startups 2013 - the five innovations that have changed startups, forever
DESCRIPTION
Presented July 12, 2013 at the Southeast Regional Technology Transfer Directors meeting in Atlanta, GA. Covers five innovations that have changed the startup world forever: the definition of a startup, the advent of the business model canvas, the application of the scientific method for startups, the customer discovery process and Steve Blank's four steps to the epiphany (discovery, validation, creation, and growth), and the lean startup methodologies of minimum viable product and actionable metrics.TRANSCRIPT
Startups 2013how five innovations have changed
the startup world, forever
Keith McGreggorDirector of VentureLab @
America’s Best Engineering Graduate Schools 2012
1. ! Massachusetts Institute of Technology2. ! Stanford University3. ! University of California — Berkeley4. ! Georgia Institute of Technology5. ! California Institute of Technology (CalTech)6. ! University of Illinois — Urbana-Champaign 7.! Carnegie Mellon University 8.! University of Michigan — Ann Arbor9.! University of Texas — Austin10.! Cornell University!
Eighth Year!
VentureLab ATDC
Entrepreneurial Flow
VentureLab ATDC
Technology Startup
Entrepreneurial Flow
active startups 322+
external investment in 2012 $80M
annual revenue of startups $1.37B
startup jobs 5345
external investment since 1999 $2.45B
ATDC is the world’s oldest and largest university accelerator program
just celebrated its 32nd anniversary
April 2010April 2010
inventions reviewed 250+
new projects 35+
ongoing projects 83
new companies created 30
external investment in new and existing VL companies in 2012 $185M
total of angel & VC investments in VL companies $700M+
2012
1 Rice Alliance for Technology and Entrepreneurship Rice University United States
2 VentureLab Georgia Tech United States
3 UB Technology Incubator State University of New York, Buffalo United States4 NDRC LaunchPad Trinity College Dublin Ireland5 SETsquared Universities of Bath... United Kingdom6 Innovation Centre University of the Sunshine Coast Australia7 Tech 20/20 University of Tennessee United States8 ATP Innovations University of Sydney Australia9 STING KTH Royal Institute of Technology Sweden10 NCTU Innovation Incubation Center National Chiao Tung University Taiwan11 Youngstown Business Incubator Youngstown State University United States12 I3P Politecnico di Torino Italy13 Vermont Center for Emerging Technologies University of Vermont United States14 Jon Brumley Texas Venture Labs University of Texas at Austin United States15 Startup Sauna Aalto University Finland16 InNOLEvation Accelerator Florida State University United States17 TEC University of Alberta Canada18 ASU Venture Catalyst Arizona State University United States19 Oxford Entrepreneurs Incubation Centre Oxford University United Kingdom20 Mason Enterprise Center George Mason University United States21 NYU-Poly Incubator Polytechnic Institute of NYU United States22 profund - Die Gründungsförderung der Freien
Universität BerlinFreie Universität Berlin Germany
23 Sid Martin Biotechnology Incubator University of Florida United States24 Advanced Science & Technology Commercialization
CenterUniversity of Kentucky United States
25 Incubateur HEC HEC Paris France26 StarTau Tel Aviv University Israel
 Engineering/Science Incubator#1 Early Stage Incubator
about startups ...
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
we know something now that we didn’t know before
we know how to build startups
engineer
five innovations
what is a company?
A organization which sells a product or service in exchange for
revenue and profit
A bit of history...
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
Startups are something else.
five innovations
what is a startup?
A startup is a temporary organization designed to search for
a repeatable and scalable business model.
innovation
Startups Search Companies Execute
Business Model Product/Service
Startups Companies
Old School of Startups(before 2010) ...
All I Need to Do is Execute the Plan
All I Need to Do is Make the Forecast
What we know now(and have known all along)...
Business Plansare
FICTION
"Everybody has a plan until they get punched in
the mouth."
Five year forecast?
MAGICALTHINKING
Crystal ball...
2007 2013
Previous 5-Year Plans
BusinessModel
BusinessPlan>
five innovations
what is a business model?
Business Model Generation
segmentsvalue prop.
revenue streams
customersofferinfrastructure
cost structure
activities
partners
resources
relationships
channels
financial
innovation
the Canvas
segmentsvalue prop.
revenue streams
customersofferinfrastructure
cost structure
activities
partners
resources
relationships
channels
financial
still fiction...
segmentsvalue prop.
revenue streams
customersofferinfrastructure
cost structure
activities
partners
resources
relationships
channels
financial
? ? ?
?
???
?
?
?
?
?
?
??
?
... and we want facts!
segmentsvalue prop.
revenue streams
customersofferinfrastructure
cost structure
activities
partners
resources
relationships
channels
financial
✔✔ ✔
?
✔✔
?
✔
✔
✔
✔
✔
?
✔?
✔
How?
pick one...
segmentsvalue prop.
revenue streams
customersofferinfrastructure
cost structure
activities
partners
resources
relationships
channels
financial
?? ?
?
???
?
?
?
?
?
?
??
?
design experiment ...
segmentsvalue prop.
revenue streams
customersoffer
cost structure
activities
resources
relationships
channels
financial
?? ?
?
???
?
??
?
A controlled experiment generally compares the results obtained from an experimental sample against a control sample, which is practically identical to the experimental sample except for the one aspect whose effect is being tested (the independent variable).
run it in the world ...
segmentsvalue prop.
revenue streams
customersoffer
cost structure
activities
resources
relationships
channels
financial
?? ?
?
???
?
??
?
A controlled experiment generally compares the results obtained from an
... and iterate!
segmentsvalue prop.
revenue streams
customersoffer
cost structure
activities
resources
relationships
channels
financial
✔? ?
?
???
?
??
?
A controlled experiment generally compares the results obtained from an
five innovations
the scientific method applies to business
©2006
innovation
62
the key idea
There are NO FACTS
in the building!
63
the big secret
Conduct 100+
Interviews
64
A manwho carriesa cat by the
tail learns something he
can learn in no other way.
Why do Startups fail?
Startups don’t fail
because theyfail to makesomething...
Startups don’t failbecause theyfail to makesomething.
Startups failbecause theyfail to makesomethingsomeone
wants to buyfrom them.
segmentsvalue prop.
revenue streams
customersofferinfrastructure
cost structure
activities
partners
resources
relationships
channels
financial
Business Model
segmentsvalue prop.
revenue streams
customersofferinfrastructure
cost structure
activities
partners
resources
relationships
channels
financial
Product / Market Fit
“If you build it, he will come...”
Tools for managing
Engineering RiskTools for managing
Customer Risk
?Waterfall Development
Porter’s Five ForcesSWOT Analysis
Project ManagementBaseline Risk Assessment
Stress TestingConcentration Methodology
Quantitative Risk Management...
five innovations
how to reducecustomer risk
Customer Discovery
innovation
Customer Discovery
Startups Search
Companies Execute
Customer Discovery
Understand the Problemthen
Develop the Solution
This may sound familiar...
Understand the Problem
then
Develop the Solution... but it’s actually
the inverse
Customers wantyour technology.
MYTH
Customers don’t careabout (your) technology.
TRUTH
Customers just want their problem solved.
Customer Discovery
key ideaCustomer POV
Customer Discovery
WHO CARES?WHY will they BUY?
segmentsvalue prop.
revenue streams
customersofferinfrastructure
cost structure
activities
partners
resources
relationships
channels
financial
Product / Market Fit
How do you know you have product / market fit?
METRICS
METRICSVanity
METRICSVanity
five innovations
build to measuremeasure to learn
learn to build
Lean Startup Methodology
innovation
Agile Development
MVPMinimum Viable Product
LOWFIDELITY
HIGHFIDELITY
Minimum Viable ProductMVPBuilt to LEARN
Not to SELL
Moneyball!
METRICSActionable
the Pipeline
$$$
METRICSAARRR
acquisition activation retention revenue
referral
the equation that matters...
segmentsvalue prop.
REVENUE
customersofferinfrastructure
COST
activities
partners
resources
relationships
channels
financial
<
... is this one: CAC << LTV
acquisition activation retention revenue
referral
CAC LTV
ifCAC << LTV
COST < REVENUEand
then COMPANY!
five innovations
define: “startup”business model generation
the scientific methodcustomer discovery
lean startup methodology
Customer Discovery
Business Model Generation
Lean Startup Methodology
Startup Engineering
venturelab.gatech.edu
@venturelab / @keithmcgreggor
75 Fifth St NW, Suite 202, Atlanta GA 30308