Sxsw New Rules for the New Bubble 031211
 

Sxsw New Rules for the New Bubble 031211

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  • Mike
  • Stevia
  • (gray out non bolded items)Talk about highlightsSingle Family Homeowners: Target customer are single family homeownerPayback period: We offer a renewable electricity generation device that has a much faster payback period than competitors. Manufacturing: We can offer this because our product is cheaper than competitors, due to our unique manufacturing process, without compromising performance and aesthetics. Direct Sales: We will sell our product directly to the customer to maximize savings to the customer. Partners: In order simplify the installation of our product, we will need to partner with local permitting officials to facilitate the permitting process. The idea is once the planning department is comfortable with our product, then there no longer needs to be a lengthy review for each installation.
  • Due to many limitations with residential market for wind turbine applications – decided not right market
  • Week 6 – ChannelsWhat we learnedNew customer segment -> cities instead of home-ownersRetrofit streetlights with VAWT, with faster payback period than alternatives and competitorsDecrease customer acquisition costChange relationship with City Council – need to get their approvalHOA not as powerful
  • Interviewed city staff members and utility commissioner to understand if they are interested in product (Assistant Director of Utilities,Purchasing Admin,Project Manager LED-Retrofit,Former City Council Member and Mayor)Came to understand city and its processes to see how to sell to city.City has long review process for project. Large projects need to fit under cities budget plan, which are planned out 2-5 years in advanceSaboteurs can include staff members or city residents who don’t want changeCity’s typically not interested in owning large amount of electrical generation assets, In CA, utilities also typically do not own their own generation units b/c of decoupling industry?Wind developer would own assets, potentially funded through investment bank or nontraditional sourcesDo we want to be manufacturer or wind developer?We will need to initially be the developer for initial pilot projects to prove concept works, before getting large amounts of investments to scale-up businessHigh liability to be developer b/c wind potential difficult to predictBusiness model that relies on cities to own asset is problem They don’t have the budgetConstantly evaluate your value prop
  • Week 1-2
  • Week 3 – Value Prop
  • Week 4 - Customers
  • Week 5 – Customer Acquisition
  • Week 6 – Channels
  • Week 7 – Revenue Model
  • Week 8 - Partners

Sxsw New Rules for the New Bubble 031211 Sxsw New Rules for the New Bubble 031211 Presentation Transcript

  • New Rules for the New Bubble
    Steve Blank
    Stanford - School of Engineering
    U.C. Berkeley - Haas School Of Business
    www.steveblank.com
    Twitter: sgblank
  • I Write a Blog
    www.steveblank.com
  • I Drew This
    CustomerDiscovery
    Company
    Building
    CustomerValidation
    Customer Creation
    Pivot
    View slide
  • I Called It:Customer Development
    CustomerDiscovery
    Company
    Building
    CustomerValidation
    Customer Creation
    Pivot
    View slide
  • I Wrote This
  • A Few People Read It
  • This Talk is Based On
    Business Model Generation
    Four Steps to the Epiphany
    Lean Startup
  • Premise
    Beginning of another tech bubble
    Rules are different in a bubble
    What are they?
    How do they differ from what you did before?
  • A Few Short Stories
  • How Did We Get Here?
  • Paths to Startup Liquidity
    1970 – 1995 build a business (revenue)
    1995 – 2000 flip the business (concept IPO)
    2001 – 2010 build a business (M&A)
    2011 – 2014 flip a built business (M&A / IPO)
  • 1970 – 1995Building a BusinessStartups Are Small Versions of A Large Company
  • 1970 - 1995 Building a Startup the Hard Way
    $Millions’sto start (Proprietary hdwr/sftwr)
    Long product dev cycle (Waterfall)
    Thousands customers (Businesses)
    Liquidity = IPO (5qtrsrevenue/profit)
    No repeatable methodology(Smallerbig company)
  • 1970 - 1995Making Money the Hard Way
    Goal was long term company success
    VC’s/Founders were company builders
    Exits were IPO’s
    Founders and VC success ≤ $10 million
  • 1970 – 1995 Playbook
  • Product Introduction Model
    Concept/Seed Round
    Product Dev.
    Alpha/Beta Test
    Launch/
    1st Ship
  • Product Introduction Model
    The Leading Cause of Startup Death
    Concept/Seed Round
    Product Dev.
    Alpha/Beta Test
    Launch/
    1st Ship
  • Product Introduction Model:Two Implicit Assumptions
    Customer Problem: known
    Concept/Seed Round
    Product Dev.
    Alpha/Beta Test
    Launch/
    1st Ship
    Product Features: known
  • Tradition – Hire Marketing
    Concept/Seed Round
    Product Dev.
    Alpha/Beta Test
    Launch/
    1st Ship
    - Create Demand
    - Launch Event
    - “Branding”
    - Hire PR Agency
    - Early Buzz
    • Create Marcom
    Materials
    - Create Positioning
    Marketing
  • Tradition – Hire Sales
    Concept/Seed Round
    Product Dev.
    Alpha/Beta Test
    Launch/
    1st Ship
    - Create Demand
    - Launch Event
    - “Branding”
    - Hire PR Agency
    - Early Buzz
    • Create Marcom
    Materials
    - Create Positioning
    Marketing
    • Build Sales Organization
    • Hire Sales VP
    • Hire 1st Sales Staff
    Sales
  • Tradition – Hire Bus Development
    Concept
    Product Dev.
    Alpha/Beta Test
    Launch/
    1st Ship
    - Create Demand
    - Launch Event
    - “Branding”
    - Hire PR Agency
    - Early Buzz
    • Create Marcom
    Materials
    - Create Positioning
    Marketing
    • Build Sales Channel / Distribution
    • Hire Sales VP
    • Pick distribution Channel
    Sales
    Business
    Development
    • Hire First Bus Dev
    • Do deals for FCS
  • Tradition – Hire Engineering
    Concept
    Product Dev.
    Alpha/Beta Test
    Launch/
    1st Ship
    - Create Demand
    - Launch Event
    - “Branding”
    - Hire PR Agency
    - Early Buzz
    • Create Marcom
    Materials
    - Create Positioning
    Marketing
    • Build Sales Channel / Distribution
    • Hire Sales VP
    • Pick distribution Channel
    Sales
    Business
    Development
    • Hire First Bus Dev
    • Do deals for FCS
    Engineering
    • Write MRD
    • Waterfall
    • Q/A
    • Tech Pubs
  • More startups fail from a lack of customers than from a failure of product development
  • 1995 – 2000Flipping A BusinessThe Dot.comBubble
  • 1995 - 2000The Dot-com Bubble
    10’s $millions to start (get big fast, create a brand)
    Long product dev cycle (ship beta, 1st mover adv)
    Millions customers (1st consumer internet wave)
    Liquidity - IPO (Little/no revenue, no profits)
    Repeatable methodology(brand, hype, flip or IPO)
  • 1995 - 2000The Dot-com Bubble – Making Money
    Goal = short term exit
    VC’sengineering financial transactions
    Founders hyped their company
    “Musical Chairs” – last one standing looked dumb
    Everyone else got absurdly rich
  • 1995 – 2000 Playbook
    Netscape
  • 2001 – 2010Why Startups Are Not Small Versions of A Large Company
  • 2001 - 2010The Lean Startup
    ≤ $½ million to start (open source, commodity hdwr)
    Short product dev cycle (Agile Development)
    100’s millions Customers (Social networks, consumer)
    Liquidity -M&A(revenue & network of users)
    Repeatable methodology(Agile + Cust Dev)
  • Scalable
    Startup
    Large Company
    • Business Model found
    • i.e. Product/Market fit
    - Repeatable sales model
    - Managers hired
    What’s A Startup?
    Search
    Execute
    A Startup is a temporary organization used to search for a repeatable and scalable business model
  • What VC’s Don’t Tell You:The Transition – Founders Leave
    Scalable
    Startup
    Transition
    Large Company
    Build
    • Founders depart
    • Professional Mgmt
    • Process
    • Beginning of scale
  • Startups Search and Pivot
    The Search for the Business Model
    Scalable
    Startup
    Transition
    Large Company
    Business Model found by founders
    • customer needs/product features found
    i.e. Product/Market fit
    • Repeatable sales model
    - Managers hired
  • Startups Search, Companies Execute
    The Execution of the Business Model
    The Search for the Business Model
    Scalable
    Startup
    Transition
    Large Company
    - Cash-flow breakeven
    - Profitable
    - Rapid scale
    - New Senior Mgmt
    ~ 150 people
    • Business Model found
    • Product/Market fit
    - Repeatable sales model
    - Managers hired
  • Metrics Versus Accounting
    The Execution of the Business Model
    Scalable
    Startup
    Transition
    Large
    Company
    Traditional Accounting
    • Balance Sheet
    • Cash Flow Statement
    • Income Statement
  • Metrics Versus Accounting
    The Search for the Business Model
    The Execution of the Business Model
    Scalable
    Startup
    Transition
    Large
    Company
    Startup Metrics
    • Customer Acquisition Cost
    • Viral coefficient
    • Customer Lifetime Value
    • Average Selling Price/Order Size
    • Monthly burn rate
    • etc.
    Traditional Accounting
    • Balance Sheet
    • Cash Flow Statement
    • Income Statement
  • Customer Validation Versus Sales
    The Execution of the Business Model
    Scalable
    Startup
    Transition
    Large
    Company
    Sales
    • Sales Organization
    • Scalable
    • Price List/Data Sheets
    • Revenue Plan
  • Customer Validation Versus Sales
    The Search for the Business Model
    The Execution of the Business Model
    Scalable
    Startup
    Transition
    Large
    Company
    Customer Validation
    • Early Adopters
    • Pricing/Feature unstable
    • Not yet repeatable
    • “One-off’s”
    Sales
    • Sales Organization
    • Scalable
    • Price List/Data Sheets
    • Revenue Plan
  • Engineering Versus Agile Development
    The Execution of the Business Model
    Scalable
    Startup
    Transition
    Large Company
    Engineering
    • Requirements Docs.
    • Waterfall Development
    • QA
    • Tech Pubs
  • Engineering Versus Agile Development
    The Search for the Business Model
    The Execution of the Business Model
    Scalable
    Startup
    Transition
    Large Company
    Engineering
    • Requirements Docs.
    • Waterfall Development
    • QA
    • Tech Pubs
    Agile Development
    • Continuous Deployment
    • Continuous Learning
    • Self Organizing Teams
    • Minimum Feature Set
    • Pivots
  • Startups Model, Companies Plan
    The Execution of the Business Model
    Scalable
    Startup
    Transition
    Large Company
    Business Plan
    • describes “knowns”
    • features
    • customers/markets
    • business model
  • Startups Model, Companies Plan
    The Search for the Business Model
    The Execution of the Business Model
    Scalable
    Startup
    Transition
    Large Company
    • Business Model
    • describes “unknowns”
    • customer needs
    • feature set
    • business model
    • found by iteration
    • Plan describes “knowns”
    • Known features for line extensions
    • Known customers/markets
    • Known business model
  • 2001 - 2010The Lean Startup
    IPO market ~closed, M&A liquidity path
    Build for long term but take short term sale
    Founders learn Lean skills
    Focus on building customers
    Minimum hype
  • 2001 - 2010 Playbook
    Four Steps to the Epiphany
    Many Agile Texts
  • But We Were Still Using This
  • No Business Plan survives first contact with customers
  • So Search for a Business Model
  • 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?
    54
  • 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
    57
    images by JAM
  • How Do Startups Search For A Business Model?
    • The Search is Customer Development
    • The Implementation is Agile Development
    • The Sum is the Lean Startup
  • Customer Development
  • 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
  • Test Hypotheses:
    • Product
    • Market Type
    • Competition
    Turning Hypotheses to Facts
  • Test Hypotheses:
    • Problem
    • Customer
    • User
    • Payer
  • Test Hypotheses:
    • Channel
  • Test Hypotheses:
    • Demand Creation
    Test Hypotheses:
    • Problem
    • Customer
    • User
    • Payer
    Test Hypotheses:
    • Product
    • Market Type
    • Competitive
    Test Hypotheses:
    • Channel
    • (Customer)
    • (Problem)
    Test Hypotheses:
    • Channel
    Test Hypotheses:
    • Pricing Model / Pricing
    Test Hypotheses:
    • Size of Opportunity/Market
    • Validate Business Model
  • Test Hypotheses:
    • Demand Creation
    Test Hypotheses:
    • Problem
    • Customer
    • User
    • Payer
    Agile Development
    Test Hypotheses:
    • Product
    • Market Type
    • Competitive
    Test Hypotheses:
    • Channel
    • (Customer)
    • (Problem)
    Customer Development Team
    Test Hypotheses:
    • Channel
    Test Hypotheses:
    • Pricing Model / Pricing
    Test Hypotheses:
    • Size of Opportunity/Market
    • Validate Business Model
  • Test Hypotheses:
    • Demand Creation
    Test Hypotheses:
    • Problem
    • Customer
    • User
    • Payer
    Agile Development
    Test Hypotheses:
    • Product
    • Market Type
    • Competitive
    Test Hypotheses:
    • Channel
    • (Customer)
    • (Problem)
    Customer Development Team
    Test Hypotheses:
    • Channel
    Test Hypotheses:
    • Pricing Model / Pricing
    Test Hypotheses:
    • Size of Opportunity/Market
    • Validate Business Model
  • The Minimum Viable Product (MVP)
    • Smallest feature set that gets you the most …orders, learning, feedback, failure…
    • MVP + Customer are the first two you need to nail
    • MVP is just 1 of the 9 parts of your model
  • The Pivot
    • The heart of Customer Development
    • Iteration without crisis
    • Fast, agile and opportunistic
  • How Does This Really Work?Stanford Lean LaunchPad Class
  • Pivot ExampleOn-line Social Buying Platform
    Talked to 250 Customers in 8 weeks
  • OURCRAVE is an online social shopping platform where customers can make their own deals on products or services of their choosing with sellers who can offer them in bulk at a discounted price.
  • Business Canvas #1
    Seller: - Access to large online customer pool
    - Bulk sales with reduced commission
    Buyer: - Better discounts
    - Maintainingonline buyer/seller communities and credibilityof transactions- Promotionof website and brand
    - Powerful sellers
    - Server providers
    - Automated services- Communities of buyers and sellers- Co-creation of value through customer feedback
    Multi-sided platformSeller:
    Pro-sellers in Amazon and eBay who sell electronicsBuyer:
    Online shoppers
    • Web & App sales
    -Online social networks
    - Physical resources (IT infrastructure)- Existing social networks -Buyer and seller communities,- Brand awareness
    Seller side:- transaction fees
    Buyer side:- targeted ads
    - Variable costs: server and traffic maintenance costs- Fixed Cost: rent, salaries
  • Seller Side Test with a fake E-MAIL
    Give me a quote
    for a bulk sale!
    Electronics Sellers on Amazon/Ebay
    FAKE CEO
    (Steve Feiberg)
    57%
    showed interest
    90%
    sell products
    on Amazon
    • 56% paid 10~20% transaction fee
    • 22% paid 5~10% transaction fee
    • 78% agreed it was too much
    • 33% actually provided discount proportional to group size
  • Seller Side
    Interview with Industry Specialist (LG Electronics)
    Main Target
    Bestbuy
    Target,
    Walmart
    25%
    Associations of
    RegionalBig Sellers
    25%
    40%
  • User Side
    : Online User Survey
    Power to choose products
    Discount on products
    Buyer community feedback
  • Business Canvas #2
    Seller: - More customer traffic
    - Bulk sales with reduced commission
    Buyer: - Better discounts
    - Power to choose product deal
    - Buyer community feedback on products and sellers
    - Maintainingonline buyer/seller communities and credibilityof transactions- Promotionof website and brand
    • Powerful sellers
    • Sellers who need more traffic
    - Server providers
    - Automated services- Communities of buyers and sellers- Co-creation of value through customer feedback
    Multi-sided platformSeller:
    Trustworthy online sellers with verifiable websitesBuyer:
    Online shoppers who are willing to wait to get significant discounts on products
    • Web & App sales
    -Online social networks
    - Physical resources (IT infrastructure)- Existing social networks -Buyer and seller communities,- Brand awareness
    Seller side:- transaction fees
    Buyer side:- targeted ads
    - Variable costs: server and traffic maintenance costs- Fixed Cost: rent, salaries
  • Key Question for Business Canvas #2
    HOW CAN WE ATTRACT BUYERS?
    CUSTOMER ACQUISION COST?
  • Buyer Demand Test
    Best Marketing Channel for having buyers is Facebook Wall
    : 144 Unique Visits, 10 e-mail subscriptions for 3 days
    Facebook Wall
    Google Adwords
    Facebook Ads
    5%
    0.08%
    0.005%
    (CTR)
    $7.52
    $4.88
    $0
    (COST)
  • Business Canvas #3
    Seller: - More customer traffic
    - Bulk sales with reduced commission
    Buyer: - Better discounts
    - Power to choose product deal
    - Buyer community feedback on products and sellers
    - Maintainingonline buyer/seller communities and credibilityof transactions- Promotionof website and brand
    • Sellers who need more traffic
    • Server providers
    Established services- Online Marketing : Google/Facebook
    - Automated services- Communities of buyers and sellers- Co-creation of value through customer feedback
    Multi-sided platformSeller:
    Trustworthy online sellers with verifiable websitesBuyer:
    Online shoppers who are willing to wait to get significant discounts on products
    • Web & App sales
    • Online social networks
    • Online advertising
    - Physical resources (IT infrastructure)- Existing social networks -Buyer and seller communities,- Brand awareness
    Seller side:- transaction fees
    Buyer side:- targeted ads
    • Variable costs: server and traffic maintenance costs- Fixed Cost: rent, salaries
    - Online ad campaigns
  • Key Question for Business Canvass #3
    HOW CAN WE ATTRACT SELLERS?
    COOPERATION WITH SELLERS?
  • Seller Contact
    Deal with sellers failed because no group pricing or discount too low.
    Organize Real Group Deal
    • Contact popular online sellers
    • 3 products: HD camera, protein drink, videogame
    • Videogame was for pre-order
    Result
    • Most sellers: no group discounts
    • Discounts offered < 10%
    • With shipping and tax still >= Amazon price
    • David vs. Goliath problem
  • To Pivot or Not to Pivot?
    Although dismayedat seller response, we did not give up.
    What do do?
    • Deal with sellers disappointing
    • Seller problem intractable?
    • Teaching staff: Pivot or else…
    Beaten, but not defeated
    • Lost one battle, but not the war!
    • Only contacted larger sellers
    • Sellers need more value
    • Show them a real website
    Filter advice and stay determined!
    No Pivot Yet
  • Solution 1 : Rapid Implementation
    Implement seller & buyer side features to give sellers fuller experience.
    Site Upgrade Frenzy
    • Improved site design
    • Buyer facebook login
    • Online social networking integration
    • Seller login and registration
    • Seller bidding
    • Seller group deal creation page
  • Solution 1 : Rapid Implementation
    Humble beginnings
  • Solution 1 : Rapid Implementation
    The Real Deal
  • Solution 1 : Rapid Implementation
    Main page
    Facebook connect
    Deal creation by sellers
    Bidding dialog
  • Solution 2 : More seller value & spamming
    Add value for sellers based on mentor and industry expert interviews
    Add Seller Value
    • Low transaction fees
    • Customer contact information
    • Cross-selling products
    • Ad banners
    • Power to create group deal
    The Art of Spam
    • Massive seller e-mail campaign (16,000 in total)
    • Stanford takes notice and issues warning (oops)
    • Enumerate value propositions
    • Show live website
    • Hand out registration codes
  • Seller Invitation Result
    180 sellers
    # of sellers who signed up
    # of deals made by sellers
    80 deals
    (below Amazon price)
  • Seller Invitation Result
    # of sellers who replied to our email
    200 sellers
    # of sellers who made suggestions on OURCRAVE
    50 sellers
  • Business Canvas #4
    - Maintainingonline buyer/seller communities and credibilityof transactions- Promotionof website and brand
    Seller: - More customer traffic
    • Bulk sales with reduced commission
    - Access to customer contact information
    • Cross-sell their products.- Site advertising- Power to create deals
    Buyer: - Better discounts
    - Power to choose product deal
    - Buyer community feedback on products and sellers
    • Sellers who need more traffic
    • Server providers
    Established services- Online Marketing : Google/Facebook
    -Payment Gateway : Paypal- Customer Service (Front side webservice) : Self- Customer Service (Product side) : Sellers- Delivery : Sellers
    - Automated services- Communities of buyers and sellers- Co-creation of value through customer feedback
    Multi-sided platformSeller:
    Trustworthy online sellers with verifiable websitesBuyer:
    Online shoppers who are willing to wait to get significant discounts on products
    • Web & App sales
    • Online social networks
    • Online advertising
    - Physical resources (IT infrastructure)- Existing social networks -Buyer and seller communities,- Brand awareness
    Seller side:- transaction fees
    Buyer side:- targeted ads
    • Variable costs: server and traffic maintenance costs- Fixed Cost: rent, salaries
    - Online ad campaigns
  • Key Question for Business Canvass #4
    Key Activities for Next Stage
    Can we make enough money?
  • Key Activity – Seller Management
    We should manage main feedbacks from sellers by making basic function,
    1. Convenient System
    • Auto Sales Tax Calculator
    • Bulk List Uploading Function
    • Notification to Sellers
    for relevant cravebags
    2. Building credibility
    • FAQ List for Sellers
    • Share buyer information
    • F2F meeting with big sellers
    3. More Incentives
    • Cross selling Option
    • Seller Advertisement Feature
  • Key Activity – Initial Advertisement
    By price comparison site and online ads, test our early service model. Then, Crazy deals needed for jumping
    2nd Active : Crazy Deals
    • 20~30 % sales for Promotion Deals
    • Very very very famous products
    1st Passive : Online Ads
    • Google / Facebook / Yahoo Ads
    • Price Comparison Site ( very important)
  • Key Activity – Encouraging Buyer’s Viral
    We will implement incentive system for sharing deals and help buyers communicate with each other in our service
    Incentive for sharing
    Buyer Community
    14%
    22%
    People who willing to share deals in FB*
    People who shared deals
    In FB*
    • OurCrave Point
    • Extra Discount
    • Free shipping or tax Coupon
    • Live comment on cravebags
    • Weekly Best cravebag vote
    • Youtube Ads Competition
    * OurCrave User Survey in 2/3 weeks
  • Revenue / Cost Source
    Revenue
    Cost
    Product Ads
    Transaction Fee ( Main )
    Float Money
    Site Maintenance
    Marketing ( Main )
    Customer Support
    Server/Traffic
    /Mobie Apps
    15% of transaction
    Ads for buyer
    Seller Management
    3~5% ( paypal)
    Outsourcing
    20%/60days*
    * google/groupon’s rule, we are asking sellers about this rule.
  • Business Canvas Final
    Seller: - More customer traffic
    • Bulk sales with reduced commission
    - Access to customer contact information
    • Cross-sell their products.- Site advertising- Power to create deals
    Buyer: - Better discounts
    - Power to choose product deal
    - Buyer community feedback on products and sellers
    • Sellers who need more traffic
    • Server providers
    Established services- Online Marketing : Google/Facebook
    - Payment Gateway : Paypal- Customer Service (Front side webservice) : Self- Customer Service (Product side) : Sellers- Delivery : Sellers
    - Automated services- Communities of buyers and sellers- Co-creation of value through customer feedback
    • Growing and maintaining online buyer/seller communities and credibilityof transactions- Promotionof website and brand
    - Establishing credibility
    Multi-sided platformSeller:
    Trustworthy online sellers with verifiable websitesBuyer:
    Online shoppers who are willing to wait to get significant discounts on products
    • Web & App sales
    • Online social networks
    • Online advertising
    - Physical resources (IT infrastructure)- Existing social networks -Buyer and seller communities,- Brand awareness
    Seller side:- transaction fees
    Buyer side:- targeted ads
    - float money
    • Variable costs: server and traffic maintenance costs- Fixed Cost: rent, salaries
    - Online ad campaigns
  • Business Canvas – Week 1
    Seller : - More customer traffic
    - Bulk sales- Lower transaction feesBuyer : - Better discounts
    - Platform/Networkmanagement (maintaining online buyer/seller communities and credibility)- promotion of website and brand
    - Powerful sellers
    - Server providers
    - Automated services- Communities of buyers and sellers- Co-creation of value through customer feedback
    Multi-sided platformSeller :pro-sellers on Amazon and eBayBuyer :Online shoppers
    - Web & App sales
    - Online social networks
    - Physical resources (IT infrastructure)- Existing social networks - Buyer and seller communities,- Brand awareness
    - Variable costs: server and traffic maintenance costs- Fixed costs: rent, salaries
    Seller side:- transaction fees
    Buyer side:- targeted ads
  • Business Canvas – Week 2
    Seller : - More customer traffic
    - Bulk sales- Lower transaction fees- Brand name marketingBuyer : - Better discounts
    - Power to choose product deal
    - Platform/Networkmanagement (maintaining online buyer/seller communities and credibility)- promotion of website and brand
    - Powerful sellers
    - Server providers
    - Automated services- Communities of buyers and sellers- Co-creation of value through customer feedback
    Multi-sided platformSeller :pro-sellers on Amazon and eBayBuyer :Online shoppers
    - Web & App sales
    - Online social networks
    - Physical resources (IT infrastructure)- Existing social networks - Buyer and seller communities,- Brand awareness
    - Variable costs: server and traffic maintenance costs- Fixed costs: rent, salaries
    Seller side:- transaction fees
    Buyer side:- targeted ads
  • Business Canvas – Week 3
    Seller : - More customer traffic
    - Bulk sales- Lower transaction fees- Brand name marketingBuyer : - Better discounts
    - Power to choose product deal
    - Buyer community feedback on products and sellers
    - Platform/Networkmanagement (maintaining online buyer/seller communities and credibility)- promotion of website and brand
    - Powerful sellers
    -Regionalsellers
    - Server providers
    - Automated services- Communities of buyers and sellers- Co-creation of value through customer feedback
    Multi-sided platformSeller :
    Sellers on Amazon and eBayBuyer :Online shoppers who are willing to waitto get significant discounts on products
    - Web & App sales
    - Online social networks
    - Physical resources (IT infrastructure)- Existing social networks - Buyer and seller communities,- Brand awareness
    - Variable costs: server and traffic maintenance costs- Fixed costs: rent, salaries
    Seller side:- transaction fees
    Buyer side:- targeted ads
  • Business Canvas – Week 4
    Seller : - More customer traffic
    • Bulk sales- Lower transaction fees- Brand name marketingBuyer : - Better discounts
    - Power to choose product deal
    - Buyer community feedback on products and sellers
    - Platform/Networkmanagement (maintaining online buyer/seller communities and credibility)- promotion of website and brand
    - Sellers who need more traffic
    -Regionalsellers
    - Server providers
    - Automated services- Communities of buyers and sellers- Co-creation of value through customer feedback
    Multi-sided platformSeller :
    Sellers on Amazon and eBayBuyer :Online shoppers who are willing to waitto get significant discounts on products
    - Web & App sales
    - Online social networks
    - Onlineadvertising
    - Physical resources (IT infrastructure)- Existing social networks - Buyer and seller communities,- Brand awareness
    - Variable costs: server and traffic maintenance costs- Fixed costs: rent, salaries
    Seller side:- transaction fees
    Buyer side:- targeted ads
  • Business Canvas – Week 5
    - Platform/Networkmanagement (maintaining online buyer/seller communities and credibility)- promotion of website and brand
    Seller : - More customer traffic
    - Bulk sales- Lower transaction fees- Brand name marketing
    - Access to customer contact information
    - Ability to cross-sell products
    - Site advertising
    Buyer : - Better discounts
    - Power to choose product deal
    - Buyer community feedback on products and sellers
    - Sellers who need more traffic
    -Regionalsellers
    - Server providers
    - Automated services- Communities of buyers and sellers- Co-creation of value through customer feedback
    Multi-sided platformSeller :
    Sellers on Amazon and eBayBuyer :Online shoppers who arewilling to waitto get significant discounts on products
    - Web & App sales
    - Online social networks
    - Onlineadvertising
    - Physical resources (IT infrastructure)- Existing social networks - Buyer and seller communities,- Brand awareness
    - Variable costs: server and traffic maintenance costs- Fixed costs: rent, salaries
    - Online ads
    Seller side:- transaction fees
    Buyer side:- targeted ads
  • Business Canvas – Week 6
    Seller : - More customer traffic
    - Bulk sales- Lower transaction fees- Access to customer contact information
    - Cross-sell their products.- Site advertising- Power to create dealsBuyer : - Better discounts- Power to choose product deal- Buyer community feedback on products and sellers
    - Platform/Networkmanagement (maintaining online buyer/seller communities and credibility)- promotion of website and brand
    - Sellers who need more traffic
    -Regionalsellers
    - Server providers
    - Automated services- Communities of buyers and sellers- Co-creation of value through customer feedback
    Multi-sided platformSeller :
    Sellers on Amazon and eBayBuyer :Online shoppers who arewilling to waitto get significant discounts on products
    - Web & App sales
    - Online social networks
    - Onlineadvertising
    - Physical resources (IT infrastructure)- Existing social networks - Buyer and seller communities,- Brand awareness
    - Variable costs: server and traffic maintenance costs- Fixed costs: rent, salaries
    - Online ads
    Seller side:- transaction fees
    Buyer side:- targeted ads
    - float money
  • Business Canvas – Week 7
    Seller : - More customer traffic
    - Bulk sales- Lower transaction fees- Access to customer contact information
    - Cross-sell their products.- Site advertising- Power to create dealsBuyer : - Better discounts- Power to choose product deal- Buyer community feedback on products and sellers
    - Platform/Networkmanagement (maintaining online buyer/seller communities and credibility)- Promotion of website and brand
    - Sellers who need more traffic
    - Regionalsellers
    - Server providers
    Established services- Online Marketing : Google/Facebook -Payment Gateway : Paypal- Customer Service (Front side webservice) : Self- Customer Service (Product side) : Sellers- Delivery : Sellers
    - Automated services- Communities of buyers and sellers- Co-creation of value through customer feedback
    Multi-sided platformSeller :Sellers on Amazon and eBay
    Seller:
    Trustworthy sellers with verifiable websites.Buyer :Online shoppers who arewilling to waitto get significant discounts on products
    - Web & App sales
    - Online social networks
    - Onlineadvertising
    - Physical resources (IT infrastructure)- Existing social networks - Buyer and seller communities,- Brand awareness
    - Variable costs: server and traffic maintenance costs- Fixed costs: rent, salaries
    - Online ads
    Seller side:- transaction fees
    Buyer side:- targeted ads
    - float money
  • Business Canvas – Week 8
    Seller : - More customer traffic
    - Bulk sales- Lower transaction fees- Access to customer contact information
    - Cross-sell their products.- Site advertising- Power to create dealsBuyer : - Better discounts- Power to choose product deal- Buyer community feedback on products and sellers
    - Platform/Networkmanagement (maintaining and growing online buyer/seller communities and credibility)- Promotion of website and brand
    - Establishing credibility
    - Sellers who need more traffic
    Established services- Online Marketing : Google/Facebook -Payment Gateway : Paypal- Customer Service (Front side webservice) : Self- Customer Service (Product side) : Sellers- Delivery : Sellers
    - Automated services- Communities of buyers and sellers- Co-creation of value through customer feedback
    Multi-sided platform
    Seller:
    Trustworthy sellers with verifiable websites.Buyer :Online shoppers who are willing to wait to get significant discounts on products
    - Web & App sales
    - Online social networks
    - Onlineadvertising
    - Physical resources (IT infrastructure)- Existing social networks - Buyer and seller communities,- Brand awareness
    - Variable costs: server and traffic maintenance costs- Fixed costs: rent, salaries
    - Online ads
    Seller side:- transaction fees
    Buyer side:- targeted ads
    - float money
  • 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)
    Confidential
  • 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
    Dealer discount
    COGS seek a 50-60% Gross Margin
    Heavy R&D investment
    Asset sale
    Our revenue stream derives from selling the equipment
  • 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
    Dealer discount
    COGS seek a 50-60% Gross Margin
    Heavy R&D investment
    Asset sale
    Our revenue stream derives from selling the equipment
  • 1 Week – 1 CarrotBot
    Confidential
  • The Business Plan Canvas Updated
    • Technology Design
    • Marketing
    • Demo and customer feedback
    • Farming conventions.
    • Demo, demo, and demo!!
    • Proximity is paramount
    • 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
  • The Business Plan Canvas Updated
    • Technology Design
    • Marketing
    • Demo and customer feedback
    • Farming conventions.
    • Demo, demo, and demo!!
    • Proximity is paramount
    • 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
    • Technology Design
    • Marketing
    • Demo and customer feedback
    • Farming conventions.
    • Demo, demo, and demo!!
    • Proximity is paramount
    • 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
    Costs for service provision
    COGS seek a 50-60% Gross Margin
    Heavy R&D investment
    Service provision
    - Charge by the acre with modifier according to weed density
    - Eventually move to asset sale
  • 2011 – 2014Rules for the New Bubble
  • New Bubble Hypotheses
    We’re in one
    Rules are different in 2011 then 2006
    Exits will be IPO and M&A
    Unlike last bubble initial IPO’s will be “real”
    Quality of IPO pipeline will diminish rapidly
    Acquirers can be “targeted”
    You can “engineer for an acquisition”
  • 2011 – 2014The New Bubble
    Short product dev cycle (Agile Development)
    Customers 10’s/100’s millions(Social networks, consumer)
    Liquidity through M&A & IPO(revenue & network of users)
    Repeatable methodology (Agile + Cust Dev + Bus Model)
    Target acquirers (Adoption, Visibility, order of battle)
  • 2011 - 2014Rules for the New Bubble
    Founders/VC’s can engineer financial transactions
    Transactions economically or usage accretive
    Still require Agile, Cust Dev & Bus Model
    Add: Adoption, Order of Battle and Visibility
  • 2011 - 2014 Playbook
    Business Model Generation
    Four Steps to the Epiphany
    Lean Startup
    Liquidity Strategy
  • Lean & Pivots is the Minimum Entry
    • Continuous Customer Discovery
    • Rapid Bus Model iteration
    • Extreme Agile Development
  • 2011 – 2014Order of Battle
    Each market has a finite number of acquirers
    Each with a finite number of deal makers
    Each looking to fill specific product/market holes
    Each read/go to finite number of blogs/conferences
    This is not an NP-complete problem
  • 2011 – 2014Adoption
    Get wide adoption (freemium, low costs, etc)
    Go for massive distribution
    Monetize later
    Can only be done Lean, requires Pivots
  • 2011 – 2014Visibility
    Be everywhere
    Look larger than life
    Conference, blogs, social networks
    PR is your best friend, invest in it
  • Closing Thoughts
    We’re at the beginning of another tech bubble
    Rules for making money are different in a bubble
    Founders & VC’s can engineer financial transactions
    Transactions need to be economically or usage accretive
    Still require Agile, Cust Dev & Bus Model
    Add: Adoption, Order of Battle and Visibility
  • Thanks
    www.steveblank.com
  • BACKUP
  • Pivot ExamplePersonal Libraries
    Talked to 75 Customers in 8 weeks
  • Version 1.0: Personal Libraries
  • something-something-something.com
    Original idea
    Invincible Business Model: Version 1.0
    SHORT TERMResearchers
    Lawyers
    Scientists
    LONG TERMAvid book readers
    Professionals
    FB/TW posts from users you know
    Company blog, FB, TW, support forums
    Import, organize and share thousands of papers
    Targeted marketing
    Product development
    Constant iteration & testing
    Libraries, Universities, Research Centers
    Bloggers and media targeting customer segment
    Academic Database providers
    Affiliate program
    SEO/SEM/SM
    IE/FF/Chrome App Stores
    Developers
    Marketers
    Affiliate program fees
    Licensing
    Subscription fees
    Ad revenue
    AWS Infrastructure
    SEM
    Eng & Marketing OpEx
  • Got out of the building
    • 100+ Interviews
    • Extensive Surveys
    • 33,000+ Adwords
    • Compete Review
    • Market Sizing
    • 50 bloggers
    • 6 Social Networks
    • Usability Tests
    • Rapid Iteration
  • Version 2.0: Trusted Advice
  • something-something-something.com
    Original idea
    Invincible Business Model: Version 2.0
    Upwardly mobile young professionals making $2-10K of discretionary online purchases a year (excluding travel)
    FB/TW posts from users you know
    Company blog, FB, TW accounts
    Discover online goods recommended by friends at the lowest possible price from trusted vendors
    Developing trusted advice and advisors
    Web marketing
    Affiliate partnerships
    Constant iteration & testing
    Bloggers and Media targeting customer segment
    Retail marketing partners
    IE/FF/Chrome teams
    Affiliate Program Providers
    Affiliate program
    SEO/SEM/SM
    IE/FF/Chrome App Stores
    Developers
    Marketers
    Content Library
    Install base
    Readership base
    Affiliate program fees
    Licensing
    Subscription fees
    Ad revenue
    AWS Infrastructure
    SEM
    Eng & Marketing OpEx
  • New Hypotheses
  • Here’s What We Did
    Version 2.0: Trusted Advice
  • Got out of the building, again
    • 40+ Interviews
    • Extensive Surveys
    • Landing Page Tests
    • Market Research
    • Compete Research
    • Revenue Analysis
    • Two Prototypes
    • Refined Personas
  • Version 2.0: Trusted Advice
    Top ~6M US Influentials (~$9B/year)
  • something-something-something.com
    Original idea
    Invincible Business Model: Version 2.0
    Upwardly mobile young professionals making $2-10K of discretionary online purchases a year (excluding travel)
    FB/TW posts from users you know
    Company blog, FB, TW accounts
    Discover online goods recommended by friends at the lowest possible price from trusted vendors
    Developing trusted advice and advisors
    Web marketing
    Affiliate partnerships
    Constant iteration & testing
    Bloggers and Media targeting customer segment
    Retail marketing partners
    IE/FF/Chrome teams
    Affiliate Program Providers
    Affiliate program
    SEO/SEM/SM
    IE/FF/Chrome App Stores
    Developers
    Marketers
    Content Library
    Install base
    Readership base
    Affiliate program fees
    Licensing
    Subscription fees
    Ad revenue
    AWS Infrastructure
    SEM
    Eng & Marketing OpEx
  • The adventure continuesTrusted Advice 2.0
    Protection against SEO-spammers
    Next Experiments:
    • Trusted Lead Gen
    • Trusted Advice website powered by Shopping Add-in
  • something-something-something.com
    Original idea
    Invincible Business Model: Version 3.0
    PAT THE PROFESSIONALUpwardly mobile young professionals making $2-10K of discretionary online purchases a year (excluding travel)
    FB/TW posts from users you know
    Company blog, FB, TW accounts
    TRUSTED ADVICE Discover online goods recommended by friends at the lowest possible price from trusted vendors
    Foil advertorial spammers polluting the Interweb with toxic pseudo-content
    Developing trusted advice and advisors
    Web marketing
    Affiliate partnerships
    Constant iteration & testing
    Bloggers and Media targeting customer segment
    Retail marketing partners
    IE/FF/Chrome teams
    Affiliate Program Providers
    Affiliate program
    SEO/SEM/SM
    IE/FF/Chrome App Stores
    Developers
    Marketers
    Content Library
    Install base
    Readership base
    Affiliate program fees
    Licensing
    Subscription fees
    Ad revenue
    AWS Infrastructure
    SEM
    Eng & Marketing OpEx
  • Pivot ExampleCloud Services
    Talked to 50 Customers in 8 weeks
  • Week 1
  • Cloud compute marketplace
    Build a cloud marketplace
    Many different customer segments on buy-side and sell-side
    Direct sales to both buyers and sellers
    Huge dependency on technical platform
  • Week 2
  • Cloud Services Match Maker
    Pivot away from technical platform
    Help buyers find the best provider
    Removed financial, consumer segments
    Act as channel for sellers
  • Week 3
  • Automated Cloud Capacity Planning
    Pivot 1:
    Capacity Planning
    Pivot 2:
    Focus on enterprises with variable workload
  • Week 4
  • Week 5
  • Week 6
  • Week 7
  • Week 8
    Capacity Planning
    · High variability in usage
    Service Matching
    • Companies unfamiliar with using cloud infrastructure
    SLA Monitoring
    • Companies with high SLA requirements with their customers
    · For enterprise segment, higher touch model with field sales force
    · Reduced cloud infrastructure cost· Better compute needs matching
    · Increased visibility on service level
    Integrators:
    · Increased budget for consulting services
    • Design and refine capacity planning and match making algorithms
    • Develop and maintain cloud infrastructure vendors relationships
    • Develop brand as go-to place for cloud lifecycle management
    · Technology partners – cloud vendors, management tools
    · System integrators / Consultants
    · Intellectual property – prediction algorithm· Developers· Inside sales force
    · Field sales force · Biz dev (channel partners and technology partners)
    · Integrators / consultants specialized in cloud infrastructure
    • Inside sales and field sales· Development Costs· Infrastructure costs – AWS· Support costs
    • Subscription charge to buyers
    • Pricing table scales based on # of servers and # of seats, with tiers
  • Cloud Lifecycle Management
    Agora – FINAL
    • Develop capacity planning algorithm
    • Develop IaaS vendor relationships
    • Marketing and sales
    · Technology partners – cloud vendors, management tools
    · System integrators / Consultants
    Partner with Integrators
    Capacity Planning
    · High variability in usage
    Service Matching
    • Companies new to cloud
    SLA Monitoring
    • Companies with high SLA requirements
    · For enterprise, higher touch model with field sales
    Customers
    · Reduced cloud infrastructure cost· Increased visibility on service level
    Integrators:
    · Increased revenue
    Position product for lifecycle management
    Leverage both inside and field sales
    · IP– prediction · Developers· Inside sales force
    · Field sales force · Biz dev (channel and technology partners)
    · IaaS Integrators / consultants
    • Inside and field sales· Development Costs· Infrastructure costs – AWS· Support costs
    • Subscription charge to buyers
    • Pricing table scales based on # of servers and # of seats, with tiers
  • Pivot ExampleUser Generated Real-Time Traffic Info
    Talked to 150 Customers in 8 weeks
  • Initial Product Idea
    Mobile application providing crowd-sourced real time traffic map in developing countries
    Lahore
    Shanghai
    Jakarta
    Bangkok
  • Business Canvas Change Progress
    1
  • Business Canvas Change Progress
    2
  • Business Canvas Change Progress
    3
  • Customer Segment: Corporate
    The Drivers:
    Are you questioning our expertise?
    Archetypes
    Users
    International, local, large, and small companies
    Influencers
    and
    Recommenders
    Economic Buyers,
    Decision Makers
    Saboteurs
  • Pass/Fail
    FAIL
  • Business Canvas Change Progress
    4
  • Business Canvas Change Progress
    5
  • Business Canvas Change Progress
    6
  • Business Canvas Change Progress
    7
  • Business Canvas Change Progress
    FINAL
  • Pivot ExampleResidential Wind Turbines
    Talked to 100 Customers in 8 weeks
  • Business Model Canvas #1
    • Continue R&D
    • Get certifications
    • Get approvals from city councils
    • Cheap wind
    • Green status symbol
    • Diversify energy portfolio
    • Faster payback than alternatives
    • Single family homeowner
    • House rental groups
    • Contractors in home remodeling
    • 5 yr full service Warranty
    • Want re-buy from customers
    • Environmental, bird, wildlife groups (regulations, publicity)
    • City councils (new regulations, permits).
    • Contractors
    • Single family homeowner
    • City councils (new regulations, permits).
    • Faster payback than alternatives
    • Wind
    • Cheap manufacturing process- Intellectual property
    • Need Initial capital
    • Endorsements by environmental groups, and local governments
    • Direct sales
    • Web site
    • Home Depot
    • Direct sales
    • Cost-driven model to provide inexpensive, quality product
    • Asset sales
  • Initial Idea
    Affordable
    New home appliance
    Status
  • Business Model Canvas # 2
    • Continuous advertise and recruit new customers (city councils)
    • Build relationship with city engineers and council members
    • Understand customer, influencers, motivations, problems, competitors
    • Form partnerships for maximum reach
    • Submit bids for city RFPs
    • Continue R&D
    • Get certifications
    • Gain Credibility
    • Retrofit wind turbine for street and highway lamps.
    • Create own wind turbines with pole manufacturers
    • Be owner of cheap green status symbol
    • Diversify green energy portfolio
    • Fast payback than alternatives
    • Single family wealthy, green home and land owner in CA, TX ,CO, WI, NY
    • Cities
    • Lighting Companies
    • 5 year full service Warranty
    • After 5 years, service charge
    • Utility to manage after warranty expiration
    • Extended warranty option
    • Environmental, bird, wildlife groups (regulations, publicity)
    • City councils not HOA(new regulations, permits).
    • Lighting Manufacturers
    • Electricians and Contractors for Installation/Maintenance
    • Research Labs
    • Turbine Certifiers
    • Build relationship with city engineers and council members
    • Retrofit wind turbine for street and highway lamps.
    • City councils not HOA
    • Cities
    • Cheap manufacturing process- Intellectual property
    • $1.5 MM of capital to start manufacturing and distribution for year 1 and 2
    • Manufacturing Parts
    • Endorsements by environmental groups, and local governments
    • Direct sales to cities
    • Web site
    • Home Depot
    • Direct Sales
    • Service Calls
    • Leasing
    • Cost-driven model to provide inexpensive, quality product
    • Manufacturing costs and customer acquisition costs.
    • May consider in-house leasing option, if upfront costs is large obstacle for customer and sufficient funding obtained (must be in future)
  • City Process
    • Policies
    • Community Culture
    • State Mandates
    • City Budget Plan
    Learn about city approval Process
    City Values
    Planning Commission
    Technical Evaluation and Recommendation
    Back to the envelop metrics
    IDEA
    Request for Quote
    City Council Approval
    City Council “Pet-Project”
    Finance Approval
  • Business Model Canvas – Final
    • Continuously advertise and recruit new customers (city councils)
    • Build relationship with city engineers and council members
    • Understand customer, influencers, motivations, problems, competitors
    • Form partnerships (developers, cities, installers, maintenance) for maximum reach
    • Submit bids for city RFPs
    • Continue R&D
    • Get certifications
    • Gain Credibility
    • Retrofit wind turbine for street and highway lamps.
    • Create own wind turbines with pole manufacturers
    • Be owner of cheap green status symbol
    • Diversify green energy portfolio
    • Fast payback than alternatives
    • Cities (pilot)
    • Cities leasing
    • Lighting Companies
    • Developer -> Utilities -> City
    • 5 year full service Warranty,
    • After 5 years, service charge
    • Utility to manage after warranty expiration
    • Extended warranty option
    • City council (new regulations, permits).
    • Environmental, bird, wildlife groups (regulations, publicity)
    • Lighting Manufacturers
    • Electricians and Contractors for Installation/Maintenance
    • Research Labs
    • Turbine Certifiers
    • Small Wind Developers
    • Utilities
    • Cheap manufacturing process- Intellectual property
    • R&D talent
    • Endorsements by environmental groups, and local governments
    • Finance
    • Direct sales to cities (long term) PILOTS
    • Small Wind Developer
    • Cities leasing
    • Developer -> Utilities -> City
    • Finance
    • Cost-driven model to provide inexpensive, quality product
    • Manufacturing costs and customer acquisition costs.
    • May consider in-house leasing option, if upfront costs is large obstacle for customer and sufficient funding obtained (must be in future)
    • Leasing, PPA
    • Direct Sales to wind developers?
    • Leasing, PPA
    • Direct Sales to wind developers?
  • Business Model Canvas – Week 1
    • Continue R&D
    • Get certifications
    • Get approvals from city councils
    • Cheap affordable wind turbine for the everyday American
    • Be owner of cheap green status symbol
    • Diversify energy portfolio,
    • Fast payback than alternatives, < 5 yrs
    • Single family homeowner
    • House rental groups
    • Contractors in home remodelling
    • 5 year full service Warranty
    • Want re-buy from customers
    • Environmental, bird, wildlife groups (regulations, publicity)
    • City councils (new regulations, permits).
    • Contractors
    • Cheap manufacturing process- Intellectual property
    • Need initial capital
    • Endorsements by environmental groups, and local governments
    • Direct sales
    • Web site
    • Home Depot
    • Cost-driven model to provide inexpensive, quality product
    • Sale of Product
  • Business Model Canvas – Week 2
    • Continuous advertise and recruit new customers
    • Continue R&D
    • Get certifications
    • Get approvals from city councils
    • Cheap affordable wind turbine for the everyday American
    • Be owner of cheap green status symbol
    • Diversify energy portfolio,
    • Fast payback than alternatives
    • Single family homeowner in CA, TX ,CO, WI, NY
    • House rental groups
    • Contractors in home remodelling
    • 5 year full service Warranty
    • Want rebuy from customers
    • Environmental, bird, wildlife groups (regulations, publicity)
    • City councils and neighborhood/??? (new regulations, permits).
    • Contractors
    • Cheap manufacturing process- Intellectual property
    • Need Iniitial capital
    • Endorsements by environmental groups, and local governments
    • Direct sales
    • Web site
    • Home Depot
    • Cost-driven model to provide inexpensive, quality product
    • May consider in-house leasing option, if upfront costs is large obstacle for customer and sufficient funding obtained.
    • Direct Sales
    • Leasing
    • Service Calls
  • Business Model Canvas – Week 3
    • Continuous advertise and recruit new customers
    • Continue R&D
    • Get certifications
    • Get approvals from city councils
    • Gain Credibility
    • Cheap affordable wind turbine for the everyday American
    • Be owner of cheap green status symbol
    • Diversify energy portfolio,
    • Fast payback than alternatives
    • Single family wealthy, green home and land owner in CA, TX ,CO, WI, NY
    • House rental groups
    • Contractors in home remodelling
    • 5 year full service Warranty
    • Additional Maintenance after
    • Want rebuy from customers
    • Environmental, bird, wildlife groups (regulations, publicity)
    • City councils and neighborhood/??? (new regulations, permits).
    • Contractors
    • Cheap manufacturing process- Intellectual property
    • Need Iniitial capital (600k)
    • Manufacturing Facilities and Areas
    • Endorsements by environmental groups, and local governments
    • Direct sales
    • Web site
    • Home Depot
    • Cost-driven model to provide inexpensive, quality product
    • May consider in-house leasing option, if upfront costs is large obstacle for customer and sufficient funding obtained.
    • Direct Sales
    • Leasing
    • Service Calls
  • Business Model Canvas – Week 4
    • Continuous advertise and recruit new customers
    • Continue R&D
    • Get certifications
    • Get approvals from city councils
    • Gain Credibility
    • Cheap affordable wind turbine for the everyday American
    • Cheap product more readily available
    • Be owner of cheap green status symbol
    • Diversify energy portfolio,
    • Fast payback than alternatives
    • Single family wealthy, green home and land owner in CA, TX ,CO, WI, NY
    • House rental groups
    • Contractors in home remodelling
    • 5 year full service Warranty
    • Additional Maintenance after
    • Want rebuy from customers
    • Environmental, bird, wildlife groups (regulations, publicity)
    • City councils and neighborhood/??? (new regulations, permits).
    • Contractors
    • Cheap manufacturing process- Intellectual property
    • Need Iniitial capital (600k)
    • Manufacturing Parts
    • Endorsements by environmental groups, and local governments
    • Direct sales
    • Web site
    • Home Depot
    • Cost-driven model to provide inexpensive, quality product
    • Manufacturing costs and customer acquisition costs.
    • May consider in-house leasing option, if upfront costs is large obstacle for customer and sufficient funding obtained (must be in future)
    • Direct Sales
    • Leasing
    • Service Calls
  • Business Model Canvas – Week 5
    • Continuous advertise and recruit new customers (city councils)
    • Build relationship with city engineers and council members
    • Understand customer, influencers, motivations, problems, competitors
    • Form partnerships for maximum reach
    • Submit bids for city RFPs
    • Continue R&D
    • Get certifications
    • Gain Credibility
    • Cheap product more readily
    • Retrofit wind turbine for street and highway lamps.
    • Create own wind turbines with pole manufacturers
    • Be owner of cheap green status symbol
    • Diversify green energy portfolio
    • Fast payback than alternatives
    • Single family wealthy, green home and land owner in CA, TX ,CO, WI, NY
    • Cities
    • Lighting Companies
    • Utilities
    • 5 year full service Warranty
    • After 5 years, service charge
    • Utility to manage after warranty expiration
    • Extended warranty option
    • Environmental, bird, wildlife groups (regulations, publicity)
    • City councils and neighborhood/??? (new regulations, permits).
    • Lighting Manufacturers
    • Electricians and Contractors for Installation/Maintenance
    • Cheap manufacturing process- Intellectual property
    • $1.5 MM of capital to start manufacturing and distribution for year 1 and 2
    • Manufacturing Parts
    • Endorsements by environmental groups, and local governments
    • Direct sales to cities (long term)
    • Web site
    • Home Depot
    • Cost-driven model to provide inexpensive, quality product
    • Manufacturing costs and customer acquisition costs.
    • May consider in-house leasing option, if upfront costs is large obstacle for customer and sufficient funding obtained (must be in future)
    • Direct Sales
    • Service Calls
    • Leasing
  • Business Model Canvas – Week 6
    • Build relationship with city engineers and council members
    • Understand customer, influencers, motivations, problems, competitors
    • Form partnerships for maximum reach
    • Submit bids for city RFPs
    • Retrofit wind turbine for street and highway lamps.
    • Use competitive, local, renewable energy, strong green symbol
    • Diversify energy portfolio,
    • Fast payback than alternatives.
    • Cities
    • Lighting Companies
    • Utilities
    • County – State Level
    • 5 year maintenance and warranty
    • After 5 years, service charge
    • Utility to manage after warranty expiration
    • Extended warranty option
    • Environmental, bird, wildlife groups (regulations, publicity)
    • City councils (new regulations, permits).
    • Light manufacturers, installers to package product/services
    • Electricians, contractors, light maintenance for additional workforce
    • Cheap manufacturing process- Intellectual property
    • $1.5 MM of capital to start manufacturing and distribution for year 1 and 2
    • Endorsements by environmental groups, city consortiums for renewable energy, public utilities, city council planning department
    • Direct sales to the city or utility, and forming long term relationship for maintenance and replacements.
    • Cost-driven model to provide inexpensive, quality product
    • Manufacturing costs and customer acquisition costs.
    • May consider in-house leasing option, if upfront costs is large obstacle for customer and sufficient funding obtained.
    • Asset sales and service calls
    • Leasing and PPA? (under review)
  • Business Model Canvas – Week 7
    • Build relationship with city engineers and council members
    • Understand customer, influencers, motivations, problems, competitors
    • Form partnerships for maximum reach
    • Submit bids for city RFPs
    • Retrofit wind turbine for street and highway lamps.
    • Use competitive, local, renewable energy, strong green symbol
    • Diversify energy portfolio,
    • Fast payback than alternatives.
    • Cities
    • Utilities
    • County – State Level
    • 5 year maintenance and warranty
    • After 5 years, service charge
    • Utility to manage after warranty expiration
    • Extended warranty option
    • Environmental, bird, wildlife groups
    • City councils (new regulations, permits).
    • Light manufacturers,
    • Installers/maintainers
    • Research Labs
    • Turbine Certifiers
    • Cheap manufacturing process- Intellectual property
    • $1.5 MM of capital to start manufacturing and distribution for year 1 and 2
    • Endorsements by environmental groups, city consortiums for renewable energy, public utilities, city council planning department
    • Direct sales to the city or utility, and forming long term relationship for maintenance and replacements.
    • Cost-driven model to provide inexpensive, quality product
    • Manufacturing costs and customer acquisition costs.
    • May consider in-house leasing option, if upfront costs is large obstacle for customer and sufficient funding obtained.
    • Asset sales and service calls
    • Leasing and PPA (Future)
  • Business Model Canvas – Final
    • Continuously advertise and recruit new customers (city councils)
    • Build relationship with city engineers and council members
    • Understand customer, influencers, motivations, problems, competitors
    • Form partnerships (developers, cities, installers, maintenance) for maximum reach
    • Submit bids for city RFPs
    • Continue R&D
    • Get certifications
    • Gain Credibility
    • Retrofit wind turbine for street and highway lamps.
    • Create own wind turbines with pole manufacturers
    • Be owner of cheap green status symbol
    • Diversify green energy portfolio
    • Fast payback than alternatives
    • Cities (pilot)
    • Cities leasing
    • Lighting Companies
    • Developer -> Utilities -> City
    • 5 year full service Warranty,
    • After 5 years, service charge
    • Utility to manage after warranty expiration
    • Extended warranty option
    • City council (new regulations, permits).
    • Environmental, bird, wildlife groups (regulations, publicity)
    • Lighting Manufacturers
    • Electricians and Contractors for Installation/Maintenance
    • Research Labs
    • Turbine Certifiers
    • Small Wind Developers
    • Utilities
    • Cheap manufacturing process- Intellectual property
    • R&D talent
    • Endorsements by environmental groups, and local governments
    • Finance
    • Direct sales to cities (long term) PILOTS
    • Small Wind Developer
    • Cost-driven model to provide inexpensive, quality product
    • Manufacturing costs and customer acquisition costs.
    • May consider in-house leasing option, if upfront costs is large obstacle for customer and sufficient funding obtained (must be in future)
    • Leasing, PPA
    • Direct Sales to wind developers?
    • Leasing, PPA
    • Direct Sales to wind developers?