autm intro and bmc
TRANSCRIPT
what is the happiest place on earth?
the startup story
THIS IS STARTUP!
no
hard work
long hours
little or no pay
>50% gone in the FIRST year
only 5% ever raise ANY money
only 0.62% ever raise any VC money
75% of all VC-backed startups
FAIL
the math is bad
it is hard ...
... but we know a better way
Evidence-Based Entrepreneurship
and the Business Model
Canvas
1996 1998 2000 2002 2004 2006 2008 2010 2012
NASDAQ
1000
2000
3000
4000
5000
$1,000,000,000,000
we know something now that we didn’t know before
...
we know something now that we didn’t know before
we know how to build startups
engineer
CoE
CoS CoC
CoA
CoLA
CoB
what is a company?
A organization which sells a product or service in exchange for revenue
and profit
Dutch West India Company 1620
1856 - First Org Chart
1908
Tools for the 20th Century “Century of the Corporation”
... but what about startups?
Startups are a Smaller Version of a Large Company
Startups are a Smaller Version of a Large Company
How to create a startup (before 2010) ...
All I Need to Do is Execute the Plan
All I Need to Do is Make the Forecast
Step 1. Business Plan Step 2. Five-year Forecast Step 3. ??? Step 4. PROFIT!
What we know now (and have known all along)...
Business Plans are
FICTION
"Everybody has a plan until they get punched in
the mouth."
Five year forecast?
Five year forecast?
MAGICAL THINKING
Previous
5-Year Plans
1908
... but what about startups?
Startups Search Companies Execute
what is a startup?
a temporary organization designed to search
for a repeatable and scalable business model
definition of “startup”
Business Model Product/Service
Startups Companies
what is a business model?
Business Model Generation2010
Motivation
A good plan violently executed now is better than a perfect plan executed next week.
Business Model
Business Plan>
Motivation #1
a better tool for startups
Core Idea or Technology Company
Core Idea or Technology Company
Core Idea or Technology Company
1
Core Idea or Technology Company
N
Motivation #2
shared language for strategic conversations
(smart people sitting around a table)
the canvas has a very specific organization
Think of it as a theater…
parts of the model
VP
Value Proposition
products & services
A list of all the products and services a value
proposition is built around
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pain relievers
describe how your products and services
alleviate customer pains
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gain creators
describe how your products and services create customer gains
VP CS
Customer Segment
customer jobs
what customers are trying to get done in their work and in their lives
task to perform, problem to solve, needs to satisfy
Job contextCustomer jobs often depend on the specific
context in which they are performed. The context
may impose certain constraints or limitations. For
example, calling somebody on the fly is different
when you are traveling on the train or when you
are driving a car. Or, going to the movies with your
kids is different than going with your partner.
* The “jobs-to-be-done” concept was invented, refined, and popu-larized by two consulting companies, Innosight and Strategyn.
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important
insignificant
Job importanceIt is important to acknowledge that
not all jobs have the same impor-
tance to your customer. Some are
important in a customer’s work or
life because, for example, fail-
ing to get them done could have
significant ramifications. Some are
insignificant because the customer cares about
other things more. Sometimes a customer might
find a job important because it occurs frequently
or because its bad or desired outcome can be
felt or experienced immediately. Customers
often, but not always perceive jobs as important
when the failure to get them done has significant
consequences.
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The following list of trigger questions can help you think of different potential customer pains:
What does your customer find too costly? E.g.
does it take them a lot of time, cost them too
much money, or require substantial efforts?
What makes your customer feel bad? E.g. what
are their frustrations, annoyances, or the things
that give them a headache?
How are current solutions underperforming for
your customer? E.g. which features are they
missing, are there performance issues that
annoy them, or malfunctions they mention?
What are the main difficulties and challenges
your customers encounter? E.g. do they under-
stand how things work, do they have difficulties
getting certain things done, or do they resist
certain jobs for specific reasons?
What negative social consequences do your
customers encounter or fear? E.g. Are they
afraid of a loss of face, power, trust, or status.
What risks do your customers fear? E.g. Are
they afraid of financial, social, or technical risks,
or are they asking themselves what could go
awfully wrong?
What’s keeping your customers awake at night?
E.g. What are their big issues, concerns, and
worries?
What common mistakes do your customers
make? E.g. Are they using a solution the wrong
way?
What barriers are keeping your customers
from adopting a solution? E.g. Are there upfront
investment costs, a steep learning curve, or are
their other obstacles preventing adoption?
Link to these trigger questions online: 39
customer pains
describe bad outcomes, risks, and obstacles related to customer jobs
The following list of trigger questions can help you think of different potential customer gains:
Which savings would make your customers
happy? E.g. which savings in terms of time,
money and effort would they value?
What quality levels do they expect and what
would they wish for more or less of?
How do current solutions delight your custom-
ers? E.g. Which specific features do they enjoy,
what performance and quality do they expect?
What would make your customers’ jobs or life
easier? E.g. Could there be a flatter learning
curve, more services, or lower costs of owner-
ship?
What positive social consequences do your
customers desire? E.g. what makes them look
good, increase their power or their status?
What are customers looking for most? Are they
searching for good design, guarantees, specific
or more features?
What do customers dream about? E.g. What do
they aspire to achieve or what would be a big
relief to them?
How do your customers measure success and
failure? E.g. How do they measure performance
or cost?
What would increase your customers’ likelihood
of adopting a solution? E.g. do they desire
lower cost, less investment, lower risk, or better
quality?
Link to these trigger questions online: xxx
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customer gains
describe the more or less expected benefits the customers are seeking
VP CS
Product /Market Fit!
The set of value proposition benefits that you design to attract customers.
Create ObserveThe set of customer characteristics that you assume, observe, and verify in the market.
Fit
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OutcomeIf a Pain reliever or Gain creator doesn't Fit anything, it may not be creating customer value. Don't worry if not all pains/gains are checked – you can't satisfy them all. Ask yourself, how well does your Value Proposi-tion really fit your Customer?
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customer profilevalue map
What About My Technology?
Customers want your technology.
MYTH
Customers want your technology.
MYTH
REALITY Customers want their jobs done;
their problems addressed;their pain killed;
their dreams achieved.
Research
Core Idea or Technology Company
Research
Core Idea or Technology Company
Our POV
Research
Core Idea or Technology Company
OVER VALUED
Core Idea or Technology Company
X
Core Idea or Technology Company
UNDER VALUED
Core Idea or Technology Company
> 95% PIVOT
Customers want your technology.
MYTH
REALITY Customers want their jobs done;
their problems addressed;their pain killed;
their dreams achieved.
Why do we call it evidence-based entrepreneurship?
Provide evidence showing “what” customers care about before focusing on “how” to help them
First, establish the customer
Provide evidence showing that your
customers care about how your products
and services kill pains and create gains
Then, develop the value proposition
Provide evidence showing that the way you intend to create, deliver, and capture value is likely to work
Finally, consider the whole model
I find out what the world needs. Then I go ahead
and try to invent it. - Thomas Edison
parts of the model continued
VP CS
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VP CS
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VP CS
C
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Cost?
Value?
VP CS
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Soccer Moms
Kids
Grandparents
Make guesses about
who or what goes into
each of the nine
boxes
BUT…they are just
GUESSES!
? ? ??
??
?
??
?
?
??
? ??
the scientific method applies to business
create a startup thesis
the scientific method
create a startup thesis
the scientific method
generate hypotheses? ? ?
??
??
??
?
?
??
? ??
create a startup thesis
the scientific method
generate hypothesesmake predictions
create a startup thesis
the scientific method
generate hypothesesmake predictions
do the iteration loop
the iteration loop
? ? ??
??
?
??
?
?
??
? ??
?Choose one of these
make hypotheses
& predictions
design tests
prioritize hypotheses
Testing Overview
Test Card
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-Extract Hypotheses Prioritize Hypotheses Design Test
Design Testing220
TEST
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* Working preview content for private review only, do not distribute — © Copyright Osterwalder, Pigneur, Bernarda, Smith, and Papadakos
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Prioritize Tests Run Tests Capture Learnings Make Progress
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prioritize tests
reflect & learn
run tests
the iteration loopTesting Overview
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-Extract Hypotheses Prioritize Hypotheses Design Test
Design Testing220
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Testing Overview
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the processTesting Overview
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thesisTesting Overview
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Testing Overview
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Testing Overview
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Design Testing220
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Testing Overview
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Learning Card
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Testing Overview
Test Card
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Design Testing220
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220 * Working preview content for private review only, do not distribute — © Copyright Osterwalder, Pigneur, Bernarda, Smith, and Papadakos
Learning Card
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Prioritize Tests Run Tests Capture Learnings Make Progress
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Testing Overview
Test Card
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Design Testing220
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220 * Working preview content for private review only, do not distribute — © Copyright Osterwalder, Pigneur, Bernarda, Smith, and Papadakos
Learning Card
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Prioritize Tests Run Tests Capture Learnings Make Progress
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Testing Overview
Test Card
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-Extract Hypotheses Prioritize Hypotheses Design Test
Design Testing220
TEST
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POST
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220* Working preview content for private review only, do not distribute — © Copyright Osterwalder, Pigneur, Bernarda, Smith, and Papadakos
Learning Card
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Prioritize Tests Run Tests Capture Learnings Make Progress
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basis for company
Testing Overview
Test Card
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-Extract Hypotheses Prioritize Hypotheses Design Test
Design Testing220
TEST
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220 * Working preview content for private review only, do not distribute — © Copyright Osterwalder, Pigneur, Bernarda, Smith, and Papadakos
Learning Card
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Prioritize Tests Run Tests Capture Learnings Make Progress
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Testing Overview
Test Card
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-Extract Hypotheses Prioritize Hypotheses Design Test
Design Testing220
TEST
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VA
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PR
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OST
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220 * Working preview content for private review only, do not distribute — © Copyright Osterwalder, Pigneur, Bernarda, Smith, and Papadakos
Learning Card
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Prioritize Tests Run Tests Capture Learnings Make Progress
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many repetitions!
critical
the info you need to know is somewhere out
in the world
the info you need to know is not in your lab
or in your office
GOOTB!
advice
The first principle is that you must not fool yourself – and you are the easiest person to fool.
“Now I’m going to discuss how we would look for a new law. In general, we look for a new law by the following process. First, we guess it … no, don’t laugh, that’s the truth. Then we compute the consequences of the guess, to see what, if this is right, if this law we guess is right, to see what it would imply and then we compare the computation results to nature or we say compare to experiment or experience, compare it directly with observations to see if it works.
If it disagrees with experiment, it’s WRONG. In that simple statement is the key to science. It doesn’t make any difference how beautiful your guess is, it doesn’t matter how smart you are who made the guess,… If it disagrees with experiment, it’s wrong. That’s all there is to it.”
useful heuristics
useful heuristics
useful heuristics
remember it’s a process
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Evidence-based Entrepreneurship
Core Idea or Technology
Customer Discovery
Customer Validation
? ✓
Customer Discovery
Customer Validation
? ✓
Customer Creation
Company Building
Startup Company
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GOOTB! Expectations
Interviews
Customer Discovery
Customer Validation
? ✓
100+ even more
just a few more…
MVPMinimum Viable Product
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Progression
Core Idea or Technology
Customer Discovery
Customer Validation
? ✓✓✓
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Progression
Core Idea or Technology
Customer Discovery
Customer Validation
? ✓✓✓What if you’re WRONG?
PIVOT
PIVOT vs PIVOT
Customer Discovery
Customer Validation
? ✓
Startup Mode
Customer Discovery
Customer Validation
? ✓
VP CS
C
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C$ R$
Start here …
Customer Discovery
Customer Validation
? ✓
a temporary organization designed to search
for a repeatable and scalable business model
definition of “startup”
NYour search begins
OW
venturelab.gatech.edu
@venturelab / @keithmcgreggor
75 Fifth St NW, Suite 415, Atlanta GA 30308