e. Have the students grade and comment their peers on the student Google Doc grading sheetNSF I-Corps Teaching Handbook Revision 22 pages 27 of 114

3. Have teaching team present lectures 1-3 face-to-face to get command of the class (lectures 4-8 are recorded) 1. Business Model ignoranceCommon student errors 2. Not understanding the difference between a value propon their 1stpresentation and features 3. Not understanding any detail about their customers 4. No understanding of a channel 5. Fantasy revenue model 6. Business Model canvas looks like a business plan 7. Thinking that they’re in the class to ―execute‖ their plan, not search for one Start with Lecture 0, Introduction to the class and teachingLecture Learning teamObjectives Next have the teams present their business model canvases Finish with Lecture 1, Business Models/Customer Development Students willunderstand the level of hypotheses testing their business model will require Lecture slides can be found here https://www.dropbox.com/sh/x26bdshi2gorbv0/WBFzHxL1tF Students should understand the concepts of: 9 parts of a Business Model Hypotheses versus facts Getting out of the building Web/Mobile versus Physical Problem/Solution Product/Market Fit Hypotheses/Experiment design/Test/Insight Iteration versus Pivot Focus on the right half of the canvas Students should understand the relationship between canvas components: Value proposition/customer segments – product market fit Customer relationships: get/keep/grow Revenue/costs – making money Many startups spend years attacking a small market. Having them think about size of the opportunity early helps them keep asking, ―How big can this really be? Is it worth doing?‖ See key lecture concept diagrams below.Lecture 0 Introduce the teaching team. Key concepts: 1. Start by saying they are the domain experts in their fields.NSF I-Corps Teaching Handbook Revision 22 page 28 of 114

Class Introduction We will not be questioning their expertise. 2. But we are the domain experts in building companies. We have a model that works, is intensive and will make all of you, including the PIs, feel like you’re back in grad school. It’s nothing personal, but we have minimal time to turn you into entrepreneurs. Key Points The class is all about ―getting out of the building‖ The program is intensive and fast-paced The importance of actively grading their peers Your technology is ONE of the many critical pieces necessary to build a company and is part of the value proposition – customers do not care about your technology, they are trying to solve a problem Difference in customer development between web/mobile vs physical channels Intro of the business model canvas and customer developmentLecture 1 Definition of hypotheses Definition of minimum feature setBusiness Model Canvas Description of experiments& Customer Definition of ―getting out of the building‖Development Definition of market size How do you determine whether a business model is worth doing? In Part 3 of the lecture, pick any one I-Corps final team presentations you feel most comfortable with from http://www.slideshare.net/sblank/tagged/i-corpsReadingfor tomorrow BMG, pp. 86-111, 135-145 SOM, pp. 51-84, market size, value proposition and MVP pgs 188-199getting out of the building, 457-459 market type What’s a Startup? First Principles Make No Little Plans – Defining the Scalable Startup A Startup is Not a Smaller Version of a Large Company 12 Tips for Early Customer Development InterviewsAssignmentfor Presentationtomorrow o Identify your market size o Identify your type of business (IP/licensing/startup/unknown) o Propose experiments to test your value proposition, customer segment, channel and revenue model of yourbusiness model o What constitutes a pass/fail signal for each test? o See http://www.slideshare.net/sblank/tagged/i-corps for examples of what’s needed in tomorrow’s presentationNSF I-Corps Teaching Handbook Revision 22 page 29 of 114

Talk to at least 5 potential customers Get team blog up and post first discovery narrativesTomorrowsPresentation Slide 1: Cover slideGuidelines Slide 2: Current business model canvas with any changes marked Slide 3: Market size (TAM/SAM/Target) Slide 4: What type of business are you building?: IP, licensing, startup, unknown Slide 5: What are your proposed experiments to test customer segment, value proposition, channel and revenue model of the hypotheses What constitutes a pass/fail signal for each test (e.g., at what point would you say that your hypothesis wasn’t even close to correct)?Typical Class 1 Student Business Model Canvas – a business plan in small typeNSF I-Corps Teaching Handbook Revision 22 page 30 of 114

Class 1 - 3: Presentation Agenda and Teaching Assistant ActivitiesTeam For Class 1 all 25 teams will present for x minutes in the same room.Presentation For Class 2 teams will spilt into two groups of 12 and 13 and presentAgenda in two different rooms.for Classes 1 - 3 For Class 3 teams will spilt into three groups of 8, 8 and 9 and present in three different rooms.Rooms Neededand Teaching Therefore at least three instructors are needed for class 3.TeamAssignments See section 11 for the presentation agendaTeaching Before Each ClassAssistantActivities for Communicate with students:Classes 1 - 3 o Topic to be addressed for class o Presentation Assignment o When presentations should be uploaded to DropBox o Team Presentation order o Allotted time for presentation o Location of presentation 1. Preflight logistics – projectors, screens, wifi, break rooms, etc. 2. Collect student slidesbeforehand so no individual computer setup is necessary. o Then load them on a single presentation computer o T/A to email team presentation order o T/A to keep the clock on team presentation time – announce 1 minute to go 2. Have the T/A prepare the shared Google Doc grading sheets o One for the teaching team o A separate one for the students 3. T/A should capture the verbal teaching team critiques in a separate Google Doc – this should be shared with all the teams This should be repeated for all classes During Each Class Time all presentations Give students 1 minute warningNSF I-Corps Teaching Handbook Revision 22 page 31 of 114

Lecture 1: Key concept diagrams Ensure students understand all the parts of the Business Model Canvas Ensure students understand the Four Steps of Customer DevelopmentNSF I-Corps Teaching Handbook Revision 22 page 32 of 114

Ensure students understand the Hypotheses>Design>Test>Insight LoopNSF I-Corps Teaching Handbook Revision 22 page 33 of 114

Class 2: Value Proposition Team Presentation based onBusiness Model Canvas and Customer Development Lecture In Person Lecture 2: Value PropositionTeaching Set expectations for:Objective o Customer discovery: quantity, speed and insight o Annotation of thebusiness model canvas updates o Their blog as ―a customer discovery narrative‖Student Remind them:Presentations o Customer calls are not optional. They need to be continuous o Hypotheses need to be turned into facts. There are no factsInstructor inside their university/labCritiques o This class is not about the execution of their original ideaHow? The teams have spoken to at least 5 customersafter class yesterday. They were supposed to set up meetings before they arrived. Hang a team publically who did not call on anyone. (There’s always one.) Stop their presentation.Have them leave to make phone calls. Tell them if they have something to add before the rest of the presentations are over they can present. Make the point clearly that this is what the class is about. Today’s presentations teams explain what they learned in those calls ○ Have them annotate the canvas with new learning each week. Make comments to show you’ve read their blog & it’s critical to update Make sure they are articulating their hypotheses of what they expected to learn versus what they found. Without that it’s just a bunch of random customer interviews o This ―hypothesis>experiment>data>insight‖ loop is the core of the process and class Not enough customer callsCommon Vague data from the callsstudent errors Little to no insight from the dataon their No clue about market size or overly optimistic2ndpresentation Not clear whether they’re IP/licensing/startup/unknown Did not articulate experiments to test their hypotheses Did not articulate pass/fail tests for each hypothesesLecture 2 Students should understand:Value The smartest teams believe ―it’s all about my invention‖Proposition Your goal is to teach them ―it’s all about thebusiness model‖ The majority of product features are never used by customers The MVP and customer development eliminate waste in time/cashLearning Engineers love to add featuresObjectives The goal of the MVP is to find the minimum feature setNSF I-Corps Teaching Handbook Revision 22 page 34 of 114

The difference in an MVP for a physical product versus the Low and High Fidelity MVP’s for a web/mobile product Explain why customer development can’t be done with Waterfall engineering but needs an Agile Development process Lecture slides can be found here https://www.dropbox.com/sh/x26bdshi2gorbv0/WBFzHxL1tF See key lecture concept diagrams below. Defining your product or service How does it differ from an ideaLecture 2 The role of pain killers, gain creators, problems/needs Identifying the competition and how your customers view theseValue competitive offeringsProposition What’s the minimum viable product? What’s the market type? Insight into market dynamics or technological shift that makes this a fresh opportunity? Instructors should emphasize: The difference between value proposition and feature sets. The goal is to find the minimum viable product. That value proposition and customers are integrated = product/market fit. The value of annotating the business model canvas The need to be open to changing initial business model canvas hypotheses.Readingfor BMG pp. 146-150, 161-168 and 200-211tomorrow SOM pp. 85-97, 112-125, 203-217 problem understanding, 218-221gain customer understanding, 260-266 product/market fitAssignment for Presentationtomorrow o What are the Pain Relievers, Gain Creators and key features? o What is the resulting MVP? o Propose experiments to test your value proposition o What constitutes a pass/fail signal? o See http://www.slideshare.net/sblank/tagged/i-corps for examples of what’s needed in tomorrow’s presentation Talk to at least 5 potential customers Post discovery narrativesNSF I-Corps Teaching Handbook Revision 22 page 35 of 114

Presentation Slide 1: Cover slideGuidelines Slide 2: Current business model canvas with any changes marked Slide 3 What were your experiments to test value proposition? Slide 4: Diagram of Value Proposition Pain/Gain/Features and MVP Slide 5 - n: What did you learn about your value proposition from talking to your first customers?  Hypothesis: Here’s What we Thought  Experiments: So Here’s What we Did  Results: So Here’s What we Found  Iterate: So Here’s What we Are Going to Do NextNSF I-Corps Teaching Handbook Revision 22 page 36 of 114

Lecture2: Key concept diagrams Ensure students understand the 3 components of the Value Proposition Casually introduce the 3 components of theCustomer SegmentNSF I-Corps Teaching Handbook Revision 22 page 37 of 114

Ensure that students understand that product/market fit = Value Proposition + Customer Segment Ensure that students understand they have to articulate their hypotheses, design experiments, test and hopefully get insightsNSF I-Corps Teaching Handbook Revision 22 page 38 of 114

Class 3:Customer Segments Team Presentation based on Value Proposition Lecture In Person Lecture 3: Customer SegmentsTeaching Objectives Continue the pace of discovery, customer calls, insights &Student Presentations critiques Make sure teams continue to: o Annotate the business model canvas with updatesInstructor Critiques o Update their blog as ―a customer discovery narrative‖ Focus your main critique ontheir understanding of the value proposition o Acknowledge you’ve read their blog Comment on other egregious parts of the canvas as necessary Before they leave, make sure you solve any apparent team dysfunctionsHow? Most teams start with a value proposition equal to the feature set Make sure they’ve articulated pain killers, gain creators, MVP Use your critiques to drive them to understand what pains their value proposition is solving, what gains is it creating? o Which features will do that? o What is the MVP to prove the value proposition? Start emphasizing the importance of diagrams for each component of the business model Not enough customer callsCommonstudenterrors Vague data from the customer calls (―they like our features...‖)on their 3rd Little to no insight from the data – ―we called on 12 customerspresentation and here’s what they said…‖ Team thinks the purpose of the class is the execution of their idea versus testing their hypotheses Still confused about the difference between a value proposition versus features Confusing features with pain killers or gain creators (the Value Prop is not a spec sheet) Did not articulate experiments to test their hypotheses Did not articulate pass/fail tests for each hypothesesLecture 3 Students should understand:Customer Segments Value proposition + customer segment = product/market fit Customer pains and gains Customer ―Jobs to be done‖Learning Objectives Customer archetypes/personas and why they are useful Problem versus Needs The difference between users, influencers, recommenders,NSF I-Corps Teaching Handbook Revision 22 page 39 of 114

decision makers, economic buyers and saboteurs Market Type – explain the difference between Existing, Resgmented, New and Clone markets ○ Explain why it matters to know which one you are in The difference between single- and multi-sided markets Lecture slides can be found here https://www.dropbox.com/sh/x26bdshi2gorbv0/WBFzHxL1tF See key lecture concept diagrams below.Why? Scientists and engineers usually have a vague sense of who will buy Get them started with talking to their peers, others at conferences, etc. Remind them that customers are the critical difference between an idea and a successful company Getting out of the building is about first testing their value proposition versus customer hypotheses. At first it’s hard and awkward. Market Type influences how much customers can teach them Instructors should emphasize: Customers need to match their value propositionLecture 3 Customer knowledge leads to an archetype/pesrsona In a multi-sided market, each side of a market has its own value proposition, customer segment, revenue model and may haveCustomer Segments its own channel and customer relationshipsReadingfor next week BMG pp. 127-133 SOMpp.98 – 111, and 332-343, 406-412-Distribution ChannelsAssignment for next Lectureweek Watch Lecture 4 Distribution Channels – take the quiz o http://www. Presentation What are the Pains, Gains and Jobs to be done? What is the resulting MVP? Draw a diagram of the customer workflow Draw a diagram of your customer archetypes How do they solve this problem(s) today? Does your value proposition solve it? How? What was it that made customers interested? excited? If your customer is part of a company, who is the decision maker, how large is their budget, what are they spending it on today, and how are they individually evaluated within that organization, and how will this buying decision be made? See http://www.slideshare.net/sblank/tagged/i-corpsfor examples of what’s needed in tomorrow’s presentation Talk to at least 10 potential customers Post discovery narrativesPresentation Slide 1: Cover slideNSF I-Corps Teaching Handbook Revision 22 page 40 of 114

Guidelines Slide 2: Current business model canvas with any changes marked Slide 3 What were your experiments to test your customer segment? Slide 4: Diagram of archetype(s) Slide 5 - n: What did you learn about your customers segments from talking to customers?  Hypothesis: Here’s What we Thought  Experiments: So Here’s What we Did  Results: So Here’s What we Found  Iterate: So Here’s What we Are Going to Do Next  Did anything change about Value Proposition?NSF I-Corps Teaching Handbook Revision 22 page 41 of 114

Lecture3: Key concept diagrams Ensure students understand the 3 components of The Customer Segment Ensure students understand the 4 Market TypesNSF I-Corps Teaching Handbook Revision 22 page 42 of 114

Example of a Customer Flow Diagram Example of a Customer Archetype/ PersonaNSF I-Corps Teaching Handbook Revision 22 page 43 of 114

Class 4: Distribution Channels Team Presentation based on Customer Segments Lecture Remote Lecture 4: Distribution ChannelsTeaching Objectives Continue the pace of discovery, customer calls, insights &Student Presentations critiques Make sure teams continue to: o Annotate the business model canvas with updatesInstructor Critiques o Include diagrams of each part of the hypothesis o Update their blog as ―a customer discovery narrative‖ Focus your main critique on their understanding of customer segments o Acknowledge you’ve read their blog Comment on other egregious parts of the canvas as necessaryHow? Most students usually think of customers as the users of the product o Make sure they understand there might be multiple customer segments (users, payers, etc.) Make sure their presentation included a customer archetype slide and a customer workflow diagram a. Ask them if they can draw a day in the life of customer.If not, tell them they don’t know enough Use your critiques to drive them to understand what pains their customershave, what gains they are looking for and what jobs do they want done? o Which features from the value prop will do that? Who specifically is (are) the archetype(s) Give complements to teams who drew archetypes and customer flow Do not be polite to those who haven’t. If you can’t draw it you don’t understand it. Not enough customer callsCommonstudenterrors Vague data from the callson their 4th PI appears to be doing all the customer callspresentation Mentors driving the team to an early conclusion rather than learning Little to no insight from the data Most entrepreneurs start with a vague statement such as ―customer segments are end users‖ Did not articulate pass/fail tests for each hypothesesThis Lecture is pre-recorded. All students need to watch it before classLecture 4 Students should understand: Definition of a distributions channelNSF I-Corps Teaching Handbook Revision 22 page 44 of 114

Distribution ○ direct, indirect and OEMChannels Difference between physical and virtual channels Types of physical and virtual channels Distribution channel versus product complexityLearning Distribution Channel economicsObjectives See key lecture concept diagrams below.Why? Scientists and engineers think of sales as a tactic a salesperson uses. Most entrepreneurs confuse channels with customers. They do not understand an impact a channel can have on its revenue streams. The more complex the channel, the smaller the margins will be. There is a cost benefit analysis made when choosing channels. Channels are a strategy. Discovering the right channel fit is an art Instructors should emphasize: Channels need to match their customer segmentsLecture 4 Channels need to match the product (and support) complexity Channel economics need to match revenue goals Founders need to sell and close the first few orders to ―prove‖ theDistribution channelChannelsReadingfor next SOMpp. 126-168 customer relationships hypotheses,week pp.296-351 Get/Keep/GrowAssignment for Lecturenext week Watch Lecture 5 Customer Relationships – take the quiz o http://www. Presentation What is the distribution channel? Are there alternatives? Draw the channel diagram o Annotate it with the channel economics What were your hypotheses about who/what your channel would be? Did you learn anything different? What was it that made channel partners interested? excited? Did anything change about Value Proposition or Customer segment? See http://www.slideshare.net/sblank/tagged/i-corps for examples of what’s needed in tomorrow’s presentation Talk to at least 10 potential customers and channel partners(Salesmen, OEM’s distributors, etc.) Post your discovery narrativesPresentation Slide 1: Cover slideGuidelines Slide 2: Current business model canvas with any changes marked Slide 3 What were your experiments to test your channels? Slide 4: diagram of Channel Slide 5 - n: What did you learn about your channel fromNSF I-Corps Teaching Handbook Revision 22 page 45 of 114

talking to customers?  Hypothesis: Here’s What we Thought  Experiments: So Here’s What we Did  Results: So Here’s What we Found  Iterate: So Here’s What we Are Going to Do Next  Did anything change about Value Proposition?Class 4 - 8: Presentation Agenda and Teaching Assistant ActivitiesTeam Teams will spilt into three groups of 8, 8 and 9 and present in threePresentation different rooms.Agenda Therefore at least three instructors are needed for classes 4-8for Classes 4 - 8 Instructors will stay with the same team for two consecutive weeks, then rotate into a new group for the next two weeks. This ensuresthat the students have a diversity of opinions and each instructor has seen all the teams at least twice. o We are consciously trading off consistency of instructor/teams for diversity of opinionsTeaching Before the First On-line ClassAssistantActivities Ensure that all teams have:For Classes 4-8 o preflighted the on-line Webex software ○ teams all have mics ○ gone online and tested their PowerPoint and audio with the T/A ○ can see and hear other teams’ slides Have the T/A organize the class split into three groups ○ Organize and email which team is in which group ○ Organize and email which instructor is in which group Before Each On-line Class Create Webex sessions for o Video Presentation Groups o Lecture Presentation (if any) Communicate with students: o Topic to be addressed for class o Presentation Assignment o When presentations should be uploaded to DropBox o Presentation order and group assignments o Allotted time for presentation o Link for Presentation Sessions o Link for Lecture SessionNSF I-Corps Teaching Handbook Revision 22 page 46 of 114

o Reminder that all participants should have a headset with microphone Upload all presentations to Webex Check timer Check Video and Audio for Webex Make sure that collaborative Google docs have been created and shared for the class o Teaching team grade sheet o Participant feedback Prepare the shared Google Doc grading sheets and share the links o One for the teaching team o A separate one for the students During On-line Presentations Time all presentations Give students 1 minute warning Capture the verbal critiques from the teaching teamNSF I-Corps Teaching Handbook Revision 22 page 47 of 114

Lecture4: Key concept diagrams Ensure students understand the Physical Distribution Channels alternatives Ensure students understand the Web/Mobile Distribution ChannelsNSF I-Corps Teaching Handbook Revision 22 page 48 of 114

Ensure students understand Direct Sales Channel EconomicsEnsure students understand Reseller Channel EconomicsEnsure students understand OEM Sales Channel EconomicsNSF I-Corps Teaching Handbook Revision 22 page 49 of 114

Ensure students understand Channel versus Product complexityNSF I-Corps Teaching Handbook Revision 22 page 50 of 114

Class 5:Customer Relationships (Get/Keep/Grow) o Team Presentation based on Distribution Channels Lecture o Remote Lecture 5: Customer Relationships (Get/Keep/Grow)Teaching Objectives Pickup the pace of discovery, customer calls, insights & critiquesStudent Presentations Make sure teams continue to: o Annotate the business model canvas with updates o Include diagrams of each part of the hypothesesInstructor Critiques o Update their blog as ―a customer discovery narrative‖ Focus your main critique on their understanding of distribution channel o Acknowledge you’ve read their blog o Realize some teams are in the ―trough of despair‖ Comment on other egregious parts of the canvas as necessaryHow? Most students confuse the channel with the users of the product Make sure their presentation included a channel diagram Make sure the channel diagram had the economics on it Use your critiques to drive them to understand: o What type of channel they’d use o Why would they pick that one o How much will it cost them to use it Ask, ―Can you draw your channel map, showing how the product moves from your startup to its end user, along with the costs and marketing/sales roles of each step in the channel?‖ o Make sure they’ve diagrammed it Do they understand the sales cycle and customer acquisition process a. Is it repeatable and scalable? Can they prove it? What is the length of the sales cycle? a. Whatare the critical points within that process? Is your sales funnel predictable? They may be stuck on their original customer segment or valueCommonstudenterrors propon their 5th o By now some might need encouragement to pivotpresentation Some might be making lots of calls, getting lots of data but not have a clue what it means Students often do not ask for an order or know what it takes to get an order from the customer in their contact o This info/feedback is key data for defining sales cycle Most first-time entrepreneurs confuse channels with customers They may not understand: o The relationship between a channel and its revenue streamsNSF I-Corps Teaching Handbook Revision 22 page 51 of 114

o The more complex the channel the smaller the margins will be o The cost benefit analysis choosing channels o Did not articulate experiments to test their hypotheses Did not articulate pass/fail tests for each hypothesesThis Lecture is pre-recorded. All students need to watch it before classLecture 5 Students should understand:Customer How teams get customers into their sales channel and move themRelationships successfully through the sales cycle How to keep them as customers andGet / Keep / How to grow additional revenue from those customers over time.Grow Students should understand how to develop ―get customer‖ experiments to determine tactics that move customers into and through the salesLearning funnel in a repeatable and scalable way.Objectives Ensure that the students have an understanding of the concept of ―Lifetime Value of a Customer‖ and how to calculate this figure and incorporate it into their customer acquisition strategies. See key lecture concept diagrams belowWhy? ―Get, Keep and Grow‖ are among the most important hypotheses for any startup to test Customer relationships are the result of a complex interplay among customers, sales channel, value proposition and budget for marketing Businesses that successfully ―Keep‖ their customers focus heavily on retention strategies, tactics and metrics such as purchase patterns, cohort analysis, complaints, participation in ―Grow‖ efforts, amongst others Multi-sided markets need separate ―Get, Keep and Grow‖ strategies (e.g., users and payers) Instructors should emphasize: Get/Keep/Grow needs to match their channel and customer segments.Lecture 5 Emphasis on repeatable and scalable relationship strategies 1. Sales Funnel (Customer Relationship Life Cycle)Customer a. AwarenessInterest Consideration Purchase KeepRelationships CustomersUnbundle/Upsell  Cross sell Referrals b. Startups need to understand the sales cycle to ―Get, Keep &Get / Keep / Grow‖ a customer for their relevant market.Grow 2. Demand creation – drives customers to chosen sales channels a. Tactics: earned and paid media & marketing, online toolsNSF I-Corps Teaching Handbook Revision 22 page 52 of 114

3. Customer Acquisition Costs (CAC) and how to model/calculate 4. Customer Lifetime Value (LTV) 5. Retention strategies and tactics How to create end user demand Difference between web and other channels Evangelism vs. existing need or category How demand creation differs in a multi-sided marketReadingfor SOM pp. 180-188 revenue and pricing hypotheses, 260-269 verify businessnext week model, 438-456 metrics that matter Watch: Mark Pincus, ―Quick and Frequent Product Testing and AssessmentAssignment for Lecturenext week Watch Lecture 6 Revenue Streams – take the quiz o http://www. Presentation Talk to at least 10 potential customers Build demand creation budget and forecast. Create objective pass/fail metrics for each ―Get‖ test/methodology o What is your customer acquisition cost? o What is your customer lifetime value? Did anything change about Value Proposition, Customers/Users, Channel? Update your blog and canvas. See http://www.slideshare.net/sblank/tagged/i-corps for examples of what’s needed in tomorrow’s presentationPresentation Slide 1: Cover slideGuidelines Slide 2: Current business model canvas with any changes marked Slide 3 What were your experiments to test Getting Customers? Slide 4: Diagram of Get/Keep/Grow o Annotate it with costs to ―Get‖ customers Slide 5 - n: What did you learn about how to Get/Keep and Grow customers? o Hypothesis: Here’s What we Thought o Experiments: So Here’s What we Did o Results: So Here’s What we Found o Iterate: So Here’s What we Are Going to Do NextNSF I-Corps Teaching Handbook Revision 22 page 53 of 114

Lecture5: Key concept diagramsEnsure students understand Get/Keep/Grow Customers on the WebEnsure students understand Get/Keep/Grow Customers for PhysicalChannelsNSF I-Corps Teaching Handbook Revision 22 page 54 of 114

Ensure students understand Customer Acquisition Cost (CAC)NSF I-Corps Teaching Handbook Revision 22 page 55 of 114

Class 6: Revenue Streams o Team Presentation based on Customer Relationships Lecture o Remote Lecture 6: Revenue StreamsTeaching Objectives Teams should be showing some real progress.Student Presentations o Realize some teams are in the ―trough of despair‖ Do not give up on the ones who seem lost, about half of those surprise youInstructor Critiques Don’t let them slow down the pace of discovery and customer calls Make sure teams continue to: o Annotate the business model canvas with updates o Include diagrams of each part of the hypotheses o Update their blog as ―a customer discovery narrative‖  Acknowledge you’ve read their blog Focus your main critique on their understanding of customer relationships Comment on other egregious parts of the canvas as necessaryHow? Ask, ―What earned media activities do you plan to do for your startup? What do you hope to achieve?‖ Even though they won’t have time to do real demand creation they need to grasp the concepts of Get/Keep/Grow, CAC, & LTV Ensure their diagrams show funnel and real $’s for costs Ask, ―Do you know what your customers read, what trade shows they attend, gurus they follow, and where they turn for new product information?‖ To most, marketing is even more of a mystery than salesCommonstudenterror Let them know that the funnel is their magic decoder ring tos on their 6th marketingpresentation Students often do not understand the difference between customer ―acquisition‖ and customer ―activation‖ for web/mobile startups Online marketing is important, even if the product and sales channels are physicalLecture 6 Students should understand:Revenue Streams Revenue model = the strategy the company uses to generate cash from each customer segmentLearning Objectives Direct Sales, Licensing, Subscription Within the revenue model – how do I price the product? Pricing is a tactic Revenue model is the strategyNSF I-Corps Teaching Handbook Revision 22 page 57 of 114

This is not about income statement, balance sheet and cash flow. Those are operating details that are derived after a proven Revenue Model and pricing. See key lecture concept diagrams belowLecture 6 Instructors should emphasize: Types of revenue streamsRevenue Streams Revenue models Pricing Tactics Physical versus Web/Mobile Revenue models and Multi-sided market revenue modelsReadingfor SOM pp. 176-179 partners 257-270 and 429-459Next WeekAssignment for LectureNext Week Watch Lecture 7 Partners – take the quiz o http://www. Presentation Talk to at least 10 potential customersTest pricing in front of 100 customers on the web, 10-15 customers non-web. What’s the revenue model strategy? What are the pricing tactics? Draw the diagram of payment flows What are the metrics that matter for your business model? Did anything change about Value Proposition, Customers/Users, Channel, Customer Relations? Update your blog and canvas See http://www.slideshare.net/sblank/tagged/i-corps for examples of what’s needed in tomorrow’s presentationPresentation Slide 1: Cover slideGuidelines Slide 2: Current business model canvas with any changes marked Slide 3: What were your hypotheses and experiments to test your Revenue Model and Pricing tactics? Slide 4: Diagram of Payment flows Slide 5 - n: What did you learn about your Revenue Model& Pricing?  Hypothesis: Here’s What we Thought  Experiments: So Here’s What we Did  Results:So Here’s What we Found  Iterate:So Here’s What we Are Going to Do NextNSF I-Corps Teaching Handbook Revision 22 page 58 of 114

Lecture6: Key concept diagramsNSF I-Corps Teaching Handbook Revision 22 page 59 of 114

Class 7: Partners o Team Presentation based on Revenue Streams Lecture o Remote Lecture 7: PartnersTeaching Objectives Teams should be showing some real progress.Student Presentations o Realize some teams are in the ―trough of despair‖ Do not give up on the ones who seem lost, about half of those surprise youInstructor Critiques Don’t let them slow down the pace of discovery and customer calls Make sure teams continue to: o Annotate the business model canvas with updates o Include diagrams of each part of the hypotheses o Update their blog as ―a customer discovery narrative‖  Acknowledge you’ve read their blog Focus your main critique on their understanding of revenue models and pricing Comment on other egregious parts of the canvas as necessaryHow? Ask: o What your revenue model? o Why did you select it? o How do customers buy today? o What do they pay today? o What do competitors charge? o Does it result in a large company? Sufficient profit? Students confuse pricing tactics with revenue model strategyCommonstudenterror Students price on cost versus values on their 7th No appreciation of competitive pricing or offerings Revenuepresentation adds up to a small business Business too small for a company should focus on licensingThis Lecture is pre-recorded. All students need to watch it before classLecture 7 Students should understand:Partners What is a Partner?Learning Types of PartnersObjectives Risks associated with having a Partner and how to manage them Suggestions related to selecting a Partner as a startup See key lecture concept diagrams belowNSF I-Corps Teaching Handbook Revision 22 page 61 of 114

Lecture 7 Instructors should emphasize: Who are PartnersPartners The difference between strategic alliances, competition, joint ventures, buyers, suppliers and licensees While Partners are critical for large companies (most companies do not do everything by themselves)Strategic alliances and joint partnerships are not needed to serve Earlyvangelists. They are needed for Mainstream customers For startups, Partners can monopolize your time Partners must have aligned goals and customers Some examples: o Partnership disasters: Boeing 787 o Strategic Alliances:Starbucks partners with Pepsi, create Frappuccino o Joint Business Development: Intel partners with PC vendors o Coopetition: Automotive suppliers create AIAG o Key Suppliers: Apple builds iPhone from multiple suppliersReadingfor Next SOM pp.169-175 resources, 180-188 revenue and pricingWeekAssignment for LectureNext Week Watch Lecture 8 Resources, Activities and Costs – take the quiz o http://www. Presentation Talk to at least 10 potential customers including potential partners What partners will you need? Why do you need them and what are risks? Why will they partner with you? What’s the cost of the partnership? Draw the diagram of partner relationships with any dollar flows Did anything change about Value Proposition or Customers/Users, Channel, Demand Creation or Revenue Streams? What are the incentives and impediments for the partners? Update your blog and canvas o See http://www.slideshare.net/sblank/tagged/i-corps for examples of what’s needed in tomorrows presentationPresentation Slide 1: Cover slideGuidelines Slide 2: Current business model canvas with any changes marked Slide 3: What were your hypotheses experiments to test your Partners? Slide 4: Diagram of partner relationships Slide 5 - n: What did you learn about your Partners?  Hypothesis: Here’s What we Thought  Experiments: So Here’s What we Did  Results:So Here’s What we Found  Iterate:So Here’s What we Are Going to Do NextNSF I-Corps Teaching Handbook Revision 22 page 62 of 114

Class 8: Resources, Activities and Costs o Team Presentation based on Partners Lecture o Remote Lecture 8: Resources, Activities and CostsTeaching Objectives This is the last presentationStudent Presentations Teams will want to slow down or stop calling customers. Don’t let them slow down the pace of discovery and customer calls Focus your main critique on their understanding of partnersInstructor Critiques Comment on other egregious parts of the canvas as necessaryHow? Ask: How many partners have you spoken to? What alignment does this partner have with your customers? What need do you solve for this partner and how important is it to the partner? What economic benefit does this partner provide your business? How many partners are there like this? Students think their business has to do everything and don’tCommonstudenterrors realize the value of a partner in their value deliveryon their 8th Students assume getting a partner is a relatively easy processpresentation Students confuse partnership interest with successful closing a partnership deal Students confuse partnership closing with successful executing partnershipThis Lecture is pre-recorded. All students need to watch it before classLecture 8 Students should understand:Resources, Cover the four categories of resourcesActivities and Cover the types of activitiesCosts Talk about the effect of people upon the culture of the startup Enumerate the ways in which a startup’s intellectual property canLearning be protectedObjectives Add up all the costs. Is this a business? worth doing? See key lecture concept diagrams belowNSF I-Corps Teaching Handbook Revision 22 page 64 of 114

Lecture 8 Students should understand Resources: Financial, Physical, Intellectual, Human CapitalResources, Intellectual property protection. The assumptive path (patents)Activities and may not be the right one to choose at this stage.Costs Activities: Manufacturing? Supply Chain? Problem Solving? Costs: Fixed costs? Variable Costs?Assignment Keep talking to 10 customers a week Get ready for your 7-minute presentation and 2-minute video Have early versions of your presentation materials available for online review by the presentation-skills instructors the week before class 9 o See the story video requirements – you want them to start work on this before they show up for Class 9Presentation See AppendixGuidelinesNSF I-Corps Teaching Handbook Revision 22 page 65 of 114

Class 9: Story Telling for ScientistsTeaching Objectives Class 9 is a day-long workshop, on-site. Teams bring their draft final presentations, draft story video, and draft technical video. They refine & polish them throughout the day changing slides, editing video, reshooting interviews, and redoing voiceovers while receiving comments and suggestions from the instructors along the way. The emphasis is on how they present themselves and their material, with a specific focus on telling a clear and compelling story. We also provide a short end-of-day-session on future funding opportunities through the NSF SBIR program and venture capitalistsFormat Two weeks before the workshop teams are instructed to have early versions of all their presentation materials available for online review by the presentation-skills instructors the week before this workshop. One week before the workshop teams are reminded to email in links to their presentations and videos. Team who followed these instructions received initial comments and suggestions via email a few days before the workshop. The day of the workshop the first 30-60 minutes is talking about storytelling and presentation basics. (The key lecture concepts are in a later section.) Then, for 2 hours, the instructors walk the room and work with team, one at a time. Often, a comment or suggestion came up that all the teams would benefit from hearing, and instructors would grab the attention of everyone in the room and share learnings with everyone. After a lunch break, each team gives their presentation to instructors and the other groups and received notes in a formal practice session. just before dinner the I-Corps program managers talk about the NSF SBIR program, and if available local VC’s talk about angel/venture fundingAssignment Students have three deliverables for tomorrow, the ―Lessons Learned‖ Class: Story Video: 2-minutevideo focused on your journey throughNSF I-Corps Teaching Handbook Revision 22 page 68 of 114

I-Corps as it relates to your business Technology Video: 1-minute video focused on scientific details of your work Lessons Learned Slide Deck (8 minutes for your slide presentation) Focus every bit of the team presentations (slide deck andBest Practices videos) on the specifics of the company each team is starting, the specifics of the customers they met, and the specific lessons they as a company learned about their particular product or service. Use diagrams of what you learned: Customers, channels, etc. Use updated business model canvases to show your journey Teams who emailed Youtube links to their videos and slide decks several days in advance got much better feedback, and had time to act on the feedback. Youtube is the right mechanism to share video for email critique; only accept YouTube links. Dropbox, and especially email attachments, are not and drag the entire process to a standstill. Think of the story video as the heart of the team presentation told with video Suggested Story Video OutlineStory Video Details(2 minutes) What are your names and what is your team’s name? Introduce yourselves. Pan the camera around your office so we can see where you work. How many customers did you talk to? Did you find this easy? Hard at first? When you started the class, what was the most important thing you thought you would have to do to successfully launch a scalable startup? How do you feel about that now? Thinking back across the class, who was the most interesting customer you met and where did you meet them? What happened?? Why, specifically, was this your most interesting customer conversation? And how, specifically, did your business model change as a result? Now that the class is over, what was the most surprising thing you learned in the class?NSF I-Corps Teaching Handbook Revision 22 page 69 of 114

Teams need to see examples ofStory videos! Point the teams to good examples including: City Climber team from City University of New York http://www.slideshare.net/sblank/city-climber-story-video-nsf RedOx team from Yale http://www.slideshare.net/sblank/redox-video-nsf PhiOptics from University of Illinois http://www.slideshare.net/sblank/phi-optics-story-video-nsf Soliculture team from UC Santa Cruz http://www.slideshare.net/sblank/soliculture-story-video-nsf NeonLabs from Carnegie Mellon University http://www.slideshare.net/sblank/neonlabs-story-video-nsf See all presentations and videos at: http://www.slideshare.net/sblank/tagged/i-corpsTechnical The technical video is a short video that is appropriate for aVideo Details technically educated audience.(1 min) *Similar to what might be submitted with a conference paper.* We actually think of this video as a catharsis for the technologists on the teams who would be otherwise trying to put all the technology details into the story video. This gives them a vehicle to stick all the detail elsewhere.Lessons Learned The Lessons Learned slide deck is a very short list of definitionsPowerPointPresentation and simple declaratives that are intended to increase the quality(8 min) of the presentations. Here it is, in full: Story. Be specific. Show me, dont tell me. Arcs. Beginning, middle, end. Character, setting, plot. Editing. Notes. Look before... Practice! Be specific. Use (or enhance) the diagrams you developed in weekly presentations to illustrate these points - Instructors will find plenty of material to work with, by looking at the slide decks and video links that are emailed in advance.NSF I-Corps Teaching Handbook Revision 22 page 70 of 114

Spend the morning sessions talking about the common pitfalls in team presentations. Made sure Slide 1 has Team Name, your product, what business you ended up in and the number of customers you talked to. Every presentation requires a diagram of Customer Archetypes, customer flow, distribution channel, revenue flow. Every presentation requires hypotheses you tested, experiments you ran and results. Final Slides – Click through each one of your business model canvas slides. Teams need to see examples ofsuccessful presentations! Point the teams to good examples including: RedOx team from Yale http://www.slideshare.net/sblank/redox-final-nsf-presentation NeonLabs from Carnegie Mellon University http://www.slideshare.net/sblank/lighttip-nsf-final- presentation Phioptics from the University of Illinois http://www.slideshare.net/sblank/phioptics-nsf-final- presentation OmegaChem Iowa State University http://www.slideshare.net/sblank/omegachem-nsf-final- presentation See all presentations and videos at: http://www.slideshare.net/sblank/tagged/i-corps Students often make very bland story videos. o They dont naturally hone in and choose very specificCommon student errors details of their technology, their customers, and their learning process. This is essential, the more specific thePresentation and video better. o It is only through the specificity of a storyteller that an audience can extrapolate to generality, which is what one wants an investor to do. Students often spent time thanking instructors, speaking excitedly about the Lean Launchpad program, or making cheeky references or inside jokes. o This is a big mistake, and can make years of research feel like a Junior High School Science Fair Project. Students should spend absolutely zero time on any of these topics, and all meta references to how important teamwork isNSF I-Corps Teaching Handbook Revision 22 page 71 of 114

should be aggressively cut. This is very hard for many students to internalize. o None of that has any place in a 2 minute video about a real company that is really trying to raise real money from real investors. Investors will ascertain team dynamics for themselves when they meet a given company and the people involved. Students think they need to tell a whitewashed success story. ○ This is another mistake, and will damage their attempts at getting subsequent financing. ○ Students must strive to tell the story of their mistakes, pitfalls discovered, and pivots made. ○ Most importantly, students must talk in the most specific terms possible about the customers they actually met, what they actually said, and how that changed their business model canvases. Students dont label their axes on graphs, label their arrows in diagrams, or make a legend showing their color coding scheme. They should.NSF I-Corps Teaching Handbook Revision 22 page 72 of 114

Class 10: Lessons Learned PresentationTeaching Objectives Teams present: 2-minute video 8-minute Lessons Learned PresentationLogistics All 25 teams present in the same room 9 am – 4pm o Breaks and lunch Graduation Ceremony o Official graduation certificates with each students name (provided by NCIIA) o Coffee cup (provided by NCIIA)NSF I-Corps Teaching Handbook Revision 22 page 73 of 114

11. Course AgendaWe use an assigned team number for the 25 teams in the class. Forexample, University of Minnesota will be team #1; Columbia University isTeam #9, and so on per the list below:Class 1: Each team has 3 minutes to introduce themselves and their business model canvas. All 25 teams present in the same room. Upload your presentations to Dropbox before you present.Presentation order we will be as follows. While Team 1 is presenting, Team2 should line up by the podium.Example:• Team 1: University of Minnesota• Team 2: Yale University• Team 3: University of Alabama• Team 4: University of Arkansas• Team 5: California Institute of Technology• Team 6: University of Oregon• Team 7: University of Kentucky• Team 8: MIT• Team 9: Columbia University• Team 10: University of Wisconsin-Milwaukee• Team 11: Georgia Tech Research Corporation• Team 12: Western Michigan Univ• Team 13: Case Western Reserve University• Team 14: UC Santa Cruz -Molecular diagnostics using optofluidic technology• Team 15: Iowa State University• Team 16: University of Rochester• Team 17: University of Washington• Team 18: University of Illinois• Team 19: CUNY City College• Team 20: University of Maryland• Team 21: University of Virginia Main Campus• Team 22: University of Michigan• Team 23: Carnegie-Mellon University• Team 24: UC Santa Cruz - Higher Performance GreenhousesNSF I-Corps Teaching Handbook Revision 22 page 74 of 114

Class 2: • Each team has 5 minutes for their presentation. • Teams will split into two groups of 12 teams. • Upload your presentations to Dropbox before you present.Teams 1-12 will remain in the main conference room.Teams 13-24 will be in the xxx room. Class 3: • Each team has 10 minutes for their presentation. • Teams will split into three groups of 8, 8 and 9 for presentations. • Upload your presentations to Dropbox before you present.Teams 1-8 will be in main conference room.Teams 9-16 in xxx room.Teams 17-24 in yyy room.All the Entrepreneurial Leads have received a Dropbox invitation to uploadpresentations for Tuesday March 20. Remote Classes 4-8: • Each team has 10 minutes for their presentation. • Teams will split into three groups of 8, 8 and 9 for presentations. • Upload your presentations to Dropbox before you present.Instructors will be with the same 8 teams in classes 4 and 5Instructors will rotate to the next 8 teams for classes 6 and 7Instructors will rotate again to the final 9 teams for class 8.The Teaching Assistant is responsible for the logistics and groupassignments.NSF I-Corps Teaching Handbook Revision 22 page 75 of 114

12. Course OperationsGiven all the moving parts of the class, (on-site and remote and the number ofparticipants involved),Instructors have to pay attention to who’s managing the details.Luckily, operations and logistics are owned by both NCIIA and your Teaching Assistant(the TA). Here’s what each of them do. Communicatingtravel, lodging, logistics information to course participants: NCIIA. Communicatingin-class information to course participants: Teaching Assistant. Collecting weeklyteam presentations: Teaching Assistant Managing Google collaboration tools: The Teaching Assistantcreates two Google documents before the course o The first is the instructor grading sheet. It allows grading and real-time collaboration for instructors o The second is the student feedback grading sheet. It allows students to offer feedback to their peers and keeps them actively engaged in the progress of other teams Managing Presentation Sessions (on-site and on-line sessions): Teaching Assistantmanages the order of presentation, timing, and presentation platforms (on- site: projector, remote: Webex). Managing LaunchPad Central:Teaching Assistant. Manage On-line Office Hours:Teaching Assistantand Instructors to provide on-line office hours while students are working remotely.The following table summarizes the responsibilities of the Teaching Assistant andincludes technology platform suggestions and execution suggestions. Two checklists forthe Teaching Assistant are also provided (on-site and remote).NSF I-Corps Teaching Handbook Revision 22 page 76 of 114

13. AppendicesNSF I-Corps Teaching Handbook Revision 22 page 77 of 114

Collaborative Google DocumentsNSF I-Corps Teaching Handbook Revision 22 page 78 of 114

**Snapshot of student Google doc goes here – need to redo taking outnames etc.NSF I-Corps Teaching Handbook Revision 22 page 80 of 114

Example Teaching AssistantCommunicationsDay 1: Introductory EmailDear entrepreneurial leads, principal investigators and mentors for the 2012 NSF I-Corps program at Stanford University,We look forward to the program kick off tomorrow morning. We will use an assignedteam number for the 24 teams in this program. For example, University of Minnesotawill be team #1; Columbia University is Team #9, and so on per the list below:Tuesday March 20Each team has 3 minutes to introduce themselves and their business model canvas.Presentation order we will be as follows. While Team 1 is presenting, Team 2 shouldline up by the podium. o Team 1: University of Minnesota o Team 2: Yale University o Team 3: University of Alabama o Team 4: University of Arkansas o Team 5: California Institute of Technology o Team 6: University of Oregon o Team 7: University of Kentucky o Team 8: MIT o Team 9: Columbia University o Team 10: University of Wisconsin-Milwaukee o Team 11: Georgia Tech Research Corporation o Team 12: Western Michigan Univ o Team 13: Case Western Reserve University o Team 14: UC Santa Cruz -Molecular diagnostics using optofluidic technology o Team 15: Iowa State University o Team 16: University of Rochester o Team 17: University of Washington o Team 18: University of Illinois o Team 19: CUNY City College o Team 20: University of Maryland o Team 21: University of Virginia Main Campus o Team 22: University of Michigan o Team 23: Carnegie-Mellon University o Team 24: UC Santa Cruz - Higher Performance GreenhousesWednesday March 21Teams will split in two groups of 12 teams.Teams 1-12 will remain in the main conference room.Teams 13-24 will be in the Oskenberg room on the 3rd floor.

Thursday March 22Teams will split into three groups of 8 for presentations.Teams 1-8 will be in main conference room.Teams 9-16 in Oskenberg Reception area on the 3rd floor.Teams 17-24 in Oskenberg main room on 3rd floor.All the Entrepreneurial Leads have received a Dropbox invitation to uploadpresentations for Tuesday March 20. Five teams have uploaded their presentationsalready. Thank you for being first.An issue I notice right away in the presentations uploaded is the font size onyour canvas is tiny. This is going to be very hard for folks in the room to read.Please re-upload the presentation with a larger font. Also add your assignedteam number as a pre-fix to your presentation name. This will make it easierand faster on Tuesday.For example: 13 - Affinity_I-Corps.pdf where 13 is team number for Case WesternReserve UniversityPeer ReviewWhile a team is presenting, we require all other teams to provide peer reviewinputs/comments to the presenting team. This is accomplished in real time using aGoogle spreadsheet, which can be found here. Please book mark this for the duration ofthis class:http://bit.ly/FUzQ3ZTeaching Team Insights/WisdomDuring the team presentations, the teaching team will provide real timeinputs/feedback. We will be capturing these insights in an online Google spreadsheet.Please bookmark this page:http://bit.ly/yhbEj4Thank youThe Teaching TeamDay 2 Expectations EmailTeamsNSF I-Corps Teaching Handbook Revision 22 page 82 of 114

Hope day 1 was stimulating and engaging. Thank you all for making the teampresentations work like clockwork this morning. For tomorrow: 1. Paste the URL of your Wordpress blog in the Peer Review Google spreadsheet in column F http://bit.ly/GDbVKA 2. Upload your team presentations to Dropbox under the March 21 folder 3. Highlight the total number of customer interviews you had today on the title slide of your presentation. Hope you took a lot of pictures for your blog from these customer meetings. 4. Teams 1-12 will meet in the main conference room we were in today; Teams 13- 24 will be in the Oskenberg room on the 3rd floor of this buildingThank youThe Teaching TeamDay 3 Expectations EmailTeamsThank you for a fantastic day #2. Just one day into the program, we heard someamazing insights from several teams. Kudos to the Arkansas team that hit the groundrunning after missing day 1 due to their 22+ hour travel time.For tomorrow: 1. Write a blog post about your customer development interviews. Paste your canvas from day 1 and 2 on the blog. 2. Upload your team presentations to Dropbox under the March 22 folder. 3. Highlight the total number of customer interviews you had today on the title slide of your presentation. 4. Presentation schedule for March 22: o Teams 17-24 main conference room with Steve Blank on the 1st floor o Teams 1 - 8 will be in the Oskenberg main room on the 3rd floor with Jon Burke o Teams 9 - 16 will be in the Oskenberg reception room on the 3rd floor with Jon FeiberThank youThe Teaching TeamNSF I-Corps Teaching Handbook Revision 22 page 83 of 114

Video Conferencing WebEx SetupTeams,Please use the following information for our WebEx set up session today 12.30 - 1.30pm. Also please see attached instructions for our online sessions starting next week. Anupdated guide will be provided early next week.Topic: WebEx test runDate and Time:Thursday, March 22, 2012 12:30 pm, Pacific Daylight Time (San Francisco, GMT-07:00)Event number: 660 606 419Event password: 1234Panelist password: The Event has no Panelist PasswordHost key: 619923 (Use this to reclaim host privileges.)Event address for attendees: https://nciiaevents.webex.com/nciiaevents/xxEvent address forpanelists: https://nciiaevents.webexhttps://nciiaevents.webex.com/nciiaevents/xx-------------------------------------------------------To start the online event-------------------------------------------------------At least 30 minutes before the starting time:1. Go to https://nciiaevents.webex.com/nciiaevents/onstage/g.php?d=660606419&t=h2. Log in to your host account if you have not yet done so.3. On the Event Information page that appears, click "Start Now".-------------------------------------------------------Teleconference information-------------------------------------------------------To receive a call back, provide your phone number when you join the event, or call thenumber below and enter the access code.Call-in toll free number (US/Canada): 1-877-668-4493Call-in toll number (US/Canada): 1-650-479-3208Global call-innumbers: https://nciiaevents.webex.com/nciiaevents/globalcallin.php?serviceType=EC&Toll-free dialing restrictions: http://www.webex.com/pdf/tollfree_restrictions.pdfAccess code: 660 606 419Thank youThe Teaching TeamNSF I-Corps Teaching Handbook Revision 22 page 84 of 114

First WebEx Video Conferencing EmailTeams,Here are the instructions for our first online class tomorrow. The instructions cover 3main areas: Office Hours via Skype: Our teaching team is offering 20 minutes per team of "office hour" time available before and after class. This first week is first- come, first-serve. Please sign up for office hours by putting your team name on http://sblank.com/H29E8u o You will be Skyping to your instructor so make sure youre in one location and can make a Skype call. WebEx sign in for team presentations: We will split the class into 3 groups of 8 teams each for the team presentations. Please make sure you dial into your correct group. See http://bit.ly/GWism5 WebEx sign in for class lecture: When the team presentations are finished you will hang up. Then at 11am PST all 3 groups will dial into a new WebEx conference line.The summary for the next 5 weeks and details can be found here: http://bit.ly/H3mgBqInstructions for WebEx: 1. Make sure all your presentations are uploaded to Dropbox no later than 8.45 am PT 2. Click on one of the following links: 1. Group 1: https://nciiaevents.webex.com/nciiaevents/onstage/g.php?d=66628486 6&t=a 2. Group 2: https://nciiaevents.webex.com/nciiaevents/onstage/g.php?d=66669217 8&t=a 3. Group 3: https://nciiaevents.webex.com/nciiaevents/onstage/g.php?d=66445843 5&t=a 3. Enter your email id, meeting password (icorps2012) and you will now be in the WebEx meeting.NSF I-Corps Teaching Handbook Revision 22 page 85 of 114

4. A pop up box will ask which toll free number youd like to use - ignore that message - we are using a Voice over IP teleconference with video. 5. Please ensure you have your headseton. 6. The host will do a quick roll call for all 8 teams in the group and then start recording the meeting. 7. The host will assign the Entrepreneurial Lead to be the presenter 8. EL will take control and share either the entire desktop or share their presentation application (Adobe or MS Powerpoint). 9. EL gets 10 minutes to present + 2-3 minutes for Q&A like we did last week on Thursday. 10. Once the time is up, the EL will hand presenter privilege back to the host. 11. Host then brings on the next EL for presentation. 12. Repeat 8 times 13. After all 8 teams are done, everyone drops off from their respective sessions and dials back into the WebEx link for the class lecture. 1. Link for class lecture: https://nciiaevents.webex.com/nciiaevents/onstage/g.php?d= 2. Meeting password: icorps2012We will not be providing any technical support for WebEx connectivityissues: Please contact WebEx Technical Support(Available 24 hours a day, 7 days a week for current customers only.)Phone: 1-866-569-3239 (U.S. and Canada Toll-Free)+1-916-861-3155 (International Toll)Thank youThe Teaching TeamNSF I-Corps Teaching Handbook Revision 22 page 86 of 114

Instructions for WebEx Session for Participants 1. Checklist for teams before joining the WebEx session: a. Upload presentation (in .ppt or .pptx format) toDropbox folder April 11 no later than 11am ET (8 am PT). Couple of teams did not upload their presentations until kick off time. Please do not do so this week. b. Use a headset c. Turn on the Webcam on the machine used to present 2. Group 1 (teams 9,10,11,12,13,14,15,16) will dial into the following WebEx meeting no later than 11.30 am ET (8.30 am PT) a. https://nciiameetings.webex.com/nciiameetingsxxxx b. Please select the option to ―Use Computer for Audio‖ and click the ―call using computer button‖ as seen below c. Lead instructors: Steve Blank d. WebEx meeting host: Bhavik Joshi 3. Go to instruction # 7 on page 3 4. Group 2 (teams 17,18,19,20,21,22,23,24) will dial into the following WebEx meeting no later than 11.30 am ET (8.30 am PT): a. https://nciiameetings.webex.com/nciiameetingsxx b. Please select the option to ―Use Computer for Audio‖ and click the ―call using computer button‖ c.NSF I-Corps Teaching Handbook Revision 22 page 87 of 114

d. Lead instructors: Jon Feiber and Jerry Engel e. WebEx meeting host: Chris D + Ricardo 5. Go to instruction # 7 on page 3. 6. Group 3 (teams 1,2,3,4,5,6,7,8) will dial into the following WebEx meeting no later than 11.30 am ET (8.30 am PT): a. https://nciiameetings.webex.com/nciiameetings/j.php?ED= a. Please select the option to ―Use Computer for Audio‖ and click the ―call using computer button‖ b. Lead instructor: John Burke, Georgia Tech Team c. WebEx meeting host: Rachel + Anne Hendrixson d. Go to instruction # 7 on page 3 7. WebEx meeting hosts will have all 8 team presentations open and ready in the WebEx whiteboard space. 8. At 12 pm ET (9 am PT) host will provide ―presenter‖ privilege to the EL on the first team in the group. All other attendees except for the presenter and the lead instructors will be on mute. 9. Host will start recording the WebEx session at this point. 10. The EL from the second team in the group will be presenting by 12.15 pm ET (9.15 am PT) and the cycle will repeat for all 8 teams. 11. At 2 pm ET (11 am PT) teams will hang up and join the WebEx meeting with for the class lecture. a. https://nciiameetings.webex.com/nciiameetings/j.phxxD%3D b. Lead instructor: Keith McGreggor c. Lecture: Resources & Costs d. Meeting Host: Bhavik JoshiNSF I-Corps Teaching Handbook Revision 22 page 88 of 114

e. For the 30-minute lecture all participants except for the lead instructor and meeting host will be muted. f. Lecture ends at 2.30 pm ET (11.30 am PT) g. Current faculty debrief 11.30 am – 12 pm PT here: h. https://nciiameetings.webex.com/nciiameetings/jxx 12. Additional details and summary can be found on the Google spreadsheet here: http://bit.ly/Hfmm6UNSF I-Corps Teaching Handbook Revision 22 page 89 of 114

SAMPLE SYLLABUS. PLEASE CONFORM TO YOUR SCHEDULE AND TEAM The National ScienceFoundation Innovation Corps: The Lean LaunchPadCourse Title: The Lean LaunchPadInstructors: Steve Blank, Jon Feiber John BurkeCo-Instructors: Jerry Engel, Oren Jacob, Jim HornthalTA’s: Bhavik JoshiDays and Times: March 20 - 22nd at Stanford University (Classes 1, 2 and 3) Mar 28th – Apr 12th Five video lectures at your school (Classes 4 – 8) broadcast Wednesdays 9:00 am –noon PST May 22nd – 23rd at Stanford University – “Lessons Learned” pitchesWebpage: http://????Texts: The Startup Owners Manual - Steve Blank Business Model Generation - Alexander OsterwalderThis curriculum requires in depth preparation and significant effort outside of the lab.Pre- class Assignments:Read pages 14-49 of Business Model Generation.Read pages 22-84 of the Startup Owners ManualReview course strategy at http://steveblank.com/category/lean-launchpad/Review I-Corps team presentations http://www.slideshare.net/sblank/tagged/i-corps. (note the number of customer contacts each team made over the course.)Each team comes into the 1st day of class:1. with a Business Model Canvas. You will present for 3-minutes on day 1 (see appendix A)2. prepared to make 10 or more customer/industry contacts at Stanford/Berkeley/UCSF and around the San Francisco Bay area, when class is not in sessionPrerequisites: 1) Attend as a team consisting of Principal Investigator, Entrepreneurial Lead,and Commercialization Mentor. 2) Each team member must commit to class time plus 15additional hours a week for Customer Discovery.I-Corps Sample Syllabus - March 2012 page 90 of 114

SAMPLE SYLLABUS. PLEASE CONFORM TO YOUR SCHEDULE AND TEAMGoals: 1)Give the I-Corps team an experiential learning opportunity to help determine thecommercial readiness of their technology. 2) Enable the team to develop a clear go/no godecision regarding commercial viability of the effort, 3) Should the decision be to move thetechnology forward to market, develop a transition plan to do so.Curriculum Description: This curriculum provides real world, hands-on learning on what it’slike to successfully transfer knowledge into products and processes that benefit society. It’s notabout how to write a research paper, business plan or NSF grant. It’s not an exercise on howsmart you are in a lab or a classroom, or how well you use the research library. The end result isnot a paper to be published or PowerPoint slide deck.Instead the entire team will be engaged withindustry; talking to customers, partners and competitors, as the team encounters the chaos anduncertainty of transferring knowledge into products and processes that benefit society.Amount of WorkGetting out of the lab/building is what the effort is about. It’s not about the lectures.You will bespending a significant amount of time in between each of the lectures outside your lab talking tocustomers and testing your hypotheses. If you can’t commit the time to talk to customers, theI-Corps effort is not for you.Class CultureStartups communicate much differently than inside a university and lab. It is dramaticallydifferent from the university culture most of you are familiar with. Given your stature inside yourinstitution, at times it can feel brusque and impersonal, but in reality is focused and oriented tocreate immediate action in time- and cash-constrained environments.We have limited time andwe push, challenge, and question you in the hope you will quickly learn. We will be direct, open,and tough – just like the real world. We hope you can recognize that these comments aren’tpersonal, but part of the process.We also expect you to question us, challenge our point of view if you disagree, and engage in areal dialog with the teaching team. This approach may seem harsh or abrupt, but it is all part ofour wanting you to learn to challenge yourselves quickly and objectively, and to appreciate thatas entrepreneurs you need to learn and evolve faster than you ever imagined possible.TeamsYou’ll work in teams learning how to turn your research and technology idea into a product,service or process that benefits society. You’ll learn how to use a business model to brainstorm eachpart of an enterprise and customer development to get out of the lab/building to see whetheranyone other than you would want/use your product. Each week will be new adventure as youI-Corps Sample Syllabus - March 2012 page 91 of 114

SAMPLE SYLLABUS. PLEASE CONFORM TO YOUR SCHEDULE AND TEAMdesign experiments and run hypotheses tests on each part of your business model andcustomers. Finally, you’ll see how agile development can help you rapidly iterate your product tobuild something potential customers will use and buy.Weekly, in a 10-minute presentation you’ll share the hard earned knowledge with the rest of theclass. Working with your team you will encounter issues on how to build and work with a teamand we will help you understand how to build and manage the startup team.See http://steveblank.com/category/lean-launchpad/ for a narrative of the class.Review I-Corps team presentations http://www.slideshare.net/sblank/tagged/i-corps to reviewprevious teams efforts.Class Organization:Three Day I-Corps Workshop:The class starts with your entire I-Corps team (Principal Investigator, Entrepreneurial Lead,I-Corps Mentor) at Stanford, March 20th -22nd for the first lectures. In the three-day workshopyour team will present what you are learning to the entire class of 25-teams. (Presentationformats will be provided.) At the end of each teams presentation we will offer observations andguidance. When not presenting each member of your team will be grading your peers.Post Workshop, Out of the Building EffortWhen I-Corps teams return to their institutions, you are required to get out of the lab to test theirbusiness model assumptions. This is a team effort. It will take at least 15 hours a week. Yourfirst slide each week is the number of customers talked to. It is the heart of the class.Online Curriculum: Weekly Presentations and Progress TrackingWe will split the 25 teams into three groups. Each team will present a 10-minute weeklyprogress report to members of the teaching team. (These slides are public. Do not putproprietary information on them.) At the end of our presentation we will offer observations andguidance.This is how we monitor your progress and give you guidance. When not presentingeach member of your team will be grading your peers.Online Curriculum: Weekly LecturesImmediately following the team presentations, all 25 teams will come together on-line for a classlecture. The instructors will run five weekly on-line lectures, March 28th – April 12th that willstep through each of the 9 business model canvas hypotheses.I-Corps Sample Syllabus - March 2012 page 92 of 114

SAMPLE SYLLABUS. PLEASE CONFORM TO YOUR SCHEDULE AND TEAMWeekly Blog TrackingIn addition to your presentations, teams will record their customer discovery progress basisusing a Wordpress blog to capture the narrative, contact information, learning and insight. This isalso how we monitor your progress.I-Corps “Lessons Learned” PresentationsThe entire I-Corps team (Entrepreneurial Lead, I-Corps Mentor and Principal Investigator) willreturn to Stanford, May 22nd -23rd . There the teams will present to the teaching team andVenture Capitalists the Lessons Learned in their exploration of commercial feasibility.Team Organization:This class is team-based. Working and studying will be done in teams. Theteams will self-organize and establish individual roles on their own. There are no formalCEO/VP’s. All three members of the team; Principal Investigator, Entrepreneurial Lead andCommercialization Mentor must participate in all out of the building customer discovery activities.Mentors have additional duties as spelled out in the separate mentor guide. Please read andreview it.Deliverables:1)if you’re a physical product you must show us a costed bill of materials and a prototype orproof demonstration. If you’re a web product you need to build it and have customers using it.2) Your weekly blog and its narrative of your customer discovery process is an integral part ofyour deliverables. It’s how the team’s progress is measured (along with the “Lessons Learned”presentations.)Takeaways: A “commercialization potential” scorecardAt the end of the course, each team will be provided feedback in the form of a scorecard on thepotential for commercializing their research and innovation. This scorecard will provide feedbackto the team about: gaps in the business model, team, product that remain, and provide specificsuggestions for how to improve and fix them.I-Corps Sample Syllabus - March 2012 page 93 of 114

SAMPLE SYLLABUS. PLEASE CONFORM TO YOUR SCHEDULE AND TEAM Class RoadmapEach week’s class is organized around: A lecture on one of the 9 building blocks of a business model (see diagram below, taken from Business Model Generation). Team presentations on their “lessons learned” from getting out of the building and iterating or pivoting their business model. Each team will capture their progression in Customer Discovery by keeping an on-line journals/blogs/wiki.“Genius is the ability to make the most mistakes in the shortest amount of time.” Aspiringentrepreneurs need to become fast iterators.I-Corps Sample Syllabus - March 2012 page 94 of 114

SAMPLE SYLLABUS. PLEASE CONFORM TO YOUR SCHEDULE AND TEAM Tuesday March 20thTime: 8:00 – 9:00 amBreakfastLocation: Bechtel Room, Bechtel Conference CenterTime: 9:00 - 11:30 amClass 1: Class IntroductionTeaching Team: Steve Blank/Jon Feiber/John Burke/Jerry EngelLocation: Bechtel Room, Bechtel Conference Center Teaching Team Introductions Team Introduction – by each of the 25 teams presenting their business model canvas Class Goals Teaching Philosophy Expectations of YouTime: 11:30 – 12:30 pmPanel: How to Succeed in the Innovation CorpsPanelists: Kamil Agi, Carol and Vasilis VoudouTeaching Team: Errol Arkilic/Jon Feiber/John BurkeLocation: Bechtel Room, Bechtel Conference CenterTime: 12:30 – 1:30 pmLunchLocation: Bechtel Room, Bechtel Conference CenterTime: 1:30 - 3:00 pmClass 1: Business Model/Customer DevelopmentTeaching Team: Steve Blank/Jon Feiber/John Burke/Jerry EngelLocation: Bechtel Room, Bechtel Conference CenterClass Lecture: The Business Model/Customer DevelopmentWhat’s a business model? What are the 9 parts of a business model? What are hypotheses? Whatis the Minimum Feature Set? What experiments are needed to run to test business modelhypotheses? What’s “getting out of the building?” What is market size? How to determinewhether a business model is worth doing?Deliverables for tomorrow Wednesday March 21stRead: Business Model Generation, pp. 86-111, 135-145 Startup Owners Manual review pages 53-84I-Corps Sample Syllabus - March 2012 page 95 of 114

SAMPLE SYLLABUS. PLEASE CONFORM TO YOUR SCHEDULE AND TEAM Steve Blank, “What’s a Startup? First Principles,” http://steveblank.com/2010/01/25/whats-a-startup-first-principles/ Steve Blank, “Make No Little Plans – Defining the Scalable Startup,” http://steveblank.com/2010/01/04/make-no-little-plans-–-defining-the-scalable- startup/ Steve Blank, “A Startup is Not a Smaller Version of a Large Company”, http://steveblank.com/2010/01/14/a-startup-is-not-a-smaller-version-of-a-largecompany/Team Presentationfor tomorrow Wednesday March 21st Market size Type of business: IP, licensing, startup, unknown Proposed experiments to test customer segment, value proposition, channel and revenue model of the hypotheses: What constitutes a pass/fail signal for each test (e.g. at what point would you say that your hypotheses wasn’t even close to correct)? Start your Customer Discovery Narrative blog in Wordpress o Email the teaching team your URLTime: 3:00 - 6:30 pmGet out of the building!We expect you to have set up meetings to talk to potential customers in the Bay Area.Read: Startup Owners Manual page 195-199 Giff Constable, “12 Tips for Early Customer Development Interviews,” http://giffconstable.com/2010/07/12-tips-for-early-customer-development-interviews/You will be presenting your results tomorrow morning. In a startup there is no “spare time.”Time: 6:30 pmDinnerLocation: Bechtel Room, Bechtel Conference CenterTime: 7:00 – 8:00 pmWorkshop: Best Practices for Customer DiscoveryLocation: Bechtel Room, Bechtel Conference Center How to call on people you don’t know. How to get the most out of the people you do. Expectations, speed, tempo, logistics, commitments.I-Corps Sample Syllabus - March 2012 page 96 of 114

SAMPLE SYLLABUS. PLEASE CONFORM TO YOUR SCHEDULE AND TEAM How do I protect my IP when I speak to partners Does Lean work for non-software efforts How do I interview” How is an interview different than a sales callI-Corps Sample Syllabus - March 2012 page 97 of 114

SAMPLE SYLLABUS. PLEASE CONFORM TO YOUR SCHEDULE AND TEAM Wednesday March 21stTime: 8:00 – 9:00 amBreakfastLocation: Bechtel Room, Bechtel Conference CenterTime: 9:00 am - 1:00 pmClass 2: Team PresentationsTeaching Team: Steve Blank/Jon Feiber/John Burke/Jerry EngelLocation: Bechtel Room, Bechtel Conference CenterTeam Presentations: 5 minutes each (all teams) Slide 1: Cover slide (appendix A, slide 1) Slide 2: Current business model canvas with any changes marked Slide 3: Tell us about your Market size (TAM/SAM/Target) Slide 4: What type of business are you building?: IP, licensing, startup, unknown Slide 5: What are your proposed experiments to test customer segment, value proposition, channel and revenue model of the hypotheses: o What constitutes a pass/fail signal for each test (e.g. at what point would you say that your hypotheses wasn’t even close to correct)?Time: 1:00-2:00 pmLunchLocation: Bechtel Room, Bechtel Conference CenterTime: 2:00 - 3:00 pmClass 2: Value PropositionTeaching Team: Steve Blank/Jon Feiber/John Burke/Jerry EngelLocation: Bechtel Room, Bechtel Conference CenterClass Lecture: Value PropositionWhat is your product or service? How does it differ from an idea? Why will people want it? Who’sthe competition and how does your customer view these competitive offerings? Where’s themarket? What’s the minimum feature set? What’s the Market Type? What was your inspirationor impetus? What assumptions drove you to this? What unique insight do you have into themarket dynamics or into a technological shift that makes this a fresh opportunity?Deliverable for Thursday March 22ndRead: Business Model Generation, pages. 146-150, 161-168 and 200-211 The Startup Owners Manual, pages 85-97I-Corps Sample Syllabus - March 2012 page 98 of 114

SAMPLE SYLLABUS. PLEASE CONFORM TO YOUR SCHEDULE AND TEAMTeam Presentation for tomorrow Thursday March 22nd Get out of the building and talk to as many people as you can What were your value proposition hypotheses? Get out of the building and begin to talk to customers for March 22nd o What did potential customers think about your value proposition hypotheses? o Follow-up with Survey Monkey (or similar service) to get more data Update your blog and canvasTime: 3:00 - 6:30 pmGet out of the building!We expect you to have set up meetings to talk to potential customers in the Bay Area.You will be presenting your results tomorrow morning. In a startup there is no “spare time.”Time: 6:00 – 7:00 pmDinnerLocation: Bechtel Room, Bechtel Conference CenterTime: 7:00 – 8:00 pmWorkshop: Mentor TutorialTeaching Team: Steve Blank/Jon Feiber/John Burke/Jerry EngelLocation: Bechtel Room, Bechtel Conference Center The role of Mentors in the Lean Launchpad ProcessI-Corps Sample Syllabus - March 2012 page 99 of 114

SAMPLE SYLLABUS. PLEASE CONFORM TO YOUR SCHEDULE AND TEAM Thursday March 22ndTime: 8:00 – 9:00 amBreakfastLocation: Bechtel Room, Bechtel Conference CenterTime: 9:00 am – 1:00 pmClass 3: Team PresentationsTeaching Team: Steve Blank/Jon Feiber/John Burke/Jerry EngelLocation: Oskenberg and Bechtel Rooms, Bechtel Conference CenterTeam Presentations: 10 minutes each (all teams) Slide 1: Cover slide Slide 2: Current business model canvas with any changes marked Slide 3 - n: What did you learn about your value proposition from talking to your first customers? o Hypothesis: Here’s What we Thought o Experiments: So Here’s What we Did o Results: So Here’s What we Found o Iterate: So Here’s What we Are Going to Do NextTime: 1:00-2:00 pmLunchLocation: Bechtel Room, Bechtel Conference CenterTime: 2:00 - 3:00 pmClass 3: Customers/Users/PayersTeaching Team: Steve Blank/Jon Feiber/John Burke/Jerry EngelLocation: Bechtel Room, Bechtel Conference CenterClass Lecture: Customers/Users/PayersWho’s the customer? User? Payer? How are they different? Why do they buy? How can you reachthem? How is a business customer different from a consumer? What’s a multi-sided market?What’s segmentation? What’s an archetype?Deliverable for Wednesday March 28thRead: Business Model Generation, pages 127-133 Startup Owners Manual, pages 98 – 111, and 189-255, 406-412I-Corps Sample Syllabus - March page 100 of 114

SAMPLE SYLLABUS. PLEASE CONFORM TO YOUR SCHEDULE AND TEAMTeam Presentation for Wednesday March 28th Get out of the building and talk to 10-15 customers face-to-face What were your hypotheses about who your users and customers were? Did you learn anything different? Did anything change about Value Proposition? What do customers say their problems/needs are? How do they solve this problem(s) today? Does your value proposition solve it? How? What was it about your product that made customers interested? excited? If your customer is part of a company, who is the decision maker, how large is their budget, what are they spending it on today, and how are they individually evaluated within that organization, and how will this buying decision be made? Update your blog and canvasTime: 3:00 – 4:00 pmWorkshop: Video SetupLocation: Bechtel Room, Bechtel Conference CenterPreflight and checkout of your computer for use in remote lectures. Configuration of hardwareand software. How to present your slides and set up video, etc.I-Corps Sample Syllabus - March page 101 of 114

SAMPLE SYLLABUS. PLEASE CONFORM TO YOUR SCHEDULE AND TEAM Wednesday March 28thTime: 9:00 am - 11:00 am PSTClass 4: Team Presentations in 3 groupsTeaching Team: Steve Blank/Jon Feiber/John BurkeLocation: Video lecture at your UniversityTeam Presentations: 10 minutes each Slide 1: Cover slide Slide 2: Current business model canvas with any changes marked Slide 3 - n: What did you learn about your customer segments from talking to your first customers? o Hypothesis: Here’s What we Thought o Experiments: So Here’s What we Did o Results: So Here’s What we Found o Iterate: So Here’s What we Are Going to Do NextTime: 11:00 am - 12:00 pm PSTClass 4: Distribution ChannelsTeaching Team: Steve Blank/Jon Feiber/John BurkeLocation: Video lecture at your UniversityClass Lecture: Distribution ChannelsWhat’s a channel? Physical versus virtual channels. Direct channels, indirect channels, OEM.Multi-sided markets. B-to-B versus B-to-C channels and sales (business to business versusbusiness to consumer)Deliverable for Wednesday April 4thRead: Startup Owners Manual pages 227-256, 332-342Team Presentation for Wednesday April 4th Get out of the building and talk to 10-15 potential channel partners face-to-face (Salesmen, OEM’s distributors, etc.) What were your hypotheses about who/what your channel would be? Did you learn anything different? Did anything change about Value Proposition? Update your blog and canvas For web teams: Get a Low-fidelity web site up and running. See Startup Owners Manual page 211-217I-Corps Sample Syllabus - March 2012 page 102 of 114

SAMPLE SYLLABUS. PLEASE CONFORM TO YOUR SCHEDULE AND TEAM Wednesday April 4thTime: 9:00 – 11:00 am PSTClass 5: Team Presentations in 3 groupsTeaching Team: Steve Blank/Jon Feiber/John BurkeLocation: Video lecture at your UniversityTeam Presentations: 10 minutes each Slide 1: Cover slide Slide 2: Current business model canvas with any changes marked Slide 3 - n: What did you learn about your channel from talking to potential channel partners? o Hypothesis: Here’s What we Thought o Experiments: So Here’s What we Did o Results: So Here’s What we Found o Iterate: So Here’s What we Are Going to Do NextTime: 11:00 am – 12:00 pm PSTClass 5: Customer Relationships: Get/Keep/GrowTeaching Team: Steve Blank/Jon Feiber/John BurkeLocation: Video lecture at your UniversityClass Lecture:Customer Relationships/ Demand CreationHow do you create end user demand? How does it differ on the web versus other channels?Evangelism vs. existing need or category? General Marketing, Sales Funnel, etc. How doesdemand creation differ in a multi-sided market?Deliverable for Wednesday April 11thRead: The Startup Owners Manual, pages 277-331 Watch: Mark Pincus, “Quick and Frequent Product Testing and Assessment”, http://ecorner.stanford.edu/authorMaterialInfo.html?mid=2313Team Presentation for April 11th For everyone: o Present and explain your marketing campaign. What worked best and why? hI-Corps Sample Syllabus - March 2012 page 103 of 114

SAMPLE SYLLABUS. PLEASE CONFORM TO YOUR SCHEDULE AND TEAM For web teams: o Get a working web site and analytics up and running. Track where your visitors are coming from (marketing campaign, search engine, etc) and how their behavior differs. What were your hypotheses about your web site results? Actually engage in “search engine marketing” (SEM) spend $20 as a team to test customer acquisition cost o Ask your users to take action, such as signing up for a newsletter o use Google Analytics to measure the success of your campaign o change messaging on site during the block to get costs lower, team that gets lowest delta costs wins. If you’re assuming virality of your product, you will need to show viral propagation of your product and the improvement of your viral coefficient over several experiments. o Submit web data or customer interview notes, present results in class. o Did anything change about Value Proposition or Customers/Users? o What is your assumed customer lifetime value? Are there any proxy companies that would suggest that this is a reasonable number? For non-web teams: o Get prototype demo working o build demand creation budget and forecast. o What is your customer acquisition cost? o Did anything change about Value Proposition or Customers/Users? o What is your customer lifetime value? Channel incentives – does your product or proposition extend or replace existing revenue for the channel? o What is the “cost” of your channel, and it’s efficiency vs. your selling price. Everyone: Update your blog and canvas. o What kind of initial feedback did you receive from your users? o What are the entry barriers? hI-Corps Sample Syllabus - March 2012 page 104 of 114

SAMPLE SYLLABUS. PLEASE CONFORM TO YOUR SCHEDULE AND TEAM Wednesday April 11thTime: 9:00 am - 11:00 am PSTClass 6: Team Presentations in 3 groupsTeaching Team: Steve Blank/Jon Feiber/John BurkeLocation: Video lecture at your UniversityTeam Presentations: 10 minutes each Slide 1: Cover slide Slide 2: Current business model canvas with any changes marked Slide 3 - n: What did you learn about how to Get/Keep and Grow customers? o Hypothesis: Here’s What we Thought o Experiments: So Here’s What we Did o Results: So Here’s What we Found o Iterate: So Here’s What we Are Going to Do NextTime: 11:00 am – 12:00 pm PSTClass 6: Revenue ModelsTeaching Team: Steve Blank/Jon Feiber/John BurkeLocation: Video lecture at your UniversityClass Lecture:Revenue ModelWhat’s a revenue model? What types of revenue streams are there? How does it differ on the webversus other channels? How does this differ in a multi-sided market?Deliverable for Wednesday April 18thRead: Startup Owners Manual pages 257-270 and 429 – 459 Business Model Generation pages 212-225Team Presentation for April 18th What’s the revenue model strategy? What are the pricing tactics? Draw the diagram of payment flows What are the metrics that matter for your business model? Test pricing in front of 100 customers on the web, 10-15 customers non-web. Update your blog and canvasI-Corps Sample Syllabus - March 2012 page 105 of 114

SAMPLE SYLLABUS. PLEASE CONFORM TO YOUR SCHEDULE AND TEAM Wednesday April 18thTime: 9:00 am - 11:00 am PSTClass 7: Team Presentations in 3 groupsTeaching Team: Steve Blank/Jon Feiber/John BurkeLocation: Video lecture at your UniversityTeam Presentations: 10 minutes each Slide 1: Cover slide Slide 2: Current business model canvas with any changes marked Slide 3 - n: What did you learn about your Revenue Model? o Hypothesis: Here’s What we Thought o Experiments: So Here’s What we Did o Results: So Here’s What we Found o Iterate: So Here’s What we Are Going to Do NextTime: 11:00 am – 12:00 pm PSTClass 7: PartnersTeaching Team: Steve Blank/Jon Feiber/John BurkeLocation: Video lecture at your UniversityClass Lecture:PartnersWho are partners? Strategic alliances, competition, joint ventures, buyer supplier, licensees.Deliverable for Wednesday April 25thRead: Business Model Generation pages 200-211 Startup Owners Manual pages 406-412Team Presentation for April 25thWhat partners will you need? Why do you need them and what are risks? Why will they partner with you? What’s the cost of the partnership? Talk to actual partners. What are the benefits for an exclusive partnership? Did anything change about Value Proposition or Customers/Users, Channel, Demand Creation? What are the incentives and impediments for the partners? Update your blog and canvasI-Corps Sample Syllabus - March 2012 page 106 of 114

SAMPLE SYLLABUS. PLEASE CONFORM TO YOUR SCHEDULE AND TEAM Wednesday April 25thTime: 9:00 am - 11:00 am PSTClass 8: Team Presentations in 3 groupsTeaching Team: Steve Blank/Jon Feiber/John BurkeLocation: Video lecture at your UniversityTeam Presentations: 10 minutes each Slide 1: Cover slide Slide 2: Current business model canvas with any changes marked Slide 3 - n: What did you learn about Partners? o Hypothesis: Here’s What we Thought o Experiments: So Here’s What we Did o Results: So Here’s What we Found o Iterate: So Here’s What we Are Going to Do NextTime: 11:00 am – 12:00 pm PSTClass 8: Key Resources & CostsTeaching Team: Steve Blank/Jon Feiber/John BurkeLocation: Video lecture at your UniversityClass Lecture: Resources and Cost StructureWhat resources do you need to build this business? How many people? What kind? Anyhardware or software you need to buy? Any IP you need to license? How much money do youneed to raise? When? Why? Importance of cash flows? When do you get paid vs. when do youpay others?Deliverable for Wednesday May 22ndRead: Startup Owners Manual pages 169-175What’s your expense model? Assemble a resources assumptions spreadsheet: o people, hardware, software, prototypes, financing, etc. o When will you need these resources? Where is your cash flow break-even point? What are the key financials metrics for costs in your business model? Costs vs. ramp vs. product iteration? Roll up all the costs from partners, resources and activities in a spreadsheet by time. Prepare for May 22nd and 23rd at Stanford o 10 –minute Team Lessons Learned Presentation o 1-2 minute “lessons learned” video o 5 minute product videoI-Corps Sample Syllabus - March 2012 page 107 of 114

SAMPLE SYLLABUS. PLEASE CONFORM TO YOUR SCHEDULE AND TEAM Tuesday May 22nd Rehearsal DayLocation: Bechtel Room, Bechtel Conference Center9:00-10:00am Presentation and Video Workshop Oren JacobWell talk through some example slides and presentations from previous groups, well discussthe basic format were asking you to follow and the reason(s) why, and then well get to work10:00 – noon Presentation and Video Q&A Oren JacobThe next few hours are lab time where we’ll working with you all on an ad hoc basis, walkingaround, talking about where you are, what youre working on, answering questions, andencouraging you all as we all whip our presentations into shape.Noon- 1:00 pm SBIR 101 / Lunch Errol ArkilicThe basics of the SBIR program and how the funding process works.1:00 -4:00 pm One-on-One Practice Pitches Oren JacobEach of your teams will each get a chance to present. Im the audience. No grades, just notes.Notes about what you are missing, what you should take out, and what you should do more of toget ready for Wednesday.4:00 -5:00 pm What’s Next? Jon Feiber / John BurkeHow does venture capital funding work? How to raise money from a VC?I-Corps Sample Syllabus - March 2012 page 108 of 114

SAMPLE SYLLABUS. PLEASE CONFORM TO YOUR SCHEDULE AND TEAM Wednesday May 23rd Final Presentations DayLocation: Bechtel Room, Bechtel Conference Center1-2 minute Videos & Lessons Learned PresentationsDeliverable: Each team will present a 10-minute “Lessons Learned” presentation about theirbusiness in front of the teaching team and potential investors.I-Corps “Lessons Learned” Presentation FormatFirst Play your videoSlide 1 Team Name, your product, what business you ended up in and number of customers you talked to.Slide 2 Team members – name, background, expertise and your role for the teamSlide 3 key NSF funded technology and/or innovationSlide 4 the size of the opportunitySlide 5 Business Model Canvas Version 1 (use the Osterwalder Canvas). So here’s what we did (explain how you got out of the building, experiments you can)Slide 6 So here’s what we found (what was reality) so then, …Slide 7 Business Model Canvas Version 2 (use the Osterwalder Canvas). We iterated or pivoted… explain why and what you found.Slide 8 So here’s what we did (explain how you got out of the building)Slide 9 So here’s what we found (what was reality) so then,Slide 10 Business Model Canvas Version 3 (use the Osterwalder Canvas). We iterated or pivoted… explain why and what you found.Etc…. Every presentation requires at least three Business Model Canvas slides.Etc…. Every presentation requires a channel diagram, distribution diagram and customer archetype or customer flow diagram.Etc…. Every presentation requires hypotheses you tested, experiments you ran and results.Side n – “So here’s where we ended up.” Talk about: 1. what did you learn 2. whether you think this a viable business, 3. whether you want to purse it after the class, etc.Final Slides – Click through each one of your business model canvas slides.I-Corps Sample Syllabus - March 2012 page 109 of 114

SAMPLE SYLLABUS. PLEASE CONFORM TO YOUR SCHEDULE AND TEAMTeaching TeamSteve Blank – Lecturer, Stanford Technology Ventures Programsblank@stanford.edu@sgblank415-999-9924Jon Feiber – General Partner Mohr DavidowJdf@mdv.com650-302-0011John Burke - General Partner True Venturesjburke@trueventures.com@andemca650-319-2150Jim Hornthal – General Partner CMEAjim@hornthal.comJerry Engel – General Partner Monitor Venturesengel@haas.berkeley.eduTeaching AssistantsBhavik Joshi – Better Place, Bus Dev Asia, Co-Founder Berkeley Stanford Cleantech ConferenceSeriesjoshibhavik@gmail.com@joshi_bhavik650-644-8183I-Corps Sample Syllabus - March 2012 page 110 of 114

SAMPLE SYLLABUS. PLEASE CONFORM TO YOUR SCHEDULE AND TEAMSteve BlankAfter 21 years in 8 high technology companies, Steve retired in 1999. He co-founded hislast company, E.piphany, in his living room in 1996. His otherstartups include two semiconductor companies, Zilog and MIPSComputers, a workstation company Convergent Technologies, aconsulting stint for a graphics hardware/software spinout Pixar, asupercomputer firm, Ardent, a computer peripheral supplier,SuperMac, a military intelligence systems supplier, ESL and a videogame company, Rocket Science Games.After he retired, Steve wrote a book about building early stagecompanies called Four Steps to the Epiphany. He moved from being an entrepreneur toteaching entrepreneurship to both undergraduate and graduate students at U.C. Berkeley,Stanford University and the Columbia University/Berkeley Joint Executive MBAprogram.In 2009, Steve was awarded the Stanford University Undergraduate Teaching Award inthe department of Management Science and Engineering. In 2010, he was awarded theEarl F. Cheit Outstanding Teaching Award at U.C. Berkeley Haas School of Business.Steve followed his curiosity about why entrepreneurship blossomed in Silicon Valleyand was stillborn elsewhere. It has led to several talks on The Secret History of SiliconValley.In 2007 the Governor of California appointed Steve to serve on the California CoastalCommission, the public body which regulates land use and public access on theCalifornia coast. He’s on the board of Audubon California (and its past chair). In 2009he joined the board of the California League of Conservation Voters (CLCV).Steve was the commencement speaker at Philadelphia University in 2011. Text of thespeech is here.I-Corps Sample Syllabus - March 2012 page 111 of 114

SAMPLE SYLLABUS. PLEASE CONFORM TO YOUR SCHEDULE AND TEAMJon FeiberIt was a chance meeting that brought Jon Feiber into the venture industry. Jon, then avice president at Sun Microsystems, was considering leavingSun for a startup. After a preliminary discussion about thestartup at Mohr Davidow, he got an offer to join the firm.Today, he is among Mohr Davidow’s most senior partnersand is responsible for many of the firm’s successfulinvestments. Most of Jon’s investments harness emergingtechnology. “I like the intersection of emerging technologyand big markets – geeky projects,” he admits.He began his career as a software programmer for mainframemaker Amdahl Corp. “I tend towards entrepreneurs who havereal insight into hard problems and a sense of their need bycustomers.”Mohr Davidow, he believes, will remain one of the technology industry’s mostsuccessful investors because of its faith and commitment to entrepreneurs. “This firmhas always been known for being direct and open in its relationships withentrepreneurs,” he explains. “Our enthusiasm for the entrepreneur is matched by depthof knowledge and experience in the areas that we choose to invest in.”“Being a venture capitalist is one of the greatest jobs you can have,” he continues. “I getto hang out with the smartest people in the world and help them turn their ideas intoworld class companies.”Jon holds a bachelors degree in computer science and mathematics and astro-physicsfrom the University of ColoradoI-Corps Sample Syllabus - March 2012 page 112 of 114

SAMPLE SYLLABUS. PLEASE CONFORM TO YOUR SCHEDULE AND TEAMJohn BurkeJohn is a founder of True Ventures, with a passion in early stage investing and growingcompanies. For eight years, he lived through thebalancing act of building his own company at BMISoftware, which he founded in 1989 and sold in 1997.He began his venture career at ABS Ventures in 1999,working with Phil Black, and then, after the acquisitionof Alex Brown and Sons by Deutsche Bank, continuedon with DB Capital Partners. Before founding True,John was a Managing Member with Blacksmith Capital. He recently crossed animportant threshold in his professional life: he has now been a venture capitalist longerthan he was a CEO. However, like most life changing events, he can still remember thelate nights dealing with HR issues, the relief of meeting payroll, and the satisfaction ofdelighting a customer.Having lived through the tough decisions required in entrepreneurship, John is now ableto guide his portfolio companies through the difficult times with a deftness that onlythose years of operating experience bring. John holds a BS degree in MechanicalEngineering from U.C. Berkeley, a BA degree in Economics from U.C. Santa Cruz, anda MBA degree from Harvard Business School. When he is not thinking about how tocreate a more valuable company, you can probably find him bird hunting with hisGerman Shorthair Pointer, teaching his kids to ski, or building furniture in his shop.I-Corps Sample Syllabus - March 2012 page 113 of 114

SAMPLE SYLLABUS. PLEASE CONFORM TO YOUR SCHEDULE AND TEAMWelcome to I-CorpsThis course provides real world, hands-on learning on what it’s like to actually start a high-techcompany. This class is not about how to write a research paper, business plan or NSF grant. It’snot an exercise on how smart you are in a lab or a classroom, or how well you use the researchlibrary. The end result is not a paper to be published or PowerPoint slide deck.Instead the entireteam will be getting their hands dirty talking to customers, partners, competitors, as youencounter the chaos and uncertainty of how to commercialize your technology.Getting out of the building is what the class is about. It’s not about the lectures. If you can’tcommit the time to talk to customers, don’t take the class.You’ll work in teams learning how to turn your research and technology idea into a greatcompany. You’ll learn how to use a business model to brainstorm each part of a company andcustomer development to get out of the classroom to see whether anyone other than you wouldwant/use your product. Finally, you’ll see how agile development can help you rapidly iterateyour product to build something customers will use and buy. Each week will be new adventureas you test each part of your business model and then share the hard earned knowledge with therest of the class. Working with your team you will encounter issues on how to build and workwith a team and we will help you understand how to build and manage the startup team.Students▪ I-Corps is only open to NSF I-Corps students.▪ We encourage the teams to recruit any and all resources to their teams. Non-students can serve as extra members of the teams.▪ Each team must have 3 I-Corps students.Your Slides Will Be Public▪ Your weekly and final slide decks should not contain any proprietary information.▪ They should focus on your business model and customer discovery▪ You will learn from looking at past classes and those to come will learn from yours.Attendance and Participation▪ You cannot miss the first three classes at Stanford or the final presentations at Stanford▪ If you anticipate missing more than one remote lecture, we recommend that you wait to apply to the I-Corps when you can commit the time.Getting out of the building is what the class is about. It’s not about the lectures. If you can’tcommit the time to talk to customers, don’t take the class.I-Corps Sample Syllabus - March 2012 page 114 of 114

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