The startup owners manual sxsw

The Startup Owners Manual Steve Blank Stanford - School of Engineering U.C. Berkeley - Haas School Of Business www.steveblank.com Twitter: @sgblank

See the Animated Version of this Presentation at:http://www.slideshare.net/sblank/the-startup-owners-manual-sxsw-the- movie-2

This Talk is Based On• Business Model Generation• The Lean Startup• Four Steps to the Epiphany

This Talk is Based On• Business Model Generation• The Lean Startup• The Startup Owners Manual

Not all those who wander are lost Bilbo Baggins

The Search for a Path 1602 - 1908

The Path to Business Execution But Startups are Not Smaller Versions of Larger Companies

From Atoms to Bits

The Startup PathSearch Versus Execution

What’s a Startup?

What’s a Business Model?

Value PropositionWhat Are You Building and For Who?

Customer Segments Who Are They? Why Would They Buy?

ChannelsHow does your Product Get to Customers?

Customer RelationshipsHow do you Get, Keep and Grow Customers?

Revenue StreamsHow do you Make Money?

Key ResourcesWhat are your most important Assets?

Key PartnersWho are your Partners and Suppliers?

Key ActivitiesWhat’s Most Important for the Business?

Cost StructureWhat are the Costs and Expenses

Turning Hypotheses Into Facts

The Four Steps – The Startup Path Customer Development

Customer DevelopmentThere Are No Facts Inside The Building, So Get the Heck Outside

Customer DevelopmentTest the Problem, Then the Solution

Customer Development The Entrepreneurial Journey

Startup Owners Manual

Startup Owners ManualNational Science Foundation

Startup Owners Manual• Yes there’s an E-Book version coming• Free autographed copies - Sunday Startup America Salon E 1:30 -3pm

Examples from the Book

Customer Relationships

How Does This Really Work? Lean LaunchPad Class National Science Foundation

How Does This Really Work? 8 Weeks from an Idea to a Business

Interviews: 252Partner: 10Survey: 76 Team Dynamo Final Presentation

THE TEAM MeghGautam Al Hassan Hleileh MS&E MS MBA 2  BTech in IT  MA in POLPICTURE PICTURE ECON SOC H Hung Le ElikaMahdavi MS&E MS MS&E MS  BS in EE/CS  BS in Indus.Eng.PICTURE PICTURE

TABLE OF CONTENTS1. Overview of our idea evolution2. Our journey from week 1 to week 83. Current Idea  Archetype  Product vision  Partner  Channel & Demand Creation  Competitive Landscape  Market Sizing4. Lesson learned and what next

IDEA EVOLUTION THROUGH PIVOT 1 2 3 4 5 6 7 8Travel Social Ex-pat Safe Travel inspiration - Nudge to enrich lifebooking travel travel travel Social platform thatportal for planning portal to portal for nudges people toMiddle Middle US inspire and enrichEasterns East travelers their life to M.E. Focus Competition Market size Market Scalability Customer Customer size Market size Insights Insights Research

Interviews: 20 1Travelbookingportal forMiddleEasterns

WEEK 1 – MAKE MY DREAMWeek 1 New Remain Remove Middle East focused Travel booking portal Hotels  Middle East focused platform price Product Development Lowest Trusted relationships Young and the affluent Airlines A/B testing Best inventory Successful partnerships High disposable incomes Events (Festivals) Relationship with Convenient Brand awareness/ Willing to explore  Offer a booking platform with group discounts and flash-sales Car rentals Promotion companies hotels; airlines; car rentals Experiential UI Social Validation identification Pilots Young and single Deal listings Sourcing deals Create a Community Cross pollination Divergent origins State Tourism Acquisition, retain Multiple options Events (Parties!) Social media savvy  Ramp up strategy through social conversations Travel agents customers Best Actionable deals Conventions (CES) Relevant locations Young couples Business Schools Trendsetting behavior  Preserve memories of travel through photo sharingand quotes (Study groups) Young families Best education for kids Cultural experience Web and mail Trendy destinations Advertising Market understanding Social Media Best in class product Word of Mouth Relationship with Referrals partners Customer call centers Human Capital Magazines Human Capital Percentage of booking costs Product Development Percentage of hotel/package (s) Advertising costs Advertising revenues Maintaining relationships Event of the month Refunds Exclusive partnership with events

WEEK 1 – MAKE MY DREAMWeek 1 New Remain Remove Hotels Product Development Lowest price Trusted relationships Young and the affluent Airlines A/B testing Best inventory Successful partnerships High disposable incomes Events (Festivals) Relationship with Convenient Brand awareness/ Willing to explore Car rentals hotels; airlines; car Experiential UI identification Promotion companies rentals Social Validation Pilots Young and single Deal listings Sourcing deals Create a Community Cross pollination Divergent origins State Tourism Acquisition, retain Multiple options Events (Parties!) Social media savvy Travel agents customers Best Actionable deals Conventions (CES) Relevant locations Young couples Business Schools Trendsetting behavior (Study groups) Young families Best education for kids Cultural experience Web and mail Trendy destinations Advertising Market understanding Social Media Best in class product Word of Mouth Relationship with Referrals partners Customer call centers Human Capital Magazines Human Capital Percentage of booking costs Product Development Percentage of hotel/package (s) Advertising costs Advertising revenues Maintaining relationships Event of the month Refunds Exclusive partnership with events

WEEK 1 – MAKE MY DREAMWeek 1 New Remain Remove Hotels Product Development Lowest price Trusted relationships Young and the affluent Airlines A/B testing Best inventory Successful partnerships High disposable incomes Events (Festivals) Relationship with Convenient Brand awareness/ Willing to explore Car rentals hotels; airlines; car Experiential UI identification Promotion companies rentals Social Validation Pilots Young and single Deal listings Sourcing deals Create a Community Cross pollination Divergent origins State Tourism Acquisition, retain Multiple options Events (Parties!) Social media savvy Travel agents customers Best Actionable deals Conventions (CES) Relevant locations Young couples Business Schools Trendsetting behavior (Study groups) Young families Best education for kids Cultural experience Lack of focus in value propositions Web and mail Trendy destinations Advertising Market understanding Social Media  Too broad a platform Best in class product Word of Mouth Relationship with Referrals partners Customer call centers  Too many value propositions Human Capital Magazines Human Capital Percentage of booking costs Product Development Percentage of hotel/package (s) Advertising costs Advertising revenues Maintaining relationships Event of the month Refunds Exclusive partnership with events

WEEK 1 – MAKE MY DREAMWeek 1 New Remain Remove Hotels Product Development Lowest price Trusted relationships Young and the affluent Airlines A/B testing Best inventory Successful partnerships High disposable incomes Events (Festivals) Relationship with Convenient Brand awareness/ Willing to explore Car rentals hotels; airlines; car Experiential UI identification Promotion companies rentals Social Validation Pilots Young and single Deal listings Sourcing deals Create a Community Cross pollination Divergent origins State Tourism Acquisition, retain Multiple options Events (Parties!) Social media savvy Travel agents Conventions (CES) customers Market sizing problem Best Actionable deals Relevant locations Young couples Business Schools Trendsetting behavior (Study groups)  The method we used was a top-down approach Young families Best education for kids Cultural experience  We didn’t use net numbers (gross) Web and mail Trendy destinations Advertising Market understanding Social Media Best in class product Relationship with  The lesson here is that if we were to do it Word of Mouth Referrals partners again we would use bottom up / net figures Customer call centers Human Capital Magazines Human Capital Percentage of booking costs Product Development Percentage of hotel/package (s) Advertising costs Advertising revenues Maintaining relationships Event of the month Refunds Exclusive partnership with events

WEEK 1 – MAKE MY DREAMWeek 1 New Remain Remove Lack of focus in customer segments Hotels Product Development Lowest price Trusted relationships Young and the affluent Airlines A/B testing Best inventory Successful partnerships High disposable incomes Events (Festivals) Relationship with We were not focused on a Convenient Brand awareness/ Willing to explore Car rentals hotels; airlines; car specific customer segment Experiential UI identification Promotion companies rentals Social Validation Pilots Young and single Deal listings Sourcing deals – too broad. Create a Community Cross pollination Divergent origins State Tourism Acquisition, retain Multiple options Events (Parties!) Social media savvy Travel agents customers Best Actionable deals Conventions (CES) Our interview base was Relevant locations Young couples Business Schools Trendsetting behavior (Study groups) biased towards our network – needed a better sample. Young families Best education for kids Cultural experience Web and mail Trendy destinations Advertising Market understanding Social Media Best in class product Word of Mouth Relationship with Referrals partners Customer call centers Human Capital Magazines Human Capital Percentage of booking costs Product Development Percentage of hotel/package (s) Advertising costs Advertising revenues Maintaining relationships Event of the month Refunds Exclusive partnership with events

WEEK 1 – MAKE MY DREAMWeek 1 New Remain Remove Hotels Product Development Lowest price Trusted relationships Young and the affluent Airlines A/B testing Best inventory Successful partnerships High disposable incomes Key learning Events (Festivals) Relationship with Convenient Brand awareness/ Willing to explore Car rentals hotels; airlines; car Experiential UI identification Promotion companies rentals Social Validation Pilots Young and single  Focus is crucial – be it in your value proposition or in your customer Deal listings State Tourism Sourcing deals Acquisition, retain Create a Community Multiple options Cross pollination Events (Parties!) Divergent origins Social media savvy segmentation Travel agents customers Best Actionable deals Conventions (CES) Relevant locations Young couples Business Schools Trendsetting behavior  Market sizing – Use bottom up whenever possible (Study groups) Young families Best education for kids  Get out of the building – in spirit and in action. Avoid bias Cultural experience Trendy destinations Web and mail Advertising Market understanding Social Media Best in class product Word of Mouth Relationship with Referrals partners Customer call centers Human Capital Magazines Human Capital Percentage of booking costs Product Development Percentage of hotel/package (s) Advertising costs Advertising revenues Maintaining relationships Event of the month Refunds Exclusive partnership with events

Interviews: 20 1 2Travel Socialbooking travelportal for planningMiddleEasterns Customer focus

WEEK 2 – SOCIAL TRIP PLANNINGWeek 2 New Remain Remove Pivot to social travel planning for group traveling Social Networks Through Acquisition Customer our mentors, we really dug into our customers insights Easy and pleasurable Trusted relationships Young and the affluent Travel Publications Customer Retention trip planning Successful partnerships High disposable incomes Product Dev Best inventory Events (Parties!) Willing to explore Hotels  They were telling us that they didn’t just want to go to the Relationship with key Business Schools partners Convenient Brand awareness/ Young and single Travel agents middle east Sourcing deals Experiential UI identification Divergent origins Airlines Lowest price Pilots Social media savvy Events Multiple options Cross pollination Deal listings  They wanted a seamless, social and enjoyable travel Best Actionable deals Young couples Car rentals experience from A-Z Relevant locations Create a Community Trendsetting behavior Promotion companies Social Validation Young families State Tourism Conventions (CES)  We pivoted to The Middle Easts travel booking portal with a Best education for kids Cultural experience ramp up focused on influential who want easy and Word of Mouth Trendy destinations Social Media Market understandingtrip planning pleasurable Human Capital Web and mail Relationship with Advertising partners Referrals Customer call centers Best in class product Magazines Human Capital Percentage of booking costs Product Development Advertising costs Percentage of hotel/package (s) Maintaining relationships Advertising revenues Refunds Event of the month Exclusive partnership with events

WEEK 2 – SOCIAL TRIP PLANNINGWeek 2 New Remain Remove Social Networks Customer Acquisition Easy and pleasurable Trusted relationships Young and the affluent Travel Publications Customer Retention trip planning Successful partnerships High disposable incomes Product Dev Best inventory Events (Parties!) Willing to explore Hotels Relationship with key Business Schools partners Convenient Brand awareness/ Young and single Travel agents Sourcing deals Experiential UI identification Divergent origins Airlines Lowest price Pilots Social media savvy Events Multiple options Cross pollination Deal listings Best Actionable deals Young couples Relevant locations Trendsetting behavior Car rentals Create a Community Promotion companies Social Validation Young families State Tourism Best education for kids Conventions (CES) Cultural experience Word of Mouth Trendy destinations Social Media Market understanding Human Capital Web and mail Relationship with Advertising partners Referrals Customer call centers Best in class product Magazines Human Capital Percentage of booking costs Product Development Advertising costs Percentage of hotel/package (s) Maintaining relationships Advertising revenues Refunds Event of the month Exclusive partnership with events

WEEK 2 – SOCIAL TRIP PLANNINGWeek 2 New Remain Remove Social Networks Customer Acquisition Easy and pleasurable Trusted relationships Young and the affluent Travel Publications Customer Retention trip planning Successful partnerships High disposable incomes Product Dev Best inventory Events (Parties!) Willing to explore Hotels Relationship with key Business Schools partners Convenient Brand awareness/ Young and single Travel agents Sourcing deals Experiential UI identification Divergent origins Airlines Lowest price Pilots Social media savvy Events Multiple options Cross pollination Deal listings Best Actionable deals Young couples Relevant locations Trendsetting behavior Car rentals Create a Community Promotion companies Social Validation Young families State Tourism Best education for kids Conventions (CES) Cultural experience Trendy destinations Word of Mouth Social Media Market understanding Human Capital Web and mail Relationship with Advertising partners Referrals Customer call centers Best in class product Magazines Human Capital Percentage of booking costs Product Development Advertising costs Percentage of hotel/package (s) Maintaining relationships Advertising revenues Refunds Event of the month Exclusive partnership with events

WEEK 2 – SOCIAL TRIP PLANNINGWeek 2 New Remain Remove Social Networks Customer Acquisition Easy and pleasurable Trusted relationships Young and the affluent Travel Publications Customer Retention trip planning Successful partnerships High disposable incomes What was the problem? Product Dev Best inventory Events (Parties!) Willing to explore Hotels Relationship with key Business Schools partners Convenient Brand awareness/ Young and single Travel agents Sourcing deals Experiential UI identification Divergent origins Airlines When research for potential partners, we learned of several existing Lowest price Pilots Social media savvy Events competitors with similar product Multiple options Cross pollination Deal listings Best Actionable deals Young couples Relevant locations Trendsetting behavior Car rentals  crowded Create a Community Promotion companies Social Validation Young families State Tourism Best education for kids  hypercompetitive Conventions (CES) Cultural experience Trendy destinations Word of Mouth Social Media Market understanding Human Capital Web and mail Relationship with Advertising partners Referrals Customer call centers Best in class product Magazines Human Capital Percentage of booking costs Product Development Advertising costs Percentage of hotel/package (s) Maintaining relationships Advertising revenues Refunds Event of the month Exclusive partnership with events

WEEK 2 – SOCIAL TRIP PLANNINGWeek 2 New Remain Remove Social Networks Customer Acquisition Easy and pleasurable Trusted relationships Young and the affluent Travel Publications Customer Retention trip planning Successful partnerships High disposable incomes Key learning Product Dev Best inventory Events (Parties!) Willing to explore Hotels Relationship with key Business Schools partners Convenient Brand awareness/ Young and single Airlines  We should have looked at the competitive landscape earlier Travel agents Sourcing deals Experiential UI Lowest price identification Pilots Divergent origins Social media savvy Events Multiple options Cross pollination Deal listings Best Actionable deals Young couples  We should have spoken to industry / domain experts earlier Relevant locations Trendsetting behavior Car rentals Create a Community Promotion companies Social Validation Young families State Tourism Best education for kids Conventions (CES) Cultural experience Word of Mouth Trendy destinations Social Media Market understanding Human Capital Web and mail Relationship with Advertising partners Referrals Customer call centers Best in class product Magazines Human Capital Percentage of booking costs Product Development Advertising costs Percentage of hotel/package (s) Maintaining relationships Advertising revenues Refunds Event of the month Exclusive partnership with events

Interviews: 64 1 2 3Travel Social Ex-patbooking travel travelportal for planning portal toMiddle MiddleEasterns East Competition

WEEK 3 – EX-PAT TRAVELINGWeek 3 New Remain Remove Pivot to Ex-pat Community Travel Portal We pivoted back to the original idea knowhow and on Trustedcustomer segment the affluent Social Networks Customer Acquisition Local with focus one relationships Young and Hotels Customer Retention content Successful partnerships High disposable incomes Business Schools Product Dev Willing to explore  A travel planner for Ex-Pat Easy and pleasurable Travel agents studentswho frequently (Parties!) Middle-East & Relationship with key Events visit the partnerstrip planning Young and single other major cities. Travel Publications Sourcing deals Best inventory Divergent origins Airlines Social media savvy Events  We want to capture & publish their travel experience. Deal listings Young couples Trendsetting behavior Word of Mouth Social Media Market understanding Human Capital Relationship with partners Human Capital Percentage of booking costs Product Development Advertising costs Maintaining relationships Refunds

WEEK 3 – EX-PAT TRAVELINGWeek 3 New Remain Remove Social Networks Customer Acquisition Local knowhow and Trusted relationships Young and the affluent Hotels Customer Retention content Successful partnerships High disposable incomes Business Schools Product Dev Willing to explore Travel agents Relationship with key Easy and pleasurable Events (Parties!) partners trip planning Young and single Travel Publications Sourcing deals Best inventory Divergent origins Airlines Social media savvy Events Deal listings Young couples Trendsetting behavior Word of Mouth Social Media Market understanding Human Capital Relationship with partners Human Capital Percentage of booking costs Product Development Advertising costs Maintaining relationships Refunds

WEEK 3 – EX-PAT TRAVELINGWeek 3 New Remain Remove Social Networks Customer Acquisition Local knowhow and Trusted relationships Young and the affluent Hotels Customer Retention content Successful partnerships High disposable incomes What was the problem? Business Schools Product Dev Willing to explore Travel agents Relationship with key Easy and pleasurable Events (Parties!) partners trip planning Young and single Travel Publications Sourcing deals Best inventory Divergent origins Airlines We interviewed 64 people and found: Social media savvy Events Deal listings Young couples  The market was too small Trendsetting behavior  There is little homogeneity in customer needs Word of Mouth  Too low frequency of travel to justify target Social Media market Market understanding Human Capital Relationship with partners Human Capital Percentage of booking costs Product Development Advertising costs Maintaining relationships Refunds

WEEK 3 – EX-PAT TRAVELINGWeek 3 New Remain Remove Social Networks Customer Acquisition Local knowhow and Trusted relationships Young and the affluent Hotels Customer Retention content Successful partnerships High disposable incomes Key learning Business Schools Product Dev Willing to explore Travel agents Relationship with key Easy and pleasurable Events (Parties!) partners trip planning Young and single Airlines  Market sizing is crucial Travel Publications Sourcing deals Best inventory Divergent origins Social media savvy Events Deal listings Young couples Trendsetting behavior Word of Mouth Social Media Market understanding Human Capital Relationship with partners Human Capital Percentage of booking costs Product Development Advertising costs Maintaining relationships Refunds

Interviews: 33 Survey: 46 1 2 3 4Travel Social Ex-pat Safebooking travel travel travelportal for planning portal to portal forMiddle Middle USEasterns East travelers to M.E. Market size

WEEK 4 – US TRAVEL TO Middle EastWeek 4 New Remain Remove Pivot to US Traveler Portal to Middle East Social Networks We expanded our market proposition US Customer Acquisition Safety to entire Trusted relationships Young and the affluent Alumni Associations Hotels travel market Customer Retention Product Development Localknowhowandconte nt Successful partnerships High disposable incomes Willing to explore Business Schools Relationship with key Community/Group Travel agents  Platform to facilitate Americans to partners Sourcing deals Travel -MBA Students Travel Publications travel to the Middle-East pleasurable Easy and Airlines trip planning Events Best inventory Deal listings Word of Mouth Social Media Market understanding Human Capital Relationship with partners Human Capital Percentage of booking costs Product Development Advertising costs Maintaining relationships Refunds

WEEK 4 – US TRAVEL TO Middle EastWeek 4 New Remain Remove Young affluent market Social Networks Customer Acquisition We surveyed 46 people and Safety proposition Trusted relationships MBA Students Alumni Associations Customer Retention Localknowhowandconte Successful partnerships Hotels Product Development interview 33 more nt Young and the affluent Business Schools Relationship with key Community/Group High disposable incomes Travel agents partners Travel Willing to explore Sourcing deals  Young & Affluent Americans Travel Publications Easy and pleasurable Airlines trip traveling to the Middle East planning Events need local insight. Best inventory Deal listings  We’ll be the trusted source! Word of Mouth Social Media Market understanding Human Capital Relationship with partners Human Capital Percentage of booking costs Product Development Advertising costs Maintaining relationships Refunds

WEEK 4 – US TRAVEL TO Middle EastWeek 4 New Remain Remove Social Networks Customer Acquisition Safety proposition Trusted relationships Young and the affluent Alumni Associations Customer Retention Localknowhowandconte Successful partnerships High disposable incomes Hotels Product Development nt Willing to explore Business Schools Relationship with key Community/Group Travel agents partners Travel -MBA Students Sourcing deals Travel Publications Easy and pleasurable Airlines trip planning Events Best inventory Deal listings Word of Mouth Social Media Market understanding Human Capital Relationship with partners Human Capital Percentage of booking costs Product Development Advertising costs Maintaining relationships Refunds

WEEK 4 – US TRAVEL TO Middle EastWeek 4 New Remain Remove Launched website with full basic booking functionalities Social Networks Customer Acquisition Safety proposition Trusted relationships MBA Students Alumni Associations Customer Retention Localknowhowandconte Successful partnerships Hotels Ebtism.com went liveProduct Development nt Young and the affluent Business Schools Relationship with key Community/Group High disposable incomes Travel agents partners Travel Willing to explore  Full basic functionalities (login, browse deals and book trips) Sourcing deals Travel Publications Easy and pleasurable Airlines trip planning Events  4 sourced deals from agencies Best inventory Deal listings  42 GSB students booked Word of Mouth Social Media Market understanding Human Capital Relationship with partners Human Capital Percentage of booking costs Product Development Advertising costs Deals selection Exclusive login Value proposition Ability to book trips Maintaining relationships (real sourcing) Refunds

WEEK 4 – US TRAVEL TO Middle EastWeek 4 New Remain Remove Social Networks Customer Acquisition Safety proposition Trusted relationships MBA Students Alumni Associations Customer Retention Localknowhowandconte Successful partnerships Hotels What was the problem? Product Development nt Young and the affluent Business Schools Relationship with key Community/Group High disposable incomes Travel agents partners Travel Willing to explore Sourcing deals We spoke to Christos Stergiou, and pleasurable truegreece.com (Greece Travel Publications Easy founder of Airlines Analogue) trip planning Events Best inventory Deal listings  10 years of development  $5M idea Word of Mouth Social Media Market understanding Human Capital Relationship with partners Human Capital Percentage of booking costs Product Development Advertising costs Maintaining relationships Refunds

WEEK 4 – US TRAVEL TO Middle EastWeek 4 New Remain Remove Social Networks Customer Acquisition Safety proposition Trusted relationships MBA Students Alumni Associations Customer Retention Localknowhowandconte Successful partnerships Hotels Key learning Product Development nt Young and the affluent Business Schools Relationship with key Community/Group High disposable incomes Travel agents partners Travel Willing to explore Sourcing deals Market size need to be VENTURE SCALE Travel Publications Easy and pleasurable Airlines trip planning Events Best inventory We want to DISRUPT the Travel Space. Deal listings Let’s Re-think the Entire Idea! Word of Mouth Social Media Market understanding Human Capital Relationship with partners Human Capital Percentage of booking costs Product Development Advertising costs Maintaining relationships Refunds

Interviews: 17 Survey: 10 1 2 3 4 5Travel Social Ex-pat Safe Socialbooking travel travel travel platformportal for planning portal to portal for thatMiddle Middle US nudgesEasterns East travelers people to to M.E. travel Market size

WEEK 5 – TRAVEL NUDGEWeek 5 Paying partner side End-user side Remove Pivot to travel inspiration Social Networks We pivot to a brand new market Customer Acquisition Enrichment (Travel) Trusted relationships Online travelers Travel Websites Customer Retention Leads Successful partnerships Travel Websites Product Development Alumni Associations  Inspire people to travelproposition Safety more Relationship with key MBA Students Travel agents partners Local knowhow and Business Schools through recommendation content Young and the affluent Hotels Sourcing deals Community/Group High disposable incomes Travel Willing to explore  Relevant based on social graph and travel history Word of Mouth Social Media User data Human Capital Relationship with partners Human Capital Leads Product Development Advertising Advertising costs Maintaining relationships Percentage of booking costs Refunds

WEEK 5 – TRAVEL NUDGEWeek 5 Paying partner side End-user side Remove Inception of Nudge by looking at the competitive landscape Social Networks Customer Acquisition Enrichment (Travel) Trusted relationships Online travelers Travel Websites Customer Retention Leads Successful partnerships Travel Websites Product Development Alumni Associations Relationship with key Safety proposition MBA Students Travel agents partners Local knowhow and Business Schools content Young and the affluent Hotels Sourcing deals Community/Group High disposable incomes Travel Willing to explore Revised later Word of Mouth Social Media User data Human Capital Relationship with partners Human Capital Leads Product Development Advertising Advertising costs Maintaining relationships Percentage of booking costs Refunds

WEEK 5 – TRAVEL NUDGEWeek 5 Paying partner side End-user side Remove Social Networks Customer Acquisition Enrichment (Travel) Trusted relationships Online travelers Travel Websites Customer Retention Leads Successful partnerships Travel Websites Product Development Alumni Associations Relationship with key Safety proposition MBA Students Travel agents partners Local knowhow and Business Schools content Young and the affluent Hotels Sourcing deals Community/Group High disposable incomes Travel Willing to explore Word of Mouth Social Media User data Human Capital Relationship with partners Human Capital Leads Product Development Advertising Advertising costs Maintaining relationships Percentage of booking costs Refunds

WEEK 5 – TRAVEL NUDGEWeek 5 Paying partner side End-user side Remove Sizeable potential market Social Networks Customer Acquisition Enrichment (Travel) Trusted relationships Online travelers Travel Websites Customer Retention Leads Bottom-up estimation Successful partnerships Travel Websites Product Development Alumni Associations TAM = $900MSafety proposition Relationship with key MBA Students Travel agents Business Schools partners Local knowhow and content  Market = population x nudgethe affluent Young and Hotels Sourcing deals Community/Group frequency x CTR x CPCdisposable incomes High Travel Willing to explore SAM = $373M  With leads revenue sharing model, TAM is based on assumptions of nudges frequency and conversion SOM = $267M Word of Mouth User data  Target market is justifiable with an Social Media Human Capital annual revenue of $267 million with Relationship with partners 31% market penetration Human Capital Leads Product Development Advertising Advertising costs Maintaining relationships Percentage of booking costs Refunds

WEEK 5 – TRAVEL NUDGEWeek 5 Paying partner side End-user side Remove Mock up of the product for customer interview Social Networks Customer Acquisition Enrichment (Travel) Trusted relationships Online travelers Travel Websites Customer Retention Leads Successful partnerships Travel Websites Product Development Alumni Associations Relationship with key Safety proposition MBA Students Travel agents partners Local knowhow and Business Schools content Young and the affluent Hotels Sourcing deals Community/Group High disposable incomes Travel Willing to explore Word of Mouth Social Media User data Human Capital Relationship with partners Human Capital Leads Product Development Advertising Advertising costs Maintaining relationships Percentage of booking costs Refunds

Interviews: 52 + 3 partners 1 2 3 4 5 6Travel Social Ex-pat Safe Travel inspiration -booking travel travel travel Social platform thatportal for planning portal to portal for nudges people toMiddle Middle US inspire and enrichEasterns East travelers their life to M.E.

WEEK 6 – TRAVEL NUDGEWeek 6 Paying partner side End-user side Remove Social Networks Customer Acquisition Enrichment (Travel) Trusted relationships Online travelers Travel Websites Customer Retention Customer Acquisition Successful partnerships Travel Websites Product Development Relationship with key Leads partners Word of Mouth Social Media User data Human Capital Relationship with partners Human Capital Cost per acquisition Product Development Advertising costs Leads Maintaining relationships Advertising

WEEK 6 – TRAVEL NUDGEWeek 6 Paying partner side End-user side Remove Partner Social Networks Customer Acquisition Enrichment (Travel) Trusted relationships Online travelers Travel Websites Reach out to Travelocity (Jim Hornthal) Customer Retention Customer Acquisition Successful partnerships Travel Websites Product Development Relationship with key Leads partners  Customer insights differed  Technological challenges (e.g. cookies)  Revenue share instead of lead generating Reach out to Expedia andBookingmarkets Word of Mouth Social Media User data  Confirm revenue share model (5% - 10%) and we Human Capital Relationship with partners even got a standard term Human Capital Cost per acquisition Product Development Advertising costs Leads Maintaining relationships Advertising

WEEK 6 – TRAVEL NUDGEWeek 6 Paying partner side End-user side Remove The customers value relevance of nudges Social Networks Customer Acquisition Enrichment (Travel) Trusted relationships Online travelers Travel Websites Then we went out of the building to interview 50partnerships Customer Retention Customer Acquisition Successful Travel Websites people at Stanford Mall Product Development Relationship with key Leads partners  What prevents people from traveling is time, not imagination or laziness (seasonal)  People don’t want to be nudged too often (1 per month) Word of Mouth  Referrals from close friends more valuable Social Media User data than referrals from strangers Human Capital Relationship with partners Human Capital Cost per acquisition Product Development Advertising costs Leads Maintaining relationships Advertising

Interviews: 16 1 2 3 4 5 6 7Travel Social Ex-pat Safe Travel inspiration - Nudge tobooking travel travel travel Social platform that enrichportal for planning portal to portal for nudges people to lifeMiddle Middle US inspire and enrichEasterns East travelers their life to M.E. Market size

Week 7 WEEK 7 - NUDGE Expand from travel to include activity nudges Social Networks  Customer Acquisition our nudges to include activities, events, Students We expanded Enrichment (Activities + Trusted relationships Travel Websites Event Websites social reminders than just travels Customer Retention Product Development Travel) Customer Acquisition Successful partnerships Graduates Young Families University Events Relationship with key Merchants  Keep user more engaged with relevant frequent nudges Websites partners Enrichment (Travel) Travel Online travelers Word of Mouth Social Media User data Human Capital Relationship with partners Human Capital Cost per acquisition Product Development Advertising costs Maintaining relationships

Week 7 WEEK 7 - NUDGE Social Networks Customer Acquisition Enrichment (Activities + Trusted relationships Students Travel Websites Customer Retention Travel) Successful partnerships Graduates Event Websites Product Development Customer Acquisition Young Families University Events Relationship with key Merchants partners Enrichment (Travel) Travel Websites Online travelers Word of Mouth Social Media User data Human Capital Relationship with partners Human Capital Cost per acquisition Product Development Advertising costs Maintaining relationships

Week 7 WEEK 7 - NUDGE Social Networks Customer Acquisition Enrichment (Activities + Trusted relationships Students Travel Websites Customer Retention Travel) Successful partnerships Graduates Event Websites Product Development Customer Acquisition Young Families University Events Relationship with key Merchants partners Enrichment (Travel) Travel Websites Online travelers The customers want diverse nudges We went out of the building to interview 20 people Word of Mouth  People also want to be nudged in other User data Social Media things than just travel Human Capital Relationship with partners  Mobile is the most effective medium to increase engagement Human Capital Cost per acquisition Product Development Advertising costs Maintaining relationships

Week 7 WEEK 7 - NUDGE Social Networks Customer Acquisition Enrichment (Activities + Trusted relationships Students Travel Websites Customer Retention Travel) Successful partnerships Graduates Event Websites Product Development Customer Acquisition Young Families University Events Relationship with key Merchants partners Enrichment (Travel) Travel Websites Online travelers Word of Mouth Social Media User data Human Capital Relationship with partners Human Capital Cost per acquisition Product Development Advertising costs Maintaining relationships

Interviews: 15 Partners: 7 Pilot nudges: 20 1 2 3 4 5 6 7 8Travel Social Ex-pat Safe Travel inspiration - Nudge to enrich lifebooking travel travel travel Social platform thatportal for planning portal to portal for nudges people toMiddle Middle US inspire and enrichEasterns East travelers their life to M.E.

Week 5 Paying partner side NUDGE End-user side Remove Creating NUDGE nudge/nəj/ Social Networks Travel Websites Customer Acquisition Customer Retention Enrichment (Travel) Leads Trusted relationships Successful partnerships Online travelers Travel Websites Product Development Alumni Associations Relationship with key Safety proposition MBA Students verb: Travel agents partners Local knowhow and to push slightly or gently, especially with the elbow, to get someones and the affluent Business Schools content Young Hotels Sourcing deals Community/Group High disposable incomes attention, prod someone into action, etc. Travel Willing to explore noun: a slight or gentle push or jog, especially with the elbow. Word of Mouth Social Media User data Human Capital Relationship with partners Human Capital Leads Product Development Advertising Advertising costs Maintaining relationships Percentage of booking costs Refunds

Week 8 Paying partner side WEEK 8 (FINAL) End-user side Remove Social Networks Customer Acquisition Enrichment (Activities + Trusted relationships Students Travel Websites Customer Retention Travel) Successful partnerships Graduates Event Websites Product Development Customer Acquisition Young Families University Events Relationship with key Merchants partners Travel Websites Word of Mouth User data Social Media Human Capital Relationship with partners Human Capital Cost per acquisition Product Development Advertising costs Maintaining relationships

CUSTOMER ARCHETYPESAshley Clair Alex Age: 26  Age:28  Age:38 Stanford Student  Works at mobile start-up in  Married, 1 child (4 y.o. Clay) Worked in Hollywood San Francisco, originally  Investment professional in Loves Adventures from Montana New York Wants to be nudged  Single & dating  Volunteer coach for son’s relevantly, and inspired!  Plays soccer, runs hockey team marathons  Commutes for work to  Likes to cook/host dinner Manhattan every day with friends when possible  Goes out of town to the country for break once/month with his family

NUDGE TYPESNudges Discoveringfrom friends nudgesas a socialpush OCCURING EVENTS (REALITY) Highest conversion social push serendipity rate nudges EVENTS YOU ARE nudge DESIRE AWARE OF (SUBCONSCIOUS) (CONSCIOUS)

SIMULATED NUDGEWe did a pilot to test how many people sign up for nudge 103 people try the product 42 people left email (41% signup for service rate) “ This is awesome! I love it!! Just told me to walk the dish today! phenomenal “ and stunning all in one shot!! Love the product idea! ” ” “ As long as there is transparency between advertisers, the suggestion database and its users, this is an innovative idea. Otherwise, it is a rather subversive tool for consumer and social trends. An interesting concept either way! ”

SIMULATED NUDGEWe carefully selected people we know to send them tailored nudgesWe sent tailored nudge to 25people with 40% conversion rate  10 people actually like the nudge and go  4 people may take the trip in the future NUDGE: "its 4 months  11 people didn’t respond till you graduate, take your best friend out for a coffee at Coupa, and share some of the good NUDGE: "Visit the Rodin Sculpture Garden times you have had at this week and get inspired. Located next to GSB" the Cantor Arts Center but accessible at all hours, the Rodin Sculpture Garden houses one of the largest collection of Rodin sculptures”

RECOMMENDING PLATFORM Input ModelCrowd-sourcedSocial nudging Computational  Matrix factorizationData mining  CollaborativeSocial networks filteringPast behaviors CuratedGeographyTime Context-basedCustomized userpreference

PARTNERS PartnerGiftsEvent +Activities RevenueUniversity sharingEvents (CPA)RestaurantsTravel

Week 7 DEMAND CREATION Days Views Unique Clicks CTR CPC 3 273,380 120,173 82 0.030% $0.38 Facebook Ad Engage Like CPC Facebook 60 898 46 83 Free Fan Page YouTube 7 370 Video Unique Avg time Bounce rate Website 30 900 430 2:22min 62%

COMPETITIVE LANDSCAPEInspiration Planning Sharing Q&A Community Flash Deal Reminder

INCOME STATEMENT Local beta at California Go global ! Stanford Universities Q2 2012 Q3 2012 Q4 2012 Q1 2013 Q2 2013 Q3 2013 Q4 2013User growth projection 2,000 20,000 50,000 500,000 1,000,000 2,000,000 4,000,000 Q2 2012 Q3 2012 Q4 2012 Q1 2013 Q2 2013 Q3 2013 Q4 2013Revenues Advertising N/A N/A N/A N/A N/A N/A N/A Rev. Share * $10,000 $100,000 $250,000 $2,500,000 $5,000,000 $10,000,000 $20,000,000 Total Revenue $10,000 $100,000 $250,000 $2,500,000 $5,000,000 $10,000,000 $20,000,000Cost of Sales Customer Acquisition $60 $600 $1,500 $15,000 $30,000 $60,000 $120,000 Advertising &Promotions $1,000 $1,000 $1,000 $3,000 $3,000 $3,000 $3,000 Total Cost of Sales $1,060 $1,600 $2,500 $18,000 $33,000 $63,000 $123,000 Gross Profit $8,940 $98,400 $247,500 $2,482,000 $4,967,000 $9,937,000 $19,877,000Expenses Development ** $645,000 $645,000 $645,000 $940,000 $1,115,000 $1,290,000 $1,465,000 Hosting $1,250 $1,250 $1,250 $1,250 $1,250 $1,250 $1,250 Other Wages *** $100,000 $100,000 $100,000 $100,000 $100,000 $100,000 $100,000 Travel $5,000 $5,000 $5,000 $10,000 $10,000 $15,000 $15,000 Office + Utilities $12,000 $12,000 $12,000 $12,000 $12,000 $12,000 $12,000 Total Expenses $763,250 $763,250 $763,250 $1,063,250 $1,238,250 $1,418,250 $1,593,250Net Income ($754,310) ($664,850) ($515,750) $1,418,750 $3,728,750 $8,518,750 $18,283,750

LESSON LEARNED Focus is key – segmentation is important Market sizingis crucial!!!! There is nothing more important than good team environmentand culture Mentorshipis hugely important, we couldn’t have got where we are without our Mentors help We should be open to pivot – even at an earlier stage and trade off: The need to be loyal to our old ideas vs. new innovations that could solve problems based on our customer insights Distilling insights and listening to experiments Looking past ourselves We have a heightened awareness of confirmation bias and try and assuage that in our different experiments

WHAT’S NEXT Incubators

CRITICAL SUCCESS MILESTONES NEXT 6 MONTHS Initiate Cohort Analysis Expand Beta testing to entire Stanford Campus Test Gamificationiteration and Badges Develop machine learning and curation technology and resources to enable scalability Hire key resources (software developer, data scientist, marketing, business development, social animal) and space

Why Do We Do This?

Make Your Lives Extraordinary

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The startup owners manual sxsw

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