Sitra portfolio company day 090711

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Sitra portfolio company day 090711

  1. SITRA Portfolio Company Day<br />Steve Blank<br />www.steveblank.com<br />Twitter: sgblank<br />Slides: www.slideshare.net/sblank<br />
  2. First<br />Observations From Abroad<br />
  3. #1<br />Startups are Smaller Versions of Large Companies<br />
  4. #1<br />×<br />Startups are Smaller Versions of Large Companies<br />oops<br />
  5. #2<br />A startup is all about focus and execution of the business plan<br />
  6. #2<br />A startup is all about focus and execution of the business plan<br />No business plan survivesfirst contact with customers<br />✓<br />
  7. #3<br />A startup is all about a great idea<br />
  8. #3<br />A startup is all about a great idea<br />An A-teamwith a B-product always beats a B-team with an A-product<br />✓<br />
  9. #4<br />Companies execute business plansStartups search for business models<br />
  10. #3<br />Companies execute business plansStartups search for business models<br />
  11. #4<br />Companies execute business plansStartups search for business models<br />✓<br />
  12. #5<br />A startup is a temporary organization designed to search for a scalable and repeatable business model<br />
  13. #6<br />Startups need their own tools, different from those used in existing companies<br />
  14. #6<br />Startups need their own tools, different from those used in existing companies<br />
  15. #7<br />Customer Development = process to searchBusiness Model Canvas is the ScorecardAgile Engineering is How We Build Startups<br />
  16. #8<br />Customer Development =process to searchBusiness Model Canvas =the ScorecardAgile Engineering is How We Build Startups<br /><ul><li>Farming conventions.
  17. Demo, demo, and demo!!
  18. Proximity is paramount
  19. Technology Design
  20. Marketing
  21. Demo and customer feedback
  22. Research Labs
  23. Equipment Manufacturers
  24. Distribution Network
  25. Service Providers
  26. Cost Reduction
  27. Remove labor force pains
  28. Eliminate bio-waste hazards
  29. Organic Farmers
  30. Weeding Service Providers
  31. Conventional Farmers
  32. IP – Patents
  33. Video Classifier Files
  34. Robust Technology
  35. Dealers
  36. Direct Service
  37. Indirect Service
  38. … then Dealers
  39. Asset Sale
  40. Direct Service with equipment rental
  41. … then Asset Sale</li></ul>Value-Driven<br />
  42. #9<br />Customer Development is the process used to searchBusiness Model Canvas is the ScorecardAgile Development is How We Build Startups<br />
  43. How To Speed Up Growth?<br />
  44. How To Speed Up Growth?<br />Eliminate Waste<br />money, time, …<br />
  45. How To Speed Up Growth?<br />Eliminate Waste<br />money, time, …<br />By Doing Fewer Dumber Things<br />
  46. The Business Model:<br />Any company can be described in 9 building blocks<br />
  47. CUSTOMER SEGMENTS<br />which customers and users are you serving? <br />which jobs do they really want to get done?<br />
  48. VALUE PROPOSITIONS<br />what are you offering them? what is that <br />getting done for them? do they care?<br />
  49. CHANNELS<br />how does each customer segment want to be reached? through which interaction points?<br />
  50. CUSTOMER RELATIONSHIPS<br />what relationships are you establishing with each segment? personal? automated? acquisitive? retentive?<br />
  51. REVENUE STREAMS<br />what are customers really willing to pay for? how? <br />are you generating transactional or recurring revenues?<br />
  52. KEY RESOURCES<br />which resources underpin your business model? which assets are essential?<br />
  53. KEY ACTIVITIES<br />which activities do you need to perform well in your business model? what is crucial?<br />28<br />
  54. KEY PARTNERS<br />which partners and suppliers leverage your model? <br />who do you need to rely on?<br />
  55. COST STRUCTURE<br />what is the resulting cost structure? <br />which key elements drive your costs?<br />
  56. value proposition<br />customer relationships<br />key activities<br />customer segments<br />key partners<br />cost structure<br />revenue streams<br />key <br />resources<br />channels<br />31<br />images by JAM<br />
  57. sketch out your business model<br />
  58. sketch out your business models<br />
  59. But,Realize They’re Hypotheses<br />
  60. 9 Guesses<br />Guess<br />Guess<br />Guess<br />Guess<br />Guess<br />Guess<br />Guess<br />Guess<br />Guess<br />
  61. Customer Development<br />The founders<br />^<br />Get Out of the Building<br />
  62. Customer DevelopmentThe Search For the Business Model<br />Company<br />Building<br />CustomerDiscovery<br />CustomerValidation<br />Customer Creation<br />Pivot<br />
  63. Customer Discovery<br />CustomerDiscovery<br />CustomerValidation<br />Company<br />Building<br />CustomerCreation<br />Stop selling, start listening<br />Test your hypotheses<br />Continuous Discovery<br />Done by founders<br />
  64. The Minimum Viable Product (MVP)<br /><ul><li> Smallest feature set that gets you the most …</li></ul> - orders, learning, feedback, failure…<br />
  65. The Pivot<br /><ul><li>The heart of Customer Development
  66. Iteration without crisis
  67. Fast, agile and opportunistic</li></li></ul><li>Pivot Cycle Time Matters<br /><ul><li>Speed of cycle minimizes cash needs
  68. Minimum feature set speeds up cycle time
  69. Near instantaneous customer feedback drives feature set</li></li></ul><li>The Pivot<br />A Pivot is the change of one or more Business Model Canvas Components <br />
  70. How to Speed Up Growth?<br />
  71. Pivot ExampleRobotic Weeding<br />Talked 75 Customers in 8 Weeks<br />
  72. Our initial plan<br />Confidential<br />
  73. 20 interviews, 6 site visits…We got OUR Boots dirty<br />Weeding<br />Visited two farms in Salinas Valley to better understand problem<br />Interviewed:<br /><ul><li>Bolthouse Farms, Large Agri-Industry in Bakersfield
  74. White Farms, Large Peanut farmer in Georgia
  75. REFCO Farms, large grower in Salinas Valley
  76. Rincon Farms, large grower in Salinas Valley
  77. Small Organic Corn/Soy grower in Nebraska
  78. Heirloom Organics, small owner/operator, Santa Cruz Mts
  79. Two small organic farmers at farmers market
  80. Ag Services of Salinas, Fertilizer applicator</li></ul>Mowing<br />Interviewed:<br /><ul><li>Golf: Stanford Golf course
  81. Parks: Stanford Grounds Supervisor, head of maintenance and lead operator (has crew of 6)
  82. Toro dealer (large mower manufacturer)
  83. User of back-yard mowing system
  84. Maintenance Services for City of Los Altos
  85. Colony Landscaping (Mowing service for stadiums)</li></li></ul><li>Business Plan Autonomous Vehicles for Mowing & Weeding<br />Dealers sell, installs and supports customer<br />Co. trains dealers, supports dealers<br />- Innovation<br />- Customer Education<br />- Dealer training<br />Mowing<br />- Owners of public or commercially used green spaces (e.g. golf courses)<br />- Landscaping service provider<br />Weeding<br />- Farmers with manual weeding operations<br />We reduce operating cost<br />- Labor reduction<br />- Better utilization of assets (eg mow or weed at nights)<br />- Improved performance (less rework, food safety)<br />- Dealers (Mowing and Ag)<br />- Vehicle OEMs (John Deere, Toro, Jacobsen, etc)<br />- Research labs<br />- Mowing Dealers<br />- Ag Dealers<br />Engineers on Autonomous vehicles, GPS, path-planning<br />Asset sale<br />Our revenue stream derives from selling the equipment<br />Dealer discount <br />COGS seek a 50-60% Gross Margin<br />Heavy R&D investment <br />
  86. Found weeding in organic crops is HUGE problem; 50 - 75% of costs<br />Crews of 100s-1000<br />Back-breaking task<br />(Ilegal) labor harder to get <br />1-5 weedings per year/field<br />$250-3,500 per acre and increasing<br />Food contamination risk<br />
  87. Decision to make – mowing vs weeding<br />
  88. Autonomous vehiclesWEEDING<br />Dealers sell, installs and supports customer<br />Co. trains dealers, supports dealers<br />- Innovation<br />- Customer Education<br />- Dealer training<br />- Low density vegetable growers<br />- High density vegetable growers<br />- Thinning operations<br />- Conventional vegetables<br />We reduce operating cost<br />- Labor reduction (100 to 1)<br />- Reduced risk of contamination<br />- Mitigate labor availability concerns<br />- Ag Dealers<br />- Ag Service providers<br />- Research labs<br />- Ag Dealers<br />- Ag Service providers<br />Engineers on Machine Vision<br />Two problems:<br />- Identification<br />- Elimination<br />Asset sale<br />Our revenue stream derives from selling the equipment<br />Dealer discount <br />COGS seek a 50-60% Gross Margin<br />Heavy R&D investment <br />
  89. 1 Week – 1 CarrotBot<br />Confidential<br />
  90. CarrotBot<br />Machine Vision data collection platform<br />Monochrome & Color Cameras<br />Laser-line sweep (depth measurement)<br />Encoders (position/velocity)<br />Onboard data acquisition & power<br />CarrotBot 1.0<br />
  91. The Business Plan Canvas Updated<br /><ul><li>Farming conventions.
  92. Demo, demo, and demo!!
  93. Proximity is paramount
  94. Technology Design
  95. Marketing
  96. Demo and customer feedback
  97. Organic Farmers
  98. Weeding Service Providers
  99. Conventional Farmers
  100. Cost Reduction
  101. Remove labor force pains
  102. Eliminate bio-waste hazards
  103. Research Labs
  104. Equipment Manufacturers
  105. Distribution Network
  106. Service Providers
  107. IP – Patents
  108. Video Classifier Files
  109. Robust Technology
  110. Dealers
  111. Direct Service
  112. Indirect Service
  113. … then Dealers
  114. Asset Sale
  115. Direct Service with equipment rental
  116. … then Asset Sale</li></ul>Value-Driven<br />
  117. Visit Highlights<br />Above: Organic Carrots, 7wks. <br />Top right: Conventional carrots<br />Bottom Right: Very weedy. Will require multiple passes of hand weeding<br />
  118. Visit Highlights<br />Carrot vs. Weeds<br />Due to small root systems, carrots have no chance against weeds <br />
  119. Visit Highlights<br />Organic Broccoli, closely cultivated. Weeds close to plants are hand-picked<br />
  120. Visit Highlights<br />State of the Art in Weeding Technology for Organic Crops<br />
  121. Customer Hypothesis<br />Pre-Test<br />Hypothesis Confirmed<br /><ul><li> Growers interested in own equipment
  122. Industrial (10,000s of acres)
  123. Large (1,000s of acres)
  124. Willing to pay $100k for one unit
  125. Smaller growers (100s of acres) usually subcontract the labor services or rent equipment
  126. All purchases through local dealers
  127. Customer service is essential</li></ul>Post-Test<br />
  128. Customer Map #1 – Industrial Growers<br />Example: Bolthouse Farms – Large Industrial Carrot Producer – 8K acres/yr<br /><ul><li> Equipment Operator
  129. Local Farm Mgr
  130. Cliff Kirkpatrick, visited
  131. Director, Ag Technology
  132. Justin Grove, interviewed</li></ul>Equipment Operator<br /><ul><li> VP, Growing Operations
  133. CFO, CEO (Jeff Dunn)</li></ul>Cliff, Farm Mgr<br />
  134. Customer Map #2 – Service Providers<br />Example: Ag Services – Service Provider, Salinas Valley<br /><ul><li> Equipment Operator
  135. Grower
  136. Service Mgr</li></ul>Me (left), Marty (middle, Service Mgr), Doug (right, Grower)<br /><ul><li> ?? (service mgr’s boss)</li></li></ul><li>The Business Plan Canvas Updated<br /><ul><li>Farming conventions.
  137. Demo, demo, and demo!!
  138. Proximity is paramount
  139. Technology Design
  140. Marketing
  141. Demo and customer feedback
  142. Mid/Large Organic Farmers
  143. Agricultural corporations
  144. Weeding Service Providers
  145. Mid/Large Conventional Farmers
  146. Cost Reduction
  147. Remove labor force pains
  148. Eliminate bio-waste hazards
  149. Research Labs
  150. Equipment Manufacturers
  151. Distribution Network
  152. Service Providers
  153. IP – Patents
  154. Video Classifier Files
  155. Robust Technology
  156. Direct Service
  157. Indirect Service
  158. … then Dealers
  159. Direct Service with equipment rental
  160. ($1,500/d; 120d/yr )
  161. Low density: $1,500/d
  162. High density: $6,000/d</li></ul>Value-Driven<br />
  163. World Ag Expo interviews:the need is real and wide spread<br />10+ interviews at show<br />Everyone confirmed the need<br />Robocrop, UK based, crude competitor sells for $171 K<br />Revenue Stream<br />Mid to small growers prefer a service<br />Large growers prefer to buy, but OK with service until technology is proven<br />Charging for labor cost saved is OK, as we provide other benefits (food safety, labor availability)<br />Confidential<br />
  164. The Business Plan Canvas Updated<br /><ul><li>Farming conventions.
  165. Demo, demo, and demo!!
  166. Proximity is paramount
  167. Technology Design
  168. Marketing
  169. Demo and customer feedback
  170. Mid/Large Organic Farmers
  171. Agricultural corporations
  172. Weeding Service Providers
  173. Mid/Large Conventional Farmers
  174. Research Labs
  175. Equipment Manufacturer
  176. Distribution Network
  177. Service Providers
  178. 2 or 3 Key Farms
  179. Cost Reduction
  180. Remove labor force pains
  181. Eliminate bio-waste hazards
  182. IP – Patents
  183. Video Classifier Files
  184. Robust Technology
  185. Direct Service
  186. Indirect Service
  187. … then Dealers
  188. Direct Service with equipment rental
  189. Low density: $1,500/d
  190. High density: $6,000/d</li></ul>Value-Driven<br /><ul><li> R&D
  191. Bill of Materials
  192. Training & Service
  193. Sales</li></li></ul><li>Autonomous weeding - Final<br />Direct<br />- Provide high quality service at competitive price<br />- Innovation<br />- Customer Education<br />- Dealer training<br />- Low density vegetable growers<br />- High density vegetable growers<br />- Thinning operations<br />- Conventional vegetables<br />We reduce operating cost<br />- Labor reduction (100 to 1)<br />- Reduced risk of contamination<br />- Mitigate labor availability concerns<br />- Ag Service providers<br />- Research Institutes (eg UC Davis, Laser Zentrum Hannover)<br />- 3-4 key farms<br />Direct <br />- Alliance with service providers<br />- Eventually sell through dealers<br />Engineers on Machine Vision<br />Two problems:<br />- Identification<br />- Elimination<br />Service provision<br />- Charge by the acre with modifier according to weed density <br />- Eventually move to asset sale<br />Costs for service provision<br />COGS seek a 50-60% Gross Margin<br />Heavy R&D investment <br />
  194. Role the Board<br />Dumb Money<br />Smart Money<br />Connections<br />Connections to more money<br />Hire/Fire the CEO<br />Advice<br />Good Advice<br />Wisdom<br />
  195. Board Meetings Haven’t Evolved<br />
  196. We Act Like It’s the 19th Century<br />Why do we need to get together in one room?<br />Why do we need to wait a month to see progress?<br />Why don’t we have standards for what you want?<br />Why haven’t we adopted the tools we build/sell?<br />
  197. How to Run a Board Meeting<br />Logistics<br />Send out board materials 2 days before, have board dinner<br />Approve minutes, stock grants<br />Business Highlights/Lowlights<br />summary of key events since last meeting<br />Financials versus Budget<br />waterfall charts<br />Management asks the board to help<br />strategy, markets, key hires, introductions.<br />Executive session<br />Meet without management to discuss performance<br />
  198. How to Run a Board Meeting<br />Logistics<br />Approve minutes, stock grants<br />Business Highlights/Lowlights<br />summary of key events since last meeting<br />Financials versus Budget<br />waterfall charts<br />Management asks the board to help<br />strategy, markets, key hires, introductions.<br />Executive session<br />Meet without management to discuss performance<br />Misc<br />Send out board materials 2 days before, have board dinner<br />Why?<br />
  199. What’s Wrong With a Board Meeting?<br />Time between meetings (every 4-6 weeks)<br />Strategy-to-tactic-to implementation lag<br />Often no follow-up on the outcomes<br />Diffuse board member attention (sits on 6-12 boards)<br />Punctuated Exec Staff Performance<br />“The Get Ready for the Board Meeting” drill<br />It’s often a performance rather than a snapshot<br />No standards for what each side does<br />What is the entrepreneur supposed to be doing?<br />What are the board members supposed to be contributing?<br />
  200. What’s Wrong With a Board Meeting?<br />Time between meetings (every 4-6 weeks)<br />Strategy-to-tactic-to implementation lag<br />Diffuse board member attention (sits on 6-12 boards<br />Punctuated Exec Staff Performance<br />“The Get Ready for the Board Meeting” drill<br />It’s often a performance rather than a snapshot<br />No standards for what each side does<br />What is the entrepreneur supposed to be doing?<br />What are the board members supposed to be contributing?<br />Why?<br />
  201. Solution:Make The Boardroom Bits<br />
  202. We Can Do This Via the Net<br />
  203. We Can Do This Via the Net<br />24/7<br />
  204. Focus on What’s Important<br />It’s about the search for the business model<br />Not income statement, cash flow, balance sheet<br />Advice/Guidance about metrics around the search<br />What are the Business model hypotheses?<br />What are the most important hypotheses to test now?<br />Progress of validating each hypotheses<br />What are the iterations and Pivots – and why?<br />
  205. We Made Students Blog Their Progress<br />
  206. How?<br />Customer Development<br />The Process<br />Narrative<br />Interviews<br />Surveys<br />Videos<br />Prototypes<br />Business Model Canvas<br />Scorekeeping<br />Real-time Feedback<br />Physical Reality Checks<br />Skype<br />Face-to-face<br />
  207. We Made Students Blog Their Progress<br />It Changed Everything<br />
  208. Interview<br />
  209. Photos<br />Videos<br />
  210. Surveys<br />
  211. Interview<br />& Photos<br />
  212. Competitive Analysis<br />
  213. Key Findings<br />
  214. A/B Test Results<br />
  215. Key Question<br />
  216. Strategy<br />
  217. Business Model Canvas as the Scorecard<br />
  218. Business Canvas Change Progress <br />1<br />
  219. Business Canvas Change Progress <br />2<br />
  220. Business Canvas Change Progress <br />3<br />
  221. Business Canvas Change Progress <br />4<br />
  222. Business Canvas Change Progress <br />5<br />
  223. Business Canvas Change Progress <br />6<br />
  224. Business Canvas Change Progress <br />7<br />
  225. Demo<br />Ben Mappen<br />Lean LaunchLab<br />
  226. Product Demo<br />
  227. CANVAS diagram is interactive and “stateful”<br />
  228. CANVAS diagram is interactive and “stateful”<br />Enter your hypotheses here<br />
  229. CANVAS diagram is interactive and “stateful”<br />Test your hypotheses and<br />record learnings in blog format<br />
  230. CANVAS diagram is interactive and “stateful”<br />Test your hypotheses and<br />record learnings in blog format<br />Interviews<br />Surveys<br />Videos<br />Photos<br />etc<br />
  231. CANVAS diagram is interactive and “stateful”<br />Test your hypotheses and<br />record learnings in blog format<br />Invite your advisors and investors to your project<br />
  232. CANVAS diagram is interactive and “stateful”<br />Test your hypotheses and<br />record learnings in blog format<br />Invite your advisors and investors to your project<br />They can view progress<br />by flipping thru your CANVAS diagrams<br />
  233. CANVAS diagram is interactive and “stateful”<br />Test your hypotheses and<br />record learnings in blog format<br />Invite your advisors and investors to your project<br />They can view progress<br />by flipping thru your CANVAS diagrams<br />They can post feedback and leave comments inline<br />
  234. CANVAS diagram is interactive and “stateful”<br />Test your hypotheses and<br />record learnings in blog format<br />Invite your advisors and investors to your project<br />They can view progress<br />by flipping thru your CANAVAS diagrams<br />They can post feedback and leave comments inline<br />Get email alert when new<br />feedback comes in<br />
  235. CANVAS diagram is interactive and “stateful”<br />Test your hypotheses and<br />record learnings in blog format<br />Invite your advisors and investors to your project<br />They can view progress<br />by flipping thru your CANAVAS diagrams<br />They can post feedback and leave comments inline<br />Get email alert when new<br />feedback comes in<br />The Lean<br />Board Meeting<br />
  236. Sign up for private beta (FREE)<br />http://www.leanlaunchlab.com<br />@leanlaunchlab<br />Ben Mappen<br />benmappen@gmail.com<br />
  237. What Does this Change?For Angel-Funded Startups<br />Angel funded startups can now get experienced advice<br />No longer requires board commitment for involvement<br />Encourages investors who need visibility<br />Ends repetition at each investor coffee<br />Turns adhoc startups into strategy-driven startups<br />Invites investor participation in the process<br />Professionalize the “throw it against the wall and see if it sticks”<br />Highly time-efficient for investor and founders<br />Eliminates Geography as a barrier to investment!<br />
  238. What Does this Change?For VC’s and Angels<br />For the first time a structure for “search”<br />Real-time monitoring of startup progress<br />Zero-lag for coaching and course-correction<br />Immediate follow-up on board meeting outcomes<br />Allows a single VC to multiply their reach and/or depth<br />Eliminates Geography as a barrier to investment!<br />
  239. Thanks<br />

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