1. The Entrepreneurial Explosion Steve Blank Stanford - School of Engineering www.steveblank.com Twitter: @sgblank

2. This Presentation Combines www.businessmodelgeneration.com www.steveblank.com

3. I Write a Blog www.steveblank.com

4. A Few Short Stories

5. Startup Constraints

6. High Cost to First Product Startup Constraints

7. Buy expensive workstationsBuy expensive development tools

8. Low Cost to 1st Product Entrepreneurial Explosion

9. Develop on inexpensive PC’s/Mac’sUse Open Source Software

10. High Cost to First Product Long Time to First Product Startup Constraints

11. Use Waterfall DevelopmentFirst Customer Ship in months/years

12. Low Cost to First Product Short Time to First Product Entrepreneurial Explosion

13. Use Agile DevelopmentFirst Customer Ship in weeks/months

14. High Cost to First Product Long Time to First Product Startup Constraints Slow Customer Adoption

15. Customers – Gov’t/Businesses# of customers - hundreds/thousands

16. Low Cost to First Product Short Time to First Product Entrepreneurial Explosion Fast Customer Adoption

17. Customers – Consumers# of customers - millions

18. High Cost to First Product Long Time to First Product Startup Constraints Slow Customer Adoption High Startup Failure Rate

19. Startups are small versions of large companiesFocus is on execution of business plan

20. Low Cost to First Product Short Time to First Product Entrepreneurial Explosion Fast Customer Adoption Lower Startup Failure Rate

21. Startups are not small versions of large companiesFocus is on Search for a business model

22. High Cost to First Product Long Time to First Product Startup Constraints Limited Number of Venture Capitalists Slow Customer Adoption High Startup Failure Rate

23. 3000 Sand Hill Road

24. Low Cost to First Product Short Time to First Product Entrepreneurial Explosion Large Pool of Risk Capital Fast Customer Adoption Rate Lower Startup Failure Rate

25. Sand Hill Road

26. High Cost to First Product Innovation Limited to a Few Regions Long Time to First Product Startup Constraints Limited Number of Venture Capitalists Slow Customer Adoption High Startup Failure Rate

27. 3000 Sand Hill RoadMenlo Park, California

28. Low Cost to First Product Global Innovation Short Time to First Product Entrepreneurial Explosion Large Pool of Risk Capital Fast Customer Adoption Rate Lower Startup Failure Rate

29. Menlo Park, San Francisco New York, Shanghai, Israel, Chile, Singapore

30. Low Cost to First Product Global Innovation Short Time to First Product Entrepreneurial Explosion This talk Large Pool of Risk Capital Fast Customer Adoption Rate Lower Startup Failure Rate

31. Why Startups Are Not Small Versions of A Large Company

32. Startups Search, Companies Execute Scalable Startup Transition Large Company Search Build Execute

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

37. Cash Flow Statement

39. Viral coefficient

40. Customer Lifetime Value

41. Average Selling Price/Order Size

42. Monthly burn rate

44. Cash Flow Statement

46. Scalable

47. Price List/Data Sheets

49. Pricing/Feature unstable

50. Not yet repeatable

52. Scalable

53. Price List/Data Sheets

55. Waterfall Development

56. QA

58. Waterfall Development

59. QA

61. Continuous Learning

62. Self Organizing Teams

63. Minimum Feature Set

65. features

66. customers/markets

68. describes “unknowns”

69. customer needs

70. feature set

71. business model

72. found by iteration

73. Plan describes “knowns”

74. Known features for line extensions

75. Known customers/markets

78. Why Startups Fail

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

81. Customer Problem: known Product Features: known

82. No Business Plan survives first contact with customers

83. So Search for a Business Model

84. The Business Model: Any company can be described in 9 building blocks

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

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

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

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

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

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

91. KEY ACTIVITIES which activities do you need to perform well in your business model? what is crucial? 58

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

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

94. value proposition customer relationships key activities customer segments key partners cost structure revenue streams key resources channels 61 images by JAM

95. sketch out your business model

96. building block

97. building block building block building block building block

98. building block building block building block building block building block building block building block building block building block building block building block building block

99. But,Realize They’re Hypotheses

100. 9 Guesses Guess Guess Guess Guess Guess Guess Guess Guess Guess

101. How Startups Succeed

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

103. Product Development Concept/Bus. Plan Product Dev. Alpha/Beta Test Launch/1st Ship + CustomerDevelopment Company Building CustomerDiscovery CustomerValidation Customer Creation Customer Development Pivot

104. Customer Discovery CustomerDiscovery CustomerValidation Company Building CustomerCreation Test yourbusiness model hypotheses Continuous Discovery Done by founders

106. Market Type

107. CompetitionTurning Hypotheses to Facts

109. Customer

110. User

112. Customer

113. User

115. Market Type

117. (Customer)

120. Customer

121. User

123. Market Type

125. (Customer)

128. MVP + Customer are the first two you need to nail

130. Iteration without crisis

132. Why Startups Aren’t Run By Accountants

133. Inventor of the Modern Corporation Scalable Startup Transition Large Company

134. Inventor of the Modern Corporation Scalable Startup Transition Large Company Alfred P. Sloan

136. MIT Sloan School

137. Sloan Foundation

139. Founder of General Motors Scalable Startup Transition Large Company Billy Durant

141. Fired by board, starts Chevrolet

142. Regains control of GM

143. Fired by board, GM ~$3.6 billion** GM Net sales in 1921 $304.5M = $3.6 Billion today

144. Durant Versus Sloan Scalable Startup Transition Large Company

148. Thanks www.steveblank.com