autm intro and bmc

what is the happiest place on earth?

the startup story

THIS IS STARTUP!

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

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

$1,000,000,000,000

we know something now that we didn’t know before

we know how to build startups

engineer

CoS CoC

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

Tools for the 20th Century “Century of the Corporation”

... but what about startups?

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?

MAGICAL THINKING

... 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

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

Value Proposition

products & services

A list of all the products and services a value

proposition is built around

pain relievers

describe how your products and services

alleviate customer pains

gain creators

describe how your products and services create customer gains

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.

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.

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

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-

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

customer gains

describe the more or less expected benefits the customers are seeking

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.

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?

customer profilevalue map

What About My Technology?

Customers want your technology.

REALITY Customers want their jobs done;

their problems addressed;their pain killed;

their dreams achieved.

Research

Our POV

Research

OVER VALUED

UNDER VALUED

> 95% PIVOT

Customers want your technology.

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

Value?

Soccer Moms

Grandparents

Make guesses about

who or what goes into

each of the nine

BUT…they are just

GUESSES!

? ? ??

the scientific method applies to business

create a startup thesis

the scientific method

generate hypotheses? ? ?

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

-Extract Hypotheses Prioritize Hypotheses Design Test

Design Testing220

* Working preview content for private review only, do not distribute — © Copyright Osterwalder, Pigneur, Bernarda, Smith, and Papadakos

Learning Card

Prioritize Tests Run Tests Capture Learnings Make Progress

prioritize tests

reflect & learn

run tests

the iteration loopTesting Overview

Test Card

Design Testing220

220* Working preview content for private review only, do not distribute — © Copyright Osterwalder, Pigneur, Bernarda, Smith, and Papadakos

Learning Card

Testing Overview

Test Card

Design Testing220

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Testing Overview

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Design Testing220

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221•••

the processTesting Overview

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Design Testing220

220 * Working preview content for private review only, do not distribute — © Copyright Osterwalder, Pigneur, Bernarda, Smith, and Papadakos

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thesisTesting Overview

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Design Testing220

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Testing Overview

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Design Testing220

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Testing Overview

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basis for company

Testing Overview

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Design Testing220

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Testing Overview

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Design Testing220

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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

remember it’s a process

Evidence-based Entrepreneurship

Core Idea or Technology

Customer Discovery

Customer Validation

Customer Discovery

Customer Validation

Customer Creation

Company Building

Startup Company

GOOTB! Expectations

Interviews

Customer Discovery

Customer Validation

100+ even more

just a few more…

MVPMinimum Viable Product

Progression

Customer Discovery

Customer Validation

? ✓✓✓

Progression

Customer Discovery

Customer Validation

? ✓✓✓What if you’re WRONG?

PIVOT vs PIVOT

Customer Discovery

Customer Validation

Startup Mode

Customer Discovery

Customer Validation

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

venturelab.gatech.edu

@venturelab / @keithmcgreggor

keith@venturelab.gatech.edu

75 Fifth St NW, Suite 415, Atlanta GA 30308

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