When the Boardroom is Bits

When The Boardroom is Bits
Steve Blank
www.steveblank.com
Twitter: sgblank

This Talk
10 Things We Learned in the Last Year ………………………
Experienced Advice Matters
Solving the Early Stage-Experience Gap
The Boardroom is Bits

First
10 Things We Learned in the Last Year

#1
Business Schools turned 300 years of business experience into an MBA

#1
Business Schools turned 300 years of business experience into an MBAMBA = Masters of Business Administration

#2
Tech Entrepreneurship + Venture Capital is ~50 Years OldStartups are Smaller Versions of Large Companies

#2
Tech Entrepreneurship + Venture Capital is ~ 50 Years OldStartups are Smaller Versions of Large Companies

#2
×
Tech Entrepreneurship + Venture Capital is ~ 50 Years OldStartups are Smaller Versions of Large Companies
oops

#3
Companies execute business modelsStartups search for business models

#3
Companies execute business modelsStartups search for business models
✓

#4
A startup is a temporary organization designed to search for a scalable and repeatable business model

#5
Startups need their own tools, different from those used in existing companies

#6
Customer Development = process to searchBusiness Model Canvas is the ScorecardAgile Engineering is How We Build Startups

#7
Customer Development =process to searchBusiness Model Canvas =the ScorecardAgile Engineering is How We Build Startups
Farming conventions.
Demo, demo, and demo!!
Proximity is paramount
Technology Design
Marketing
Demo and customer feedback
Research Labs
Equipment Manufacturers
Distribution Network
Service Providers
Cost Reduction
Remove labor force pains
Eliminate bio-waste hazards
Organic Farmers
Weeding Service Providers
Conventional Farmers
IP – Patents
Video Classifier Files
Robust Technology
Dealers
Direct Service
Indirect Service
… then Dealers
Asset Sale
Direct Service with equipment rental
… then Asset Sale
Value-Driven

#8
Customer Development is the process used to searchBusiness Model Canvas is the ScorecardAgile Development is How We Build Startups

#9
Startups that pivot 1 or 2 times:
raise 2.5x more money
have 3.6x better user growth
52% less likely to scale prematurely
than startups that pivot more than 2 times or not at all
Startup Genome Report

#9
Startups that pivot 1 or 2 times:
raise 2.5x more money
have 3.6x better user growth
52% less likely to scale prematurely
than startups that pivot more than 2 times or not at all
Startups that have:
helpful mentors
listen to customers,
learn from startup thought leaders
Raise 7x more money and have 3.5x better user growth
Startup Genome Report

#10
We’ve cracked the code in teaching entrepreneurship

#10
We’ve cracked the code in teaching entrepreneurship
http://steveblank.com/category/lean-launchpad/

What Have We Learned in the Last Year?
Startups ≠ MBA toolset
Startup Toolset
Customer Development
Business Model Canvas
Agile Development
We have real data that this works
A Better Way to Teach Entrepreneurship

What’s Next?

Hypothesis:Experienced Advice Matters

You1board at a time

You1board at a time
VC’s6 - 12 boards at a time

You1board at a time
X
Avg 4 years per board

You1board at a time
X
X
2 VC’s per board

You1board at a time
X
X
2 VC’s per board
=
~50-100x Pattern Recognition

You1
VC’s50 - 100

You1
VC’s50 - 100
(Discount for 7 Deadly Sins)

50 - 100 ≥ 1

50 - 100 ≥ 1
The Early Stage-Experience Gap

Solving the Early Stage-Experience Gap

Venture Funded companies have boards
Angel Funded companies often do not
Experienced Advice is sparse outside of technology clusters

Early Stage companies often do not

Angel Funded companies often do not

Why Have a Board Meeting?Investor
Fiduciary Responsibility
Company has asymmetric information
Board has legal responsibility to their Limited Partners
Maximize Investment Potential
Board has asymmetric knowledge 50-100x experience
Good board asks hard questions

Why Have a Board Meeting?Founder
Board Guidance
50-100x more experience = Pattern recognition
Multiple opinions across VC’s
Board Network
Customers, Partners, Recruiting, Financing
Obligation
It came with the check

Board Meetings Are Heavyweight Processes Antithesis of Lean

Board Meetings Haven’t Evolved

We Act Like It’s the 19th Century
Why do we need to get together in one room?
Why do we need to wait a month to see progress?
Why don’t we have standards for what you want?
Why haven’t we adopted the tools we build/sell?

How to Run a Board Meeting
Logistics
Send out board materials 2 days before, have board dinner
Approve minutes, stock grants
Business Highlights/Lowlights
summary of key events since last meeting
Financials versus Budget
waterfall charts
Management asks the board to help
strategy, markets, key hires, introductions.
Executive session
Meet without management to discuss performance

How to Run a Board Meeting
Logistics
Approve minutes, stock grants
Business Highlights/Lowlights
summary of key events since last meeting
Financials versus Budget
waterfall charts
Management asks the board to help
strategy, markets, key hires, introductions.
Executive session
Meet without management to discuss performance
Misc
Send out board materials 2 days before, have board dinner
Why?

What’s Wrong With a Board Meeting?
Time between meetings (every 4-6 weeks)
Strategy-to-tactic-to implementation lag
Often no follow-up on the outcomes
Diffuse board member attention (sits on 6-12 boards)
Punctuated Exec Staff Performance
“The Get Ready for the Board Meeting” drill
It’s often a performance rather than a snapshot
No standards for what each side does
What is the entrepreneur supposed to be doing?
What are the board members supposed to be contributing?

What’s Wrong With a Board Meeting?
Time between meetings (every 4-6 weeks)
Strategy-to-tactic-to implementation lag
Diffuse board member attention (sits on 6-12 boards
Punctuated Exec Staff Performance
“The Get Ready for the Board Meeting” drill
It’s often a performance rather than a snapshot
No standards for what each side does
What is the entrepreneur supposed to be doing?
What are the board members supposed to be contributing?
Why?

Solution:Make The Boardroom Bits

We Can Do This Via the Net

24/7

Connecting Advisors to/from Anywhere

Focus on What’s Important
It’s about the search for the business model
Not income statement, cash flow, balance sheet
Advice/Guidance about metrics around the search
What are the Business model hypotheses?
What are the most important hypotheses to test now?
Progress of validating each hypotheses
What are the iterations and Pivots – and why?

Continuous Information Access
Founders / mgmt team invest 1 hour a week
Structured blog
Unstructured data
Formal business model canvas
Real-time advisor/board feedback

We Made Students Blog Their Progress

How?
Customer Development
The Process
Narrative
Interviews
Surveys
Videos
Prototypes
Business Model Canvas
Scorekeeping
Real-time Feedback
Physical Reality Checks
Skype
Face-to-face

We Made Students Blog Their Progress
It Changed Everything

Interview

Photos
Videos

Surveys

Interview
& Photos

Competitive Analysis

Key Findings

A/B Test Results

Key Question

Strategy

Business Model Canvas as the Scorecard

Business Canvas Change Progress
1

2

3

4

5

6

7

Demo
Ben Mappen
Lean LaunchLab

Product Demo

CANVAS diagram is interactive and “stateful”

Enter your hypotheses here

Test your hypotheses and
record learnings in blog format

Interviews
Surveys
Videos
Photos
etc

Invite your advisors and investors to your project

They can view progress
by flipping thru your CANVAS diagrams

by flipping thru your CANVAS diagrams
They can post feedback and leave comments inline

by flipping thru your CANAVAS diagrams
Get email alert when new
feedback comes in

by flipping thru your CANAVAS diagrams
Get email alert when new
feedback comes in
The Lean
Board Meeting

Sign up for private beta (FREE)
http://www.leanlaunchlab.com
@leanlaunchlab
Ben Mappen
benmappen@gmail.com

What Does this Change?For Angel-Funded Startups
Angel funded startups can now get experienced advice
No longer requires board commitment for involvement
Encourages investors who need visibility
Ends repetition at each investor coffee
Turns adhoc startups into strategy-driven startups
Invites investor participation in the process
Professionalize the “throw it against the wall and see if it sticks”
Highly time-efficient for investor and founders
Eliminates Geography as a barrier to investment!

What Does this Change?For VC’s and Angels
For the first time a structure for “search”
Real-time monitoring of startup progress
Zero-lag for coaching and course-correction
Immediate follow-up on board meeting outcomes
Allows a single VC to multiply their reach and/or depth
Eliminates Geography as a barrier to investment!

Show Me the Money

It’s about time!
Email me
jdf@mdv.com

Great Experiment
Email me
ann@floodgate.com

This Solves A Real Problem

This Solves A Real Problem
I thought it was such a good idea I Just funded the Lean LaunchLab
Email me:
shawn@menloventures.com

Lets experiment with the idea
Now at Gould Investments
Email me:
Kathryn@gouldinvestments.com

Wouldn’t miss trying this!
Email me:
eric@ingroup.com

Thanks

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When the Boardroom is Bits

by steve blank

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