Why Fighter Pilots Run Startups<br />Steve Blank<br />Stanford - School of Engineering<br />U.C. Berkeley - Haas School Of...
Early-Stage Ventures<br />
I Drew This<br />CustomerDiscovery<br />Company <br /> Building<br />CustomerValidation<br />Customer Creation<br />Pivot<...
I Called It:Customer Development<br />CustomerDiscovery<br />Company <br /> Building<br />CustomerValidation<br />Customer...
I Wrote This<br />
I Write a Blog  <br />www.steveblank.com<br />
Six Short Stories<br />
Not All Startups Are Equal<br />
Small Business<br />Startup<br />Small Business Startups<br />
Small Business<br />Startup<br />-  Business Model found<br />- Profitable business<br /><ul><li> Existing team</li></ul><...
Small Business<br />Startup<br />- Business Model found<br />- Profitable business<br /><ul><li> Existing team</li></ul>< ...
Small Business Startup:Internet Edition<br />Small Business<br />Startup<br />- Business Model found<br />- Profitable bus...
Not all businesses on the Internet are “Scalable Startups”</li></li></ul><li>Large Company Sustaining Innovation<br />Sust...
 Incremental improvements</li></li></ul><li>Large Company Disruptive Innovation<br />New Division<br />Transition<br />Lar...
 New tech, customers, channels</li></li></ul><li>Scalable<br />Startup<br />Large Company<br />>$100M/year<br />Scalable S...
Scalable<br />Startup<br />Large Company<br />>$100M/year<br /><ul><li>Total Available Market > $500m
 Company can grow to $100m/year
 Business model found
 Focused on execution and process</li></ul>Scalable Startup<br />
Scalable<br />Startup<br />Large Company<br />>$100M/year<br /><ul><li>Total Available Market > $500m
 Company can grow to $100m/year
 Business model found
 Focused on execution and process
 Typically requires “risk capital”</li></ul>Scalable Startup<br /><ul><li> In contrast a scalable startup is designed to g...
 Typically needs venture (risk) capital
 What Silicon Valley means when they say “Startup”</li></li></ul><li>Very Different Startup Goals<br />Small Business<br /...
 Company can grow to $100m/year
 Business model found
 Focused on execution and process
 Typically requires “risk capital”</li></li></ul><li>Venture Firms Invest in Scalable Startups<br />Small Business<br />St...
Scalable<br />Startup<br />Transition<br />Large Company<br /><ul><li>Business Model found
 i.e. Product/Market fit</li></ul>- Repeatable sales model<br />- Managers hired<br />What’s A Startup?<br />A Startup is ...
What VC’s Don’t Tell You:The Transition<br />Scalable<br />Startup<br />Transition<br />Large Company<br />Search<br />Bui...
What VC’s Don’t Tell You:The Transition – Founders Leave<br />Scalable<br />Startup<br />Transition<br />Large Company<br ...
 Professional Mgmt
 Process
 Beginning of scale</li></li></ul><li>Plan versus Model<br />
No Business Plan survives first contact with customers<br />
So Search for a Business Model<br />
The Search for a Business Model<br /><ul><li>A Business Plan is static
A Business Model diagrams how a company creates, delivers and captures value – it’s dynamic
 Or in English: How a company makes money</li></li></ul><li>Emphasis On Hypotheses Testing<br />
Startups Continually Pivot (Iterate)<br />
Startups versus Companies<br />
Startups Search and Pivot<br />The Search for the Business Model<br />Scalable<br />Startup<br />Transition<br />Large Com...
 i.e. Product/Market fit</li></ul>- Repeatable sales model<br />- Managers hired<br />
Startups Search, Companies Execute<br />The Execution of the Business Model<br />The Search for the Business Model<br />Sc...
 Product/Market fit</li></ul>- Repeatable sales model<br />- Managers hired<br />
Metrics Versus Accounting<br />The Execution of the Business Model<br />Scalable<br />Startup<br />Transition<br />Large<b...
 Cash Flow Statement
 Income Statement</li></li></ul><li>Metrics Versus Accounting<br />The Search for the Business Model<br />The Execution of...
 Viral coefficient
 Customer Lifetime Value
 Average Selling Price/Order Size
 Monthly burn rate
 etc.  </li></ul>Traditional Accounting<br /><ul><li> Balance Sheet
 Cash Flow Statement
 Income Statement</li></li></ul><li>Customer Validation Versus Sales<br />The Execution of the Business Model<br />Scalabl...
 Scalable
 Price List/Data Sheets
 Revenue Plan</li></li></ul><li>Customer Validation Versus Sales<br />The Search for the Business Model<br />The Execution...
 Pricing/Feature unstable
 Not yet repeatable
“One-off’s”</li></ul>Sales<br /><ul><li> Sales Organization
 Scalable
 Price List/Data Sheets
 Revenue Plan</li></li></ul><li>Customer Development VersusProduct Management<br />The Execution of the Business Model<br ...
 Feature Spec’s
 Competitive Analysis</li></li></ul><li>Customer Development Versus Product Management<br />The Search for the Business Mo...
 Feature Spec’s
 Competitive Analysis</li></ul>Customer Development<br /><ul><li> Hypothesis Testing
 Minimum Feature Set
 Pivots</li></li></ul><li>Engineering Versus Agile Development<br />The Execution of the Business Model<br />Scalable<br /...
 Waterfall Development
 QA
 Tech Pubs</li></li></ul><li>Engineering Versus Agile Development<br />The Search for the Business Model<br />The Executio...
 Waterfall Development
 QA
 Tech Pubs</li></ul>Agile Development<br /><ul><li> Continuous Deployment
 Continuous Learning
 Self Organizing Teams
 Minimum Feature Set
 Pivots</li></li></ul><li>Startups Model, Companies Plan<br />The Execution of the Business Model<br />Scalable<br />Start...
 Known features for line extensions
 Known customers/markets
 Known business model</li></li></ul><li>Startups Model, Companies Plan<br />The Search for the Business Model<br />The Exe...
 Unknown feature set
 Unknown business model
 Model found by iteration
 Plan describes “knowns”
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Why fighter pilots run startups

  1. 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. 2. Early-Stage Ventures<br />
  3. 3. I Drew This<br />CustomerDiscovery<br />Company <br /> Building<br />CustomerValidation<br />Customer Creation<br />Pivot<br />
  4. 4. I Called It:Customer Development<br />CustomerDiscovery<br />Company <br /> Building<br />CustomerValidation<br />Customer Creation<br />Pivot<br />
  5. 5. I Wrote This<br />
  6. 6. I Write a Blog <br />www.steveblank.com<br />
  7. 7. Six Short Stories<br />
  8. 8. Not All Startups Are Equal<br />
  9. 9. Small Business<br />Startup<br />Small Business Startups<br />
  10. 10. 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 />
  11. 11. 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>97% of all companies in Israel are small businesses</li></ul>http://www.milkeninstitute.org/pdf/israel_small_business_0105.pdf<br />
  12. 12. Small Business Startup:Internet Edition<br />Small Business<br />Startup<br />- Business Model found<br />- Profitable business<br /><ul><li> Existing team</li></ul>< $10M in revenue<br /><ul><li>The Internet allows a new class of Small Businesses
  13. 13. Not all businesses on the Internet are “Scalable Startups”</li></li></ul><li>Large Company Sustaining Innovation<br />Sustaining Innovation<br />Transition<br />Scalable<br />Startup<br />Large Company<br /><ul><li> Existing Market
  14. 14. Incremental improvements</li></li></ul><li>Large Company Disruptive Innovation<br />New Division<br />Transition<br />Large Company<br />Disruptive Innovation<br /><ul><li> New Market
  15. 15. New tech, customers, channels</li></li></ul><li>Scalable<br />Startup<br />Large Company<br />>$100M/year<br />Scalable Startup<br />
  16. 16. Scalable<br />Startup<br />Large Company<br />>$100M/year<br /><ul><li>Total Available Market > $500m
  17. 17. Company can grow to $100m/year
  18. 18. Business model found
  19. 19. Focused on execution and process</li></ul>Scalable Startup<br />
  20. 20. Scalable<br />Startup<br />Large Company<br />>$100M/year<br /><ul><li>Total Available Market > $500m
  21. 21. Company can grow to $100m/year
  22. 22. Business model found
  23. 23. Focused on execution and process
  24. 24. Typically requires “risk capital”</li></ul>Scalable Startup<br /><ul><li> In contrast a scalable startup is designed to grow big
  25. 25. Typically needs venture (risk) capital
  26. 26. What Silicon Valley means when they say “Startup”</li></li></ul><li>Very Different Startup Goals<br />Small Business<br />Startup<br />- Business Model found<br />- Profitable business<br /><ul><li> Existing team</li></ul>< $10M<br />Scalable<br />Startup<br />Large Company<br /><ul><li> Total Available Market > $500m
  27. 27. Company can grow to $100m/year
  28. 28. Business model found
  29. 29. Focused on execution and process
  30. 30. Typically requires “risk capital”</li></li></ul><li>Venture Firms Invest in Scalable Startups<br />Small Business<br />Startup<br />Scalable<br />Startup<br />Large Company<br />
  31. 31. Scalable<br />Startup<br />Transition<br />Large Company<br /><ul><li>Business Model found
  32. 32. i.e. Product/Market fit</li></ul>- Repeatable sales model<br />- Managers hired<br />What’s A Startup?<br />A Startup is the organization used to search for a scalable business model<br />
  33. 33. What VC’s Don’t Tell You:The Transition<br />Scalable<br />Startup<br />Transition<br />Large Company<br />Search<br />Build<br />Grow<br />
  34. 34. What VC’s Don’t Tell You:The Transition – Founders Leave<br />Scalable<br />Startup<br />Transition<br />Large Company<br /><ul><li>Founders depart
  35. 35. Professional Mgmt
  36. 36. Process
  37. 37. Beginning of scale</li></li></ul><li>Plan versus Model<br />
  38. 38. No Business Plan survives first contact with customers<br />
  39. 39. So Search for a Business Model<br />
  40. 40. The Search for a Business Model<br /><ul><li>A Business Plan is static
  41. 41. A Business Model diagrams how a company creates, delivers and captures value – it’s dynamic
  42. 42. Or in English: How a company makes money</li></li></ul><li>Emphasis On Hypotheses Testing<br />
  43. 43. Startups Continually Pivot (Iterate)<br />
  44. 44. Startups versus Companies<br />
  45. 45. Startups Search and Pivot<br />The Search for the Business Model<br />Scalable<br />Startup<br />Transition<br />Large Company<br /><ul><li>Business Model found
  46. 46. i.e. Product/Market fit</li></ul>- Repeatable sales model<br />- Managers hired<br />
  47. 47. 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 />- Cash-flow breakeven<br />- Profitable<br />- Rapid scale<br />- New Senior Mgmt<br />~ 150 people<br /><ul><li>Business Model found
  48. 48. Product/Market fit</li></ul>- Repeatable sales model<br />- Managers hired<br />
  49. 49. 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
  50. 50. Cash Flow Statement
  51. 51. 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
  52. 52. Viral coefficient
  53. 53. Customer Lifetime Value
  54. 54. Average Selling Price/Order Size
  55. 55. Monthly burn rate
  56. 56. etc. </li></ul>Traditional Accounting<br /><ul><li> Balance Sheet
  57. 57. Cash Flow Statement
  58. 58. 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
  59. 59. Scalable
  60. 60. Price List/Data Sheets
  61. 61. 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
  62. 62. Pricing/Feature unstable
  63. 63. Not yet repeatable
  64. 64. “One-off’s”</li></ul>Sales<br /><ul><li> Sales Organization
  65. 65. Scalable
  66. 66. Price List/Data Sheets
  67. 67. Revenue Plan</li></li></ul><li>Customer Development VersusProduct Management<br />The Execution of the Business Model<br />Scalable<br />Startup<br />Transition<br />Large Company<br />Product Management<br /><ul><li> Delivers MRD’s
  68. 68. Feature Spec’s
  69. 69. Competitive Analysis</li></li></ul><li>Customer Development Versus Product Management<br />The Search for the Business Model<br />The Execution of the Business Model<br />Scalable<br />Startup<br />Transition<br />Large Company<br />Product Management<br /><ul><li> Delivers MRD’s
  70. 70. Feature Spec’s
  71. 71. Competitive Analysis</li></ul>Customer Development<br /><ul><li> Hypothesis Testing
  72. 72. Minimum Feature Set
  73. 73. Pivots</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.
  74. 74. Waterfall Development
  75. 75. QA
  76. 76. 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.
  77. 77. Waterfall Development
  78. 78. QA
  79. 79. Tech Pubs</li></ul>Agile Development<br /><ul><li> Continuous Deployment
  80. 80. Continuous Learning
  81. 81. Self Organizing Teams
  82. 82. Minimum Feature Set
  83. 83. 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 /><ul><li> Plan describes “knowns”
  84. 84. Known features for line extensions
  85. 85. Known customers/markets
  86. 86. 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 /><ul><li>Unknown customer needs
  87. 87. Unknown feature set
  88. 88. Unknown business model
  89. 89. Model found by iteration
  90. 90. Plan describes “knowns”
  91. 91. Known features for line extensions
  92. 92. Known customers/markets
  93. 93. Known business model</li></li></ul><li>Startups Don’t Last Forever<br />Scalable<br />Startup<br />Transition<br />Large Company<br />- Cash-flow breakeven<br />- Profitable<br />- Rapid scale<br />- New Senior Mgmt<br />~ 150 people<br /><ul><li> Business Model found
  94. 94. Product/Market fit</li></ul>- Repeatable sales model<br />- Managers hired<br />You failif you remain a startup!<br />
  95. 95. Customer Risk Versus Technology Risk<br />
  96. 96. Industry Affects Type of Risk<br /><ul><li>Web 2.0
  97. 97. Enterprise Software
  98. 98. Enterprise Hardware
  99. 99. Communication Hardware
  100. 100. Communication Software
  101. 101. Consumer Electronics
  102. 102. Game Software
  103. 103. Semiconductors
  104. 104. Electronic Design Automation
  105. 105. Cleantech
  106. 106. Med Dev / Health Care
  107. 107. Life Science / Biotech
  108. 108. Personalized Medicine</li></ul>Large Company<br />Transition<br />
  109. 109. Technology Known,Customers Unknown<br /><ul><li>Web 2.0
  110. 110. Enterprise Software
  111. 111. Enterprise Hardware
  112. 112. Communication Hardware
  113. 113. Communication Software
  114. 114. Consumer Electronics
  115. 115. Game Software
  116. 116. Semiconductors
  117. 117. Electronic Design Automation
  118. 118. Cleantech
  119. 119. Med Dev / Health Care
  120. 120. Life Science / Biotech
  121. 121. Personalized Medicine</li></ul>Customer Risk<br />Large Company<br />Transition<br />
  122. 122. Technology Unknown, Customers Known<br /><ul><li>Web 2.0
  123. 123. Enterprise Software
  124. 124. Enterprise Hardware
  125. 125. Communication Hardware
  126. 126. Communication Software
  127. 127. Consumer Electronics
  128. 128. Game Software
  129. 129. Semiconductors
  130. 130. Electronic Design Automation
  131. 131. Cleantech
  132. 132. Med Dev / Health Care
  133. 133. Life Science / Biotech
  134. 134. Personalized Medicine</li></ul>Large Company<br />Transition<br />Technology Risk<br />
  135. 135. Technology and Customers Unknown<br /><ul><li>Web 2.0
  136. 136. Enterprise Software
  137. 137. Enterprise Hardware
  138. 138. Communication Hardware
  139. 139. Communication Software
  140. 140. Consumer Electronics
  141. 141. Game Software
  142. 142. Semiconductors
  143. 143. Electronic Design Automation
  144. 144. Cleantech
  145. 145. Med Dev / Health Care
  146. 146. Life Science / Biotech
  147. 147. Personalized Medicine</li></ul>Customer and <br />Technology Risk<br />
  148. 148. Rewards Differ by Industry<br /><ul><li>Web 2.0
  149. 149. Enterprise Software
  150. 150. Enterprise Hardware
  151. 151. Communication Hardware
  152. 152. Communication Software
  153. 153. Consumer Electronics
  154. 154. Game Software
  155. 155. Semiconductors
  156. 156. Electronic Design Automation
  157. 157. Cleantech
  158. 158. Med Dev / Health Care
  159. 159. Life Science / Biotech
  160. 160. Personalized Medicine
  161. 161. Huge payoff in biotech for solving technology problem
  162. 162. In other industries you’re giving away your hard work</li></ul>Technology Risk<br />
  163. 163. Rewards Differ by Industry<br /><ul><li>Web 2.0
  164. 164. Enterprise Software
  165. 165. Enterprise Hardware
  166. 166. Communication Hardware
  167. 167. Communication Software
  168. 168. Consumer Electronics
  169. 169. Game Software
  170. 170. Semiconductors
  171. 171. Electronic Design Automation
  172. 172. Cleantech
  173. 173. Med Dev / Health Care
  174. 174. Life Science / Biotech
  175. 175. Personalized Medicine</li></ul>Customer Risk<br /><ul><li>No payoff in Web 2.0 until you solve the customer risk</li></ul>Technology Risk<br />
  176. 176. How Do Startups Search For A Business Model?<br /><ul><li> The Search is called Customer Development
  177. 177. The Implementation is called Agile Development</li></li></ul><li>The Lean Startup<br /><ul><li> The Search is called Customer Development
  178. 178. The Implementation is called Agile Development</li></li></ul><li>Customer Development<br />
  179. 179. Solving For Customer Risk:Customer Development<br />
  180. 180. Solving For Customer Risk:Customer Development<br />Get the Hell Out of the Building<br />
  181. 181. Solving For Customer Risk:Customer Development<br />Get the Hell Out of the Building<br />Country<br />
  182. 182. More startups fail from a lack of customers than from a failure of product development<br />
  183. 183. Then why do we have:<br />process to manage product development?<br />
  184. 184. Then why do we have:<br />process to manage product development?<br />no process to manage customer development?<br />
  185. 185. Because:<br />The smarter the founders the more likely, “I know what customers want”<br />Usually wrong<br />Usually come from military intelligence<br />Startups are not an intelligence test<br />
  186. 186. Product Development Model<br />Concept/Seed Round<br />Product Dev.<br />Alpha/Beta Test<br />Launch/<br />1st Ship<br />
  187. 187. 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 />
  188. 188. 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
  189. 189. Hire Sales VP
  190. 190. Hire 1st Sales Staff</li></ul>Sales<br />
  191. 191. 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
  192. 192. Hire Sales VP
  193. 193. Pick distribution Channel</li></ul>Sales<br />Business <br />Development<br /><ul><li> Hire First Bus Dev
  194. 194. 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
  195. 195. Hire Sales VP
  196. 196. Pick distribution Channel</li></ul>Sales<br />Business <br />Development<br /><ul><li> Hire First Bus Dev
  197. 197. Do deals for FCS</li></ul>Engineering<br /><ul><li> Write MRD
  198. 198. Waterfall
  199. 199. Q/A
  200. 200. Tech Pubs</li></li></ul><li>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 />
  201. 201. Customer Discovery<br />CustomerDiscovery<br />CustomerValidation<br />Company<br />Building<br />CustomerCreation<br />Stop selling, start listening<br />Test your hypotheses<br />Continuous Discovery<br />
  202. 202. Customer Validation<br />CustomerDiscovery<br />CustomerValidation<br />Customer Creation<br />Company<br />Building<br />Pivot<br /><ul><li>Repeatable and scalable business model?
  203. 203. Passionate earlyvangelists?
  204. 204. Pivot back to Discovery if no customers</li></li></ul><li>The Pivot<br /><ul><li> The heart of Customer Development
  205. 205. Iteration without crisis
  206. 206. Fast, agile and opportunistic</li></li></ul><li>So What Does Engineering Do?<br />
  207. 207. Traditional Product DevelopmentUnit of progress: Advance to Next Stage<br />Waterfall<br />Requirements<br />Design<br />Problem: known<br />Solution: known<br />Implementation<br />Verification<br />Maintenance<br />Source: Eric Rieshttp://startuplessonslearned.blogspot.com<br />
  208. 208. When the Customer Problem is Known<br />“Product Owner” or <br />in-house customer <br />Problem: Known<br />Solution: Unknown<br />Source: Eric Rieshttp://startuplessonslearned.blogspot.com<br />
  209. 209. Agile - Customer Problem is KnownUnit of progress: a line of working code<br />“Product Owner” or <br />in-house customer <br />Problem: Known<br />Solution: Unknown<br />Source: Eric Rieshttp://startuplessonslearned.blogspot.com<br />
  210. 210. When the Customer Problem is Unknown<br />Problem: Unknown<br />Solution: Unknown<br />Source: Eric Rieshttp://startuplessonslearned.blogspot.com<br />
  211. 211. Customer Problem is UnknownUnit of progress: learning about customers<br />Problem: Unknown<br />Solution: Unknown<br />Source: Eric Rieshttp://startuplessonslearned.blogspot.com<br />
  212. 212. Leadership Versus Management<br />
  213. 213. Scalable<br />Startup<br />Transition<br />Large Company<br />Leadership Versus Management<br />
  214. 214. Scalable<br />Startup<br />Transition<br />Large Company<br />Leadership Versus Management<br />
  215. 215. Scalable<br />Startup<br />Transition<br />Large Company<br />Leadership Versus Management<br />Search<br />
  216. 216. Scalable<br />Startup<br />Transition<br />Large<br />Company<br />Leadership Versus Management<br />Build<br />Search<br />
  217. 217. Scalable<br />Startup<br />Transition<br />Large<br />Company<br />Leadership Versus Management<br />Build<br />Grow<br />Search<br />
  218. 218. Why Fighter Pilots Run Startups<br />
  219. 219. No Surprises in an Airline<br />Scalable<br />Startup<br />Transition<br />Large Company<br />Scheduled Airline<br /><ul><li> Scheduled
  220. 220. Routine
  221. 221. 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
  222. 222. Rapid, unanticipated changes
  223. 223. Changes lead to disorientation
  224. 224. 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 />
  225. 225. Observe, Orient, Decide and Act:OODA Loop<br /><ul><li>Agility requires continuous interactions with the environment
  226. 226. Winning requires constant assessment of change and ways to mitigate risk
  227. 227. Iterating faster than competitors yields substantial advantage</li></ul> = Victory<br />
  228. 228. 86<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 />
  229. 229. Customer Development = OODA Loop<br />Observe<br />Orient<br />Act<br />Decide <br />
  230. 230. OODA Loop is Not an Intelligence Test<br /><ul><li>It’s about Agility
  231. 231. It’s about Resilience
  232. 232. It’s not about winning arguments inside the company
  233. 233. Fighters pilots vs. military intelligence</li></li></ul><li>Warfare (Startups) Changes Forever<br />
  234. 234. Thanks<br />www.steveblank.com<br />
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