1. Why Startups Are Not Small Versions of Large Companies Steve Blank www.steveblank.com Twitter: sgblank

2. I Wrote This

3. Five Short Stories

4. Not All Startups Are Equal

8. 99.7% of all companies

9. ~ 50% of total U.S. workershttp://www.sba.gov/advo/stats/sbfaq.pdf

12. New tech / Unknown product features

15. Total Available Market > $500m -$1B

16. Can grow to $100m/year

17. Focused on execution and processScalable Startup

19. Can grow to $100m/year

20. Business model found

21. Focused on execution and process

23. Typically needs risk capital

26. Professional Mgmt

27. Process

30. Repeatable sales model- Managers hired

32. Product/Market fit- Repeatable sales model - Managers hired

34. Cash Flow Statement

36. Viral coefficient

37. Customer Lifetime Value

38. Average Selling Price/Order Size

39. Monthly burn rate

41. Cash Flow Statement

43. Scalable

44. Price List/Data Sheets

46. Pricing/Feature unstable

47. Not yet repeatable

48. “One-off’s”

50. Scalable

51. Price List/Data Sheets

53. Feature Spec’s

54. Competitive Analysis

56. Feature Spec’s

58. Minimum Feature Set

59. Pivots

61. Waterfall Development

62. QA

64. Waterfall Development

65. QA

67. Continuous Learning

68. Self Organizing Teams

69. Minimum Feature Set

71. Known features for line extensions

72. Known customers/markets

74. 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

81. Always looking at something different

83. Finds your next market

84. Pains in the butt

85. Always looking at something different

87. Product/Market fit- Repeatable sales model - Managers hired You failif you remain a startup!

88. Plan versus Model

90. Customers

91. Channel

92. Demand Creation

93. Revenue/Expenses/ProfitThe template to look like everyone else when you present to VC’s/Management

94. No Business Plan survives first contact with customers

95. So Search for a Business Model

96. What Is a Business Model? Diagram of flows between company and customers Scorecard of hypotheses testing Rapid change with each iteration and pivot Product Management-driven * Alex Osterwalder

97. Business Model = Keeping Score in a Startup CUSTOMER RELATIONSHIP PARTNER NETWORK INFRASTRUCTURE CUSTOMER OFFER TARGET CUSTOMER CORE CAPABILITIES portrays the network of cooperative agreements with other companies explains the relationships a company establishes with its customers VALUE PROPOSITION describes the customers a company wants to offer value to outlines the capabilities required to run a company's business model gives an overall view of a company's bundle of products and services DISTRIBUTION CHANNEL VALUE CONFIGURATION describes the channels to communicate and get in touch with customers describes the arrangement of activities and resources sums up the monetary consequences to run a business model describes the revenue streams through which money is earned COST STRUCTURE REVENUE STREAMS FINANCE

98. Business Model Generation Book

101. Who Does This Search? The Founders Not Employees How?

102. Customer Development

103. Solving For Customer and Product Unknowns:Customer Development

104. Customer Development The founders Get the Hell Out of the Building ^

105. More startups fail from a lack of customers than from a failure of product development

106. Then why do we have: process to manage product development?

107. Then why do we have: Process to manage product development? None to manage customer development?

108. Startup - Back of the Napkin Model Concept/Seed Round Product Dev. Alpha/Beta Test Launch/ 1st Ship

111. Hire Sales VP

112. Hire 1st Sales StaffSales

114. Hire Sales VP

117. Hire Sales VP

120. Waterfall

121. Q/A

123. Customer Discovery CustomerDiscovery CustomerValidation Company Building CustomerCreation Stop selling, start listening Test your hypotheses Continuous Discovery Done by founders

124. Customer Discovery Phase 3 Test ProductHypothesis Phase 4Verify, Iterate & Expand CustomerDiscovery To Validation Phase 1Author Hypothesis Phase 2Test ProblemHypothesis

125. Hypothesis Product Customer/Problem Distribution/Pricing Demand Creation Market Type Competition

127. PassionateEarlyvangelists?

130. Iteration without crisis

132. Minimum feature set speeds up cycle time

134. Waterfall / Product ManagementExecution on Two “Knowns” Requirements Product Features: known Design Implementation Verification Customer Problem: known Maintenance Source: Eric Rieshttp://startuplessonslearned.blogspot.com

135. Agile - Customer Problem is KnownExisting Company/Market “Product Owner” or in-house customer Unit of progress: a line of working code Problem: Known Solution: Unknown Source: Eric Rieshttp://startuplessonslearned.blogspot.com

136. Lean StartupCustomer Problem + Product Features are Unknown Problem: Unknown Solution: Unknown Source: Eric Rieshttp://startuplessonslearned.blogspot.com

138. $’s for scale

141. Summary Founders can’t delegate customer discovery Startups are about speed of pivots Product Customer Channel They are not about MRD’s and process Product management can be an asset or an albatross in startups You can make the difference…with sneakers

142. Thanks www.steveblank.com