1. So You Want To Be An Entrepreneur?
Steve Blank
www.steveblank.com
www.slideshare.net/sblank
Twitter: @sgblank

2. So What Do I Do?

3. 12 Steps to a Startup
1. Decide what type of entrepreneur
2. Do you have what it takes?
3. Find an idea of sufficient size
4. Craft company hypotheses
5. Build the Website Logistics
6. Build a “low-fidelity” web site
7. Get customers to the site
8. Add the backend code to make the site work
9. Test the “problem” with customer data
10. Test the “solution” by building the “high-fidelity” website
11.Ask for money

4. Step 1: What’s A Startup?
Who’s An Entrepreneur?

5. Lifestyle Startups
Work to Live their Passion
Startup
• Serve known customer with
known product
• Work for their passion

6. Small Business Startups
Work to Feed the Family
Small
Startup
Business
• Serve known customer with
known product
• Feed the family

7. Small Business Startups
Work to Feed the Family
Small
Startup
Business
Exit Criteria
• known customer - Business Model found
known product
- Profitable business
• Feed the family
- Existing team
< $500K in revenue

8. Social Entrepreneurship Startups
Social Large
Startup Non-Profit
• Solve pressing social problems
• Social Enterprise: Profitable
• Social Innovation: New Strategies

9. Scalable Startup
Search Execute
Scalable Large
Startup Company
Goal is to solve for: Exit Criteria
unknown customer and - Business model found
unknown features - Total Available Market > $500m
- Can grow to $100/year

10. Buyable Startup
Born to Be Big
Search Sell
Scalable $2 to $50M
Startup Acquisition
Goal is to solve for: Sell to larger company
Internet, Mobile, Gaming Apps

11. What’s A Startup?
Search Build Execute
Large
Startup Transition
Company
A Startup is a temporary organization
used to search for a repeatable and
scalable business model

12. Step 2: Do You Have What It Takes?
• Founder?
• Early Employee?
• Later Stage?
• Resilient
• Relentless
• Agile
• Curious
• Passionate
• Driven

13. Step 3: Find an Idea of Sufficient Size
• Idea sources:
– New technology
– Regulatory/legal changes
– Customer tastes changes
– Unmet customer needs
• Size the opportunity:
– Total Available Market
– Served Available Market
– Target Market

14. Step 4: Craft Company Hypotheses
• Any company can be described in 9 hypotheses

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

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

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

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

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

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

21. KEY ACTIVITIES
which activities do you need to perform well in your
business model? what is crucial?
21

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

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

24. key activities value customer
proposition relationships
key customer
partners segments
cost revenue
structure key streams
resources channels
24
images by JAM

25. sketch out your
business model

26. Step 5: Website Logistics
• Get a domain name
• Set up Google Apps
• For Coders: set up a web host
– Use virtual private servers (VPS)
– “Platform As A Service like Heroku, Dotcloud or
Amazon Web Services

27. Step 6: Build a “Low-Fidelity” Web Site
• Splash Page
– value proposition, benefits summary, and a call-to-action to learn
more, answer a short survey, or pre-order
• For Non-coders
– Make a quick prototype in PowerPoint or use Unbouce,
Wordpress
– For surveys and pre-order forms use Wufoo or Google Forms
• For Coders
– Build the User Interface with a wireframe prototyping tool
– Create a fake sign up/order form

28. Step 7: Get Customers to the Site
• Start showing the site to potential customers, testing
customer segment and value proposition
• Use Ads, textlinks or Google AdWords, Facebook ads
and natural search
• Usse your network to find target customers
• For B2B products, use Twitter, Quora, and industry
mailing lists are a good place to find target customers.
• Use Mailchimp, Postmark or Google Groups to send out
emails and create groups
• Create online surveys with Wufoo or ZoomerangGet
feedback on your Minimum Viable Product (MVP)
features and User Interface

29. Step 8: Build a Complete Solution
• Build a more complete solution (Connect the User
Interface to code)
• Connect the UI to a web application framework (
– Node.js, Rubyon Rails, Django, SproutCore, jQuery, Symfony,
Sencha, etc.)

30. Step 9: Test the Customer Problem

31. Customer Development
The Search for the repeatable and
scalable Business Model

32. Customer Development
There are no facts inside your building
So get the hell out

33. More startups fail from
a lack of customers than from a
failure of product development

34. Customer Development
The Search For the Business Model
Customer Customer Customer Company
Discovery Validation Creation Building
Pivot

35. Customer Discovery
Customer Customer Customer Company
Discovery Validation Creation Building
Pivot
• Stop selling, start listening
• Test your hypotheses – problem and solution
• Continuous Discovery

36. Customer Discovery

37. Customer Validation
Customer Customer Customer Company
Discovery Validation Creation Building
Pivot
• Repeatable and scalable business model?
• Passionate earlyvangelists?
• Pivot back to Discovery if no customers

38. The Pivot
• The heart of Customer Development
•Iteration without crisis
•Fast, agile and opportunistic

39. Pivot Cycle Time Matters
•Speed of cycle minimizes cash needs
•Minimum feature set speeds up cycle time
• Near instantaneous customer feedback
drives feature set

40. The Minimum Viable Product (MVP)
• Smallest feature set that gets you the most …
- orders, learning, feedback, failure…

41. Pivot Example
Robotic Weeding
Talked 75 Customers in 8 Weeks

42. Our initial plan
Confidential

43. 20 interviews, 6 site visits…
We got OUR Boots dirty
Mowing
Interviewed:
• Golf: Stanford Golf course
• Parks: Stanford Grounds Supervisor, head of maintenance and
lead operator (has crew of 6)
• Toro dealer (large mower manufacturer)
• User of back-yard mowing system
• Maintenance Services for City of Los Altos
• Colony Landscaping (Mowing service for stadiums)
Weeding
Visited two farms in Salinas Valley to better understand problem
Interviewed:
• Bolthouse Farms, Large Agri-Industry in Bakersfield
• White Farms, Large Peanut farmer in Georgia
• REFCO Farms, large grower in Salinas Valley
• Rincon Farms, large grower in Salinas Valley
• Small Organic Corn/Soy grower in Nebraska
• Heirloom Organics, small owner/operator, Santa Cruz Mts
• Two small organic farmers at farmers market
• Ag Services of Salinas, Fertilizer applicator

44. Business Plan
Autonomous Vehicles for Mowing & Weeding
- Innovation Dealers Mowing
- Dealers - Customer We reduce sell, installs and - Owners of
(Mowing and Education operating cost supports public or
Ag) - Dealer training - Labor reduction customer commercially
- Vehicle OEMs - Better used green
(John utilization of Co. trains spaces (e.g. golf
Deere, Toro, Jac assets (eg mow dealers, supports courses)
obsen, etc) or weed at dealers - Landscaping
Engineers on nights) - Mowing
service provider
- Research labs Autonomous - Improved Dealers
vehicles, GPS, performance - Ag Dealers Weeding
path-planning (less - Farmers with
rework, food manual weeding
safety) operations
Dealer discount Asset sale
COGS seek a 50-60% Gross Margin Our revenue stream derives from selling the
Heavy R&D investment equipment

45. 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

46. Decision to make – mowing vs weeding
Application If ROI is < 1 Labor costs Autonomous TAM
yr they will significant? would solve
buy problem?
Mowing of Yes. Yes Yes Adjusted up to
Professionally xxx
large fields run
organizations
Weeding in Agri Industry: YES! for TAM increased
YES! organic crops Not necessarily to $2.6 B (Total
Agriculture organic)
Large They are Key need is
Growers: Yes spending weed vs. crop Target Market
$500/ac! differentiation (organic
Small specialty)
Growers: No 162 M/yr
18%/yr growth

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

48. 1 Week – 1 CarrotBot
Confidential

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

50. The Business Plan Canvas Updated
•Technology •Farming
Design conventions.
•Marketing •Demo, demo, a
•Demo and nd demo!!
customer •Cost •Proximity is •Organic
•Research Labs feedback paramount Farmers
Reduction
•Equipment •Weeding
•Remove labor
Manufacturers Service
force pains
•Distribution Providers
•Eliminate bio-
Network •Conventional
waste hazards
•Service •IP – Patents Farmers
Providers •Video •Dealers
Classifier Files •Direct Service
•Robust •Indirect Service
Technology • … then Dealers
•Asset Sale
Value-Driven •Direct Service with
equipment rental
•… then Asset Sale

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

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

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

54. Customer Hypothesis
Pre-Test
Large
Growers
Us Dealer
Industrial
Growers
Hypothesis Confirmed
• Growers interested in own
Industrial equipment
Growers • Industrial (10,000s of acres)
Post-Test • Large (1,000s of acres)
Large • Willing to pay $100k for one unit
Growers
Us Dealer • Smaller growers (100s of acres)
Service usually subcontract the labor
Providers services or rent equipment
Equipment • All purchases through local dealers
Rental •Customer service is essential

55. Customer Map #1 – Industrial Growers
Example: Bolthouse Farms – Large Industrial Carrot Producer – 8K acres/yr
End User • Equipment Operator
Influencer • Local Farm Mgr
• Cliff Kirkpatrick, visited
Recommender • Director, Ag Equipment Operator
Technology
• Justin
Grove, interviewed
Decision
• VP, Growing
Maker
Operations
Approver • CFO, CEO (Jeff Dunn)
Cliff, Farm Mgr

56. Customer Map #2 – Service Providers
Example: Ag Services – Service Provider, Salinas Valley
End User • Equipment Operator
Influencer • Grower
Recommender • Service Mgr
Me (left), Marty (middle, Service Mgr), Doug
(right, Grower)
Decision Maker • ?? (service mgr’s
& Approver boss)

57. The Business Plan Canvas Updated
•Technology •Farming
Design conventions.
•Marketing •Demo, demo, a •Mid/Large
•Demo and nd demo!! Organic Farmers
customer •Cost •Proximity is •Agricultural
•Research Labs feedback paramount
Reduction corporations
•Equipment
•Remove labor •Weeding Service
Manufacturers
force pains Providers
•Distribution
•Eliminate bio-
Network
•Service •IP – Patents
waste hazards •Mid/Large
Providers •Video •Direct Service Conventional
Classifier Files •Indirect Service Farmers
•Robust • … then Dealers
Technology
•Direct Service with
equipment rental
Value-Driven •($1,500/d; 120d/yr )
•Low density: $1,500/d
•High density: $6,000/d

58. 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

59. The Business Plan Canvas Updated
•Technology •Farming
Design conventions.
•Marketing •Demo, demo, a •Mid/Large
•Research Labs •Demo and nd demo!! Organic Farmers
•Equipment customer •Cost •Proximity is •Agricultural
Manufacturer feedback Reduction paramount corporations
•Distribution •Remove labor •Weeding Service
Network force pains Providers
•Service •Eliminate bio-
Providers
•IP – Patents
waste hazards •Mid/Large
•2 or 3 Key
•Video •Direct Service Conventional
Farms
Classifier Files •Indirect Service Farmers
•Robust • … then Dealers
Technology
Value-Driven •Direct Service with
• R&D equipment rental
• Bill of Materials •Low density: $1,500/d
• Training & Service •High density: $6,000/d
• Sales

60. Autonomous weeding - Final
- Innovation Direct - Low density
- Ag Service - Customer We reduce - Provide high vegetable
providers Education operating cost quality service at growers
- Dealer training - Labor reduction competitive price - High density
- Research (100 to 1) vegetable
Institutes (eg - Reduced risk of growers
UC Davis, Laser contamination - Thinning
Zentrum - Mitigate labor operations
Hannover) Engineers on availability Direct
- Conventional
Machine Vision concerns - Alliance with
vegetables
- 3-4 key farms Two problems: service
- Identification providers
- Elimination - Eventually sell
through dealers
Costs for service provision Service provision
COGS seek a 50-60% Gross Margin - Charge by the acre with modifier according to
Heavy R&D investment weed density
- Eventually move to asset sale

61. Thanks
www.steveblank.com