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Sitra portfolio company day 090711
 

Sitra portfolio company day 090711

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    Sitra portfolio company day 090711 Sitra portfolio company day 090711 Presentation Transcript

    • SITRA Portfolio Company Day
      Steve Blank
      www.steveblank.com
      Twitter: sgblank
      Slides: www.slideshare.net/sblank
    • First
      Observations From Abroad
    • #1
      Startups are Smaller Versions of Large Companies
    • #1
      ×
      Startups are Smaller Versions of Large Companies
      oops
    • #2
      A startup is all about focus and execution of the business plan
    • #2
      A startup is all about focus and execution of the business plan
      No business plan survivesfirst contact with customers

    • #3
      A startup is all about a great idea
    • #3
      A startup is all about a great idea
      An A-teamwith a B-product always beats a B-team with an A-product

    • #4
      Companies execute business plansStartups search for business models
    • #3
      Companies execute business plansStartups search for business models
    • #4
      Companies execute business plansStartups search for business models

    • #5
      A startup is a temporary organization designed to search for a scalable and repeatable business model
    • #6
      Startups need their own tools, different from those used in existing companies
    • #6
      Startups need their own tools, different from those used in existing companies
    • #7
      Customer Development = process to searchBusiness Model Canvas is the ScorecardAgile Engineering is How We Build Startups
    • #8
      Customer Development =process to searchBusiness Model Canvas =the ScorecardAgile Engineering is How We Build Startups
      • Farming conventions.
      • Demo, demo, and demo!!
      • Proximity is paramount
      • Technology Design
      • Marketing
      • Demo and customer feedback
      • Research Labs
      • Equipment Manufacturers
      • Distribution Network
      • Service Providers
      • Cost Reduction
      • Remove labor force pains
      • Eliminate bio-waste hazards
      • Organic Farmers
      • Weeding Service Providers
      • Conventional Farmers
      • IP – Patents
      • Video Classifier Files
      • Robust Technology
      • Dealers
      • Direct Service
      • Indirect Service
      • … then Dealers
      • Asset Sale
      • Direct Service with equipment rental
      • … then Asset Sale
      Value-Driven
    • #9
      Customer Development is the process used to searchBusiness Model Canvas is the ScorecardAgile Development is How We Build Startups
    • How To Speed Up Growth?
    • How To Speed Up Growth?
      Eliminate Waste
      money, time, …
    • How To Speed Up Growth?
      Eliminate Waste
      money, time, …
      By Doing Fewer Dumber Things
    • The Business Model:
      Any company can be described in 9 building blocks
    • CUSTOMER SEGMENTS
      which customers and users are you serving?
      which jobs do they really want to get done?
    • VALUE PROPOSITIONS
      what are you offering them? what is that
      getting done for them? do they care?
    • CHANNELS
      how does each customer segment want to be reached? through which interaction points?
    • CUSTOMER RELATIONSHIPS
      what relationships are you establishing with each segment? personal? automated? acquisitive? retentive?
    • REVENUE STREAMS
      what are customers really willing to pay for? how?
      are you generating transactional or recurring revenues?
    • KEY RESOURCES
      which resources underpin your business model? which assets are essential?
    • KEY ACTIVITIES
      which activities do you need to perform well in your business model? what is crucial?
      28
    • KEY PARTNERS
      which partners and suppliers leverage your model?
      who do you need to rely on?
    • COST STRUCTURE
      what is the resulting cost structure?
      which key elements drive your costs?
    • value proposition
      customer relationships
      key activities
      customer segments
      key partners
      cost structure
      revenue streams
      key
      resources
      channels
      31
      images by JAM
    • sketch out your business model
    • sketch out your business models
    • But,Realize They’re Hypotheses
    • 9 Guesses
      Guess
      Guess
      Guess
      Guess
      Guess
      Guess
      Guess
      Guess
      Guess
    • Customer Development
      The founders
      ^
      Get Out of the Building
    • Customer DevelopmentThe Search For the Business Model
      Company
      Building
      CustomerDiscovery
      CustomerValidation
      Customer Creation
      Pivot
    • Customer Discovery
      CustomerDiscovery
      CustomerValidation
      Company
      Building
      CustomerCreation
      Stop selling, start listening
      Test your hypotheses
      Continuous Discovery
      Done by founders
    • The Minimum Viable Product (MVP)
      • Smallest feature set that gets you the most …
      - orders, learning, feedback, failure…
    • The Pivot
      • The heart of Customer Development
      • Iteration without crisis
      • Fast, agile and opportunistic
    • Pivot Cycle Time Matters
      • Speed of cycle minimizes cash needs
      • Minimum feature set speeds up cycle time
      • Near instantaneous customer feedback drives feature set
    • The Pivot
      A Pivot is the change of one or more Business Model Canvas Components
    • How to Speed Up Growth?
    • Pivot ExampleRobotic Weeding
      Talked 75 Customers in 8 Weeks
    • Our initial plan
      Confidential
    • 20 interviews, 6 site visits…We got OUR Boots dirty
      Weeding
      Visited two farms in Salinas Valley to better understand problem
      Interviewed:
      • Bolthouse Farms, Large Agri-Industry in Bakersfield
      • White Farms, Large Peanut farmer in Georgia
      • REFCO Farms, large grower in Salinas Valley
      • Rincon Farms, large grower in Salinas Valley
      • Small Organic Corn/Soy grower in Nebraska
      • Heirloom Organics, small owner/operator, Santa Cruz Mts
      • Two small organic farmers at farmers market
      • Ag Services of Salinas, Fertilizer applicator
      Mowing
      Interviewed:
      • Golf: Stanford Golf course
      • Parks: Stanford Grounds Supervisor, head of maintenance and lead operator (has crew of 6)
      • Toro dealer (large mower manufacturer)
      • User of back-yard mowing system
      • Maintenance Services for City of Los Altos
      • Colony Landscaping (Mowing service for stadiums)
    • Business Plan Autonomous Vehicles for Mowing & Weeding
      Dealers sell, installs and supports customer
      Co. trains dealers, supports dealers
      - Innovation
      - Customer Education
      - Dealer training
      Mowing
      - Owners of public or commercially used green spaces (e.g. golf courses)
      - Landscaping service provider
      Weeding
      - Farmers with manual weeding operations
      We reduce operating cost
      - Labor reduction
      - Better utilization of assets (eg mow or weed at nights)
      - Improved performance (less rework, food safety)
      - Dealers (Mowing and Ag)
      - Vehicle OEMs (John Deere, Toro, Jacobsen, etc)
      - Research labs
      - Mowing Dealers
      - Ag Dealers
      Engineers on Autonomous vehicles, GPS, path-planning
      Asset sale
      Our revenue stream derives from selling the equipment
      Dealer discount
      COGS seek a 50-60% Gross Margin
      Heavy R&D investment
    • Found weeding in organic crops is HUGE problem; 50 - 75% of costs
      Crews of 100s-1000
      Back-breaking task
      (Ilegal) labor harder to get
      1-5 weedings per year/field
      $250-3,500 per acre and increasing
      Food contamination risk
    • Decision to make – mowing vs weeding
    • Autonomous vehiclesWEEDING
      Dealers sell, installs and supports customer
      Co. trains dealers, supports dealers
      - Innovation
      - Customer Education
      - Dealer training
      - Low density vegetable growers
      - High density vegetable growers
      - Thinning operations
      - Conventional vegetables
      We reduce operating cost
      - Labor reduction (100 to 1)
      - Reduced risk of contamination
      - Mitigate labor availability concerns
      - Ag Dealers
      - Ag Service providers
      - Research labs
      - Ag Dealers
      - Ag Service providers
      Engineers on Machine Vision
      Two problems:
      - Identification
      - Elimination
      Asset sale
      Our revenue stream derives from selling the equipment
      Dealer discount
      COGS seek a 50-60% Gross Margin
      Heavy R&D investment
    • 1 Week – 1 CarrotBot
      Confidential
    • CarrotBot
      Machine Vision data collection platform
      Monochrome & Color Cameras
      Laser-line sweep (depth measurement)
      Encoders (position/velocity)
      Onboard data acquisition & power
      CarrotBot 1.0
    • The Business Plan Canvas Updated
      • Farming conventions.
      • Demo, demo, and demo!!
      • Proximity is paramount
      • Technology Design
      • Marketing
      • Demo and customer feedback
      • Organic Farmers
      • Weeding Service Providers
      • Conventional Farmers
      • Cost Reduction
      • Remove labor force pains
      • Eliminate bio-waste hazards
      • Research Labs
      • Equipment Manufacturers
      • Distribution Network
      • Service Providers
      • IP – Patents
      • Video Classifier Files
      • Robust Technology
      • Dealers
      • Direct Service
      • Indirect Service
      • … then Dealers
      • Asset Sale
      • Direct Service with equipment rental
      • … then Asset Sale
      Value-Driven
    • Visit Highlights
      Above: Organic Carrots, 7wks.
      Top right: Conventional carrots
      Bottom Right: Very weedy. Will require multiple passes of hand weeding
    • Visit Highlights
      Carrot vs. Weeds
      Due to small root systems, carrots have no chance against weeds
    • Visit Highlights
      Organic Broccoli, closely cultivated. Weeds close to plants are hand-picked
    • Visit Highlights
      State of the Art in Weeding Technology for Organic Crops
    • Customer Hypothesis
      Pre-Test
      Hypothesis Confirmed
      • Growers interested in own equipment
      • Industrial (10,000s of acres)
      • Large (1,000s of acres)
      • Willing to pay $100k for one unit
      • Smaller growers (100s of acres) usually subcontract the labor services or rent equipment
      • All purchases through local dealers
      • Customer service is essential
      Post-Test
    • Customer Map #1 – Industrial Growers
      Example: Bolthouse Farms – Large Industrial Carrot Producer – 8K acres/yr
      • Equipment Operator
      • Local Farm Mgr
      • Cliff Kirkpatrick, visited
      • Director, Ag Technology
      • Justin Grove, interviewed
      Equipment Operator
      • VP, Growing Operations
      • CFO, CEO (Jeff Dunn)
      Cliff, Farm Mgr
    • Customer Map #2 – Service Providers
      Example: Ag Services – Service Provider, Salinas Valley
      • Equipment Operator
      • Grower
      • Service Mgr
      Me (left), Marty (middle, Service Mgr), Doug (right, Grower)
      • ?? (service mgr’s boss)
    • The Business Plan Canvas Updated
      • Farming conventions.
      • Demo, demo, and demo!!
      • Proximity is paramount
      • Technology Design
      • Marketing
      • Demo and customer feedback
      • Mid/Large Organic Farmers
      • Agricultural corporations
      • Weeding Service Providers
      • Mid/Large Conventional Farmers
      • Cost Reduction
      • Remove labor force pains
      • Eliminate bio-waste hazards
      • Research Labs
      • Equipment Manufacturers
      • Distribution Network
      • Service Providers
      • IP – Patents
      • Video Classifier Files
      • Robust Technology
      • Direct Service
      • Indirect Service
      • … then Dealers
      • Direct Service with equipment rental
      • ($1,500/d; 120d/yr )
      • Low density: $1,500/d
      • High density: $6,000/d
      Value-Driven
    • World Ag Expo interviews:the need is real and wide spread
      10+ interviews at show
      Everyone confirmed the need
      Robocrop, UK based, crude competitor sells for $171 K
      Revenue Stream
      Mid to small growers prefer a service
      Large growers prefer to buy, but OK with service until technology is proven
      Charging for labor cost saved is OK, as we provide other benefits (food safety, labor availability)
      Confidential
    • The Business Plan Canvas Updated
      • Farming conventions.
      • Demo, demo, and demo!!
      • Proximity is paramount
      • Technology Design
      • Marketing
      • Demo and customer feedback
      • Mid/Large Organic Farmers
      • Agricultural corporations
      • Weeding Service Providers
      • Mid/Large Conventional Farmers
      • Research Labs
      • Equipment Manufacturer
      • Distribution Network
      • Service Providers
      • 2 or 3 Key Farms
      • Cost Reduction
      • Remove labor force pains
      • Eliminate bio-waste hazards
      • IP – Patents
      • Video Classifier Files
      • Robust Technology
      • Direct Service
      • Indirect Service
      • … then Dealers
      • Direct Service with equipment rental
      • Low density: $1,500/d
      • High density: $6,000/d
      Value-Driven
      • R&D
      • Bill of Materials
      • Training & Service
      • Sales
    • Autonomous weeding - Final
      Direct
      - Provide high quality service at competitive price
      - Innovation
      - Customer Education
      - Dealer training
      - Low density vegetable growers
      - High density vegetable growers
      - Thinning operations
      - Conventional vegetables
      We reduce operating cost
      - Labor reduction (100 to 1)
      - Reduced risk of contamination
      - Mitigate labor availability concerns
      - Ag Service providers
      - Research Institutes (eg UC Davis, Laser Zentrum Hannover)
      - 3-4 key farms
      Direct
      - Alliance with service providers
      - Eventually sell through dealers
      Engineers on Machine Vision
      Two problems:
      - Identification
      - Elimination
      Service provision
      - Charge by the acre with modifier according to weed density
      - Eventually move to asset sale
      Costs for service provision
      COGS seek a 50-60% Gross Margin
      Heavy R&D investment
    • Role the Board
      Dumb Money
      Smart Money
      Connections
      Connections to more money
      Hire/Fire the CEO
      Advice
      Good Advice
      Wisdom
    • Board Meetings Haven’t Evolved
    • We Act Like It’s the 19th Century
      Why do we need to get together in one room?
      Why do we need to wait a month to see progress?
      Why don’t we have standards for what you want?
      Why haven’t we adopted the tools we build/sell?
    • How to Run a Board Meeting
      Logistics
      Send out board materials 2 days before, have board dinner
      Approve minutes, stock grants
      Business Highlights/Lowlights
      summary of key events since last meeting
      Financials versus Budget
      waterfall charts
      Management asks the board to help
      strategy, markets, key hires, introductions.
      Executive session
      Meet without management to discuss performance
    • How to Run a Board Meeting
      Logistics
      Approve minutes, stock grants
      Business Highlights/Lowlights
      summary of key events since last meeting
      Financials versus Budget
      waterfall charts
      Management asks the board to help
      strategy, markets, key hires, introductions.
      Executive session
      Meet without management to discuss performance
      Misc
      Send out board materials 2 days before, have board dinner
      Why?
    • What’s Wrong With a Board Meeting?
      Time between meetings (every 4-6 weeks)
      Strategy-to-tactic-to implementation lag
      Often no follow-up on the outcomes
      Diffuse board member attention (sits on 6-12 boards)
      Punctuated Exec Staff Performance
      “The Get Ready for the Board Meeting” drill
      It’s often a performance rather than a snapshot
      No standards for what each side does
      What is the entrepreneur supposed to be doing?
      What are the board members supposed to be contributing?
    • What’s Wrong With a Board Meeting?
      Time between meetings (every 4-6 weeks)
      Strategy-to-tactic-to implementation lag
      Diffuse board member attention (sits on 6-12 boards
      Punctuated Exec Staff Performance
      “The Get Ready for the Board Meeting” drill
      It’s often a performance rather than a snapshot
      No standards for what each side does
      What is the entrepreneur supposed to be doing?
      What are the board members supposed to be contributing?
      Why?
    • Solution:Make The Boardroom Bits
    • We Can Do This Via the Net
    • We Can Do This Via the Net
      24/7
    • Focus on What’s Important
      It’s about the search for the business model
      Not income statement, cash flow, balance sheet
      Advice/Guidance about metrics around the search
      What are the Business model hypotheses?
      What are the most important hypotheses to test now?
      Progress of validating each hypotheses
      What are the iterations and Pivots – and why?
    • We Made Students Blog Their Progress
    • How?
      Customer Development
      The Process
      Narrative
      Interviews
      Surveys
      Videos
      Prototypes
      Business Model Canvas
      Scorekeeping
      Real-time Feedback
      Physical Reality Checks
      Skype
      Face-to-face
    • We Made Students Blog Their Progress
      It Changed Everything
    • Interview
    • Photos
      Videos
    • Surveys
    • Interview
      & Photos
    • Competitive Analysis
    • Key Findings
    • A/B Test Results
    • Key Question
    • Strategy
    • Business Model Canvas as the Scorecard
    • Business Canvas Change Progress
      1
    • Business Canvas Change Progress
      2
    • Business Canvas Change Progress
      3
    • Business Canvas Change Progress
      4
    • Business Canvas Change Progress
      5
    • Business Canvas Change Progress
      6
    • Business Canvas Change Progress
      7
    • Demo
      Ben Mappen
      Lean LaunchLab
    • Product Demo
    • CANVAS diagram is interactive and “stateful”
    • CANVAS diagram is interactive and “stateful”
      Enter your hypotheses here
    • CANVAS diagram is interactive and “stateful”
      Test your hypotheses and
      record learnings in blog format
    • CANVAS diagram is interactive and “stateful”
      Test your hypotheses and
      record learnings in blog format
      Interviews
      Surveys
      Videos
      Photos
      etc
    • CANVAS diagram is interactive and “stateful”
      Test your hypotheses and
      record learnings in blog format
      Invite your advisors and investors to your project
    • CANVAS diagram is interactive and “stateful”
      Test your hypotheses and
      record learnings in blog format
      Invite your advisors and investors to your project
      They can view progress
      by flipping thru your CANVAS diagrams
    • CANVAS diagram is interactive and “stateful”
      Test your hypotheses and
      record learnings in blog format
      Invite your advisors and investors to your project
      They can view progress
      by flipping thru your CANVAS diagrams
      They can post feedback and leave comments inline
    • CANVAS diagram is interactive and “stateful”
      Test your hypotheses and
      record learnings in blog format
      Invite your advisors and investors to your project
      They can view progress
      by flipping thru your CANAVAS diagrams
      They can post feedback and leave comments inline
      Get email alert when new
      feedback comes in
    • CANVAS diagram is interactive and “stateful”
      Test your hypotheses and
      record learnings in blog format
      Invite your advisors and investors to your project
      They can view progress
      by flipping thru your CANAVAS diagrams
      They can post feedback and leave comments inline
      Get email alert when new
      feedback comes in
      The Lean
      Board Meeting
    • Sign up for private beta (FREE)
      http://www.leanlaunchlab.com
      @leanlaunchlab
      Ben Mappen
      benmappen@gmail.com
    • What Does this Change?For Angel-Funded Startups
      Angel funded startups can now get experienced advice
      No longer requires board commitment for involvement
      Encourages investors who need visibility
      Ends repetition at each investor coffee
      Turns adhoc startups into strategy-driven startups
      Invites investor participation in the process
      Professionalize the “throw it against the wall and see if it sticks”
      Highly time-efficient for investor and founders
      Eliminates Geography as a barrier to investment!
    • What Does this Change?For VC’s and Angels
      For the first time a structure for “search”
      Real-time monitoring of startup progress
      Zero-lag for coaching and course-correction
      Immediate follow-up on board meeting outcomes
      Allows a single VC to multiply their reach and/or depth
      Eliminates Geography as a barrier to investment!
    • Thanks