Demolish the status quo in entrepreneurial education 082311

1. Demolishing the Status Quo in Entrepreneurial Education And I think I’m liking it

2. I Write a Blog www.steveblank.com

3. This Talk is Based On Business Model Generation Four Steps to the Epiphany The Lean Startup

4. This Talk What’s a Startup? Search versus Execution Entrepreneurship As a Mgmt Science B-Schools = Large company mgmt Incubators = the transition E-School = the conclusion

5. First -What’s A Startup? Five Types of Startups

9. 99.7% of all companies

10. ~ 50% of total U.S. workershttp://www.sba.gov/advo/stats/sbfaq.pdf

12. Social Enterprise: Profitable

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

16. Can grow to $100m/yearScalable Startup

18. Company can grow to $100m/year

19. Business model found

20. Focused on execution and process

22. Typically needs risk capital

24. Professional Mgmt

25. Process

27. Buyable Startup Search Sell Scalable Startup $5 to 50M Acquisition Goal is to solve for: Internet and Mobile Apps Sell to larger company

29. i.e. Product/Market fit- Repeatable sales model - Managers hired What’s A Startup? Search Execute A Startup is a temporary organization used to search for a repeatable and scalable business model

33. Acquire - IP- Talent - Product - Customers - Business

34. Search Versus ExecutionWhy Accountants Don’t Run Startups

36. Repeatable sales model- Managers hired

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

40. Cash Flow Statement

42. Viral coefficient

43. Customer Lifetime Value

44. Average Selling Price/Order Size

45. Monthly burn rate

47. Cash Flow Statement

49. Scalable

50. Price List/Data Sheets

52. Pricing/Feature unstable

53. Not yet repeatable

54. “One-off’s”

56. Scalable

57. Price List/Data Sheets

59. Feature Spec’s

60. Competitive Analysis

62. Feature Spec’s

64. Minimum Feature Set

65. Pivots

67. Waterfall Development

68. QA

70. Waterfall Development

71. QA

73. Continuous Learning

74. Self Organizing Teams

75. Minimum Feature Set

77. Known features for line extensions

78. Known customers/markets

80. Unknown feature set

81. Unknown business model

82. Model found by iteration

83. Plan describes “knowns”

84. Known features for line extensions

85. Known customers/markets

87. Entrepreneurship as a Management Science E-School instead of B-School

89. 300 years of companies without MBA credentials

91. Strategy

92. Accounting

93. Products

94. Engineering

95. Management

97. Managing Groups and Teams

98. Financial Accounting

99. Operations

100. Modeling for Optimization

102. Cadre of experienced managers to match

103. Experts on finance and growth (Dupont/GM)B-Schools made the 20th Century the American business century

104. Business School Focus on Large Company StrategiesExecution versus Search

106. Most believe startups are just smaller versions of large companies

109. 1996 IdeaLab

110. 2005 Y-Combinator

112. Goal: create a company and jobs

113. Full-time residential, stipend-based program

115. Startups Are Not Smaller Versions of Large Companies Large Companies Execute Known Business Models

116. Startups Are Not Smaller Versions of Large Companies Startups Search for Unknown Business Models

118. Goal: methodology for startup creation

119. Can be taught anywhere

120. University

121. Incubator

122. Remotely

124. CUSTOMER SEGMENTS which customers and users are you serving? which jobs do they really want to get done?

125. VALUE PROPOSITIONS what are you offering them? what is that getting done for them? do they care?

126. CHANNELS how does each customer segment want to be reached? through which interaction points?

127. CUSTOMER RELATIONSHIPS what relationships are you establishing with each segment? personal? automated? acquisitive? retentive?

128. REVENUE STREAMS what are customers really willing to pay for? how? are you generating transactional or recurring revenues?

129. KEY RESOURCES which resources underpin your business model? which assets are essential?

130. KEY ACTIVITIES which activities do you need to perform well in your business model? what is crucial? 55

131. KEY PARTNERS which partners and suppliers leverage your model? who do you need to rely on?

132. COST STRUCTURE what is the resulting cost structure? which key elements drive your costs?

133. value proposition customer relationships key activities customer segments key partners cost structure revenue streams key resources channels 58 images by JAM

134. sketch out your business model

135. sketch out your business models

136. But,Realize They’re Hypotheses

137. 9 Guesses Guess Guess Guess Guess Guess Guess Guess Guess Guess

138. Customer Development The founders ^ Get Out of the Building

139. Customer DevelopmentThe Search For the Business Model Company Building CustomerDiscovery CustomerValidation Customer Creation Pivot

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

142. Market Type

143. CompetitionTurning Hypotheses to Facts

145. Customer

146. User

148. Customer

149. User

151. Market Type

153. (Customer)

156. Customer

157. User

159. Market Type

161. (Customer)

165. Iteration without crisis

167. Minimum feature set speeds up cycle time

169. The Pivot Strong clinical data Training Maintenance Conferences CME courses Product Development IP Clinical trials FDA Publishing Doctors: Earlier detection Price Accuracy Patients: Radiation Free Non-Invasive A Pivot is the change of one or more Business Model Canvas Components Leading doctors Key Opinion Leaders 3rd party manufacturers Distributors Breast Cancer Foundations ACOGACS OB/GYNs PCPs Direct Sales to hospitals Distributor IP Leading doctors Technical Expertise Product Development Clinical trials Operating Costs Marketing Costs Capital Equipment Sales and disposable item Per use fees

170. How Does This Really Work?Stanford Lean LaunchPad Class

171. How Does This Really Work?Stanford Lean LaunchPad Class 8 Weeks From an Idea to a Business

172. Pivot ExampleRobotic Weeding Talked 75 Customers in 8 Weeks

173. Our initial plan Confidential

175. White Farms, Large Peanut farmer in Georgia

176. REFCO Farms, large grower in Salinas Valley

177. Rincon Farms, large grower in Salinas Valley

178. Small Organic Corn/Soy grower in Nebraska

179. Heirloom Organics, small owner/operator, Santa Cruz Mts

180. Two small organic farmers at farmers market

182. Parks: Stanford Grounds Supervisor, head of maintenance and lead operator (has crew of 6)

183. Toro dealer (large mower manufacturer)

184. User of back-yard mowing system

185. Maintenance Services for City of Los Altos

187. Found weeding in organic crops is HUGE problem; 50 - 75% of costs Crews of 100s-1000 Back-breaking task (Ilegal) labor harder to get 1-5 weedings per year/field $250-3,500 per acre and increasing Food contamination risk

188. Decision to make – mowing vs weeding

189. Autonomous vehiclesWEEDING Dealers sell, installs and supports customer Co. trains dealers, supports dealers - Innovation - Customer Education - Dealer training - Low density vegetable growers - High density vegetable growers - Thinning operations - Conventional vegetables We reduce operating cost - Labor reduction (100 to 1) - Reduced risk of contamination - Mitigate labor availability concerns - Ag Dealers - Ag Service providers - Research labs - Ag Dealers - Ag Service providers Engineers on Machine Vision Two problems: - Identification - Elimination Asset sale Our revenue stream derives from selling the equipment Dealer discount COGS seek a 50-60% Gross Margin Heavy R&D investment

190. 1 Week – 1 CarrotBot Confidential

191. CarrotBot Machine Vision data collection platform Monochrome & Color Cameras Laser-line sweep (depth measurement) Encoders (position/velocity) Onboard data acquisition & power CarrotBot 1.0

193. Demo, demo, and demo!!

194. Proximity is paramount

195. Technology Design

196. Marketing

197. Demo and customer feedback

198. Organic Farmers

199. Weeding Service Providers

200. Conventional Farmers

201. Cost Reduction

202. Remove labor force pains

203. Eliminate bio-waste hazards

204. Research Labs

205. Equipment Manufacturers

206. Distribution Network

207. Service Providers

208. IP – Patents

209. Video Classifier Files

210. Robust Technology

211. Dealers

212. Direct Service

213. Indirect Service

214. … then Dealers

215. Asset Sale

216. Direct Service with equipment rental

217. … then Asset SaleValue-Driven

218. Visit Highlights Above: Organic Carrots, 7wks. Top right: Conventional carrots Bottom Right: Very weedy. Will require multiple passes of hand weeding

219. Visit Highlights Carrot vs. Weeds Due to small root systems, carrots have no chance against weeds

220. Visit Highlights Organic Broccoli, closely cultivated. Weeds close to plants are hand-picked

221. Visit Highlights State of the Art in Weeding Technology for Organic Crops

223. Industrial (10,000s of acres)

224. Large (1,000s of acres)

225. Willing to pay $100k for one unit

226. Smaller growers (100s of acres) usually subcontract the labor services or rent equipment

227. All purchases through local dealers

228. Customer service is essentialPost-Test

230. Local Farm Mgr

231. Cliff Kirkpatrick, visited

232. Director, Ag Technology

234. CFO, CEO (Jeff Dunn)Cliff, Farm Mgr

236. Grower

241. Marketing

243. Mid/Large Organic Farmers

244. Agricultural corporations

246. Mid/Large Conventional Farmers

247. Cost Reduction

250. Research Labs

251. Equipment Manufacturers

254. IP – Patents

257. Direct Service

261. ($1,500/d; 120d/yr )

262. Low density: $1,500/d

263. High density: $6,000/dValue-Driven

264. World Ag Expo interviews:the need is real and wide spread 10+ interviews at show Everyone confirmed the need Robocrop, UK based, crude competitor sells for $171 K Revenue Stream Mid to small growers prefer a service Large growers prefer to buy, but OK with service until technology is proven Charging for labor cost saved is OK, as we provide other benefits (food safety, labor availability) Confidential

269. Marketing

271. Mid/Large Organic Farmers

272. Agricultural corporations

274. Mid/Large Conventional Farmers

275. Research Labs

276. Equipment Manufacturer

279. 2 or 3 Key Farms

280. Cost Reduction

283. IP – Patents

286. Direct Service

290. Low density: $1,500/d

292. Bill of Materials

293. Training & Service

295. MammOptics Final project presentation for E 245 Winter 2011

297. Non-radiative

299. MammOptics Business Model Canvas 1 of 4 Strong clinical data Training Maintenance Product Development IP Clinical trials FDA Hospitals Leading doctors 3rd party manufacturers Distributors Pioneering radiologists in hospitals Radiation-free Earlier detection Non-invasive IP Leading doctors Technical Expertise Direct sales to hospitals Product Development Clinical trials Operating Costs Capital equipment sales and disposable item

300. MammOptics MammOptics Business Model Canvas 1 of 4 Business Model Canvas 1 of 4 Strong clinical data Training Maintenance Product Development IP Clinical trials FDA Initial guess Initial guess Hospitals Leading doctors 3rd party manufacturers Distributors Pioneering radiologists in hospitals Radiation-free Earlier detection Non-invasive Test: Customer segment Value proposition Initial guess IP Leading doctors Technical Expertise Direct sales to hospitals Product Development Clinical trials Operating Costs Initial guess Capital equipment sales and disposable item

301. Finding the right customer From radiologists to gynecologists

302. MammOptics Excursions into hospitals Debra Ikeda Jason Davies Jafi Alissa Lipson Sunita Pal Leading doctors 6 women >40 8 women <40 Patients Alicia X-ray mammography Technicians Hospital Managers Paul Billings Holly V. Gautier

303. MammOptics Hospital purchasing decision tree

304. MammOptics Hospital purchasing decision tree Hospitals Complex purchasing decision tree. Several saboteours

305. MammOptics Private practice purchasing decision tree

306. MammOptics Private practice purchasing decision tree Private practice Faster adoption rate Attractive value proposition ✔

307. MammOptics Business Model Canvas 2 of 4 Strong clinical data Training Maintenance Product Development IP Clinical trials FDA Doctors: Earlier detection Price Accuracy Patients: Radiation Free Non-Invasive Hospitals (Capital Spending Committee) Leading doctors 3rd party manufacturers Distributors Research Hospitals Pioneering Doctors Hospitals OB/GYNs PCPs Direct Sales to doctors IP Leading doctors Technical Expertise Product Development Clinical trials Operating Costs Capital Equipment Sales and disposable item

308. MammOptics Business Model Canvas 2 of 4 Strong clinical data Training Maintenance Product Development IP Clinical trials FDA Doctors: Earlier detection Price Accuracy Patients: Radiation Free Non-Invasive Hospitals (Capital Spending Committee) Leading doctors 3rd party manufacturers Distributors Research Hospitals Pioneering Doctors Hospitals OB/GYNs PCPs How do we get to our customer? Need sensitivity and specificity Direct Sales to doctors IP Leading doctors Technical Expertise Product Development Clinical trials Operating Costs Capital Equipment Sales and disposable item

309. Getting to our customer The world of direct sales and medical marketing

310. MammOptics Interviews Breast Cancer Advocacy Groups Be Bright Pink Jennifer Glover Dr. Cindy Woo Dr. Jags Powers Dr. Aaron Shuvkan OB/GYNs Katrina Bell Tanay Dudhela Jed Hwang Medical Sales FDA/Clinical Trials Phyllis Whitely Carl Simpson

311. MammOptics Marketing

312. MammOptics Marketing Strong influence on doctors via ACOG Standard of Care Strongly influenced by KOLs Access to ACOG by former member

313. MammOptics Marketing Researchers with strong peer recommendations Researchers conducting important clinical trials Outsourced survey research Researchers with numerous publications

314. MammOptics Marketing Focus on prominent journals Need two big publications Choose KOL as Principal Investigators (PI)

315. MammOptics Marketing Effective method for educating doctors Workshop must be approved by ACOG Doctors required to attend workshops Taught by objective medical experts

316. MammOptics Marketing ACOG Annual Clinical Meeting Opportunity for feedback from doctors Miami Breast Cancer Conference

317. MammOptics Marketing Trusted information source for patients Access to media outlets Critical opinion leader for technology adoption

319. Direct feedback from doctors

321. No customer feedback

323. MammOptics Pricing Strategy Equipment Lease model Per-use model Consumable Cost of the device $50,000 $5,000 $5,000 $25,000 Service per year $3,000 $10,000 0 0 Per-use fee 0 0 $50 0 Consumable 0 0 0 $20

324. MammOptics Pricing Strategy Approved by customers and investors Equipment Lease model Per-use model Consumable Cost of the device $50,000 $5,000 $5,000 $25,000 Service per year $3,000 $10,000 0 0 Per-use fee 0 0 $50 0 Consumable 0 0 0 $20

325. MammOptics Customer Workflow Current market Insurance Mammography Radiologist Hospital Administration Technician ACOG ACS Doctor specialty committee

326. MammOptics Customer Workflow Current market But what would happen if we replace mammography? Insurance Mammography Radiologist Hospital Administration Technician ACOG ACS Doctor specialty committee

327. MammOptics Customer Workflow Insurance Mammography Radiologist Breast Radiologists Hospitals Technicians Loss of jobs Eliminates loss leader Puts emphasis on biopsies Loss of jobs Hospital Administration Technician ACOG ACS Doctor specialty committee

328. MammOptics Customer Workflow Insurance Mammography Radiologist Hospital Administration Technician ACOG ACS Doctor specialty committee

329. MammOptics Customer Workflow Insurance Mammography Radiologist Insurance ACOG/ACS Same cost as mammography ($140) Reduced number of biopsies ($1000) Improved healthcare (mammography weak technique) Hospital Administration Technician ACOG ACS Doctor specialty committee

330. MammOptics Customer Workflow Insurance Mammography Radiologist Hospital Administration Technician ACOG ACS Doctor specialty committee

331. MammOptics Customer Workflow Insurance PCP OB/GYN Mammography Patient Radiologist Hospital Administration Technician MammOptics Doctor specialty committee ACOG ACS

332. MammOptics Customer Workflow Insurance PCP OB/GYN PCP OB/GYN Mammography Mammography Patient Patient Radiologist Radiologist PCP OB/GYNs Patient MammOptics Increased revenue More complete patient care Improved healthcare Comfort Revenue Hospital Administration Technician Hospital Administration Technician MammOptics MammOptics Doctor specialty committee ACOG ACS

333. MammOptics Customer Workflow Insurance PCP OB/GYN Mammography Patient Radiologist Hospital Administration Technician MammOptics ACOG ACS Doctor specialty committee

334. MammOptics Business Model Canvas 3 of 4 Strong clinical data Training Maintenance Conferences CME courses Product Development IP Clinical trials FDA Publishing Doctors: Earlier detection Price Accuracy Patients: Radiation Free Non-Invasive Leading doctors Key Opinion Leaders 3rd party manufacturers Distributors Breast Cancer Foundations ACOGACS OB/GYNs PCPs Direct Sales to hospitals Distributor IP Leading doctors Technical Expertise Product Development Clinical trials Operating Costs Marketing Costs Capital Equipment Sales and disposable item Per use fees

335. MammOptics Business Model Canvas 3 of 4 Strong clinical data Training Maintenance Conferences CME courses Product Development IP Clinical trials FDA ReimbursementPublishing Doctors: Earlier detection Price Accuracy Patients: Radiation Free Non-Invasive Leading doctors Key Opinion Leaders 3rd party manufacturers Distributors Breast Cancer Foundations ACOGACS OB/GYNs PCPs Learned how to reach the customer How do we build a company based on this? Direct Sales to hospitals Distributor IP Leading doctors Technical Expertise Product Development Clinical trials Operating Costs Marketing Costs Capital Equipment Sales and disposable item Per use fees

336. Building the company The backstage of a medical device company

337. MammOptics Interviews Stanford StatisticsSteve Axelrod Marga Ortigas-Wedekind FDA Clinical Trials Nick Mourlas Don Archambault Manufacturing Shannon Bergstedt Ali Habib Reimbursement Venture Capitalists Dana Mead Bill Starling Doctors/Sales Dr. Aron Shuftan Jed Hwang Michael J. Nohr

338. MammOptics Partners Manufacturing Choose manufacturing facility close to home

339. MammOptics MammOptics Partners Partners Manufacturing Reimbursement Manufacturing Difficult to get coverage for new product.

340. MammOptics Reimbursement Partners Insurances CPT Codes $75-$150

341. MammOptics Partners Manufacturing Reimbursement 510K vs. PMA Largest cost Biggest financial risk FDA Clinical Trials

342. MammOptics Clinical Trials Stage 1 Pilot trials Feasibility Comparison with mammography 50 patients $600K 6 months 12/4/2009

343. MammOptics Clinical Trials Stage 2 Interim trials Prove superior safety-efficacy & sensitivity Stage 1 Pilot trials 500 patients $7.2M 6 months 15 months 12/4/2009

344. MammOptics Clinical Trials Stage 2 Interim trials Stage 3 FDA pivotal trials Stage 1 Pilot trials FDA class II, 510(K) w/ trials Focus on superiority & economic end-points 1500 patients $20.5M 6 months 15 months 24 months 12/4/2009

345. MammOptics Clinical Trials Stage 4 Post-market studies Stage 2 Interim trials 2000 patients $26.8M Stage 3 FDA pivotal trials Stage 1 Pilot trials Specific Cat III CPT/ACP Codes Market traction 6 months 15 months 24 months 24 months 12/4/2009

346. MammOptics Clinical Trials Stage 4 Post-market studies Stage 2 Interim trials $26.8M Stage 3 FDA pivotal trials Stage 1 Pilot trials $7.2M $600K $20.5M 6 months 15 months 24 months 24 months 12/4/2009

347. MammOptics Clinical Trials 12/4/2009

348. MammOptics MammOptics Partners Partners Manufacturing Reimbursement Financial timeline Funding FDA Clinical Trials

349. MammOptics MammOptics Financial / Operations Timeline 2016 2012 2013 2014 2015 2017 2018 M&A / IPO $50 MM Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q1 Q2 Q3 Q4 Q3 Series D $35 MM $40M Series C $30.5 MM $30M $20M Cash Reserve Series B $9 MM $15M Series A $3.5 MM $10M $5M Financial timeline System Initialize Launch Regulatory / Clinical Marketable Product Proof of Concept Second Release Beta Prototype Design Milestones 1st Release Test 2nd Release Test Beta-Version Testing Laboratory Prototype Publication Publication Clinical Results Post-Market Clinical Studies Pilot Studies US Pivotal Clinical Trials Clinical Milestones US Interim Trials Non-Specific Codes Provisional Patent IRB / IDE Specific Codes (Cat. I CPT / APC) Cat III CPT FDA – Class II – 510 (k) with Clinical Trials Regulatory/ IP Milestones Application and System Patents Initial Product Launch IC and Processing Patents Technology Licensing 149 12/4/2009

350. MammOptics MammOptics Financial / Operations Timeline 2016 2012 2013 2014 2015 2017 2018 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q1 Q2 Q3 Q4 Q3 $40M $30M $20M Cash Reserve $15M $10M $5M Initialize Proof of Concept Design Milestones Clinical Milestones Provisional Patent Regulatory/ IP Milestones Technology Licensing 150 12/4/2009

351. MammOptics MammOptics Financial / Operations Timeline 2016 2012 2013 2014 2015 2017 2018 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q1 Q2 Q3 Q4 Q3 $40M $30M $20M Cash Reserve $15M Series A $3.5 MM $10M $5M System Initialize Proof of Concept Beta Prototype Design Milestones Beta-Version Testing Laboratory Prototype Pilot Studies Clinical Milestones Provisional Patent Regulatory/ IP Milestones Technology Licensing 151 12/4/2009

352. MammOptics MammOptics Financial / Operations Timeline 2016 2012 2013 2014 2015 2017 2018 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q1 Q2 Q3 Q4 Q3 $40M $30M $20M Cash Reserve Series B $9 MM $15M Series A $3.5 MM $10M $5M System Regulatory / Clinical Marketable Product Beta Prototype Design Milestones Beta-Version Testing Laboratory Prototype Pilot Studies Clinical Milestones IRB / IDE Regulatory/ IP Milestones Application and System Patents IC and Processing Patents 152 12/4/2009

353. MammOptics MammOptics Financial / Operations Timeline 2016 2012 2013 2014 2015 2017 2018 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q1 Q2 Q3 Q4 Q3 $40M Series C $30.5 MM $30M $20M Cash Reserve Series B $9 MM $15M $10M $5M System Regulatory / Clinical Second Release Design Milestones 1st Release Test Publication Pilot Studies US Pivotal Clinical Trials Clinical Milestones US Interim Trials IRB / IDE Cat III CPT Regulatory/ IP Milestones Application and System Patents IC and Processing Patents 153

354. MammOptics MammOptics Financial / Operations Timeline 2016 2012 2013 2014 2015 2017 2018 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q1 Q2 Q3 Q4 Q3 Series D $35 MM $40M Series C $30.5 MM $30M $20M Cash Reserve $15M $10M $5M Launch Regulatory / Clinical Second Release Design Milestones 2nd Release Test Publication Publication Clinical Results US Pivotal Clinical Trials Clinical Milestones US Interim Trials Non-Specific Codes FDA – Class II – 510 (k) with Clinical Trials Regulatory/ IP Milestones Initial Product Launch 154 12/4/2009

355. MammOptics MammOptics Financial / Operations Timeline 2016 2012 2013 2014 2015 2017 2018 M&A / IPO $50 MM Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q1 Q2 Q3 Q4 Q3 Series D $35 MM $40M $30M $20M Cash Reserve $15M $10M $5M Launch Regulatory / Clinical Design Milestones Publication Post-Market Clinical Studies Clinical Results Clinical Milestones Non-Specific Codes Specific Codes (Cat. I CPT / APC) FDA – Class II – 510 (k) with Clinical Trials Regulatory/ IP Milestones Initial Product Launch 12/4/2009

356. MammOptics MammOptics Financial / Operations Timeline 2016 2012 2013 2014 2015 2017 2018 M&A / IPO $50 MM Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q1 Q2 Q3 Q4 Q3 Series D $35 MM $40M Series C $30.5 MM $30M $20M Cash Reserve Series B $9 MM $15M Series A $3.5 MM $10M $5M System Initialize Launch Regulatory / Clinical Marketable Product Proof of Concept Second Release Beta Prototype Design Milestones 1st Release Test Beta-Version Testing 2nd Release Test Laboratory Prototype Publication Publication Post-Market Clinical Studies Clinical Results Pilot Studies US Pivotal Clinical Trials Clinical Milestones US Interim Trials Non-Specific Codes Provisional Patent IRB / IDE Specific Codes (Cat. I CPT / APC) Cat III CPT FDA – Class II – 510 (k) with Clinical Trials Regulatory/ IP Milestones Application and System Patents Initial Product Launch IC and Processing Patents Technology Licensing 156 12/4/2009

357. MammOptics Business Model Canvas 4 of 4 Strong clinical data Training Maintenance Conferences CME courses Product Development IP Clinical trials FDA Reimbursement Publishing Doctors: Earlier detection Price Accuracy Immediate Results Patients: Radiation Free Non-Invasive KOLs 3rd party manufacturers Distributors Breast Cancer Foundations ACOGACS Clinical trial designer OB/GYNs PCPs Direct Sales to hospitals Distributor Online IP Leading doctors Technical Expertise Product Development Clinical trials Operating Costs Marketing Costs Per use fees

358. MammOptics Business Model Canvas 4 of 4 Strong clinical data Training Maintenance Conferences CME courses Product Development IP Clinical trials FDA Reimbursement Publishing KOLs 3rd party manufacturers Breast Cancer Foundations ACOGACS Clinical trial designer Earlier detection Non invasive Price Accuracy Immediate Results OB/GYNs PCPs Final iteration of our business model But… need to think about the big picture… Direct Sales to hospitals Distributor Online IP Leading doctors Technical Expertise Product Development Clinical trials Operating Costs Marketing Costs Per use fees

359. MammOptics Business Model Canvas 1 Strong clinical data Training Maintenance Product Development IP Clinical trials FDA Hospitals Leading doctors 3rd party manufacturers Distributors Radiation-free Earlier detection Non invasive Pioneering Doctors Hospitals Direct Sales to hospitals IP Leading doctors Technical Expertise Product Development Clinical trials Operating Costs Capital Equipment Sales and disposable item

360. MammOptics Business Model Canvas 2 Strong clinical data Training Maintenance Product Development IP Clinical trials FDA Hospitals Leading doctors 3rd party manufacturers Distributors Research Hospitals Radiation-free Earlier detection Non invasive Pioneering Doctors Hospitals Direct Sales to hospitals IP Leading doctors Technical Expertise Product Development Clinical trials Operating Costs Capital Equipment Sales and disposable item

361. MammOptics Business Model Canvas 3 Strong clinical data Training Maintenance Product Development IP Clinical trials FDA Doctors: Earlier detection Price Accuracy Patients: Radiation Free Non-Invasive Hospitals (Capital Spending Committee) Leading doctors 3rd party manufacturers Distributors Research Hospitals Pioneering Doctors Hospitals Direct Sales to hospitals IP Leading doctors Technical Expertise Product Development Clinical trials Operating Costs Capital Equipment Sales and disposable item

362. MammOptics Business Model Canvas 4 Strong clinical data Training Maintenance Product Development IP Clinical trials FDA Doctors: Earlier detection Price Accuracy Immediate Results Patients: Radiation Free Non-Invasive Hospitals (Capital Spending Committee) Leading doctors 3rd party manufacturers Distributors Research Hospitals Breast Cancer Foundations Pioneering Doctors Hospitals OB/GYNs PCPs Direct Sales to hospitals IP Leading doctors Technical Expertise Product Development Clinical trials Operating Costs Capital Equipment Sales and disposable item

363. MammOptics Business Model Canvas 5 Strong clinical data Training Maintenance Conferences CME courses Product Development IP Clinical trials FDA ReimbursementPublishing Doctors: Earlier detection Price Accuracy Patients: Radiation Free Non-Invasive Leading doctors Key Opinion Leaders 3rd party manufacturers Distributors Breast Cancer Foundations ACOGACS OB/GYNs PCPs Direct Sales to hospitals Distributor IP Leading doctors Technical Expertise Product Development Clinical trials Operating Costs Marketing Costs Capital Equipment Sales and disposable item

364. MammOptics Business Model Canvas 6 Strong clinical data Training Maintenance Conferences CME courses Product Development IP Clinical trials FDA Reimbursement Publishing Doctors: Earlier detection Price Accuracy Immediate Results Patients: Radiation Free Non-Invasive KOLs 3rd party manufacturers Distributors Breast Cancer Foundations ACOGACS OB/GYNs PCPs Direct Sales to hospitals Distributor IP Leading doctors Technical Expertise Product Development Clinical trials Operating Costs Marketing Costs Capital Equipment Sales and disposable item Per use fees

365. MammOptics Business Model Canvas 7 Strong clinical data Training Maintenance Conferences CME courses Product Development IP Clinical trials FDA Reimbursement Publishing Doctors: Earlier detection Price Accuracy Immediate Results Patients: Radiation Free Non-Invasive KOLs 3rd party manufacturers Distributors Breast Cancer Foundations ACOGACS Clinical trial designer OB/GYNs PCPs Direct Sales to hospitals Distributor IP Leading doctors Technical Expertise Product Development Clinical trials Operating Costs Marketing Costs Per use fees

366. MammOptics Business Model Canvas 8 Strong clinical data Training Maintenance Conferences CME courses Product Development IP Clinical trials FDA Reimbursement Publishing Doctors: Earlier detection Price Accuracy Immediate Results Patients: Radiation Free Non-Invasive KOLs 3rd party manufacturers (local) Breast Cancer Foundations ACOGACS Clinical trial designer OB/GYNs PCPs Direct Sales to hospitals Distributor IP Leading doctors Technical Expertise Product Development Clinical trials Operating Costs Marketing Costs Per use fees

367. MammOptics Business Model Canvas 9 Strong clinical data Training Maintenance Conferences CME courses Product Development IP Clinical trials FDA Reimbursement Publishing Doctors: Earlier detection Price Accuracy Immediate Results Patients: Radiation Free Non-Invasive KOLs 3rd party manufacturers (local) Breast Cancer Foundations ACOGACS Clinical trial designer OB/GYNs PCPs Direct Sales to hospitals Distributor IP Leading doctors Technical Expertise Product Development Clinical trials Operating Costs Marketing Costs Per use fees

368. Personal Libraries

369. Insight: No more bookshelves eBooks+150% YoY ‘10 Printed Books -20% YoY ‘10

370. Version 1.0: Personal Libraries

371. Original Idea: Personal Digital Libraries Import, organize and share thousands of digital papers

372. something-something-something.com Original idea Invincible Business Model: Version 1.0 SHORT TERMResearchers Lawyers Scientists LONG TERMAvid book readers Professionals Import, organize and share thousands of papers FB/TW posts from users you know Company blog, FB, TW, support forums Targeted marketing Product development Constant iteration & testing Libraries, Universities, Research Centers Bloggers and media targeting customer segment Academic Database providers Affiliate program SEO/SEM/SM IE/FF/Chrome App Stores Developers Marketers AWS Infrastructure SEM Eng & Marketing OpEx Affiliate program fees Licensing Subscription fees Ad revenue

373. Here’s What We Did Version 1.0: Personal Libraries

374. Got out of the building

378. Extensive Surveys

381. 33,000+ Adwords

384. 33,000+ Adwords

385. Compete Review

388. 33,000+ Adwords

389. Compete Review

390. Market Sizing

393. 33,000+ Adwords

394. Compete Review

395. Market Sizing

396. 50 bloggers

399. 33,000+ Adwords

400. Compete Review

401. Market Sizing

402. 50 bloggers

403. 6 Social Networks

406. 33,000+ Adwords

407. Compete Review

408. Market Sizing

409. 50 bloggers

410. 6 Social Networks

411. Usability Tests

415. Pipelines Optimize

419. Run away from this customer as fast as possible.

420. Run away from this customer as fast as possible. They don’t want to spend money and will incur infinite support and infinite cost.

427. Negative Margins

428. ECM = BoringNo adjacent pivots worked for the team

429. Version 2.0: Trusted Advice

430. something-something-something.com Original idea Invincible Business Model: Version 2.0 Upwardly mobile young professionals making $2-10K of discretionary online purchases a year (excluding travel) Developing trusted advice and advisors Web marketing Affiliate partnerships Constant iteration & testing FB/TW posts from users you know Company blog, FB, TW accounts Discover online goods recommended by friends at the lowest possible price from trusted vendors Bloggers and Media targeting customer segment Retail marketing partners IE/FF/Chrome teams Affiliate Program Providers Affiliate program SEO/SEM/SM IE/FF/Chrome App Stores Developers Marketers Content Library Install base Readership base AWS Infrastructure SEM Eng & Marketing OpEx Affiliate program fees Licensing Subscription fees Ad revenue

431. New Hypotheses

432. Here’s What We Did Version 2.0: Trusted Advice

436. Landing Page TestsLanding pages tested on affluent, career aged professionals, approximately 70/30 male/female, N=800+

439. Landing Page Tests

443. Market Research

448. Compete Research

454. Revenue Analysis

455. Two PrototypesInsidely.com wantio.com

461. Revenue Analysis

462. Two Prototypes

465. Values celebrity trends & friends’ opinions

466. Wants high ticket items at lowest price

468. Hates tedious work

469. Identifies as influencer among friends

472. Version 2.0: Trusted Advice Top ~6M US Influentials (~$9B/year)

473. something-something-something.com Original idea Invincible Business Model: Version 2.0 Upwardly mobile young professionals making $2-10K of discretionary online purchases a year (excluding travel) Developing trusted advice and advisors Web marketing Affiliate partnerships Constant iteration & testing FB/TW posts from users you know Company blog, FB, TW accounts Discover online goods recommended by friends at the lowest possible price from trusted vendors Bloggers and Media targeting customer segment Retail marketing partners IE/FF/Chrome teams Affiliate Program Providers Affiliate program SEO/SEM/SM IE/FF/Chrome App Stores Developers Marketers Content Library Install base Readership base AWS Infrastructure SEM Eng & Marketing OpEx Affiliate program fees Licensing Subscription fees Ad revenue

474. Here’s What We Found Version 2: Trusted Advice

477. High Conversion43% clickthrough on Top Admissions Books for Stanford MBAs article Compare to 0.5% clickthrough on ads ~100x difference

479. High Conversion

480. Needs Addressed See videos at http://factnote.com/c/e245

483. Needs Addressed Super easy to install and use. I really did enjoy it! Great idea! I will keep the extension installed because I do think this is practical! I could see myself using this regularly

498. Life is short, focus on big markets

500. How? Customer Development The Process Narrative Interviews Surveys Videos Prototypes Business Model Canvas Scorekeeping Real-time Feedback Physical Reality Checks Skype Face-to-face

501. We Made Students Blog Their Progress It Changed Everything

502. Interview

503. Photos Videos

504. Surveys

505. Interview & Photos

506. Competitive Analysis

507. Key Findings

508. A/B Test Results

509. Key Question

510. Strategy

511. Business Model Canvas as the Scorecard

513. Business Model design

514. Customer Development

515. Agile Development

516. Metrics

517. Venture Finance

518. Design Thinking

519. Execution

520. Accounting

521. Products

522. Engineering

523. Management

525. Customer/Agile Development

526. Business Model Design

527. Entrepreneurial Management

528. Creativity and Innovation

529. Entrepreneurial Finance

531. Managing Groups and Teams

532. Financial Accounting

533. Operations

534. Modeling for Optimization

536. Customer/Agile Development

537. Business Model Design

538. Entrepreneurial Management

539. Creativity and Innovation

540. Entrepreneurial Finance

542. East coast manufacturing-centric

543. East coast B-School-centric

544. 21st century focus on virtual and physical goods and channels

546. Adopted by the U.S. Government

547. Thanks www.steveblank.com

Demolish the status quo in entrepreneurial education 082311

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