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Why fighter pilots run startups 090511
Why fighter pilots run startups 090511
Why fighter pilots run startups 090511
Why fighter pilots run startups 090511
Why fighter pilots run startups 090511
Why fighter pilots run startups 090511
Why fighter pilots run startups 090511
Why fighter pilots run startups 090511
Why fighter pilots run startups 090511
Why fighter pilots run startups 090511
Why fighter pilots run startups 090511
Why fighter pilots run startups 090511
Why fighter pilots run startups 090511
Why fighter pilots run startups 090511
Why fighter pilots run startups 090511
Why fighter pilots run startups 090511
Why fighter pilots run startups 090511
Why fighter pilots run startups 090511
Why fighter pilots run startups 090511
Why fighter pilots run startups 090511
Why fighter pilots run startups 090511
Why fighter pilots run startups 090511
Why fighter pilots run startups 090511
Why fighter pilots run startups 090511
Why fighter pilots run startups 090511
Why fighter pilots run startups 090511
Why fighter pilots run startups 090511
Why fighter pilots run startups 090511
Why fighter pilots run startups 090511
Why fighter pilots run startups 090511
Why fighter pilots run startups 090511
Why fighter pilots run startups 090511
Why fighter pilots run startups 090511
Why fighter pilots run startups 090511
Why fighter pilots run startups 090511
Why fighter pilots run startups 090511
Why fighter pilots run startups 090511
Why fighter pilots run startups 090511
Why fighter pilots run startups 090511
Why fighter pilots run startups 090511
Why fighter pilots run startups 090511
Why fighter pilots run startups 090511
Why fighter pilots run startups 090511
Why fighter pilots run startups 090511
Why fighter pilots run startups 090511
Why fighter pilots run startups 090511
Why fighter pilots run startups 090511
Why fighter pilots run startups 090511
Why fighter pilots run startups 090511
Why fighter pilots run startups 090511
Why fighter pilots run startups 090511
Why fighter pilots run startups 090511
Why fighter pilots run startups 090511
Why fighter pilots run startups 090511
Why fighter pilots run startups 090511
Why fighter pilots run startups 090511
Why fighter pilots run startups 090511
Why fighter pilots run startups 090511
Why fighter pilots run startups 090511
Why fighter pilots run startups 090511
Why fighter pilots run startups 090511
Why fighter pilots run startups 090511
Why fighter pilots run startups 090511
Why fighter pilots run startups 090511
Why fighter pilots run startups 090511
Why fighter pilots run startups 090511
Why fighter pilots run startups 090511
Why fighter pilots run startups 090511
Why fighter pilots run startups 090511
Why fighter pilots run startups 090511
Why fighter pilots run startups 090511
Why fighter pilots run startups 090511
Why fighter pilots run startups 090511
Why fighter pilots run startups 090511
Why fighter pilots run startups 090511
Why fighter pilots run startups 090511
Why fighter pilots run startups 090511
Why fighter pilots run startups 090511
Why fighter pilots run startups 090511
Why fighter pilots run startups 090511
Why fighter pilots run startups 090511
Why fighter pilots run startups 090511
Why fighter pilots run startups 090511
Why fighter pilots run startups 090511
Why fighter pilots run startups 090511
Why fighter pilots run startups 090511
Why fighter pilots run startups 090511
Why fighter pilots run startups 090511
Why fighter pilots run startups 090511
Why fighter pilots run startups 090511
Why fighter pilots run startups 090511
Why fighter pilots run startups 090511
Why fighter pilots run startups 090511
Why fighter pilots run startups 090511
Why fighter pilots run startups 090511
Why fighter pilots run startups 090511
Why fighter pilots run startups 090511
Why fighter pilots run startups 090511
Why fighter pilots run startups 090511
Why fighter pilots run startups 090511
Why fighter pilots run startups 090511
Why fighter pilots run startups 090511
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Why fighter pilots run startups 090511

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  • 1. Why Fighter Pilots Run Startups<br />Steve Blank<br />Stanford - School of Engineering<br />U.C. Berkeley - Haas School Of Business<br />www.steveblank.com<br />Twitter: sgblank<br />
  • 2. I Write a Blog <br />www.steveblank.com<br />
  • 3. This Talk is Based On<br />Business Model Generation<br />Four Steps to the Epiphany<br />The Lean Startup<br />
  • 4. The Life of an Entrepreneur<br />
  • 5. Top Gun dogfight scene<br />
  • 6. First -What’s A Startup?<br />Six Types of Startups<br />
  • 7. Startup<br />Lifestyle Startups Work to Live their Passion<br /><ul><li>Serve known customer with known product
  • 8. Get paid for their passion</li></li></ul><li>Small Business<br />Startup<br />Small Business StartupsWork to Feed the Family<br /><ul><li>Serve known customer with known product
  • 9. Feed the family</li></li></ul><li>Small Business<br />Startup<br />Exit Criteria<br /><ul><li> Business Model found</li></ul>- Profitable business<br /><ul><li> Existing team</li></ul>< €100K in revenue<br />Small Business StartupsWork to Feed the Family<br /><ul><li>known customer known product
  • 10. Feed the family</li></li></ul><li>Small Business<br />Startup<br />- Business Model found<br />- Profitable business<br /><ul><li> Existing team</li></ul>< $10M in revenue<br />Small Business Startups<br /><ul><li>5.7 million small businesses in the U.S. <500 employees
  • 11. 99.7% of all companies
  • 12. ~ 50% of total U.S. workers</li></ul>http://www.sba.gov/advo/stats/sbfaq.pdf<br />
  • 13. Scalable<br />Startup<br />Large Company<br />Scalable Startup<br />Search<br />Goal is to solve for:<br /> unknown customer and unknown features <br />
  • 14. Execute<br />Search<br />Scalable<br />Startup<br />Large Company<br />Exit Criteria<br /><ul><li> Business model found
  • 15. Total Available Market > €300m
  • 16. Can grow to €50/year</li></ul>Scalable StartupBorn to Be Big<br />
  • 17. Scalable<br />Startup<br />Large Company<br /><ul><li> Total Available Market > $500m
  • 18. Company can grow to $100m/year
  • 19. Business model found
  • 20. Focused on execution and process
  • 21. Typically requires “risk capital”</li></ul>Scalable StartupBorn to Be Big<br />Execute<br />Search<br /><ul><li> In contrast a scalable startup is designed to grow big
  • 22. Typically needs risk capital
  • 23. What Silicon Valley means when they say “Startup”</li></li></ul><li>The Transition – Founders Leave<br />Scalable<br />Startup<br />Transition<br />Large Company<br />Build<br />Execute<br />Search<br />Founders depart<br /><ul><li> Operating executives
  • 24. Professional Mgmt
  • 25. Process
  • 26. Beginning of scale</li></li></ul><li>Buyable StartupBorn to Be Sold<br />Search<br />Sell<br />Scalable<br />Startup<br />€3 to 30M Acquisition<br />Goal is to solve for:<br /> Internet, Mobile, Gaming Apps<br />
  • 27. Buyable Startup<br />Search<br />Sell<br />Scalable<br />Startup<br />€3 to e0M Acquisition<br />Goal is to solve for:<br /> Internet and Mobile Apps<br />Sell to larger company<br />
  • 28. Scalable<br />Startup<br />Large Company<br /><ul><li>Business Model found
  • 29. i.e. Product/Market fit</li></ul>- Repeatable sales model<br />- Managers hired<br />What’s A Startup?<br />Search <br />Execute<br />A Startup is a temporary organization used to search for a repeatable and scalable business model <br />
  • 30. Venture Firms Invest in Scalable and BuyableStartups<br />Small Business<br />Startup<br />Scalable<br />Startup<br />Large Company<br />
  • 31. Large Company Sustaining InnovationInnovate or Evaporate<br />Sustaining Innovation<br />Transition<br />Scalable<br />Startup<br />Large Company<br /><ul><li> Existing Market / Known customer
  • 32. Known product feature needs</li></li></ul><li>Large Company Disruptive Innovation<br />New Division<br />Transition<br />Large Company<br />Disruptive Innovation<br /><ul><li>New Market
  • 33. New tech, customers, channels</li></li></ul><li>Large Company Disruptive Innovation<br />New Division<br />Transition<br />Large Company<br />Disruptive Innovation<br /><ul><li>Build
  • 34. Partner
  • 35. Acquire</li></ul> - IP- Talent<br /> - Product<br /> - Customers<br /> - Business<br />
  • 36. Large Non-Profit<br />Social Startup<br />Social Entrepreneurship Startups<br /><ul><li>Solve pressing social problems
  • 37. Social Enterprise: Profitable
  • 38. Social Innovation: New Strategies</li></li></ul><li>Search Versus ExecutionWhy Accountants Don’t Run Startups<br />
  • 39. Startups Search and Pivot<br />The Search for the Business Model<br />Scalable<br />Startup<br />Transition<br />Large Company<br />Searching for the Business Model<br /><ul><li> customer needs/product features</li></ul> i.e. Product/Market fit<br /><ul><li>Found by founders, not employees
  • 40. Repeatable sales model</li></li></ul><li>Startups Search, Companies Execute<br />The Execution of the Business Model<br />The Search for the Business Model<br />Scalable<br />Startup<br />Transition<br />Large Company<br /><ul><li>Business Model found
  • 41. Product/Market fit</li></ul>- Repeatable sales model<br />- Managers hired<br />Executing a known Business Model<br /><ul><li> Known customers, and product
  • 42. Profitable</li></ul>~ 150 people<br />
  • 43. Metrics Versus Accounting<br />The Execution of the Business Model<br />Scalable<br />Startup<br />Transition<br />Large<br />Company<br />Traditional Accounting<br /><ul><li>Balance Sheet
  • 44. Cash Flow Statement
  • 45. Income Statement</li></li></ul><li>Metrics Versus Accounting<br />The Search for the Business Model<br />The Execution of the Business Model<br />Scalable<br />Startup<br />Transition<br />Large<br />Company<br />Startup Metrics<br /><ul><li> Customer Acquisition Cost
  • 46. Viral coefficient
  • 47. Customer Lifetime Value
  • 48. Average Selling Price/Order Size
  • 49. Monthly burn rate
  • 50. etc. </li></ul> Traditional Accounting<br /><ul><li> Balance Sheet
  • 51. Cash Flow Statement
  • 52. Income Statement</li></li></ul><li>Customer Validation Versus Sales<br />The Execution of the Business Model<br />Scalable<br />Startup<br />Transition<br />Large<br />Company<br />Sales<br /><ul><li>Sales Organization
  • 53. Scalable
  • 54. Price List/Data Sheets
  • 55. Revenue Plan</li></li></ul><li>Customer Validation Versus Sales<br />The Search for the Business Model<br />The Execution of the Business Model<br />Scalable<br />Startup<br />Transition<br />Large<br />Company<br />Customer Validation<br /><ul><li> Early Adopters
  • 56. Pricing/Feature unstable
  • 57. Not yet repeatable
  • 58. “One-off’s”</li></ul>Sales<br /><ul><li> Sales Organization
  • 59. Scalable
  • 60. Price List/Data Sheets
  • 61. Revenue Plan</li></li></ul><li>Engineering Versus Agile Development<br />The Execution of the Business Model<br />Scalable<br />Startup<br />Transition<br />Large Company<br />Engineering<br /><ul><li> Requirements Docs.
  • 62. Waterfall Development
  • 63. QA
  • 64. Tech Pubs</li></li></ul><li>Engineering Versus Agile Development<br />The Search for the Business Model<br />The Execution of the Business Model<br />Scalable<br />Startup<br />Transition<br />Large Company<br />Engineering<br /><ul><li> Requirements Docs.
  • 65. Waterfall Development
  • 66. QA
  • 67. Tech Pubs</li></ul>Agile Development<br /><ul><li> Continuous Deployment
  • 68. Continuous Learning
  • 69. Self Organizing Teams
  • 70. Minimum Feature Set
  • 71. Pivots</li></li></ul><li>Startups Model, Companies Plan<br />The Execution of the Business Model<br />Scalable<br />Startup<br />Transition<br />Large Company<br />Business Plan<br /><ul><li>Plan describes “knowns”
  • 72. Known features for line extensions
  • 73. Known customers/markets
  • 74. Known business model</li></li></ul><li>Startups Model, Companies Plan<br />The Search for the Business Model<br />The Execution of the Business Model<br />Scalable<br />Startup<br />Transition<br />Large Company<br />Business Model<br />- Unknown customer needs<br /><ul><li> Unknown feature set
  • 75. Unknown business model
  • 76. Model found by iteration
  • 77. Plan describes “knowns”
  • 78. Known features for line extensions
  • 79. Known customers/markets
  • 80. Known business model</li></li></ul><li>All I Need to Do is Execute the Plan<br />
  • 81. Product Introduction Model<br />Concept/Seed Round<br />Product Dev.<br />Alpha/Beta Test<br />Launch/<br />1st Ship<br />
  • 82. Product Introduction Model<br />The Leading Cause of Startup Death<br />Concept/Seed Round<br />Product Dev.<br />Alpha/Beta Test<br />Launch/<br />1st Ship<br />
  • 83. Product Introduction Model:Two Implicit Assumptions<br />Customer Problem: known<br />Concept/Seed Round<br />Product Dev.<br />Alpha/Beta Test<br />Launch/<br />1st Ship<br /> Product Features: known<br />
  • 84. Tradition – Hire Marketing<br />Concept/Seed Round<br />Product Dev.<br />Alpha/Beta Test<br />Launch/<br />1st Ship<br />- Create Demand<br />- Launch Event<br />- “Branding”<br />- Hire PR Agency<br />- Early Buzz<br /><ul><li> Create Marcom </li></ul> Materials<br />- Create Positioning<br />Marketing<br />
  • 85. Tradition – Hire Sales<br />Concept/Seed Round<br />Product Dev.<br />Alpha/Beta Test<br />Launch/<br />1st Ship<br />- Create Demand<br />- Launch Event<br />- “Branding”<br />- Hire PR Agency<br />- Early Buzz<br /><ul><li> Create Marcom </li></ul> Materials<br />- Create Positioning<br />Marketing<br /><ul><li> Build Sales Organization
  • 86. Hire Sales VP
  • 87. Hire 1st Sales Staff</li></ul>Sales<br />
  • 88. Tradition – Hire Bus Development<br />Concept<br />Product Dev.<br />Alpha/Beta Test<br />Launch/<br />1st Ship<br />- Create Demand<br />- Launch Event<br />- “Branding”<br />- Hire PR Agency<br />- Early Buzz<br /><ul><li> Create Marcom </li></ul> Materials<br />- Create Positioning<br />Marketing<br /><ul><li> Build Sales Channel / Distribution
  • 89. Hire Sales VP
  • 90. Pick distribution Channel</li></ul>Sales<br />Business <br />Development<br /><ul><li> Hire First Bus Dev
  • 91. Do deals for FCS</li></li></ul><li>Tradition – Hire Engineering<br />Concept<br />Product Dev.<br />Alpha/Beta Test<br />Launch/<br />1st Ship<br />- Create Demand<br />- Launch Event<br />- “Branding”<br />- Hire PR Agency<br />- Early Buzz<br /><ul><li> Create Marcom </li></ul> Materials<br />- Create Positioning<br />Marketing<br /><ul><li> Build Sales Channel / Distribution
  • 92. Hire Sales VP
  • 93. Pick distribution Channel</li></ul>Sales<br />Business <br />Development<br /><ul><li> Hire First Bus Dev
  • 94. Do deals for FCS</li></ul>Engineering<br /><ul><li> Write MRD
  • 95. Waterfall
  • 96. Q/A
  • 97. Tech Pubs</li></li></ul><li>More startups fail from a lack of customers than from a failure of product development<br />
  • 98. Then why do we have:<br />process to manage product development?<br />
  • 99. Then why do we have:<br />process to manage product development?<br />no process to manage customer development?<br />
  • 100. No Business Plan survives first contact with customers<br />
  • 101. So Search for a Business Model<br />
  • 102. The Business Model:<br />Any company can be described in 9 building blocks<br />
  • 103. CUSTOMER SEGMENTS<br />which customers and users are you serving? <br />which jobs do they really want to get done?<br />
  • 104. VALUE PROPOSITIONS<br />what are you offering them? what is that <br />getting done for them? do they care?<br />
  • 105. CHANNELS<br />how does each customer segment want to be reached? through which interaction points?<br />
  • 106. CUSTOMER RELATIONSHIPS<br />what relationships are you establishing with each segment? personal? automated? acquisitive? retentive?<br />
  • 107. REVENUE STREAMS<br />what are customers really willing to pay for? how? <br />are you generating transactional or recurring revenues?<br />
  • 108. KEY RESOURCES<br />which resources underpin your business model? which assets are essential?<br />
  • 109. KEY ACTIVITIES<br />which activities do you need to perform well in your business model? what is crucial?<br />54<br />
  • 110. KEY PARTNERS<br />which partners and suppliers leverage your model? <br />who do you need to rely on?<br />
  • 111. COST STRUCTURE<br />what is the resulting cost structure? <br />which key elements drive your costs?<br />
  • 112. value proposition<br />customer relationships<br />key activities<br />customer segments<br />key partners<br />cost structure<br />revenue streams<br />key <br />resources<br />channels<br />57<br />images by JAM<br />
  • 113. Solving For Customer Risk:Customer Development<br />Get the Hell Out of the Building<br />
  • 114. Solving For Customer Risk:Customer Development<br />Get the Hell Out of the Building<br />Country<br />
  • 115. Product Development<br />Concept/Bus. Plan<br />Product Dev.<br />Alpha/Beta Test<br />Launch/1st Ship<br />+<br />CustomerDevelopment<br />Company<br />Building<br />CustomerDiscovery<br />CustomerValidation<br />Customer Creation<br />Customer Development<br />
  • 116. Customer Discovery<br />CustomerDiscovery<br />CustomerValidation<br />Company<br />Building<br />CustomerCreation<br />Stop coding, stop selling, start listening<br />Test your hypotheses<br />Continuous Discovery<br />
  • 117. Customer Validation<br />CustomerDiscovery<br />CustomerValidation<br />Customer Creation<br />Company<br />Building<br />Pivot<br /><ul><li>Repeatable and scalable business model?
  • 118. Passionate earlyvangelists?
  • 119. Pivot back to Discovery if no customers</li></li></ul><li>The Pivot<br /><ul><li> The heart of Customer Development
  • 120. Iteration without crisis
  • 121. Fast, agile and opportunistic</li></li></ul><li>Pivot Cycle Time Matters<br /><ul><li>Speed of cycle minimizes cash needs
  • 122. Minimum feature set speeds up cycle time
  • 123. Near instantaneous customer feedback drives feature set</li></li></ul><li>The Minimum Viable Product (MVP)<br /><ul><li> Smallest feature set that gets you the most …</li></ul> - orders, learning, feedback, failure…<br />
  • 124. Pivot ExampleRobotic Weeding<br />Talked 75 Customers in 8 Weeks<br />
  • 125. Our initial plan<br />Confidential<br />
  • 126. 20 interviews, 6 site visits…We got OUR Boots dirty<br />Weeding<br />Visited two farms in Salinas Valley to better understand problem<br />Interviewed:<br /><ul><li>Bolthouse Farms, Large Agri-Industry in Bakersfield
  • 127. White Farms, Large Peanut farmer in Georgia
  • 128. REFCO Farms, large grower in Salinas Valley
  • 129. Rincon Farms, large grower in Salinas Valley
  • 130. Small Organic Corn/Soy grower in Nebraska
  • 131. Heirloom Organics, small owner/operator, Santa Cruz Mts
  • 132. Two small organic farmers at farmers market
  • 133. Ag Services of Salinas, Fertilizer applicator</li></ul>Mowing<br />Interviewed:<br /><ul><li>Golf: Stanford Golf course
  • 134. Parks: Stanford Grounds Supervisor, head of maintenance and lead operator (has crew of 6)
  • 135. Toro dealer (large mower manufacturer)
  • 136. User of back-yard mowing system
  • 137. Maintenance Services for City of Los Altos
  • 138. Colony Landscaping (Mowing service for stadiums)</li></li></ul><li>Business Plan Autonomous Vehicles for Mowing & Weeding<br />Dealers sell, installs and supports customer<br />Co. trains dealers, supports dealers<br />- Innovation<br />- Customer Education<br />- Dealer training<br />Mowing<br />- Owners of public or commercially used green spaces (e.g. golf courses)<br />- Landscaping service provider<br />Weeding<br />- Farmers with manual weeding operations<br />We reduce operating cost<br />- Labor reduction<br />- Better utilization of assets (eg mow or weed at nights)<br />- Improved performance (less rework, food safety)<br />- Dealers (Mowing and Ag)<br />- Vehicle OEMs (John Deere, Toro, Jacobsen, etc)<br />- Research labs<br />- Mowing Dealers<br />- Ag Dealers<br />Engineers on Autonomous vehicles, GPS, path-planning<br />Asset sale<br />Our revenue stream derives from selling the equipment<br />Dealer discount <br />COGS seek a 50-60% Gross Margin<br />Heavy R&D investment <br />
  • 139. Found weeding in organic crops is HUGE problem; 50 - 75% of costs<br />Crews of 100s-1000<br />Back-breaking task<br />(Ilegal) labor harder to get <br />1-5 weedings per year/field<br />$250-3,500 per acre and increasing<br />Food contamination risk<br />
  • 140. Decision to make – mowing vs weeding<br />
  • 141. Autonomous vehiclesWEEDING<br />Dealers sell, installs and supports customer<br />Co. trains dealers, supports dealers<br />- Innovation<br />- Customer Education<br />- Dealer training<br />- Low density vegetable growers<br />- High density vegetable growers<br />- Thinning operations<br />- Conventional vegetables<br />We reduce operating cost<br />- Labor reduction (100 to 1)<br />- Reduced risk of contamination<br />- Mitigate labor availability concerns<br />- Ag Dealers<br />- Ag Service providers<br />- Research labs<br />- Ag Dealers<br />- Ag Service providers<br />Engineers on Machine Vision<br />Two problems:<br />- Identification<br />- Elimination<br />Asset sale<br />Our revenue stream derives from selling the equipment<br />Dealer discount <br />COGS seek a 50-60% Gross Margin<br />Heavy R&D investment <br />
  • 142. 1 Week – 1 CarrotBot<br />Confidential<br />
  • 143. CarrotBot<br />Machine Vision data collection platform<br />Monochrome & Color Cameras<br />Laser-line sweep (depth measurement)<br />Encoders (position/velocity)<br />Onboard data acquisition & power<br />CarrotBot 1.0<br />
  • 144. The Business Plan Canvas Updated<br /><ul><li>Farming conventions.
  • 145. Demo, demo, and demo!!
  • 146. Proximity is paramount
  • 147. Technology Design
  • 148. Marketing
  • 149. Demo and customer feedback
  • 150. Organic Farmers
  • 151. Weeding Service Providers
  • 152. Conventional Farmers
  • 153. Cost Reduction
  • 154. Remove labor force pains
  • 155. Eliminate bio-waste hazards
  • 156. Research Labs
  • 157. Equipment Manufacturers
  • 158. Distribution Network
  • 159. Service Providers
  • 160. IP – Patents
  • 161. Video Classifier Files
  • 162. Robust Technology
  • 163. Dealers
  • 164. Direct Service
  • 165. Indirect Service
  • 166. … then Dealers
  • 167. Asset Sale
  • 168. Direct Service with equipment rental
  • 169. … then Asset Sale</li></ul>Value-Driven<br />
  • 170. Visit Highlights<br />Above: Organic Carrots, 7wks. <br />Top right: Conventional carrots<br />Bottom Right: Very weedy. Will require multiple passes of hand weeding<br />
  • 171. Visit Highlights<br />Carrot vs. Weeds<br />Due to small root systems, carrots have no chance against weeds <br />
  • 172. Visit Highlights<br />Organic Broccoli, closely cultivated. Weeds close to plants are hand-picked<br />
  • 173. Visit Highlights<br />State of the Art in Weeding Technology for Organic Crops<br />
  • 174. Customer Hypothesis<br />Pre-Test<br />Hypothesis Confirmed<br /><ul><li> Growers interested in own equipment
  • 175. Industrial (10,000s of acres)
  • 176. Large (1,000s of acres)
  • 177. Willing to pay $100k for one unit
  • 178. Smaller growers (100s of acres) usually subcontract the labor services or rent equipment
  • 179. All purchases through local dealers
  • 180. Customer service is essential</li></ul>Post-Test<br />
  • 181. Customer Map #1 – Industrial Growers<br />Example: Bolthouse Farms – Large Industrial Carrot Producer – 8K acres/yr<br /><ul><li> Equipment Operator
  • 182. Local Farm Mgr
  • 183. Cliff Kirkpatrick, visited
  • 184. Director, Ag Technology
  • 185. Justin Grove, interviewed</li></ul>Equipment Operator<br /><ul><li> VP, Growing Operations
  • 186. CFO, CEO (Jeff Dunn)</li></ul>Cliff, Farm Mgr<br />
  • 187. Customer Map #2 – Service Providers<br />Example: Ag Services – Service Provider, Salinas Valley<br /><ul><li> Equipment Operator
  • 188. Grower
  • 189. Service Mgr</li></ul>Me (left), Marty (middle, Service Mgr), Doug (right, Grower)<br /><ul><li> ?? (service mgr’s boss)</li></li></ul><li>The Business Plan Canvas Updated<br /><ul><li>Farming conventions.
  • 190. Demo, demo, and demo!!
  • 191. Proximity is paramount
  • 192. Technology Design
  • 193. Marketing
  • 194. Demo and customer feedback
  • 195. Mid/Large Organic Farmers
  • 196. Agricultural corporations
  • 197. Weeding Service Providers
  • 198. Mid/Large Conventional Farmers
  • 199. Cost Reduction
  • 200. Remove labor force pains
  • 201. Eliminate bio-waste hazards
  • 202. Research Labs
  • 203. Equipment Manufacturers
  • 204. Distribution Network
  • 205. Service Providers
  • 206. IP – Patents
  • 207. Video Classifier Files
  • 208. Robust Technology
  • 209. Direct Service
  • 210. Indirect Service
  • 211. … then Dealers
  • 212. Direct Service with equipment rental
  • 213. ($1,500/d; 120d/yr )
  • 214. Low density: $1,500/d
  • 215. High density: $6,000/d</li></ul>Value-Driven<br />
  • 216. World Ag Expo interviews:the need is real and wide spread<br />10+ interviews at show<br />Everyone confirmed the need<br />Robocrop, UK based, crude competitor sells for $171 K<br />Revenue Stream<br />Mid to small growers prefer a service<br />Large growers prefer to buy, but OK with service until technology is proven<br />Charging for labor cost saved is OK, as we provide other benefits (food safety, labor availability)<br />Confidential<br />
  • 217. The Business Plan Canvas Updated<br /><ul><li>Farming conventions.
  • 218. Demo, demo, and demo!!
  • 219. Proximity is paramount
  • 220. Technology Design
  • 221. Marketing
  • 222. Demo and customer feedback
  • 223. Mid/Large Organic Farmers
  • 224. Agricultural corporations
  • 225. Weeding Service Providers
  • 226. Mid/Large Conventional Farmers
  • 227. Research Labs
  • 228. Equipment Manufacturer
  • 229. Distribution Network
  • 230. Service Providers
  • 231. 2 or 3 Key Farms
  • 232. Cost Reduction
  • 233. Remove labor force pains
  • 234. Eliminate bio-waste hazards
  • 235. IP – Patents
  • 236. Video Classifier Files
  • 237. Robust Technology
  • 238. Direct Service
  • 239. Indirect Service
  • 240. … then Dealers
  • 241. Direct Service with equipment rental
  • 242. Low density: $1,500/d
  • 243. High density: $6,000/d</li></ul>Value-Driven<br /><ul><li> R&D
  • 244. Bill of Materials
  • 245. Training & Service
  • 246. Sales</li></li></ul><li>Autonomous weeding - Final<br />Direct<br />- Provide high quality service at competitive price<br />- Innovation<br />- Customer Education<br />- Dealer training<br />- Low density vegetable growers<br />- High density vegetable growers<br />- Thinning operations<br />- Conventional vegetables<br />We reduce operating cost<br />- Labor reduction (100 to 1)<br />- Reduced risk of contamination<br />- Mitigate labor availability concerns<br />- Ag Service providers<br />- Research Institutes (eg UC Davis, Laser Zentrum Hannover)<br />- 3-4 key farms<br />Direct <br />- Alliance with service providers<br />- Eventually sell through dealers<br />Engineers on Machine Vision<br />Two problems:<br />- Identification<br />- Elimination<br />Service provision<br />- Charge by the acre with modifier according to weed density <br />- Eventually move to asset sale<br />Costs for service provision<br />COGS seek a 50-60% Gross Margin<br />Heavy R&D investment <br />
  • 247. Why Fighter Pilots Run Startups<br />
  • 248. No Surprises in an Airline<br />Scalable<br />Startup<br />Transition<br />Large Company<br />Scheduled Airline<br /><ul><li> Scheduled
  • 249. Routine
  • 250. Burn rate preplanned</li></li></ul><li>Air-Air Combat is Constant Surprise<br />Scalable<br />Startup<br />Transition<br />Large Company<br />Air-Air Combat<br /><ul><li> Uncertain environment
  • 251. Rapid, unanticipated changes
  • 252. Changes lead to disorientation
  • 253. Burn rate (time, fuel, bullets, $’s)limits window of opportunity</li></li></ul><li>Observe, Orient, Decide and Act:OODA Loop<br />John Boyd<br />
  • 254. Observe, Orient, Decide and Act:OODA Loop<br /><ul><li>Agility requires continuous interactions with the environment
  • 255. Winning requires constant assessment of change and ways to mitigate risk
  • 256. Iterating faster than competitors yields substantial advantage</li></ul> = Victory<br />
  • 257. 92<br />Boyd’s OODA Loop<br />Observe<br />Orient<br />Decide<br />Act<br />ImplicitGuidance& Control<br />ImplicitGuidance& Control<br />UnfoldingCircumstances<br />CulturalTraditions<br />Observations<br />GeneticHeritage<br />Decision(Hypothesis)<br />Analyses &Synthesis<br />Action(Test)<br />FeedForward<br />FeedForward<br />FeedForward<br />NewInformation<br />PreviousExperience<br />OutsideInformation<br />InteractionWithEnvironment<br />Interaction w/Environment<br />
  • 258. Customer Development = OODA Loop<br />Observe<br />Orient<br />Act<br />Decide <br />
  • 259. OODA Loop is Not an Intelligence Test<br /><ul><li>It’s about Agility
  • 260. It’s about Resilience
  • 261. It’s not about winning arguments inside the company
  • 262. Fighters pilots vs. military intelligence</li></li></ul><li>Am IFighter Pilot For a Startup?<br />
  • 263. Am I an Entrepreneur?Startup Personal Checklist<br />Are you comfortable with:<br />Chaos<br />Uncertainty<br />Are you:<br />Curious<br />Resilient<br />Agile<br />Passionate<br />Driven<br />Articulate<br />Tenacious<br />
  • 264. EntrepreneurshipYour Role in a Startup<br />Decreasing chaos/reward<br />Founder<br />Co-founder<br />Early Employee<br />Late Employee<br />They don’t require the same risk/personality profile<br />
  • 265. February 28, 2009<br />One candidate got a C in macroeconomics. “That’s troubling to me,” Ms. Mayer says. “Good students are good at all things.”Marissa MayerGoogle<br />
  • 266. The “Good Student”<br />Will go to work for Google, Microsoft, NokiaIBM or Apple<br />Successful tech entrepreneurs and grades have at best zero correlation<br />
  • 267. The Following People Would Never Have Been Hired by Marissa Mayer and Google<br />
  • 268.
  • 269. Thanks<br />www.steveblank.com<br />

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