Lean Startups, AUTM 2014 Startup Class

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A brief presentation on Evidence-based Entrepreneurship, given as a part of AUTM 2014's Startup Class.

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Lean Startups, AUTM 2014 Startup Class

  1. 1. Lean Startups evidence-based entrepreneurship Keith McGreggor, Ph.D. Director of VentureLab
  2. 2. #1 early #1 stage incubator engineering/science incubator #2 overall
  3. 3. innovations reviewed new projects current projects companies created total of angel & VC investments in VL companies 250+/year 35+/year 100+ active 150+ $730M+
  4. 4. since June 2012 13 cohorts / 5 nodes 300+ NSF teams 12+ teams
  5. 5. since May 2012 22+ cohorts / 7 locations 250+ teams 400+ entrepreneurs
  6. 6. Lean Startup?
  7. 7. Lean Startup is now known as Evidence-based Entrepreneurship
  8. 8. A new way of thinking about and designing startups engineering
  9. 9. three big ideas a definition a framework a methodology
  10. 10. three big ideas : Definition what is a startup?
  11. 11. three big ideas : Definition We used to think A startup is a smaller version of a large company.
  12. 12. Startups 
? 
 Companies ✓
  13. 13. three big ideas : Definition A startup is a temporary organization designed to search for a repeatable and scalable business model. - Steve Blank
  14. 14. Startups Search 
 
 Companies Execute
  15. 15. three big ideas : Definition A startup is a temporary organization designed to search for a repeatable and scalable business model. - Steve Blank
  16. 16. Research Team Core Idea or Technology
  17. 17. Research Team Core Idea or Technology Company
  18. 18. three big ideas : Definition Not everyone can or should be a founder. ! Professors are terrible as CEOs (but great as advisors).
  19. 19. three big ideas : Framework How do we share our thinking?
  20. 20. three big ideas : Framework What we used to do Write a business plan. Make a five-year forecast. Pitch for investors.
  21. 21. Business plan? 
Fiction 
 5 year forecast? Fantasy
  22. 22. three big ideas : Framework What we do now Focus on the business model. Talk about evidence, not belief.
  23. 23. Use the business model canvas
  24. 24. As a Startup Engine… KA P VP KR C$ CS C R$
  25. 25. … and as Investment Readiness ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓
  26. 26. three big ideas : Methodology How can we be assured?
  27. 27. Startups are risky. Startups fail, often. Even yours. Even ours.
  28. 28. Four Existential Startup Risks Product Market Team Financial
  29. 29. Four Startup Risks: Product Every startup can make something. Can you transform that great technology into a product someone wants to buy from you?
  30. 30. ? $ Core Idea or Technology Startup Customers
  31. 31. Four Startup Risks: Market The common denominator of every business is a customer. Most startups fail because they fail to find their customer.
  32. 32. Four Startup Risks: Team Can your team execute? Do they have the network? Can they attract & hire talent? Can they get the funding?
  33. 33. Four Startup Risks: Financial Is the model capital efficient? Revenue in year 1? Repeatable sales process by 2? Organic growth or investment?
  34. 34. three big ideas : Methodology Systematic reduction of startup risk Product Market Do this first. Team Financial Then, do this.
  35. 35. three big ideas : Product Methodology Market Connected & Primary Risks
  36. 36. three big ideas : Methodology Customer Development
  37. 37. Customer Development ? ✓ Customer Discovery Customer Validation Startup Customer Creation Company Building Company
  38. 38. Alignment & Sequence Risk Process Market Product ? ✓ Customer Discovery Customer Validation
  39. 39. However… Assume Risk Market you can transform ? technology Process into product … Customer Discovery Product ✓ Customer Validation
  40. 40. … and Risk Process Market ? Customer Discovery … Address Product Market Risk before doing ✓ Anything Else Customer Validation
  41. 41. Why? ? $
  42. 42. Customers, not Technology Desire Job / Task ✓ Pain
  43. 43. How? ? $
  44. 44. three big ideas : Methodology Answer these questions: WHO CARES? WHY will they BUY?
  45. 45. three big ideas : Methodology There are NO facts in your buildings or labs. Get out into the world and find out what’s true. the real key: 100+ Interviews
  46. 46. A man who carries a cat by the tail learns something he can learn in no other way.
  47. 47. three big ideas : Methodology You cannot outsource the discovery process. ! Your startup team must gather the evidence themselves (but you can guide them).
  48. 48. three big ideas : Methodology You should expect: Deadends & Pivots Complaints Frustration and then, finally, Evidence
  49. 49. Startups are risky. Evidence-based entrepreneurship and these processes will make yours fail less.
  50. 50. 75 Fifth St NW, Suite 415, Atlanta GA 30308 venturelab.gatech.edu @venturelab / @keithmcgreggor keith@venturelab.gatech.edu

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