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True ventures 072011
 

True ventures 072011

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    True ventures 072011 True ventures 072011 Presentation Transcript

    • Welcome to Customer Development
      Steve Blank
      Stanford - School of Engineering
      U.C. Berkeley - Haas School Of Business
      www.steveblank.com
      Twitter: sgblank
      Slides at: slideshare.net/sblank
    • I Write a Blog
      www.steveblank.com
    • I Drew This
      CustomerDiscovery
      Company
      Building
      CustomerValidation
      Customer Creation
      Pivot
    • I Called It:Customer Development
      CustomerDiscovery
      Company
      Building
      CustomerValidation
      Customer Creation
      Pivot
    • This Talk is Based On
      Business Model Generation
      Four Steps to the Epiphany
      Lean Startup
    • 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
    • The Memo You Never GetThe Transition – Founders Leave
      Scalable
      Startup
      Transition
      Large Company
      Search
      Build
      Execute
      • 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
    • 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
    • I Have a Vision
    • I Know What Needs to Be Done
    • Lets Launch a New Product!
    • Five Ways Founders Fail
    • #1I Know Who The Customer Is
    • #2I Know Exactly the Product They Need
    • #3I Know the Problem They Have
    • #4We Can Fix It After We Ship It All
    • #5
      All I Need to Do is Execute the Plan
    • 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
    • No Business Plan survives first contact with customers
    • Startups Are Not Smaller Versions of Large Companies
    • Startups Are Not Smaller Versions of Large Companies
      Large Companies Execute Known Business Models
    • Startups Are Not Smaller Versions of Large Companies
      Startups Search for Unknown Business Models
    • 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?
      48
    • 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
      51
      images by JAM
    • sketch out your business model
    • sketch out your business models
    • But,Realize They’re Hypotheses
    • 9 Guesses
      Guess
      Guess
      Guess
      Guess
      Guess
      Guess
      Guess
      Guess
      Guess
    • Customer Development
      The founders
      ^
      Get Out of the Building
    • Customer DevelopmentThe Search For the Business Model
      Company
      Building
      CustomerDiscovery
      CustomerValidation
      Customer Creation
      Pivot
    • Customer Discovery
      CustomerDiscovery
      CustomerValidation
      Company
      Building
      CustomerCreation
      Stop selling, start listening
      Test your hypotheses
      Continuous Discovery
      Done by founders
    • 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:
      • Size of Opportunity/Market
      • Validate Business Model
      Test Hypotheses:
      • Pricing Model / Pricing
    • 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:
      • Size of Opportunity/Market
      • Validate Business Model
      Test Hypotheses:
      • Pricing Model / Pricing
    • The Minimum Viable Product (MVP)
      • Smallest feature set that gets you the most …
      - orders, learning, feedback, failure…
    • The Pivot
      • The heart of Customer Development
      • Iteration without crisis
      • Fast, agile and opportunistic
    • Pivot Cycle Time Matters
      • Speed of cycle minimizes cash needs
      • Minimum feature set speeds up cycle time
      • Near instantaneous customer feedback drives feature set
    • The Pivot
      A Pivot is the change of one or more Business Model Canvas Components
    • The Pivot
      Strong clinical data
      Training
      Maintenance
      Conferences
      CME courses
      Product Development
      IP
      Clinical trials
      FDA
      Publishing
      Doctors:
      Earlier detection
      Price
      Accuracy
      Patients:
      Radiation Free
      Non-Invasive
      A Pivot is the change of one or more Business Model Canvas Components
      Leading doctors
      Key Opinion Leaders
      3rd party manufacturers
      Distributors
      Breast Cancer Foundations
      ACOGACS
      OB/GYNs
      PCPs
      Direct Sales to hospitals
      Distributor
      IP
      Leading doctors
      Technical Expertise
      Product Development
      Clinical trials
      Operating Costs
      Marketing Costs
      Capital Equipment Sales and disposable item
      Per use fees
    • How Does This Really Work?Stanford Lean LaunchPad Class
    • How Does This Really Work?Stanford Lean LaunchPad Class
      8 Weeks From an Idea to a Business
    • Pivot ExampleRobotic Weeding
      Talked 75 Customers in 8 Weeks
    • Our initial plan
      Confidential
    • 20 interviews, 6 site visits…We got OUR Boots dirty
      Weeding
      Visited two farms in Salinas Valley to better understand problem
      Interviewed:
      • Bolthouse Farms, Large Agri-Industry in Bakersfield
      • White Farms, Large Peanut farmer in Georgia
      • REFCO Farms, large grower in Salinas Valley
      • Rincon Farms, large grower in Salinas Valley
      • Small Organic Corn/Soy grower in Nebraska
      • Heirloom Organics, small owner/operator, Santa Cruz Mts
      • Two small organic farmers at farmers market
      • Ag Services of Salinas, Fertilizer applicator
      Mowing
      Interviewed:
      • Golf: Stanford Golf course
      • Parks: Stanford Grounds Supervisor, head of maintenance and lead operator (has crew of 6)
      • Toro dealer (large mower manufacturer)
      • User of back-yard mowing system
      • Maintenance Services for City of Los Altos
      • Colony Landscaping (Mowing service for stadiums)
    • Business Plan Autonomous Vehicles for Mowing & Weeding
      Dealers sell, installs and supports customer
      Co. trains dealers, supports dealers
      - Innovation
      - Customer Education
      - Dealer training
      Mowing
      - Owners of public or commercially used green spaces (e.g. golf courses)
      - Landscaping service provider
      Weeding
      - Farmers with manual weeding operations
      We reduce operating cost
      - Labor reduction
      - Better utilization of assets (eg mow or weed at nights)
      - Improved performance (less rework, food safety)
      - Dealers (Mowing and Ag)
      - Vehicle OEMs (John Deere, Toro, Jacobsen, etc)
      - Research labs
      - Mowing Dealers
      - Ag Dealers
      Engineers on Autonomous vehicles, GPS, path-planning
      Asset sale
      Our revenue stream derives from selling the equipment
      Dealer discount
      COGS seek a 50-60% Gross Margin
      Heavy R&D investment
    • Found weeding in organic crops is HUGE problem; 50 - 75% of costs
      Crews of 100s-1000
      Back-breaking task
      (Ilegal) labor harder to get
      1-5 weedings per year/field
      $250-3,500 per acre and increasing
      Food contamination risk
    • Decision to make – mowing vs weeding
    • Autonomous vehiclesWEEDING
      Dealers sell, installs and supports customer
      Co. trains dealers, supports dealers
      - Innovation
      - Customer Education
      - Dealer training
      - Low density vegetable growers
      - High density vegetable growers
      - Thinning operations
      - Conventional vegetables
      We reduce operating cost
      - Labor reduction (100 to 1)
      - Reduced risk of contamination
      - Mitigate labor availability concerns
      - Ag Dealers
      - Ag Service providers
      - Research labs
      - Ag Dealers
      - Ag Service providers
      Engineers on Machine Vision
      Two problems:
      - Identification
      - Elimination
      Asset sale
      Our revenue stream derives from selling the equipment
      Dealer discount
      COGS seek a 50-60% Gross Margin
      Heavy R&D investment
    • 1 Week – 1 CarrotBot
      Confidential
    • CarrotBot
      Machine Vision data collection platform
      Monochrome & Color Cameras
      Laser-line sweep (depth measurement)
      Encoders (position/velocity)
      Onboard data acquisition & power
      CarrotBot 1.0
    • The Business Plan Canvas Updated
      • Farming conventions.
      • Demo, demo, and demo!!
      • Proximity is paramount
      • Technology Design
      • Marketing
      • Demo and customer feedback
      • Organic Farmers
      • Weeding Service Providers
      • Conventional Farmers
      • Cost Reduction
      • Remove labor force pains
      • Eliminate bio-waste hazards
      • Research Labs
      • Equipment Manufacturers
      • Distribution Network
      • Service Providers
      • IP – Patents
      • Video Classifier Files
      • Robust Technology
      • Dealers
      • Direct Service
      • Indirect Service
      • … then Dealers
      • Asset Sale
      • Direct Service with equipment rental
      • … then Asset Sale
      Value-Driven
    • Visit Highlights
      Above: Organic Carrots, 7wks.
      Top right: Conventional carrots
      Bottom Right: Very weedy. Will require multiple passes of hand weeding
    • Visit Highlights
      Carrot vs. Weeds
      Due to small root systems, carrots have no chance against weeds
    • Visit Highlights
      Organic Broccoli, closely cultivated. Weeds close to plants are hand-picked
    • Visit Highlights
      State of the Art in Weeding Technology for Organic Crops
    • Customer Hypothesis
      Pre-Test
      Hypothesis Confirmed
      • Growers interested in own equipment
      • Industrial (10,000s of acres)
      • Large (1,000s of acres)
      • Willing to pay $100k for one unit
      • Smaller growers (100s of acres) usually subcontract the labor services or rent equipment
      • All purchases through local dealers
      • Customer service is essential
      Post-Test
    • Customer Map #1 – Industrial Growers
      Example: Bolthouse Farms – Large Industrial Carrot Producer – 8K acres/yr
      • Equipment Operator
      • Local Farm Mgr
      • Cliff Kirkpatrick, visited
      • Director, Ag Technology
      • Justin Grove, interviewed
      Equipment Operator
      • VP, Growing Operations
      • CFO, CEO (Jeff Dunn)
      Cliff, Farm Mgr
    • Customer Map #2 – Service Providers
      Example: Ag Services – Service Provider, Salinas Valley
      • Equipment Operator
      • Grower
      • Service Mgr
      Me (left), Marty (middle, Service Mgr), Doug (right, Grower)
      • ?? (service mgr’s boss)
    • The Business Plan Canvas Updated
      • Farming conventions.
      • Demo, demo, and demo!!
      • Proximity is paramount
      • Technology Design
      • Marketing
      • Demo and customer feedback
      • Mid/Large Organic Farmers
      • Agricultural corporations
      • Weeding Service Providers
      • Mid/Large Conventional Farmers
      • Cost Reduction
      • Remove labor force pains
      • Eliminate bio-waste hazards
      • Research Labs
      • Equipment Manufacturers
      • Distribution Network
      • Service Providers
      • IP – Patents
      • Video Classifier Files
      • Robust Technology
      • Direct Service
      • Indirect Service
      • … then Dealers
      • Direct Service with equipment rental
      • ($1,500/d; 120d/yr )
      • Low density: $1,500/d
      • High density: $6,000/d
      Value-Driven
    • World Ag Expo interviews:the need is real and wide spread
      10+ interviews at show
      Everyone confirmed the need
      Robocrop, UK based, crude competitor sells for $171 K
      Revenue Stream
      Mid to small growers prefer a service
      Large growers prefer to buy, but OK with service until technology is proven
      Charging for labor cost saved is OK, as we provide other benefits (food safety, labor availability)
      Confidential
    • The Business Plan Canvas Updated
      • Farming conventions.
      • Demo, demo, and demo!!
      • Proximity is paramount
      • Technology Design
      • Marketing
      • Demo and customer feedback
      • Mid/Large Organic Farmers
      • Agricultural corporations
      • Weeding Service Providers
      • Mid/Large Conventional Farmers
      • Research Labs
      • Equipment Manufacturer
      • Distribution Network
      • Service Providers
      • 2 or 3 Key Farms
      • Cost Reduction
      • Remove labor force pains
      • Eliminate bio-waste hazards
      • IP – Patents
      • Video Classifier Files
      • Robust Technology
      • Direct Service
      • Indirect Service
      • … then Dealers
      • Direct Service with equipment rental
      • Low density: $1,500/d
      • High density: $6,000/d
      Value-Driven
      • R&D
      • Bill of Materials
      • Training & Service
      • Sales
    • Autonomous weeding - Final
      Direct
      - Provide high quality service at competitive price
      - Innovation
      - Customer Education
      - Dealer training
      - Low density vegetable growers
      - High density vegetable growers
      - Thinning operations
      - Conventional vegetables
      We reduce operating cost
      - Labor reduction (100 to 1)
      - Reduced risk of contamination
      - Mitigate labor availability concerns
      - Ag Service providers
      - Research Institutes (eg UC Davis, Laser Zentrum Hannover)
      - 3-4 key farms
      Direct
      - Alliance with service providers
      - Eventually sell through dealers
      Engineers on Machine Vision
      Two problems:
      - Identification
      - Elimination
      Service provision
      - Charge by the acre with modifier according to weed density
      - Eventually move to asset sale
      Costs for service provision
      COGS seek a 50-60% Gross Margin
      Heavy R&D investment
    • MammOptics
      Final project presentation for E 245 Winter 2011
    • Project Overview
      Initial industry guesses and customer hypothesis
    • MammOptics
      Initial Idea
      Breast cancer
      Mammography
      Leading cause of cancer in women
      190,000 diagnosis every year US
      41,000 deaths every year US
      Increasing diagnosis rates
      15%-25% false negatives rate
      25% false positives rate
      Requires X-ray radiation
      Low resolution
      MammOptics
      Novel technology based on RF-modulated optical spectroscopy
      • Earlier detection
      • Non-radiative
      • Non-invasive
    • MammOptics
      Technology Comparison
      I.I.T.Y.I.W.H.T.K.Y
    • MammOptics
      Business Model Canvas 1 of 4
      Strong clinical data
      Training
      Maintenance
      Product Development
      IP
      Clinical trials
      FDA
      Hospitals
      Leading doctors
      3rd party manufacturers
      Distributors
      Pioneering radiologists in
      hospitals
      Radiation-free
      Earlier detection
      Non-invasive
      IP
      Leading doctors
      Technical Expertise
      Direct sales to hospitals
      Product Development
      Clinical trials
      Operating Costs
      Capital equipment sales and disposable item
    • MammOptics
      MammOptics
      Business Model Canvas 1 of 4
      Business Model Canvas 1 of 4
      Strong clinical data
      Training
      Maintenance
      Product Development
      IP
      Clinical trials
      FDA
      Initial guess
      Initial guess
      Hospitals
      Leading doctors
      3rd party manufacturers
      Distributors
      Pioneering radiologists in
      hospitals
      Radiation-free
      Earlier detection
      Non-invasive
      Test:
      Customer segment
      Value proposition
      Initial guess
      IP
      Leading doctors
      Technical Expertise
      Direct sales to hospitals
      Product Development
      Clinical trials
      Operating Costs
      Initial guess
      Capital equipment sales and disposable item
    • Finding the right customer
      From radiologists to gynecologists
    • MammOptics
      Excursions into hospitals
      Debra Ikeda
      Jason Davies
      Jafi Alissa Lipson
      Sunita Pal
      Leading doctors
      6 women >40
      8 women <40
      Patients
      Alicia X-ray mammography
      Technicians
      Hospital Managers
      Paul Billings
      Holly V. Gautier
    • MammOptics
      Hospital purchasing decision tree
    • MammOptics
      Hospital purchasing decision tree
      Hospitals
      Complex purchasing decision tree. Several saboteours
    • MammOptics
      Private practice purchasing decision tree
    • MammOptics
      Private practice purchasing decision tree
      Private practice
      Faster adoption rate
      Attractive value proposition

    • MammOptics
      Business Model Canvas 2 of 4
      Strong clinical data
      Training
      Maintenance
      Product Development
      IP
      Clinical trials
      FDA
      Doctors:
      Earlier detection
      Price
      Accuracy
      Patients:
      Radiation Free
      Non-Invasive
      Hospitals (Capital Spending Committee)
      Leading doctors
      3rd party manufacturers
      Distributors
      Research Hospitals
      Pioneering Doctors
      Hospitals
      OB/GYNs
      PCPs
      Direct Sales to doctors
      IP
      Leading doctors
      Technical Expertise
      Product Development
      Clinical trials
      Operating Costs
      Capital Equipment Sales and disposable item
    • MammOptics
      Business Model Canvas 2 of 4
      Strong clinical data
      Training
      Maintenance
      Product Development
      IP
      Clinical trials
      FDA
      Doctors:
      Earlier detection
      Price
      Accuracy
      Patients:
      Radiation Free
      Non-Invasive
      Hospitals (Capital Spending Committee)
      Leading doctors
      3rd party manufacturers
      Distributors
      Research Hospitals
      Pioneering Doctors
      Hospitals
      OB/GYNs
      PCPs
      How do we get to our customer?
      Need sensitivity and specificity
      Direct Sales to doctors
      IP
      Leading doctors
      Technical Expertise
      Product Development
      Clinical trials
      Operating Costs
      Capital Equipment Sales and disposable item
    • Getting to our customer
      The world of direct sales and medical marketing
    • MammOptics
      Interviews
      Breast Cancer Advocacy Groups
      Be Bright Pink
      Jennifer Glover
      Dr. Cindy Woo
      Dr. Jags Powers
      Dr. Aaron Shuvkan
      OB/GYNs
      Katrina Bell
      Tanay Dudhela
      Jed Hwang
      Medical Sales
      FDA/Clinical Trials
      Phyllis Whitely
      Carl Simpson
    • MammOptics
      Marketing
    • MammOptics
      Marketing
      Strong influence on doctors via ACOG Standard of Care
      Strongly influenced by KOLs
      Access to ACOG by former member
    • MammOptics
      Marketing
      Researchers with strong peer recommendations
      Researchers conducting important clinical trials
      Outsourced survey research
      Researchers with numerous publications
    • MammOptics
      Marketing
      Focus on prominent journals
      Need two big publications
      Choose KOL as Principal Investigators (PI)
    • MammOptics
      Marketing
      Effective method for educating doctors
      Workshop must be approved by ACOG
      Doctors required to attend workshops
      Taught by objective medical experts
    • MammOptics
      Marketing
      ACOG Annual Clinical Meeting
      Opportunity for feedback from doctors
      Miami Breast Cancer Conference
    • MammOptics
      Marketing
      Trusted information source for patients
      Access to media outlets
      Critical opinion leader for technology adoption
    • MammOptics
      Channel Strategies and Costs
      Individual
      Doctors
      High value medical products
      (e.g. cardiovascular stents)
      Direct Sales
      • Doctor education
      • Direct feedback from doctors
      • Very expensive
      Individual Doctors
      Purchasing Administrators
      Purchasing Administrators
      Commodity medical products
      (e.g. latex gloves)
      Distributors
      • No doctor education
      • No customer feedback
      • Inexpensive
    • MammOptics
      Channel Strategies and Costs
      Sales strategy 1
      Sales strategy 2
      5 dedicated sales people
      $150,000 each/year
      Hire nurses or technicians
      with established
      relationships
      Early adopter feedback
      Continue with core group of sales people
      Use women’s healthcare equipment distributor
      Already established network of customers
    • MammOptics
      Pricing Strategy
      Equipment
      Lease model
      Per-use model
      Consumable
      Cost of the device
      $50,000
      $5,000
      $5,000
      $25,000
      Service per year
      $3,000
      $10,000
      0
      0
      Per-use fee
      0
      0
      $50
      0
      Consumable
      0
      0
      0
      $20
    • MammOptics
      Pricing Strategy
      Approved by customers and investors
      Equipment
      Lease model
      Per-use model
      Consumable
      Cost of the device
      $50,000
      $5,000
      $5,000
      $25,000
      Service per year
      $3,000
      $10,000
      0
      0
      Per-use fee
      0
      0
      $50
      0
      Consumable
      0
      0
      0
      $20
    • MammOptics
      Customer Workflow
      Current market
      Insurance
      Mammography
      Radiologist
      Hospital Administration
      Technician
      ACOG
      ACS
      Doctor specialty committee
    • MammOptics
      Customer Workflow
      Current market
      But what would happen if we replace mammography?
      Insurance
      Mammography
      Radiologist
      Hospital Administration
      Technician
      ACOG
      ACS
      Doctor specialty committee
    • MammOptics
      Customer Workflow
      Insurance
      Mammography
      Radiologist
      Breast Radiologists
      Hospitals
      Technicians
      Loss of jobs
      Eliminates loss leader
      Puts emphasis on biopsies
      Loss of jobs
      Hospital Administration
      Technician
      ACOG
      ACS
      Doctor specialty committee
    • MammOptics
      Customer Workflow
      Insurance
      Mammography
      Radiologist
      Hospital Administration
      Technician
      ACOG
      ACS
      Doctor specialty committee
    • MammOptics
      Customer Workflow
      Insurance
      Mammography
      Radiologist
      Insurance
      ACOG/ACS
      Same cost as mammography ($140)
      Reduced number of biopsies ($1000)
      Improved healthcare
      (mammography weak technique)
      Hospital Administration
      Technician
      ACOG
      ACS
      Doctor specialty committee
    • MammOptics
      Customer Workflow
      Insurance
      Mammography
      Radiologist
      Hospital Administration
      Technician
      ACOG
      ACS
      Doctor specialty committee
    • MammOptics
      Customer Workflow
      Insurance
      PCP
      OB/GYN
      Mammography
      Patient
      Radiologist
      Hospital Administration
      Technician
      MammOptics
      Doctor specialty committee
      ACOG
      ACS
    • MammOptics
      Customer Workflow
      Insurance
      PCP
      OB/GYN
      PCP
      OB/GYN
      Mammography
      Mammography
      Patient
      Patient
      Radiologist
      Radiologist
      PCP OB/GYNs
      Patient
      MammOptics
      Increased revenue
      More complete patient care
      Improved healthcare
      Comfort
      Revenue
      Hospital Administration
      Technician
      Hospital Administration
      Technician
      MammOptics
      MammOptics
      Doctor specialty committee
      ACOG
      ACS
    • MammOptics
      Customer Workflow
      Insurance
      PCP
      OB/GYN
      Mammography
      Patient
      Radiologist
      Hospital Administration
      Technician
      MammOptics
      ACOG
      ACS
      Doctor specialty committee
    • MammOptics
      Business Model Canvas 3 of 4
      Strong clinical data
      Training
      Maintenance
      Conferences
      CME courses
      Product Development
      IP
      Clinical trials
      FDA
      Publishing
      Doctors:
      Earlier detection
      Price
      Accuracy
      Patients:
      Radiation Free
      Non-Invasive
      Leading doctors
      Key Opinion Leaders
      3rd party manufacturers
      Distributors
      Breast Cancer Foundations
      ACOGACS
      OB/GYNs
      PCPs
      Direct Sales to hospitals
      Distributor
      IP
      Leading doctors
      Technical Expertise
      Product Development
      Clinical trials
      Operating Costs
      Marketing Costs
      Capital Equipment Sales and disposable item
      Per use fees
    • MammOptics
      Business Model Canvas 3 of 4
      Strong clinical data
      Training
      Maintenance
      Conferences
      CME courses
      Product Development
      IP
      Clinical trials
      FDA
      ReimbursementPublishing
      Doctors:
      Earlier detection
      Price
      Accuracy
      Patients:
      Radiation Free
      Non-Invasive
      Leading doctors
      Key Opinion Leaders
      3rd party manufacturers
      Distributors
      Breast Cancer Foundations
      ACOGACS
      OB/GYNs
      PCPs
      Learned how to reach the customer
      How do we build a company based on this?
      Direct Sales to hospitals
      Distributor
      IP
      Leading doctors
      Technical Expertise
      Product Development
      Clinical trials
      Operating Costs
      Marketing Costs
      Capital Equipment Sales and disposable item
      Per use fees
    • Building the company
      The backstage of a medical device company
    • MammOptics
      Interviews
      Stanford StatisticsSteve Axelrod
      Marga Ortigas-Wedekind
      FDA Clinical Trials
      Nick Mourlas
      Don Archambault
      Manufacturing
      Shannon Bergstedt
      Ali Habib
      Reimbursement
      Venture Capitalists
      Dana Mead
      Bill Starling
      Doctors/Sales
      Dr. Aron Shuftan
      Jed Hwang
      Michael J. Nohr
    • MammOptics
      Partners
      Manufacturing
      Choose manufacturing facility close to home
    • DSP
      RFIC
      Photo probe
      Disposable head
      MammOptics
      Manufacturing Partner
      I.I.T.Y.I.W.H.T.K.Y
      9 Inches
      ~5 lbs
      75% gross margin
      Discounts for Revenue Model
      COGS
      $4-5k per unit
    • MammOptics
      Technology
      I.I.T.Y.I.W.H.T.K.Y
    • MammOptics
      MammOptics
      Partners
      Partners
      Manufacturing
      Reimbursement
      Manufacturing
      Difficult to get coverage for new product.
    • MammOptics
      Reimbursement Partners
      Insurances
      CPT Codes
      $75-$150
    • MammOptics
      Partners
      Manufacturing
      Reimbursement
      510K vs. PMA
      Largest cost
      Biggest financial risk
      FDA Clinical Trials
    • MammOptics
      Clinical Trials
      Stage 1
      Pilot trials
      Feasibility
      Comparison with mammography
      50 patients
      $600K
      6 months
      12/4/2009
    • MammOptics
      Clinical Trials
      Stage 2
      Interim trials
      Prove superior safety-efficacy & sensitivity
      Stage 1
      Pilot trials
      500 patients
      $7.2M
      6 months
      15 months
      12/4/2009
    • MammOptics
      Clinical Trials
      Stage 2
      Interim trials
      Stage 3
      FDA pivotal trials
      Stage 1
      Pilot trials
      FDA class II, 510(K) w/ trials
      Focus on superiority & economic end-points
      1500 patients
      $20.5M
      6 months
      15 months
      24 months
      12/4/2009
    • MammOptics
      Clinical Trials
      Stage 4
      Post-market studies
      Stage 2
      Interim trials
      2000 patients
      $26.8M
      Stage 3
      FDA pivotal trials
      Stage 1
      Pilot trials
      Specific Cat III CPT/ACP Codes
      Market traction
      6 months
      15 months
      24 months
      24 months
      12/4/2009
    • MammOptics
      Clinical Trials
      Stage 4
      Post-market studies
      Stage 2
      Interim trials
      $26.8M
      Stage 3
      FDA pivotal trials
      Stage 1
      Pilot trials
      $7.2M
      $600K
      $20.5M
      6 months
      15 months
      24 months
      24 months
      12/4/2009
    • MammOptics
      Clinical Trials
      12/4/2009
    • MammOptics
      MammOptics
      Partners
      Partners
      Manufacturing
      Reimbursement
      Financial timeline
      Funding
      FDA Clinical Trials
    • MammOptics
      MammOptics
      Financial / Operations Timeline
      2016
      2012
      2013
      2014
      2015
      2017
      2018
      M&A / IPO $50 MM
      Q1
      Q2
      Q3
      Q4
      Q1
      Q2
      Q3
      Q4
      Q1
      Q2
      Q3
      Q4
      Q1
      Q2
      Q3
      Q4
      Q1
      Q2
      Q3
      Q4
      Q1
      Q2
      Q1
      Q2
      Q3
      Q4
      Q3
      Series D $35 MM
      $40M
      Series C $30.5 MM
      $30M
      $20M
      Cash Reserve
      Series B $9 MM
      $15M
      Series A $3.5 MM
      $10M
      $5M
      Financial timeline
      System
      Initialize
      Launch
      Regulatory / Clinical
      Marketable Product
      Proof of Concept
      Second Release
      Beta Prototype
      Design Milestones
      1st Release Test
      2nd Release Test
      Beta-Version Testing
      Laboratory Prototype
      Publication
      Publication
      Clinical Results
      Post-Market Clinical Studies
      Pilot Studies
      US Pivotal Clinical Trials
      Clinical Milestones
      US Interim Trials
      Non-Specific Codes
      Provisional Patent
      IRB / IDE
      Specific Codes
      (Cat. I CPT / APC)
      Cat III CPT
      FDA – Class II – 510 (k) with Clinical Trials
      Regulatory/ IP Milestones
      Application and System Patents
      Initial Product Launch
      IC and Processing Patents
      Technology Licensing
      145
      12/4/2009
    • MammOptics
      MammOptics
      Financial / Operations Timeline
      2016
      2012
      2013
      2014
      2015
      2017
      2018
      Q1
      Q2
      Q3
      Q4
      Q1
      Q2
      Q3
      Q4
      Q1
      Q2
      Q3
      Q4
      Q1
      Q2
      Q3
      Q4
      Q1
      Q2
      Q3
      Q4
      Q1
      Q2
      Q1
      Q2
      Q3
      Q4
      Q3
      $40M
      $30M
      $20M
      Cash Reserve
      $15M
      $10M
      $5M
      Initialize
      Proof of Concept
      Design Milestones
      Clinical Milestones
      Provisional Patent
      Regulatory/ IP Milestones
      Technology Licensing
      146
      12/4/2009
    • MammOptics
      MammOptics
      Financial / Operations Timeline
      2016
      2012
      2013
      2014
      2015
      2017
      2018
      Q1
      Q2
      Q3
      Q4
      Q1
      Q2
      Q3
      Q4
      Q1
      Q2
      Q3
      Q4
      Q1
      Q2
      Q3
      Q4
      Q1
      Q2
      Q3
      Q4
      Q1
      Q2
      Q1
      Q2
      Q3
      Q4
      Q3
      $40M
      $30M
      $20M
      Cash Reserve
      $15M
      Series A $3.5 MM
      $10M
      $5M
      System
      Initialize
      Proof of Concept
      Beta Prototype
      Design Milestones
      Beta-Version Testing
      Laboratory Prototype
      Pilot Studies
      Clinical Milestones
      Provisional Patent
      Regulatory/ IP Milestones
      Technology Licensing
      147
      12/4/2009
    • MammOptics
      MammOptics
      Financial / Operations Timeline
      2016
      2012
      2013
      2014
      2015
      2017
      2018
      Q1
      Q2
      Q3
      Q4
      Q1
      Q2
      Q3
      Q4
      Q1
      Q2
      Q3
      Q4
      Q1
      Q2
      Q3
      Q4
      Q1
      Q2
      Q3
      Q4
      Q1
      Q2
      Q1
      Q2
      Q3
      Q4
      Q3
      $40M
      $30M
      $20M
      Cash Reserve
      Series B $9 MM
      $15M
      Series A $3.5 MM
      $10M
      $5M
      System
      Regulatory / Clinical
      Marketable Product
      Beta Prototype
      Design Milestones
      Beta-Version Testing
      Laboratory Prototype
      Pilot Studies
      Clinical Milestones
      IRB / IDE
      Regulatory/ IP Milestones
      Application and System Patents
      IC and Processing Patents
      148
      12/4/2009
    • MammOptics
      MammOptics
      Financial / Operations Timeline
      2016
      2012
      2013
      2014
      2015
      2017
      2018
      Q1
      Q2
      Q3
      Q4
      Q1
      Q2
      Q3
      Q4
      Q1
      Q2
      Q3
      Q4
      Q1
      Q2
      Q3
      Q4
      Q1
      Q2
      Q3
      Q4
      Q1
      Q2
      Q1
      Q2
      Q3
      Q4
      Q3
      $40M
      Series C $30.5 MM
      $30M
      $20M
      Cash Reserve
      Series B $9 MM
      $15M
      $10M
      $5M
      System
      Regulatory / Clinical
      Second Release
      Design Milestones
      1st Release Test
      Publication
      Pilot Studies
      US Pivotal Clinical Trials
      Clinical Milestones
      US Interim Trials
      IRB / IDE
      Cat III CPT
      Regulatory/ IP Milestones
      Application and System Patents
      IC and Processing Patents
      149
    • MammOptics
      MammOptics
      Financial / Operations Timeline
      2016
      2012
      2013
      2014
      2015
      2017
      2018
      Q1
      Q2
      Q3
      Q4
      Q1
      Q2
      Q3
      Q4
      Q1
      Q2
      Q3
      Q4
      Q1
      Q2
      Q3
      Q4
      Q1
      Q2
      Q3
      Q4
      Q1
      Q2
      Q1
      Q2
      Q3
      Q4
      Q3
      Series D $35 MM
      $40M
      Series C $30.5 MM
      $30M
      $20M
      Cash Reserve
      $15M
      $10M
      $5M
      Launch
      Regulatory / Clinical
      Second Release
      Design Milestones
      2nd Release Test
      Publication
      Publication
      Clinical Results
      US Pivotal Clinical Trials
      Clinical Milestones
      US Interim Trials
      Non-Specific Codes
      FDA – Class II – 510 (k) with Clinical Trials
      Regulatory/ IP Milestones
      Initial Product Launch
      150
      12/4/2009
    • MammOptics
      MammOptics
      Financial / Operations Timeline
      2016
      2012
      2013
      2014
      2015
      2017
      2018
      M&A / IPO $50 MM
      Q1
      Q2
      Q3
      Q4
      Q1
      Q2
      Q3
      Q4
      Q1
      Q2
      Q3
      Q4
      Q1
      Q2
      Q3
      Q4
      Q1
      Q2
      Q3
      Q4
      Q1
      Q2
      Q1
      Q2
      Q3
      Q4
      Q3
      Series D $35 MM
      $40M
      $30M
      $20M
      Cash Reserve
      $15M
      $10M
      $5M
      Launch
      Regulatory / Clinical
      Design Milestones
      Publication
      Post-Market Clinical Studies
      Clinical Results
      Clinical Milestones
      Non-Specific Codes
      Specific Codes
      (Cat. I CPT / APC)
      FDA – Class II – 510 (k) with Clinical Trials
      Regulatory/ IP Milestones
      Initial Product Launch
      12/4/2009
    • MammOptics
      MammOptics
      Financial / Operations Timeline
      2016
      2012
      2013
      2014
      2015
      2017
      2018
      M&A / IPO $50 MM
      Q1
      Q2
      Q3
      Q4
      Q1
      Q2
      Q3
      Q4
      Q1
      Q2
      Q3
      Q4
      Q1
      Q2
      Q3
      Q4
      Q1
      Q2
      Q3
      Q4
      Q1
      Q2
      Q1
      Q2
      Q3
      Q4
      Q3
      Series D $35 MM
      $40M
      Series C $30.5 MM
      $30M
      $20M
      Cash Reserve
      Series B $9 MM
      $15M
      Series A $3.5 MM
      $10M
      $5M
      System
      Initialize
      Launch
      Regulatory / Clinical
      Marketable Product
      Proof of Concept
      Second Release
      Beta Prototype
      Design Milestones
      1st Release Test
      Beta-Version Testing
      2nd Release Test
      Laboratory Prototype
      Publication
      Publication
      Post-Market Clinical Studies
      Clinical Results
      Pilot Studies
      US Pivotal Clinical Trials
      Clinical Milestones
      US Interim Trials
      Non-Specific Codes
      Provisional Patent
      IRB / IDE
      Specific Codes
      (Cat. I CPT / APC)
      Cat III CPT
      FDA – Class II – 510 (k) with Clinical Trials
      Regulatory/ IP Milestones
      Application and System Patents
      Initial Product Launch
      IC and Processing Patents
      Technology Licensing
      152
      12/4/2009
    • MammOptics
      Business Model Canvas 4 of 4
      Strong clinical data
      Training
      Maintenance
      Conferences
      CME courses
      Product Development
      IP
      Clinical trials
      FDA
      Reimbursement Publishing
      Doctors:
      Earlier detection
      Price
      Accuracy
      Immediate Results
      Patients:
      Radiation Free
      Non-Invasive
      KOLs
      3rd party manufacturers
      Distributors
      Breast Cancer Foundations
      ACOGACS
      Clinical trial designer
      OB/GYNs
      PCPs
      Direct Sales to hospitals
      Distributor
      Online
      IP
      Leading doctors
      Technical Expertise
      Product Development
      Clinical trials
      Operating Costs
      Marketing Costs
      Per use fees
    • MammOptics
      Business Model Canvas 4 of 4
      Strong clinical data
      Training
      Maintenance
      Conferences
      CME courses
      Product Development
      IP
      Clinical trials
      FDA
      Reimbursement Publishing
      KOLs
      3rd party manufacturers
      Breast Cancer Foundations
      ACOGACS
      Clinical trial designer
      Earlier detection
      Non invasive
      Price
      Accuracy
      Immediate Results
      OB/GYNs
      PCPs
      Final iteration of our business model
      But… need to think about the big picture…
      Direct Sales to hospitals
      Distributor
      Online
      IP
      Leading doctors
      Technical Expertise
      Product Development
      Clinical trials
      Operating Costs
      Marketing Costs
      Per use fees
    • MammOptics
      Business Model Canvas 1
      Strong clinical data
      Training
      Maintenance
      Product Development
      IP
      Clinical trials
      FDA
      Hospitals
      Leading doctors
      3rd party manufacturers
      Distributors
      Radiation-free
      Earlier detection
      Non invasive
      Pioneering Doctors
      Hospitals
      Direct Sales to hospitals
      IP
      Leading doctors
      Technical Expertise
      Product Development
      Clinical trials
      Operating Costs
      Capital Equipment Sales and disposable item
    • MammOptics
      Business Model Canvas 2
      Strong clinical data
      Training
      Maintenance
      Product Development
      IP
      Clinical trials
      FDA
      Hospitals
      Leading doctors
      3rd party manufacturers
      Distributors
      Research Hospitals
      Radiation-free
      Earlier detection
      Non invasive
      Pioneering Doctors
      Hospitals
      Direct Sales to hospitals
      IP
      Leading doctors
      Technical Expertise
      Product Development
      Clinical trials
      Operating Costs
      Capital Equipment Sales and disposable item
    • MammOptics
      Business Model Canvas 3
      Strong clinical data
      Training
      Maintenance
      Product Development
      IP
      Clinical trials
      FDA
      Doctors:
      Earlier detection
      Price
      Accuracy
      Patients:
      Radiation Free
      Non-Invasive
      Hospitals (Capital Spending Committee)
      Leading doctors
      3rd party manufacturers
      Distributors
      Research Hospitals
      Pioneering Doctors
      Hospitals
      Direct Sales to hospitals
      IP
      Leading doctors
      Technical Expertise
      Product Development
      Clinical trials
      Operating Costs
      Capital Equipment Sales and disposable item
    • MammOptics
      Business Model Canvas 4
      Strong clinical data
      Training
      Maintenance
      Product Development
      IP
      Clinical trials
      FDA
      Doctors:
      Earlier detection
      Price
      Accuracy
      Immediate Results
      Patients:
      Radiation Free
      Non-Invasive
      Hospitals (Capital Spending Committee)
      Leading doctors
      3rd party manufacturers
      Distributors
      Research Hospitals
      Breast Cancer Foundations
      Pioneering Doctors
      Hospitals
      OB/GYNs
      PCPs
      Direct Sales to hospitals
      IP
      Leading doctors
      Technical Expertise
      Product Development
      Clinical trials
      Operating Costs
      Capital Equipment Sales and disposable item
    • MammOptics
      Business Model Canvas 5
      Strong clinical data
      Training
      Maintenance
      Conferences
      CME courses
      Product Development
      IP
      Clinical trials
      FDA
      ReimbursementPublishing
      Doctors:
      Earlier detection
      Price
      Accuracy
      Patients:
      Radiation Free
      Non-Invasive
      Leading doctors
      Key Opinion Leaders
      3rd party manufacturers
      Distributors
      Breast Cancer Foundations
      ACOGACS
      OB/GYNs
      PCPs
      Direct Sales to hospitals
      Distributor
      IP
      Leading doctors
      Technical Expertise
      Product Development
      Clinical trials
      Operating Costs
      Marketing Costs
      Capital Equipment Sales and disposable item
    • MammOptics
      Business Model Canvas 6
      Strong clinical data
      Training
      Maintenance
      Conferences
      CME courses
      Product Development
      IP
      Clinical trials
      FDA
      Reimbursement Publishing
      Doctors:
      Earlier detection
      Price
      Accuracy
      Immediate Results
      Patients:
      Radiation Free
      Non-Invasive
      KOLs
      3rd party manufacturers
      Distributors
      Breast Cancer Foundations
      ACOGACS
      OB/GYNs
      PCPs
      Direct Sales to hospitals
      Distributor
      IP
      Leading doctors
      Technical Expertise
      Product Development
      Clinical trials
      Operating Costs
      Marketing Costs
      Capital Equipment Sales and disposable item
      Per use fees
    • MammOptics
      Business Model Canvas 7
      Strong clinical data
      Training
      Maintenance
      Conferences
      CME courses
      Product Development
      IP
      Clinical trials
      FDA
      Reimbursement Publishing
      Doctors:
      Earlier detection
      Price
      Accuracy
      Immediate Results
      Patients:
      Radiation Free
      Non-Invasive
      KOLs
      3rd party manufacturers
      Distributors
      Breast Cancer Foundations
      ACOGACS
      Clinical trial designer
      OB/GYNs
      PCPs
      Direct Sales to hospitals
      Distributor
      IP
      Leading doctors
      Technical Expertise
      Product Development
      Clinical trials
      Operating Costs
      Marketing Costs
      Per use fees
    • MammOptics
      Business Model Canvas 8
      Strong clinical data
      Training
      Maintenance
      Conferences
      CME courses
      Product Development
      IP
      Clinical trials
      FDA
      Reimbursement Publishing
      Doctors:
      Earlier detection
      Price
      Accuracy
      Immediate Results
      Patients:
      Radiation Free
      Non-Invasive
      KOLs
      3rd party manufacturers
      (local)
      Breast Cancer Foundations
      ACOGACS
      Clinical trial designer
      OB/GYNs
      PCPs
      Direct Sales to hospitals
      Distributor
      IP
      Leading doctors
      Technical Expertise
      Product Development
      Clinical trials
      Operating Costs
      Marketing Costs
      Per use fees
    • MammOptics
      Business Model Canvas 9
      Strong clinical data
      Training
      Maintenance
      Conferences
      CME courses
      Product Development
      IP
      Clinical trials
      FDA
      Reimbursement Publishing
      Doctors:
      Earlier detection
      Price
      Accuracy
      Immediate Results
      Patients:
      Radiation Free
      Non-Invasive
      KOLs
      3rd party manufacturers
      (local)
      Breast Cancer Foundations
      ACOGACS
      Clinical trial designer
      OB/GYNs
      PCPs
      Direct Sales to hospitals
      Distributor
      IP
      Leading doctors
      Technical Expertise
      Product Development
      Clinical trials
      Operating Costs
      Marketing Costs
      Per use fees
    • Personal Libraries
    • Insight: No more bookshelves
      eBooks+150% YoY ‘10
      Printed Books
      -20% YoY ‘10
    • Version 1.0: Personal Libraries
    • Original Idea: Personal Digital Libraries
      Import, organize and share thousands of digital papers
    • something-something-something.com
      Original idea
      Invincible Business Model: Version 1.0
      SHORT TERMResearchers
      Lawyers
      Scientists
      LONG TERMAvid book readers
      Professionals
      Import, organize and share thousands of papers
      FB/TW posts from users you know
      Company blog, FB, TW, support forums
      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
      AWS Infrastructure
      SEM
      Eng & Marketing OpEx
      Affiliate program fees
      Licensing
      Subscription fees
      Ad revenue
    • Here’s What We Did
      Version 1.0: Personal Libraries
    • Got out of the building
    • Got out of the building
      • 100+ Interviews
      Professors, Litigators, IP lawyers, Post-docs, PhD researchers, Engineering Students, Law Students…
    • Got out of the building
      • 100+ Interviews
      • Extensive Surveys
    • Got out of the building
      • 100+ Interviews
      • Extensive Surveys
      • 33,000+ Adwords
    • Got out of the building
      • 100+ Interviews
      • Extensive Surveys
      • 33,000+ Adwords
      • Compete Review
    • Got out of the building
      • 100+ Interviews
      • Extensive Surveys
      • 33,000+ Adwords
      • Compete Review
      • Market Sizing
    • Got out of the building
      • 100+ Interviews
      • Extensive Surveys
      • 33,000+ Adwords
      • Compete Review
      • Market Sizing
      • 50 bloggers
    • Got out of the building
      • 100+ Interviews
      • Extensive Surveys
      • 33,000+ Adwords
      • Compete Review
      • Market Sizing
      • 50 bloggers
      • 6 Social Networks
    • Got out of the building
      • 100+ Interviews
      • Extensive Surveys
      • 33,000+ Adwords
      • Compete Review
      • Market Sizing
      • 50 bloggers
      • 6 Social Networks
      • Usability Tests
    • 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
    • Here’s What We Found
      Version 1.0: Personal Libraries
    • Here's what we found: Version 1.0
      A great business if we had more users…
      GOOD
      • Subscriptions Rock
    • Here's what we found: Version 1.0
      Shorter pages raise conversions 80%
      GOOD
      • Subscriptions Rock
      • Pipelines Optimize
    • Here's what we found: Version 1.0
      Sites will feature your service
      GOOD
      • Subscriptions Rock
      • Pipelines Optimize
      • The Web Listens
    • Here's what we found: Version 1.0
      GOOD
      • Subscriptions Rock
      • Pipelines Optimize
      • The Web Listens
      BAD
      • Academics = Cheap
      Teaching team saw pattern in our data
    • Run away from this customer as fast as possible.
    • Run away from this customer as fast as possible.
      They don’t want to spend money and will incur infinite support and infinite cost.
    • Here's what we found: Version 1.0
      Working for peanuts, and hitting wild product success leads to economic failure
      GOOD
      • Subscriptions Rock
      • Pipelines Optimize
      • The Web Listens
      BAD
      • Academics = Cheap
      • Negative Margins
    • Here's what we found: Version 1.0
      GOOD
      • Subscriptions Rock
      • Pipelines Optimize
      • The Web Listens
      BAD
      • Academics = Cheap
      • Negative Margins
      • ECM = Boring
      No adjacent pivots worked for the team
    • 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)
      Developing trusted advice and advisors
      Web marketing
      Affiliate partnerships
      Constant iteration & testing
      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
      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
      AWS Infrastructure
      SEM
      Eng & Marketing OpEx
      Affiliate program fees
      Licensing
      Subscription fees
      Ad revenue
    • New Hypotheses
    • Here’s What We Did
      Version 2.0: Trusted Advice
    • Got out of the building, again
      • 40+ Interviews
    • Got out of the building, again
      • 40+ Interviews
      • Extensive Surveys
    • Got out of the building, again
      • 40+ Interviews
      • Extensive Surveys
      • Landing Page Tests
      Landing pages tested on affluent, career aged professionals, approximately 70/30 male/female, N=800+
    • Got out of the building, again
      • 40+ Interviews
      • Extensive Surveys
      • Landing Page Tests
      • Market Research
    • Got out of the building, again
      • 40+ Interviews
      • Extensive Surveys
      • Landing Page Tests
      • Market Research
      • Compete Research
    • Got out of the building, again
      • 40+ Interviews
      • Extensive Surveys
      • Landing Page Tests
      • Market Research
      • Compete Research
      • Revenue Analysis
    • Got out of the building, again
      • 40+ Interviews
      • Extensive Surveys
      • Landing Page Tests
      • Market Research
      • Compete Research
      • Revenue Analysis
      • Two Prototypes
      Insidely.com
      wantio.com
    • Got out of the building, again
      • 40+ Interviews
      • Extensive Surveys
      • Landing Page Tests
      • Market Research
      • Compete Research
      • Revenue Analysis
      • Two Prototypes
      • Refined Personas
    • Customer Segment: Professional-class consumers shopping frequently online
      Pat the Professional
      Upwardly mobile professional (some Grad Students)
      Salary: $40,000 – 150,000/year
      Finance, Consulting, PR, Marketing
      Follows fashion/technology trends
      Spends $1-15K on discretionary items online
      Purchased online in last 30 days
      Demographics
      • Male/female, aged 18-35
      • Minimum bachelors from expensive school
      Traits:
      • Ideas from blogs & shopping websites
      • Values celebrity trends & friends’ opinions
      • Wants high ticket items at lowest price
      • Event-driven shopper—new release or sale
      Motivation
      • Craves new products
      • Hates tedious work
      • Identifies as influencer among friends
      • Fears being cheated online
      Behavior
      • Spends 5 hour+ monthly hearing about products
      • Shares online and in person about products he loves
      Budget
      • $2-10K+/year in discretionary online purchases
      “The XXX is awesome, I really want one. I know I just bought the YYY, but it’s probably time to upgrade.”
      ~5.9M “Pat the Professionals” in US
      Drawn from top 1/3 of 17.8M frequent online shoppers
      17.8M based on 40.2M Professionals (2008 Census) * 0.762 US Internet Penetration (Nielsen 2010Q1) * 0.58 consumers shopping online in last month (Nielsen 2010Q1)
      Online Recommendation Market Opportunity (conservative strawman #s)
      Assuming 10% share, 5% affiliate fees
      Top Shoppers (~$7B/year spend): ~ $35M/year
      Professional-class frequent shoppers (~$1.8B/year): ~ $9M/year
      Other Professional-class shoppers ($0.7B/year): ~3.5M/year
      Source: US Bureau of Labor Statistics
    • 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)
      Developing trusted advice and advisors
      Web marketing
      Affiliate partnerships
      Constant iteration & testing
      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
      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
      AWS Infrastructure
      SEM
      Eng & Marketing OpEx
      Affiliate program fees
      Licensing
      Subscription fees
      Ad revenue
    • Here’s What We Found
      Version 2: Trusted Advice
    • Findings on "Trusted Advice"
      GOOD
      • Fast Interest
      Insidely.com
      Trusted advice site for
      Silicon Valley/Stanford MBAs
      Launched 2/15
      425 visitors by 2/28
    • Findings on "Trusted Advice"
      Ranked #6 by Google for “Stanford Admissions Books”
      GOOD
      • Fast Interest
    • Findings on "Trusted Advice"
      GOOD
      • Fast Interest
      • High Conversion
      43% clickthrough
      on Top Admissions Books for Stanford MBAs article
      Compare to 0.5% clickthrough on ads
      ~100x difference
    • Findings on "Trusted Advice"
      Positive results on “Trusted Advice” Shopping Add-in testing
      GOOD
      • Fast Interest
      • High Conversion
      • Needs Addressed
      See videos at http://factnote.com/c/e245
    • Findings on "Trusted Advice"
      Positive results on “Trusted Advice” Shopping Add-in testing
      GOOD
      • Fast Interest
      • High Conversion
      • Needs Addressed
      Super easy to install and use.
      I really did enjoy it! 
      Great idea! I will keep the extension installed because I do think this is practical!
      I could see myself using this regularly
    • Findings on "Trusted Advice"
      Some negative results on “Trusted Advice” Shopping Add-in testing
      GOOD
      • Fast Interest
      • High Conversion
      • Needs Addressed
      BAD
      • Missing Features
      See videos at http://factnote.com/c/e245
    • Findings on "Trusted Advice"
      Some negative results on “Trusted Advice” Shopping Add-in testing
      GOOD
      • Fast Interest
      • High Conversion
      • Needs Addressed
      BAD
      • Missing Features
      I was a little frustrated when it didn’t find the item I was looking for
      I can find more thorough price comparisons elsewhere…
      I usually don’t shop in Chrome, so that’s an inconvenience.
    • Findings on "Trusted Advice"
      MBA Exchange spams us out of Google
      GOOD
      • Fast Interest
      • High Conversion
      • Needs Addressed
      BAD
      • Missing Features
      • SEO Battle
    • Here’s Where We Ended Up
      Version 2.1: Trusted Advice
    • 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)
      Developing trusted advice and advisors
      Web marketing
      Affiliate partnerships
      Constant iteration & testing
      FB/TW posts from users you know
      Company blog, FB, TW accounts
      Bloggers and Media targeting customer segment
      Retail marketing partners
      IE/FF/Chrome teams
      Affiliate Program Providers
      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
      Affiliate program
      SEO/SEM/SM
      IE/FF/Chrome App Stores
      Developers
      Marketers
      Content Library
      Install base
      Readership base
      AWS Infrastructure
      SEM
      Eng & Marketing OpEx
      Affiliate program fees
      Licensing
      Subscription fees
      Ad revenue
    • What We Learned
      • Potential for disruption abounds
    • What We Learned
      • Potential for disruption abounds
      • Life is short, focus on big markets
    • What We Learned
      • Potential for disruption abounds
      • Life is short, focus on big markets
      • All we need is to be relentless
    • Blog Your Progress
    • How?
      Customer Development
      The Process
      Narrative
      Interviews
      Surveys
      Videos
      Prototypes
      Business Model Canvas
      Scorekeeping
      Real-time Feedback
      Physical Reality Checks
      Skype
      Face-to-face
    • We Made Students Blog Their Progress
      It Changed Everything
    • Interview
    • Photos
      Videos
    • Surveys
    • Interview
      & Photos
    • Competitive Analysis
    • Key Findings
    • A/B Test Results
    • Key Question
    • Strategy
    • Business Model Canvas as the Scorecard
    • Carpe Diem
      www.steveblank.com
    • Customer DevelopmentTesting Your Hypotheses
      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
    • This Talk is Based On
      Business Model Generation
      Four Steps to the Epiphany
      Lean Startup
    • Customer Discovery Phase 1 - Hypotheses
    • Customer Discovery
      CustomerDiscovery
      CustomerValidation
      Company
      Building
      CustomerCreation
      Stop selling, start listening
      Test your hypotheses
      Two are fundamental: problem and product concept
    • Customer Discovery
      Phase 3
      TestSolutionHypothesis
      Phase 4Verify, Iterate &
      Expand
      CustomerDiscovery
      To Validation
      Phase 1Author
      Hypothesis
      Phase 2Test ProblemHypothesis
    • Customer Discovery
    • Customer Discovery
      Inside the Building
      Outside the Building
    • Value Prop 1
      Product/MVP
      Customers
      Who/Problem
      Channels
      Physical/Virtual
      Value Prop 2
      Market Type
      Revenue Streams
      Pricing
      Customer Relationships
      Get/Keep/Grow
      Partners
      Key Resources
      Customer Discovery Phase 1 - Hypotheses
    • Value Prop 1
      Product/MVP
      Customers
      Who/Problem
      Channels
      Physical/Virtual
      Value Prop 2
      Market Type
      Long-Term Vision/ Mkt Size
      Revenue Streams
      Pricing
      Customer Relationships
      Get/Keep/Grow
      Partners
      Key Resources
      Customer Discovery Value Proposition – Product/MVP
      Product Features/Benefits
      MVP
    • VALUE PROPOSITIONS
      what are you offering them? what is that
      getting done for them? do they care?
    • Testing the MVP
      Smoke testing with landing pages using AdWords
      In-product split-testing
      Prototypes (particularly for hardware)
      Removing features
      Continued customer discovery and validation
      Surveys
      Interviews
    • Testing the MVP (Web Example)
      Can you get customers to pay for a product that doesn’t yet exist (or barely does)?
      Do customers say they have a matching core problem?
      Landing page test for conversion
      What’s required to get customers to activate? (prizes, payment)
      Use customer problem to identify key word list
      plug into Google search traffic estimator - high traffic means there is problem awareness
      Drive traffic to site using Google search and see how deep into a registration process customers are willing to go through
    • Testing the MVP (Non-Web)
      Can you get customers to pay for a product that doesn’t yet exist (or barely does)?
      Interview customers to make sure they have a matching core problem
      Set up web site landing page to test for conversion
      Set up a Lighthouse Customer Program where potential customers pay to get early access to product prototypes
    • Customers
      Who/Problem
      Value Prop 1
      Product/MVP
      Channels
      Physical/Virtual
      Value Prop 2
      Market Type
      Revenue Streams
      Pricing
      Customer Relationships
      Get/Keep/Grow
      Partners
      Key Resources
      Customer Discovery Customer Segments
    • CUSTOMER SEGMENTS
      which customers and users are you serving?
      which jobs do they really want to get done?
    • Who’s The Customer?
      Consumer End Users, Corporate Customers Pay
      Multiple Consumers
      Etc.
    • Market/Opportunity Analysis
      How Big is It?: Market/Opportunity Analysis
      Identify a Customer and Market Need
      Size the Market
      Competitors
      Growth Potential
    • How Big is the Pie?Total Available Market
      Total Available Market
      • How manypeople would want/needthe product?
      • How large is the market be (in $’s) if they all bought?
      • How many units would that be?
      How Do I Find Out?
      • Industry Analysts – Gartner, Forrester
      • Wall Street Analysts – Goldman, Morgan
    • How Big is My Slice?Served Available Market
      • How many people need/can use product?
      • How many people have the money to buy the product
      • How large would the market be (in $’s) if they all bought?
      • How many units would that be?
      How Do I Find Out?
      • Talk to potential customers
      Served Available Market
      TotalAvailableMarket
    • How Much Can I Eat?Target Market
      • Who am I going to sell to in year 1, 2 & 3?
      • How many customers is that?
      • How largeis the market be (in $’s) if they all bought?
      • How many units would that be?
      How Do I Find Out?
      • Talk to potential customers
      • Identify and talk to channel partners
      • Identify and talk to competitors
      TotalAvailableMarket
      ServedAvailableMarket
      Target Market
    • SegmentationIdentification of groups most likely to buy
      TotalAvailableMarket
      • Geographic
      • Demographic
      • Psychographic variables
      • Behavioral variables
      • Channel
      • etc…
      ServedAvailableMarket
      Target Market
      254
    • Market Size: Summary
      Market Size Questions:
      How big can this market be?
      How much of it can we get?
      Market growth rate
      Market structure (Mature or in flux?)
      Most important: Talk to Customers and Sales Channel
      Next important: Market size by competitive approximation
      Wall Street analyst reports are great
      And : Market research firms Like Forester, Gartner
    • Corporate? Consumer?
      Business to Business (B to B)
      Use or buy inside a company
      Business to Consumer (B to C)
      Use or buy for themselves
      Business to Business to Consumer (B to B to C)
      Sell a business to get to a consumer
      Other Multi-sided Markets with multiple customers
    • What do they want you to do?Corporate
      Increase revenue?
      Decrease costs?
      Get them new customers?
      Keep up with or pass competitors?
      How important is it?
    • What do they want you to do?Consumers
      Does it entertain them?
      Does it connect them with others?
      Does it make their lives easier?
      Does it satisfy a basic need?
      How important is it?
      Can they afford it?
    • Market Type & Ignoring Customers
      Existing Market?
      Resegmenting an Existing Market?
      niche or low cost
      New Market?
      When do I ignore customer feedback?
    • Who’s the Customer in a Company?
      User?
      Influencer?
      Recommender?
      Decision Maker?
      Economic Buyer?
      Saboteur?
      Archetypes for each?
    • MammOptics
      Hospital purchasing decision tree
      Hospitals
      Complex purchasing decision tree. Several saboteours
    • MammOptics
      Private practice purchasing decision tree

      Private practice
      Faster adoption rate
      Good value proposition
    • MammOptics
      Customer Workflow
      Insurance
      Radiologist
      PCP
      OB/GYN
      Mammography
      Patient
      Technician
      Hospital Administration
      Sales representatives
      Demand Creation
      Doctor specialty committee
      ACOG
      ACS
      MammOptics
    • How Do Corporate Customers Interact to Buy?
      Organization Chart
      Influence Map
      Sales Road Map
    • Consumer Customer Interactions
      Do they buy it by themselves?
      Do they need approval of others?
      Do they use it alone or with others?
    • Pass/Fail Signals & Experiments
      How do you test interest?
      Where do you test interest?
      What kind of experiments can you run?
      How many do you test?
    • How Do They Hear About You?
      Demand Creation
      Network effect
      Sales
    • Channels
      Physical/Virtual
      Value Prop 1
      Product/MVP
      Customers
      Who/Problem
      Value Prop 2
      Market Type
      Revenue Streams
      Pricing
      Customer Relationships
      Get/Keep/Grow
      Partners
      Key Resources
      Customer Discovery Channels
    • Multiple Customer Segments
      Each has its own Value Proposition
      Each has its own Revenue Stream
      One segment cannot exist without the other
      Which one do you start with?
    • CHANNELS
      how does each customer segment want to be reached? through which interaction points?
    • OEM
      System Integrators
      Direct Sales Force
      Our Customers
      Value-Added Resellers (VAR’s)
      Our Company
      Dealers
      Distributors
      Retail/Mass Merchants
      Web/Online
      OEM
      System Integrators
      Direct Sales Force
      Value-Added Reseller
      Dealers
      Distributors
      Retailers/Mass Merchants