E101 october 24 2012 entrepreneurial management
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This presentation illustrates the emergence and impact of a new management practice based on Steve Blank's Customer Development Model and Eric Ries' lean StartUp approach.
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E101 october 24 2012 entrepreneurial management
- 1. Entrepreneurial Management Entrepreneurship 101 October 24 2012 Jon E Worren
- 3. Established practices not working Share of Voice Share of Mind Share of Market
- 4. The Emergence of New Practices 1911 Scientific Mgmt 1948 Toyota Production System 2001 Agile Develo pment 2003 Lean Thinking 2005 Customer Development 2009 Lean Startup Mvmt
- 5. A set of principles and frameworks that helps startups identify a sustainable business model with the least amount of waste possible Entrepreneurial Management
- 8. Scientific Management • Time & Work Studies (measurement)
- 9. Toyota Production System • Muda – Elimination of waste • Hansei - learning • Kaizen – continuous improvement • Jidoka – self-learning
- 10. Agile Development • Customer Collaboration • Iteration (short time frames)
- 11. Lean Thinking • Generalization of TPS • Increased focus on “Value”
- 12. Customer Development • New 1: De-risking a new venture by breaking up the commercialization process and prioritize business problems to solve • New 2: Focus on Customer Acquisition Customer Discovery Customer Validation Customer Creation Company Building
- 13. Lean Startup • Lean Startup = Customer Development + Agile development • Strong build+ measure focus • Popularized approach – created Lean Movement Build Test Measure Learn
- 16. Step 0- Describe Idea What kind of problem do you solve for the customer? Is this an important problem for these customers? Is there a big potential market for your idea? What is your competition and how do they solve this problem for their customers today? What is unique about your way of solving the problem?
- 17. Step 1 – Review Assumptions • Is the customer problem you are solving validated by a measurable fact? • Are you able to identify which customers are suffering the most from this problem? • Do you understand how the problem impacts the customer and their business? • Do you have evidence that links the customer problem to the target customer?
- 18. Step 2 –Test • What key piece of information would validate or invalidate the assumption? • Where does that information reside? • What is the best way to gather that information?
- 19. Step 4 & 5 – Measure & Evaluate • Is the customer problem urgent? • Is the problem pervasive? • Will customers pay to have the problem solved? How do these answers measure against your initial assumptions?
- 20. 3 outcomes Evaluate Validate: Confirmed value of MVP Iterate: Change your product features Exit: Don’t spend any more money!
- 21. The Pivot Easier when…. • You have invested little to this point • You are getting absolutely no traction Harder when……. • High noise to signal ratio ( no clear feedback) • Next step is unclear Entrepreneurs are eternal optimists – choose to persist: - Tweak a little: Our next version will take off! - Easy: Our next campaign/trade show will land key customers!
- 22. THE 3 STAGES OF THE PROCESS The quest for a Business Model
- 23. The 3 stages of the search process Customer Problem Product Solution Business Model
- 25. Value Proposition • What you offer and how you offer it to customers • What type of value or benefit is associated with your offering (e.g., cost savings, time savings, revenue increase, customer/employee satisfaction) and how much of it the customer can expect • How the value is generated • Why it differs from anything else on the market
- 26. Examples Winners Winners is a department store that offers fashion conscious consumers the latest brand names for up to 60 per cent off. Google Google is the world’s largest search engine that allows internet users to find relevant information quickly and easily
- 27. CONCLUSION & SUMMARY Final two slides
- 28. Summary • Startups are different • Search is about learning • Lean is about minimizing waste • CDM: De-risk your venture by breaking up the process • Test for customer problem first • Test solution/MVP • Test customer acquisition • Human element: Give someone the task to keep you accountable!
- 29. Conclusion • Entrepreneurial Management offers a set of tools and processes that makes the process of starting up more manageable: • The philosophy brings clarity to the skillset required to succeed: – Less persistence – more perception – Stack the odds in your favour – rather than trying to win against all odds – Commit to the process – not the idea
Editor's Notes
- Help me understand who you are? By show of hands…..
- Tell the story about my first job. Loved Michael Porter and Philip Kotler, Henry Minztberg, Al Ries, David Aaker etc. But they way writing for big corporations – not startup. For people operating in established marketsWhat’s not working:Frameworks meant for established companiesA lot more is known about established markets – rate of change is slower than what is the case;So I’d create strategies and plans using what I knew, but from the outset it felt wrong; you kind of knew that this was a window dressing exercise;So I largely went through the 90’ies having to operate by trial and error; seeking to avoid repeating mistakes and duplicating whatever worked.
- Entrepreneurial management is relatively new – emerged in the last decade – but its roots go way back in time. We’ll go more into how the practices of EM came about in a minute – let me first define what we mean
- Read definitionUseful for entrepreneurs and their teams in early-stage start-ups as well as those seeking to launch new products from within larger companies, and governments looking to innovate to improve government itselfFundamentally, Entrepreneurial management is about de-risking a new venture in a step-wise, iterative process of investigation and learning
- Blank: A startup is a temporary organization with an idea designed to search for a repeatable and scalable business model (S. Blank) The startup phase is on the left hand side – this is where we use EMThe growth phase relies more on established practices
- Insert Steve Blank process form FOB presentationKey points:Iterative processPurpose is to glean and integrate learningBreaks commercialization process down to manageblepieciesCan consist of 3 circles
- Insert key questions – describe your idea
- What do you know - what don’t you knowIdentify assumptions that can be tested, determine how to test and test
- Many different ways of testing – some sort of market exposureCustomer interviewTest usersObservationIn-field
- Back at the office
- Figure from presentation
- Pivot – IterationDifficult choice: Have you given your strategy a chance or is there a risk you are pulling the trigger too soon?What are you changing to?If you are obviously failing, change is less gut wrenching than if you are doing OK; what’s to say that your next version won’t take off; or your next campaign won’t be a slam dunk? It is not hard to understand why entrepreneurs choose to persist in those cases.Change is easier when little has been invested – than further into the venture, when plenty has been invested (key MVP)Pivot: Most pivots will be done with a high noise to signal ratio: almost no clear feedbackFactors that matter:TimingDestinationClarityCost
- ProblemSolutionBusiness ModelWell – wasn’t the whole purpose of the search to find business model – so why are we doing the other two before business model
- Insert Business Model Canvas This is Alex Osterwalder’s Business Model Canvas – published in 2009 – enormously popular; we use it here at MaRS, They use it in class at business schools such as Stanford and of course in a lot of businesses for their planning.Ash Maruya has developedThe value proposition sits in the middle of the canvas – everything in the canvas depends on the value proposition; so as decision for the 9 building blocks
- Show key components
- Skills: not persistence but perceptive; not against all odds; but diligently stacking the odds in your favour; although still a heroTeam/co-founder skillsComittment to process – not ideaKeep each other accountableMaintain momentum