Neuro engr 245 lean launchpad stanford 2019
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business model, customer development, e245, engr245, lean launchpad, lean startup, stanford, startup, steve blank
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Neuro engr 245 lean launchpad stanford 2019
- 1. 107 total interviews Tyler Maloney Maxine Lim Adeesh Goel Tyler Ernst Picker MBA, BS Materials Science Designer MBA/MS Computer Science Hacker MS MS&E, BS Economics Hustler MBA, BS Economics DAY 1 : A secular meditation studio for professionals NOW: A gym with integrated exercise + meditation classes for body hackers
- 2. Tengboche Monastery in Nepal, May 2018
- 3. Stanford University, August 2018
- 4. Team Tyler Maloney Maxine Lim Adeesh Goel Tyler Ernst Vipassana Attendee + Daily Meditator Vipassana Attendee + Daily Meditator Meditation Classes + Daily Meditator Headspace User + Sanity Check
- 5. Original Value Proposition For busy professionals who want to improve mental performance, Neuro is a cognitive gym that offers meditation classes. Unlike our competitors, we are secular and scientifically-based. BeyondWeek 9Week 8Week 7Week 6Week 5Week 4Week 3Week 2Week 1Pre-LLP
- 6. We Visited Our Competitors Los Angeles Phoenix New YorkToronto BeyondWeek 9Week 8Week 7Week 6Week 5Week 4Week 3Week 2Week 1Pre-LLP
- 7. 1) We must provide an experience apps can’t offer.1) We must provide an experience apps can’t offer. 1) We needed to focus on a specific customer segment. What We Learned: BeyondWeek 9Week 8Week 7Week 6Week 5Week 4Week 3Week 2Week 1Pre-LLP
- 8. First Pivot For body hackers who want to strengthen their minds, Neuro is a cognitive gym that offers Endurance Sits. Unlike our competitors, we challenge our customers to sit still for an entire hour through physical and mental pain. BeyondWeek 9Week 8Week 7Week 6Week 5Week 4Week 3Week 2Week 1Pre-LLP
- 9. “I want this. Headspace is too soft for me to get anything out of it.” - Ian McMilan, MSX Student at Stanford “Crossfit for your mind? I’ll be there.” - Jeremy Zhang, PM at SmartCar BeyondWeek 9Week 8Week 7Week 6Week 5Week 4Week 3Week 2Week 1Pre-LLP
- 10. 1st MVP BeyondWeek 9Week 8Week 7Week 6Week 5Week 4Week 3Week 2Week 1Pre-LLP
- 11. 1st MVP ● 14 paying customers ● $280 of revenue ● NPS: +21 BeyondWeek 9Week 8Week 7Week 6Week 5Week 4Week 3Week 2Week 1Pre-LLP
- 12. BeyondWeek 9Week 8Week 7Week 6Week 5Week 4Week 3Week 2Week 1Pre-LLP Second Pivot
- 13. BeyondWeek 9Week 8Week 7Week 6Week 5Week 4Week 3Week 2Week 1Pre-LLP
- 14. BeyondWeek 9Week 8Week 7Week 6Week 5Week 4Week 3Week 2Week 1Pre-LLP
- 15. “This was my first meditation and I loved it. When’s the next one? You can count us in - we will totally be there!” - Princi and her husband BeyondWeek 9Week 8Week 7Week 6Week 5Week 4Week 3Week 2Week 1Pre-LLP
- 16. Market Opportunity TAM = $30B SAM = $4.2B SOM = $1.0B Gyms & Fitness are a $30B industry 14% of the US now meditates 25% SAM market penetration BeyondWeek 9Week 8Week 7Week 6Week 5Week 4Week 3Week 2Week 1Pre-LLP
- 17. Market Opportunity Meditation in US has grown 6x as fast as yoga ● 2012: 4.1% of Americans meditated ● 2017: 14.2% of Americans meditated Growing Market, Growing Leaders ● Calm: $1B valuation, making it the first mental health unicorn ● Headspace: $250M valuation BeyondWeek 9Week 8Week 7Week 6Week 5Week 4Week 3Week 2Week 1Pre-LLP
- 18. Year 1 2 3 4 5 Stores 1 3 10 30 100 Revenue $500k $3M $15M $60M $200M BeyondWeek 9Week 8Week 7Week 6Week 5Week 4Week 3Week 2Week 1Pre-LLP
- 19. Major BMC Changes BEFORE Customer Segment Successful and unsatisfied professionals Value Proposition An edge at work Key Activities Secular meditation classes NOW Customer Segment Body hackers Value Proposition A superior workout routine that benefits body and brain Key Activities Mind Day classes | Body + Brain classes
- 20. Strengthening body and mind to achieve peak physical and mental performance.
- 21. Thank you! Michael Heinrich Founder, Oh My Green
- 22. VIDEO
- 23. Appendix
- 24. Influencers Neuroscientists, Military Leaders, Athletes, Technology Executives Technology Providers Muse - eeG | Halo - tDCS Swag Suppliers Lululemon or other fitting partner for swag Get an edge at work. Improve your cognitive function in work and life. Supercharge your development. Enhance your practice with technology. Meditation without the baggage. Scientifically-based, dogma- free education. A high performing community. Meet successful, like-minded people. Leases, Physical Equipment and Technology Instructor Training and Salaries IT Development and Maintenance Cleaning and Maintenance Influencer Recruitment and Fees Targeted Advertising Monthly Membership Dues: Tiered structure Upselling for use of technologies: Muse - eeG | Halo - tDCS Non-recurring revenue: Swag, special events, drop-in classes Meditation Classes Segmented by length and difficulty with opt-in for technology (eeG, tDCS). Includes education on scientific basis for practice. Influencer Speaker Series Teacher - Student Trustworthy guidance and education from teachers. Student - Student Strong relationships with other like-minded students. Curriculum Instructor Training Real Estate/Leases Physical Equipment Technology (eeG, tDCS) Web/Mobile App IT Physical Gyms A network of country-wide physical gyms with consistent product quality. Companion Application For goal tracking and accountability. Neuro Pre-Week 1 Successful and Unsatisfied High status, high-earners in demanding careers (bankers, tech employees, consultants, etc.) looking for a way to reduce stress and improve cognitive performance. Secular Meditators People who do not identify with an organized religion and want to explore meditation from an evidence-based, scientific perspective.
- 25. Instructors - Dynamic, fun instructors with a passion for exercise and meditation. A big plus if the have a SM following. Gyms - To partner with and offer classes until demand justifies opening retail locations. Influencers - Writers, Bloggers, SM Influencers, Military Leaders, Athletes, Technology Execs. Swag Suppliers - Lululemon or other fitting partner for swag. Look, Think and Feel Great Our Body + Brain classes are more than just a workout. Designed to help you have it all. Become Mentally Strong Mind Day will challenge your willpower. Develop emotional resilience and grit. Achieve Peak Mental and Physical Performance Success and happiness are a product of both mental and physical performance. Achieve both - with us. Leases Instructor + Staff Labor Subscription to Online Marketing Tools Cleaning and Maintenance Body + Brain Classes - One hour instructor-led exercise + meditation classes. 30 minutes of each. Mind Day - Challenging one- hour meditations to improve cognitive control, emotional resilience and grit. Drop-In Classes: Purchase individual classes or blocks of class. Monthly Subscriptions: Buy unlimited access to our gyms. Non-Recurring Revenue: Swag and special events. Teacher - Student Trustworthy guidance and education from teachers. Student - Student Strong relationships with other like-minded students.. Workouts/Meditation Scripts Gym Partnerships/Leases Online Marketing Tools Instructor Training Physical Equipment Physical Gyms A network of country-wide physical gyms with consistent product quality. Companion Application For goal tracking and accountability. Neuro Week 10 Body Hackers - People focused on optimizing physical and mental wellness through diet, exercise, and habit. Tech Addicts - We struggle to put down our phones and never turn off. This addiction destroys quality of life and sleep. Get control over your technology habits. Workout Equipment Instructor Training
Editor's Notes
- Hook: 10 hours/day. That’s how long I sat in silent meditation, for 10 straight days in a tiny corner of Nepal. My bones ached and I often felt as if I were losing my mind. But by the end of my vipassana, a radical 10 day silent meditation retreat, I noticed an enormous change in my quality of life. I became happier, less quick to anger, and more in control of my own thoughts and emotions.
- Three months later, I arrived at Stanford for business school, determined to continue advancing my daily meditation practice. But, to my surprise, I could find nowhere nearby that fit my needs. There weren’t many meditation studios, and the ones that did exist were kind of hokey. For me, meditation wasn’t some pseudo-spiritual practice that consisted of aligning chakras and wearing healing crystals. It was the deliberate and willful rewiring of my brain through hard work and effort. As an entrepreneur, I immediately started to think about building what I called a “cognitive gym” for people like me to come together and meditate. So I decided to apply to the Lean Launchpad program and began talking to classmates to assemble a team.
- [Click for Maxine] First, I met Maxine, who had actually attended multiple 10-day retreats. Maxine went to the local buddhist center once a week, but what she really wanted was a secular community to advance her practice. [Click for Adeesh] Then I met Adeesh, who has taken pretty much every meditation class offered at Stanford - and there are a lot. [Click for Tyler] Lastly, I wanted to bring on someone who hadn’t drank the cool-aid to make sure we stayed on track. So I recruited Tyler, who dabbled in at home meditation apps like Headspace. He was to be our sanity check, an outside perspective to make sure we didn’t go too far off track.
- When we applied to the Lean Launchpad, we thought we would offer secular meditation classes to busy professionals to help improve their mental performance at work. And we got in!
- So in week 1, we hopped on a plane, to visit competing meditation studios in Toronto, New York, LA and Phoenix. [click for 1 at a time] where we attended classes, spoke with more than 30 customers and employees, and even sat outside their doors counting attendance. To our surprise and disappointment, it turned out that none of these businesses were doing all that well. By our estimates, only a few were close to breaking even, and none were growing. This was incredibly disheartening. The businesses we saw weren’t all that different from what we had envisioned - and they weren’t working. We stumbled through our first three weeks of the class, and even flirted with pivoting away from meditation entirely. But, thanks to the teaching team, we decided to stick with it. Now looking back, I realize we learned two very important things from these visits:
- [CLICK] The first was that our product needed to be meaningfully different from at home apps like headspace. Our competitors offered 30 minute meditations that just weren’t worth leaving the convenience of your own home. [CLICK] Second, the places we visited really struggled to build a brand. They tried to serve both spiritual and scientific meditators, and as a result their experience came off as bland. In contrast, we needed to focus on a specific customer segment. So we took this knowledge and ran facebook tests to find the right segment. And the segment that had the best response rate to our ads were what we call “body hackers” - scientifically minded fitness oriented individuals.
- So we pivoted and decided to take a stand: we were going to serve body hackers with a mental strength training product. In short, we would become the CrossFit for your mind. To do this, our meditations would be no sleepy snooze. We were going to challenge our customers with something we called an “endurance sit” - a one hour meditation in which we pushed our customers to sit still without a single movement and control their mind and body for an entire hour. It would be tough, it would be mentally frustrating and physically painful, but our customers would see the results translate to day to day life, just like after my vipassana retreat. When we started talking about this idea, people thought we were going crazy. In fact, no one else in the Lean Launchpad class thought we’d get customers to show up. But we didn’t doubt ourselves, because we were starting to have interviews where we heard:
- “I want this” and “I’ll be there.” Before this week, many people had told us “yeah this seems cool, someone probably would want this”, but now we were finding actual, real customers like “ Ian, Jeremy and Gabe.”
- So, in week 4, we ran our first MVP - a one hour endurance sit. We went to local gyms to hand out flyers, and we advertised on Facebook and Instagram.
- And we rented out a small gym space at the University Club. A total of 14 people showed up for our first class, paying $20/seat. We made our first $280 of revenue - and we were in business! Over the next 3 weeks, we grew our attendance to almost double, but we started to notice we were competing for people’s “me time” with exercise, so we decided to pivot once again and pilot a new class.
- Our Body + Brain Class would incorporate physical and mental exercise into an integrated one hour workout. During this hour, we’d push our customers to crush an intense CrossFit-like workout in 30 minutes, then sit in meditation for 30 minutes. In the time that it takes to complete a Barry’s or SoulCycle, our customers could get their bodies AND minds right.
- In Week 9, we ran our 4th MVP - our first Body + Brain class. The exercise portion included a circuit with [click each] battle ropes, punching bags, and sprinter slides.
- And the meditation occured right there in the gym. This is an image I just love because I think it captures so much of what we’re doing. It’s a bunch of badass, sweaty people, working hard to sharpen their minds and improve their lives.
- The verdict? Our customers loved it. We received our highest NPS ever (+50) and had multiple new customers off Facebook asking when our next class would be. [PAUSE]
- So what’s next? Well, we believe this a huge market. The US Fitness Industry is more than 30B market and it is growing rapidly. 14% of the US now meditates, making our Serviceable Available Market $4.2B. And given that we are the only provider of exercise+meditation, if we could capture 25% of that market we would be a billion dollar revenue business. But that’s just today.
- Meditation is also the fastest growing wellness trend, growing 6x as fast as yoga. Based on growth rates of the past 5 years, we believe the market will double in size within the next 5 years. This has led to big winners in the app space, with Calm now valued at over $1B. And we believe it will lead to big winners in the retail space as well.
- To get there, we plan to open our first location this year and achieve $500k/year in revenues in year 1. To do this, we need to charge $35/class (like SoulCycle), offer 3 classes a day, and have an average attendance of 13 people/class. These metrics are reasonable for Year 1. Over the next 5 years, we believe we can grow the business to 100 locations with a average revenues of $2M/gym, slightly better than Planet Fitness and just half of what Soul Cycle achieves. And, because we require very little capital equipment compared to other gyms, we don’t require much up front investment. So we plan to own and operate our own gyms. By our projections, we can get to $200M in revenue with as little as $30M in of funding. We started to pitch to seed investors and are now having discussions about how we can best use our spring and summer to take this forward.” $500k/location: $35/class 3 classes/day 13 attendees/class $1M/location: $35/class 3 classes/day 26 attendees/class $2M/location: $35/class 6 classes/day 26 attendees/class Average revenues: Crossfit: 220k PF: $1.7M SC: $4M Opening a CorePower Yoga: $214,700 to $427,000 initial investment Hockey Stick Graph Open first retail location in 2019 - owner operated Scale to Bay Area in 2020 - 2021 (3, then 8 stores) - franchise Scale to US in 2022 - 2030 (exponential growth) - affiliate model
- When we started the class, we THOUGHT we would be serving unhappy employees with a tool to get ahead at work. We now KNOW that we’re providing body hackers with a superior workout routine that combines exercise + meditation to help you LOOK, THINK, AND FEEL GREAT. Since we focused most of the class on finding product market fit, our next steps will be to start exploring the left side of the business model canvas, including cost structure, key partners and key resources.
- We hope to help you strengthen body and mind to achieve peak physical and mental performance. We are Neuro: The Cognitive Gym.
- Now we’re going to show you a quick video explaining our concept, but first we want to give a few shoutouts. 1) To our mentor, Michael Heinrich, who has provided both business and personal guidance throughout this challenging 10 week process to keep us on track. 2) Second, to the teaching team for dedicating your valuable time to be here and help all of us explore our passions. And lastly, to the other members of the class for always providing such thoughtful and helpful feedback each week. We wouldn’t have made it this far in such a short period of time if it weren’t for all of you. Thank you!
- Looking back at our original Business Model Canvas, you can see just how much we’ve learned over the past 10 weeks. Our business model canvas has gone from this -
- To this. To highlight the most significant changes