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Startups Now how five innovations have changed     the startup world, forever       Keith McGreggor  Director of VentureLab @
s                                                                                           m   o w ls                    ...
GT Research Distribution       EACH YEAR ATOver half a billion dollars total R&D on campus for FY2009!                    ...
research is the transformationof money into knowledge
EACH YEAR ATannual invention disclosures   400unencumbered inventions        250   VentureLab  startup ideas              ...
at least one new invention      every day
innovation is the transformationof knowledge into money
Decisions           {                         LICENSE                  Inform Office of Technology                         ...
todayinventions reviewed               250+new projects                        35+ongoing projects                     83n...
about startups ...
NASDAQ        5000                                                        4000                                            ...
$1,000,000,000,000
we know something now that   we didn’t know before            ...
we know something now that   we didn’t know before   we know how to build        startups
we know something now that   we didn’t know before                   engineer   we know how to build        startups
five innovations
what is a company?
A organization which sells aproduct or service in exchange for        revenue and profit
A bit of history...
Dutch West India Company 1620
1856 - First Org Chart
1908
Tools for the 20th Century“Century of the Corporation”
... but what about startups?
Startups are a Smaller Version     of a Large Company
Startups are a Smaller Version     of a Large Company
Startups are something else.
five innovationswhat is a startup?
innovation     A startup is a temporaryorganization designed to search for    a repeatable and scalable         business m...
Startups SearchCompanies Execute
Startups   Business ModelCompanies    Product/Service
Old School of Startups   (before 2010) ...
All I Need to Do is Execute the Plan
All I Need to Do is Make the Forecast
Step 1.   Write Business PlanStep 2.   Make 5-year ForecastStep 3.   ???Step 4.   PROFIT!
Crystal ball...2007                 2013
Previous5-Year Plans
as a general rule...Business Plan is a work ofFICTION
Business       BusinessModel      >    Plan
five innovationswhat is a business     model?
innovationBusiness Model Generation                     infrastructure              offer              customers          ...
the Canvas    infrastructure              offer            customers                 activities              relationships...
still fiction...      infrastructure            offer                 customers                   ?             ?  ?       ...
... and we want facts!     infrastructure             offer               customers                   ✔             ✔ ✔   ...
How?
pick one...      infrastructure            offer                 customers                   ?              ?  ?          ...
design experiment ...  offer                 customers                                            A controlled experiment ...
run it in the world ...  offer                 customers           A controlled                                           ...
... and iterate!  offer                 customers           A controlled                                            experi...
five innovationsthe scientific method applies to business
innovation             ©2006
the key idea   There are  NO FACTSin the building!                   57
the big secretConduct 100+Interviews                  58
59
A man   who carries  a cat by the    tail learns something he  can learn inno other way.           60
Why do Startups fail?
Startups   don’t failbecause they fail to makesomething...
Startups don’t fail  because they   fail to make   something.Startups failbecause they fail to make  something   someonewa...
Business Model    infrastructure              offer            customers                 activities              relations...
Product / Market Fit    infrastructure              offer            customers                 activities              rel...
“If you build it, he will come...”
Tools for managing       Tools for managing   Engineering Risk            Customer Risk   Waterfall Development           ...
five innovationshow to reducecustomer risk
innovationCustomer Discovery
Customer DiscoveryStartups   Companies Search    Execute
Customer Discovery Understand the Problem          then  Develop the Solution
This may sound familiar...Understand the Problem         then                      ... but it’s actually Develop the Solut...
MYTHCustomers wantyour technology.
TRUTH Customers don’t careabout (your) technology.Customers just want their    problem solved.
Customer Discovery  key ideaCustomer POV
Customer Discovery  WHO CARES?WHY will they BUY?
Customer           Gains  JobsProblems Needs             Pains
Customer             Gains  JobsProblems   Archetype Needs               Pains
Something Makeable...             Gain Creators Products& Services              Pain Killers
Value Proposition             Gain CreatorsProducts & Services    MVP              Pain Killers
Product / Market Fit    infrastructure              offer            customers                 activities              rel...
How do you know you have  product / market fit?
METRICS
VanityMETRICS
VanityMETRICS
five innovationsbuild to measuremeasure to learn learn to build
innovationLean Startup Methodology
Agile Development
MVPMinimum Viable Product
MVP Minimum Viable Product                              HIGH  LOW                            FIDELITYFIDELITY           Bu...
Moneyball! ActionableMETRICS
the Pipeline               $$$
METRICSAARRR
acquisition   activation   retention   revenue              referral
the equation that matters...     infrastructure           offer            customers               activities             ...
... is this one: CAC << LTV    acquisition   activation   retention   revenue      CAC                            LTV     ...
CAC << LTV if         and       COST < REVENUEthen    COMPANY!
five innovations      define: “startup”business model generation   the scientific method    customer discovery lean startup m...
Business Model Generation   Customer DiscoveryLean Startup Methodology Startup Engineering
one more thing...
Business PlanCompetition  1995-2013
Business Model Competition    Fall 2013
75 Fifth St NW, Suite 202, Atlanta GA 30308venturelab.gatech.edu@venturelab / @keithmcgreggorkeith@venturelab.gatech.edu
Startups Today (Keynote at Auburn, April 2013)
Startups Today (Keynote at Auburn, April 2013)
Startups Today (Keynote at Auburn, April 2013)
Startups Today (Keynote at Auburn, April 2013)
Startups Today (Keynote at Auburn, April 2013)
Startups Today (Keynote at Auburn, April 2013)
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Startups Today (Keynote at Auburn, April 2013)

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The Five Innovations that have changed the Startup landscape forever.
Presented to the Auburn University chapter of the National Academy of Inventors, April 5, 2013

Published in: Business
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Startups Today (Keynote at Auburn, April 2013)

  1. 1. Startups Now how five innovations have changed the startup world, forever Keith McGreggor Director of VentureLab @
  2. 2. s m o w ls i ty e te dsh Too ur s s s a y c oi ce Sy l ro dia or et x Se cknstartups ur e ted se et e pt dN efle ta so it a n N M c e e e Ba n lan l R e finter A nI on d ar 21 R il to At ixe B eI eC u M AI P Th G Bel l a ch rn ed ol a Te e he C i th ck ple ca oo rg ou h eo SFwork S Lo Ap Co Ya G N ele ew h ic h dr ra life M An Saschool S hD BS M P 1980 1990 2000 2010
  3. 3. GT Research Distribution EACH YEAR ATOver half a billion dollars total R&D on campus for FY2009! College of Computing Other Research Centers College of Sciences College of Engineering GTRI > $500,000,000 / year7/14/09 Enterprise Innovation Institute 12
  4. 4. research is the transformationof money into knowledge
  5. 5. EACH YEAR ATannual invention disclosures 400unencumbered inventions 250 VentureLab startup ideas 25 license ideas 200 early ideas 25
  6. 6. at least one new invention every day
  7. 7. innovation is the transformationof knowledge into money
  8. 8. Decisions { LICENSE Inform Office of Technology 80% Licensing START-UP Assign to Catalyst 10% LIFESTYLE COMPANY Advice team on viable commercialization strategies.Research SCIENCE PROJECT Put technology on hold Contact professor every 10% six months for an update
  9. 9. todayinventions reviewed 250+new projects 35+ongoing projects 83new companies created est. 30external investment in new and $185Mexisting VL companies in 2012total of all investments $700M
  10. 10. about startups ...
  11. 11. NASDAQ 5000 4000 3000 2000 10001996 1998 2000 2002 2004 2006 2008 2010 2012
  12. 12. $1,000,000,000,000
  13. 13. we know something now that we didn’t know before ...
  14. 14. we know something now that we didn’t know before we know how to build startups
  15. 15. we know something now that we didn’t know before engineer we know how to build startups
  16. 16. five innovations
  17. 17. what is a company?
  18. 18. A organization which sells aproduct or service in exchange for revenue and profit
  19. 19. A bit of history...
  20. 20. Dutch West India Company 1620
  21. 21. 1856 - First Org Chart
  22. 22. 1908
  23. 23. Tools for the 20th Century“Century of the Corporation”
  24. 24. ... but what about startups?
  25. 25. Startups are a Smaller Version of a Large Company
  26. 26. Startups are a Smaller Version of a Large Company
  27. 27. Startups are something else.
  28. 28. five innovationswhat is a startup?
  29. 29. innovation A startup is a temporaryorganization designed to search for a repeatable and scalable business model.
  30. 30. Startups SearchCompanies Execute
  31. 31. Startups Business ModelCompanies Product/Service
  32. 32. Old School of Startups (before 2010) ...
  33. 33. All I Need to Do is Execute the Plan
  34. 34. All I Need to Do is Make the Forecast
  35. 35. Step 1. Write Business PlanStep 2. Make 5-year ForecastStep 3. ???Step 4. PROFIT!
  36. 36. Crystal ball...2007 2013
  37. 37. Previous5-Year Plans
  38. 38. as a general rule...Business Plan is a work ofFICTION
  39. 39. Business BusinessModel > Plan
  40. 40. five innovationswhat is a business model?
  41. 41. innovationBusiness Model Generation infrastructure offer customers activities relationships partners value segments prop. resources channels financial cost structure revenue streams
  42. 42. the Canvas infrastructure offer customers activities relationshipspartners value segments prop. resources channels financial cost structure revenue streams
  43. 43. still fiction... infrastructure offer customers ? ? ? activities ? relationships ?partners ? value segments prop. ? ? ? resources channels ? ? financial ? ? cost structure ? revenue streams ? ?
  44. 44. ... and we want facts! infrastructure offer customers ✔ ✔ ✔ activities relationships ✔ ✔partners ✔ value segments prop. ? ✔ ✔ resources channels ✔ ? financial ✔ ✔ cost structure ? revenue streams ? ✔
  45. 45. How?
  46. 46. pick one... infrastructure offer customers ? ? ? activities ? relationships ?partners ? value segments prop. ? ? ? resources channels ? ? financial ? ? cost structure ? revenue streams ? ?
  47. 47. design experiment ... offer customers A controlled experiment ? generally compares the results obtained from an experimental ? relationships ? sample against a control sample, which is practically identical to the experimental ? value segments sample except for the one prop. ? aspect whose effect is being tested (the independent ? variable). channels ? ?financial ? ? revenue streams ?
  48. 48. run it in the world ... offer customers A controlled experiment ? generally compares the ? relationships ? results obtained from an ? value segments prop. ? ? channels ? ?financial ? ? revenue streams ?
  49. 49. ... and iterate! offer customers A controlled experiment generally ✔ compares the ? relationships ? results obtained from an ? value segments prop. ? ? channels ? ?financial ? ? revenue streams ?
  50. 50. five innovationsthe scientific method applies to business
  51. 51. innovation ©2006
  52. 52. the key idea There are NO FACTSin the building! 57
  53. 53. the big secretConduct 100+Interviews 58
  54. 54. 59
  55. 55. A man who carries a cat by the tail learns something he can learn inno other way. 60
  56. 56. Why do Startups fail?
  57. 57. Startups don’t failbecause they fail to makesomething...
  58. 58. Startups don’t fail because they fail to make something.Startups failbecause they fail to make something someonewants to buy from them.
  59. 59. Business Model infrastructure offer customers activities relationshipspartners value segments prop. resources channels financial cost structure revenue streams
  60. 60. Product / Market Fit infrastructure offer customers activities relationshipspartners value segments prop. resources channels financial cost structure revenue streams
  61. 61. “If you build it, he will come...”
  62. 62. Tools for managing Tools for managing Engineering Risk Customer Risk Waterfall Development ? Porter’s Five Forces SWOT Analysis Project Management Baseline Risk Assessment Stress Testing Concentration MethodologyQuantitative Risk Management ...
  63. 63. five innovationshow to reducecustomer risk
  64. 64. innovationCustomer Discovery
  65. 65. Customer DiscoveryStartups Companies Search Execute
  66. 66. Customer Discovery Understand the Problem then Develop the Solution
  67. 67. This may sound familiar...Understand the Problem then ... but it’s actually Develop the Solution the inverse
  68. 68. MYTHCustomers wantyour technology.
  69. 69. TRUTH Customers don’t careabout (your) technology.Customers just want their problem solved.
  70. 70. Customer Discovery key ideaCustomer POV
  71. 71. Customer Discovery WHO CARES?WHY will they BUY?
  72. 72. Customer Gains JobsProblems Needs Pains
  73. 73. Customer Gains JobsProblems Archetype Needs Pains
  74. 74. Something Makeable... Gain Creators Products& Services Pain Killers
  75. 75. Value Proposition Gain CreatorsProducts & Services MVP Pain Killers
  76. 76. Product / Market Fit infrastructure offer customers activities relationshipspartners value segments prop. resources channels financial cost structure revenue streams
  77. 77. How do you know you have product / market fit?
  78. 78. METRICS
  79. 79. VanityMETRICS
  80. 80. VanityMETRICS
  81. 81. five innovationsbuild to measuremeasure to learn learn to build
  82. 82. innovationLean Startup Methodology
  83. 83. Agile Development
  84. 84. MVPMinimum Viable Product
  85. 85. MVP Minimum Viable Product HIGH LOW FIDELITYFIDELITY Built to LEARN Not to SELL
  86. 86. Moneyball! ActionableMETRICS
  87. 87. the Pipeline $$$
  88. 88. METRICSAARRR
  89. 89. acquisition activation retention revenue referral
  90. 90. the equation that matters... infrastructure offer customers activities relationships partners value segments prop. resources channels financial COST < REVENUE
  91. 91. ... is this one: CAC << LTV acquisition activation retention revenue CAC LTV referral
  92. 92. CAC << LTV if and COST < REVENUEthen COMPANY!
  93. 93. five innovations define: “startup”business model generation the scientific method customer discovery lean startup methodology
  94. 94. Business Model Generation Customer DiscoveryLean Startup Methodology Startup Engineering
  95. 95. one more thing...
  96. 96. Business PlanCompetition 1995-2013
  97. 97. Business Model Competition Fall 2013
  98. 98. 75 Fifth St NW, Suite 202, Atlanta GA 30308venturelab.gatech.edu@venturelab / @keithmcgreggorkeith@venturelab.gatech.edu

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