Business 101.1 Lean and Design Thinking for Startups - Week 2 Personas, TAM, SAM, TM

1. Business 101.1
A class in business. And entrepreneurship.
Fall 2016
NYU ITP
September 12, 2016
Josh Knowles
Jen van der Meer
Extra love from Tom Igoe
And the Leslie E-Lab

2. Syllabus Map
START +
Form
Teams
Business
Models
Customer
Development
How to
Interview
Value
+ The Purpose
of Business
Values
Motivation
Team
Customer
Relationships
+ Channels
Analytics
Key Resources
Activities
Partners
Biggest Vision
Analyze Test
The Money
Plan MVP
Turning
Insights Into
Features
More MVP
How small,
How big?
Launch MVP
Lessons
Learned
Go/No Go?
Sketch
Paper
Prototype
Oz Test
Smallest MVP
Tech
Architecture

3. Last WEEK:
COURSE MAP
TEAM FORMATION
3 Round ROBINS
5 TEAMS
No CHANGES :)
START +
Form
Teams

4. Last WEEK:
COURSE MAP
TEAM FORMATION
3 Round ROBINS
5 TEAMS
No CHANGES :)
START +
Form
Teams

5. TEAMS
Fragrances
Yu Shi
Joy (Eun Jee Kim)
Igor Carrasco
Fashion Socent
Soy (Soyeon Chung)
Peter Winne
Asad Lilani
Lin Yang
Prisons
Social Community for
Designers
Dhruv
Daniel Silber Baker
Molly O’Shea
Predictive Social
Listening
Tattoo Artist Matching
Fernanda
Eric Ramirez
Javiera Valle Toro
Assistive Tech
Colostomy or Mental
Health Provider Match
for LGBTQ
Angie Aguilar
Olivia
Isobel Donjon
Ergonomic Design
Ashley Williams
Yan
Max Theony
Malcolm Pittman

6. Teams x2
Business Model Canvas Intro
Persona
First Sketch - What Could This Be?
SAM TAM TM
Business
Models
Customer
Development
Sketch

7. BMC 1.0

8. NO BUSINESS PLANS
WHY?

9. LEAN WHAT IS OLD IS NEW AGAIN

10. CLASS BOUNDARIES
STARTING A BUSINESS BY SEARCHING FOR A BUSINESS MODEL
YES:
FOR PROFIT
NOT FOR PROFIT WITH
SUSTAINABLE CUSTOMER-
DERIVED REVENUE SOURCE
CLEAR TARGET MARKET AND
SIZABLE ADDRESSABLE MARKET
PATH TO VALIDATE REVENUE
STREAMS
IDENTIFIABLE REVENUE
STREAMS
NO:
NO MOVEMENTS
NO “CHANGE THE REGULATION”
CONCEPTS
NO CAMPAIGNS / PUBLIC SERVICE /
RAISE AWARENESS / CHANGE
BEHAVIOR CONCEPTS
(USE THE ABOVE WITHIN YOUR
BUSINESS MODEL, NOT OUTSIDE
OF HAVING ONE)
NO MINUSCULE IDEAS (< $1 MM
TOTAL ADDRESSABLE MARKET)

11. DESIGN THINKING > BUSINESS MODEL CANVAS > LEAN STARTUP

12. LET’S BEGIN
HOW TO DRAW ON A BLANK SHEET
H H

13. H H
HOW TO DRAW ON A BLANK SHEET
LET’S BEGIN

14. LET’S BEGIN
Customer
Segments
Customer
Relationships
Value
Proposition
Key ActivitiesPartners
Key
Resources
Customer
Channels
RevenuesCosts
Source: Strategyzer Osterwalder, Pigneur
THE BUSINESS MODEL CANVAS:

15. CREATED BY: CREATED FOR: VERSION:
Customer
Segments
Customer
Relationships
Value
Proposition
Key ActivitiesPartners
Key
Resources
Customer
Channels
RevenuesCosts
Source: Strategyzer Osterwalder, Pigneur
HOW WILL YOUR BUSINESS WORK?
Whom do
you help?
What pains
do you
solve?
What do
you
uniquely
offer?
Distinct
segmentsWhere do
we reach
them?
How do we
get keep
and grow?
How will
you
charge?
What will
it cost?
What do
you need
to have?
How do
you do it?
Who will
help you?

16. WHOM DO YOU
SERVE?

17. ALWAYS START WITH THE CUSTOMER:
Customer
Segments
Customer
Relationships
Value
Proposition
Key ActivitiesPartners
Key Resources
Customer
Channels
RevenuesCosts
Source: Strategyzer Osterwalder, Pigneur
WHOM ARE YOU HERE TO SERVE?

18. ALWAYS START WITH THE CUSTOMER:
Customer
Segments
Customer
Relationships
Value
Proposition
Key ActivitiesPartners
Key Resources
Customer
Channels
RevenuesCosts
Source: Strategyzer Osterwalder, Pigneur
WHOM ARE YOU HERE TO SERVE?
WHO PAYS?
WHO INFLUENCES?
WHO DOESN’T PAY?
IN PRIORITY ORDER, WHO ARE THE MOST IMPORTANT CUSTOMER TYPES?

19. PERSONA TIME
Source: van der Meer, Reason Street
Context:
Instagram
Snapchat
#stillathome
#notanadultyet
Name:
Peyton
Age:
24
Living with
Mom at
home
Goals:
Independence
Freedom
Apartment
Bike to work
Pay off college loan
Interests:
Roller derby
Raising money for
breast cancer
Jewelry making
Pains:
Can’t seem to save
At breakeven/loss
each month
Bad credit rating
Fears + Secrets:
Afraid of getting
rejected for an
apartment
Really likes
mom’s support
CUSTOMER SEGMENT: 21-30 WITH > $50K STUDENT LOANS
Networks + Memes

20. PERSONAS ARE FOR CONTINUOUS IMPROVEMENT?
ASK ALWAYS: IS THIS FOR REAL?
WHAT ARE YOU LEARNING?
WHAT’S CHANGING IN THEIR LIVES?
For real?
No?
Revise!
Tech
Changing?
Yes?
Revise!

21. PERSONA TIME
YOUR TURN
Context:
Name:
Age:
Family:
Goals: (in order)
Interests:
Pains (in order):
Fears + Secrets: Networks + Memes
Source: van der Meer, Reason Street

22. FIRST ASSIGNMENT FOR NEXT WEEK
FIND 3 CUSTOMERS THAT FIT YOUR PERSONA
(TALK TO 6)

23. LEARNING OUTCOMES
NOTE: AS YOU VALIDATE YOUR BUSINESS MODEL, YOU WILL CHANGE
THE TYPE OF CUSTOMER SEGMENT OR RANK PRIORITIES
DIFFERENTLY

24. MEET TAM, SAM,
AND TM

25. MARKET SIZING
TOTAL AVAILABLE MARKET

26. MARKET SIZING
SERVED AVAILABLE MARKET

27. MARKET SIZING
TARGET MARKET

28. MARKET SIZING
TOTAL AVAILABLE MARKET
Order of magnitude
assessment -
What is the total
REVENUE potential of
your market
opportunity?

29. MARKET SIZING
SERVED AVAILABLE MARKET
The % of the
market that is
realistically in your
reach (geography,
technology)

30. MARKET SIZING
TARGET MARKET
Your target -the
easiest place to start
(big pain point,
identifiable)

31. ITERATE UNTIL YOUR SIZE OF PRIZE IS BIG ENOUGH FOR YOUR VISION
NOTE: AS YOU VALIDATE YOUR BUSINESS MODEL and YOUR
CUSTOMER TARGET, MAKE SURE YOU STILL HAVE A BIG
ENOUGH MARKET

32. SOURCING
HOW TO FIND AND VERIFY YOUR NUMBERS IN A GOOGLE AGE
▸ Top down: industry estimates
▸ Bottoms up: NAICS #s, Census data, raw customer data, government open data
▸ Time stamp your data
▸ Be wary of source. Which do you trust most?
▸ Academic
▸ Think Tank
▸ Government
▸ Market Research Firm
▸ Industry Association
▸ Company

33. SOURCING
QUICK TEST
▸ What % of Americans live paycheck to paycheck?

34. TAM SAM TM
NOW YOU
▸ How many people are in your total market?
▸ Are you limited by geography? technology? something
else?
▸ Where will you start?

35. SKETCHING

36. BLANK SLATE SKETCHING
TAKE 5 MINUTES
▸ What is the first interaction / first moment of awareness for
the service/product/experience/business you are creating?

37. FOR NEXT WEEK

38. Outwork.
Get out (of the building)
Find 3 customers fit your persona (talk to 6, because not all will fit)
Ask:
“What is a typical day like for you?”
“What keeps you up at night”
“What makes you angry about the world right now?”
Then: Refine Persona and Business Model v 2.0
Present next week 5 minutes tops, 5 slides
# of interviews. key insights. revisions.

39. CONTACT:
Jen or Josh for Office Hours