lean launchpad columbia block week january 12-16, 2015

LEAN LAUNCHPADCOLUMBIA BLOCK WEEKJANUARY 12-16, 2015

Turning Hackers, Hustlers and Designers

into Entrepreneurs

TURNING GREAT IDEAS INTO GREAT BUSINESSES

A brief HISTORY lesson

YOU’RE IN GOOD COMPANY

• US National Science Foundation• National Institute of Health(last week)• Stanford, Berkeley, UCSF, Princeton• 350 Universities we’re aware of• Incubators, Accelerators Worldwide• Columbia Block Week and Full Term• Hundreds more educators per year

Steve Blank

More than a decade developing Customer Development8 startups in Silicon Valley• Semiconductors• Supercomputers• Consumer electronics• Video games• Enterprise software• Military intelligence

Teach: Stanford, Berkeley, Columbia, UCSF

TEACHING TEAM

FACULTY:

Bob Dorf, seven startups, CBS Adjunct, co-author Startup Owner’s Manual

Asha Saxena, Founder/CEO Future Tech, plus multiple other ventures

Alicia Syrett, Founder and CEO of Pantegrion Capital

Adam Royalty, Designer in Residence, CU Entrepreneurship

TBD, Seasoned entrepreneur

TA/COACH TEAM:

Nathaniel Kelner, Columbia University Entrepreneurship Team

Meghan Cross, 2nd year MBA, Co-President of CEO Club

COURSE INFOTeam: Application is by teams of 3-5

(ideally include 1 ENGR or technical);

avoid “all MBA” teams where you can

Workload: half-day in classroom, half “out of the building

don’t plan much of a social agenda for the week

Credit: 3 credits based on team improvement Mon-Fri, plus your contribution and student evaluation of startup

Format: Flipped Classroom; watch lectures nightly with team

Every team presents progress, gets feedback every day

Teams split into cohorts Tues-Wed-Thurs

THE BASICS

1. Join a team!

2. Business Model Canvas

3. Is it scalable…?

4. Who else is doing it?

The Entrepreneurial Venture FOUR PERIODS of DEVELOPMENT

Time

CashFlow

II III IVI

Customer Development is how you search for the model

The Entrepreneurial Venture FOUR PERIODS of DEVELOPMENT

Time

CashFlow

II III IVI

Business Models

Business Models

Business Models

9 Guesses

Guess Guess

Guess

Guess

GuessGuess

Guess

GuessGuess

Implications of Search and ExecutionThe Customer Discovery Approach

• Lower Initial Investment• Minimum Viable Product [MVP] tests only crucial features

• Earlier testing and validation. Room to recover AND REVISE.• More capital preserved and higher valuation achieved before

scaling• Scaling financing more available• Clarify the role of the entrepreneur• Able to retain entrepreneurs engaged in business senior

leadership• Higher rate of return for all

• Entrepreneurs• Investors• Employees

Example of a Team’s Final Presentation

As of: 8/31/12JerseySquare“The Netflix of Licensed Sports Jerseys”

Bryan Gitler Elmer Moore Jay NaikMichael Melmed

JerseySquare is a rental service for professional sports jerseys

Total Interviews: 169

Total Website Visits: 190TOTAL SUBSCRIPTIONS SOLD: 2

Customer Discovery

6655

207

2

15

4

0

10

20

30

40

50

60

70

80

Monday Tuesday Wednesday Thursday Friday

Key Partners

Cost Resources

Potential Customers

Over the course of the week, we spoke with 169 contacts during the customer discovery process

Yankee Stadium

Nike, NBA, NHL Stores

Cleaners,Shipping,

Sports BarsSocial Media,

StarStreet,Sports Bars

1

Customer Sales

1

Key Partners (7)Who are our key partners/ suppliers

Key Activities (5)Which key activities does the biz model require

Value Proposition (1)What value do we deliver to the customer

Customer Relationships (4)What type of relationship does each segment require of us

Customer Segments (2)For whom are we creating value

Channels (3)Through which channel does each segment want to be reached

Cost Structure (9)What are our cost drivers

Key Resources (6)Which key resources does the biz model require

Professional Sports Game Attendees

- Male

- Adult

- <$100k income

- Attend 10+ games per yr

A cheaper way to wear Officially Licensed sports jerseys to a game

Eliminate risk of owning a player jersey who is traded

Provide alternative to purchasing counterfeit jerseys Website

Stadium Shops/Vendors

Ticket Websites

Direct Mail

Annual Subscription Model

Search ads

Social Media

At Stadium Promotions

Revenue Streams (8)How much is each segment willing to pay and how would they like to pay us this amount

Warehouse, shipping, cleaning, logistics tracking, website development/maintenance

Jersey Inventory

Warehouse

Logistics system

- Rental Tracking

- Shipping

- Dry cleaning

- Marketing

- Customer Service

Professional Sports Leagues

Jersey Suppliers

Dry Cleaners

Stadium Shop/Vendors

Pre-paid Envelope Suppliers

USPS/Fedex/UPS

Day 1 Canvas As of: 8/27/12

Day 1 - Yankee StadiumCustomer Discovery

Current CanvasKey Partners (7)Who are our key partners/ suppliers

Key Activities (5)Which key activities does the biz model require

Value Proposition (1)What value do we deliver to the customer

Customer Relationships (4)What type of relationship does each segment require of us

Customer Segments (2)For whom are we creating value

Channels (3)Through which channel does each segment want to be reached

Cost Structure (9)What are our cost drivers

Key Resources (6)Which key resources does the biz model require

Professional Sports Game Attendees

- Male and Female

- Young Adult 18-30

- <$100k income

- Attend >10% of home games per yr

- Casual sports fans

A cheaper way to wear Officially Licensed sports jerseys to a game

Eliminate risk of owning a player jersey who is traded

Provide alternative to purchasing counterfeit jerseys Website

Stadium Shops/Vendors

Ticket Websites

Direct Mail

Annual Subscription Model

Pay per Rental

GET - Search Ads, Partnerships, At stadium promotion

KEEP - Customer Service

GROW - Referral Program

Revenue Streams (8)How much is each segment willing to pay and how would they like to pay us this amount

Jerseys, warehouse, shipping, cleaning, logistics tracking, website development/maintenance, customer service employees

Jersey Inventory

Warehouse

Logistics system

- Rental Tracking

- Shipping

- Dry cleaning

- Marketing

- Customer Service

Professional Sports Leagues

Jersey Suppliers

Dry Cleaners

Stadium Shop/Vendors

Pre-paid Envelope Suppliers

USPS/Fedex/UPS

Day 2 Canvas As of: 8/28/12

Day 2- Customer DiscoveryNike Town NBA Store NHL Store

Current CanvasKey Partners (7)Who are our key partners/ suppliers

Key Activities (5)Which key activities does the biz model require

Value Proposition (1)What value do we deliver to the customer

Customer Relationships (4)What type of relationship does each segment require of us

Customer Segments (2)For whom are we creating value

Channels (3)Through which channel does each segment want to be reached

Cost Structure (9)What are our cost drivers

Key Resources (6)Which key resources does the biz model require

Professional Sports Fans

Website

Stadium Shops/Vendors

Ticket Websites

Direct Mail

GET - Search Ads, Partnerships, At stadium promotion

KEEP - Customer Service

GROW - Referral Program

Revenue Streams (8)How much is each segment willing to pay and how would they like to pay us this amount

Jerseys, warehouse, shipping, cleaning, logistics tracking, website development/maintenance, customer service employees

Jersey Inventory

Warehouse

Logistics system

- Rental Tracking

- Shipping

- Dry cleaning

- Marketing

- Customer Service

Jersey Suppliers

Dry Cleaners

Pre-paid Envelope Suppliers

USPS/Fedex/UPS

Day 3 Canvas As of: 8/29/12

SPORTS JERSEY OWNERS- Male- Kid to Young

Adult 13-35

SINGLE GAME ATTENDEES- Male and

Female- Young Adult 18-

30- Casual fan

SPORTS JERSEY OWNERS- Flexibility to change jersey- Eliminate risk of owning jersey who is traded

SINGLE GAME ATTENDEES- Cheaper way to wear jersey to a game

SPORTS JERSEY OWNERS- Annual Subscription

SINGLE GAME ATTENDEES- Pay per Rental

Jersey Suppliers

Dry Cleaners

Pre-paid Envelope Suppliers

USPS/Fedex/UPS

Jersey Inventory

Warehouse

Logistics system

Rental Tracking

Shipping

Dry cleaning

Marketing

Customer Service

Jerseys, warehouse, shipping, cleaning, logistics tracking, website development/maintenance, customer service employees

Website

Stadium Shops/Vendors

Ticket Websites

Direct Mail

GET - Search Ads, Partnerships, At stadium promotion

KEEP - Customer Service

GROW – Referral/ Reward Program

Day 3 - Customer Discovery

Commercial Dry Cleaners USPS & FedEx

Sports Bars

Jersey Suppliers

Left Side of Canvas Right Side of Canvas

Social Media

Current CanvasKey Partners (7)Who are our key partners/ suppliers

Key Activities (5)Which key activities does the biz model require

Value Proposition (1)What value do we deliver to the customer

Customer Relationships (4)What type of relationship does each segment require of us

Customer Segments (2)For whom are we creating value

Channels (3)Through which channel does each segment want to be reached

Cost Structure (9)What are our cost drivers

Key Resources (6)Which key resources does the biz model require

Professional Sports Fans

Website

Stadium Shops/Vendors

Ticket Websites

GET - Search Ads, Partnerships, At stadium promotion

KEEP - Customer Service

GROW - Referral Program

Revenue Streams (8)How much is each segment willing to pay and how would they like to pay us this amount

Jerseys, warehouse, shipping, cleaning, logistics tracking, website development/maintenance, customer service employees

Jersey Inventory

Warehouse

Logistics system

- Rental Tracking

- Shipping

- Dry cleaning

- Marketing

- Customer Service

Jersey Suppliers

Dry Cleaners

Pre-paid Envelope Suppliers

USPS/Fedex/UPS

Day 4 Canvas As of: 8/30/12

SPORTS JERSEY OWNERS- Male- Kids to Young

Adult 13-35

SINGLE GAME ATTENDEES- Male and

Female- Young Adult 18-

30- Casual fan

SPORTS JERSEY OWNERS- Flexibility to change jersey- Eliminate risk of owning jersey who is traded

SINGLE GAME ATTENDEES- Cheaper way to wear jersey to a game

SPORTS JERSEY OWNERS- Annual Subscription $200

SINGLE GAME ATTENDEES- Pay per Rental

Jersey Suppliers

Dry Cleaners

Pre-paid Envelope Suppliers

USPS/Fedex/UPS

Jersey Inventory

Warehouse

Logistics system

Rental Tracking

Shipping

Dry cleaning

Marketing

Customer Service

Jerseys, warehouse, shipping, cleaning, logistics tracking, website development/maintenance, customer service employees

Website

Ticket Websites

GET - Search Ads, Partnerships, Social Media, At stadium promotion

KEEP - Customer Service

GROW – Referral/ Reward Program

Launched JerseySquare.com

81 VisitorsIn 1st 9 hours

With 30-Second Demo Video

www.jerseysquare.com

Our First Customer

Our Email Blasts

Current CanvasKey Partners (7)Who are our key partners/ suppliers

Key Activities (5)Which key activities does the biz model require

Value Proposition (1)What value do we deliver to the customer

Customer Relationships (4)What type of relationship does each segment require of us

Customer Segments (2)For whom are we creating value

Channels (3)Through which channel does each segment want to be reached

Cost Structure (9)What are our cost drivers

Key Resources (6)Which key resources does the biz model require

Professional Sports Fans

Website

Stadium Shops/Vendors

Ticket Websites

Direct Mail

GET - Search Ads, Partnerships, At stadium promotion

KEEP - Customer Service

GROW - Referral Program

Revenue Streams (8)How much is each segment willing to pay and how would they like to pay us this amount

Jerseys, warehouse, shipping, cleaning, logistics tracking, website development/maintenance, customer service employees

Jersey Inventory

Warehouse

Logistics system

- Rental Tracking

- Shipping

- Dry cleaning

- Marketing

- Customer Service

Jersey Suppliers

Dry Cleaners

Pre-paid Envelope Suppliers

USPS/Fedex/UPS

Day 5 Canvas As of: 8/31/12

SPORTS JERSEY OWNERS- Male- Kids to Young Adult 13-35

SINGLE GAME ATTENDEES- Male and Female- Young Adult 18-30- Casual fan

SPORTS JERSEY OWNERS- Flexibility to change jersey- Eliminate risk of owning jersey who is traded

SINGLE GAME ATTENDEES- Cheaper way to wear jersey to a game

SPORTS JERSEY OWNERS- Annual Subscription, Monthly Subscription, One-Time

SINGLE GAME ATTENDEES- Pay per Rental

Jersey Suppliers

Dry Cleaners

Pre-paid Envelope Suppliers

USPS

Jersey Inventory

Warehouse

Logistics system

Rental Tracking

Shipping

Dry cleaning

Marketing

Customer Service

Jerseys, warehouse, shipping, cleaning, logistics tracking, website development/maintenance, customer service employees

Website

GET - Search Ads, Partnerships, Social Media, At stadium promotion

KEEP – Seniority, loyalty program

GROW – Premium subs, Family plan

What We Thought Results What We Found

Customer segment is adult males who attend lots of games each year X

There are two customer segments:• SPORTS JERSEY OWNERS

o Male, Kids to Young Adult 13-35• SINGLE GAME ATTENDEES

o Male and Female, Young Adult 18-30, Casual fan

Customers will use JerseySquare because we are cheaper X

Customers like our company because we provide both:• the ability to wear different jerseys throughout

the season• a hedge against players being traded, getting

hurt, retiring, etc.

Customers will not be willing to spend as much on rental jerseys X Customers are actually willing to spend as much (if

not more) on a subscription for jersey rentals as they do on buying a jersey!

There is a market for renting professional jerseys! P We received payment from our first customer on

Thursday, 8/30/2012

Biggest Learning Moments

Archetypes

Attribute Gasol Junior Becky

Age 32 15 24

Income $65K N/A $40K

Demographics White White White

Type Jersey Buyer Social Statement Social Sports Viewer

Fan Type Avid In-Season Casual

Class Middle Middle Middle

Facebook Status Single/It’s Complicated Single In Relationship

SUBSCRIPTION SUBSCRIPTION PAY PER RENTALRENTAL TYPE

Unit Economics

Jersey Cost(w/ 25% off)

$ 150

Shipping$ 9

Cleaning$ 1

Customer Acquisition

$ 25

Processing$ 1

X 5

X 5

X 5

Unit Costs- $ 230

Revenue$ 199

Net- $ 31

Shipping$ 9

Cleaning$ 1

Processing$ 1

X 5

X 5

X 5

Unit Costs- $ 55

Revenue$ 199

Net$ 86

Year 1 Year 2

Retention 60 %x

TurnsTurns

(For One Person)

Current Pricing Plans

Annual Subscription$199 /year

• Authentic Top of Line Jerseys• Free Shipping• Send back a jersey in exchange for another

Monthly Subscription$29.99 /month

• Authentic Top of Line Jerseys• Free Shipping• Send back a jersey in exchange for another

1 Time, 1 Week Rental$24.99

• Authentic Top of Line Jerseys• Free Shipping• Send back jersey within 1 week

(But A/B Testing for Price Elasticity)

Customer Relationships

GET

KEEPGROW

Results Pending…

• Google AdWords• Guerilla style marketing on

FB, YouTube, and Twitter• Customer referral bonuses• Targeted promotions

• Customer Loyalty program with bonus rentals and discount purchases

• Seniority credits• Partnership rewards and

discounts• Free jersey giveaways

• Sale of customer data• Family plan• Premium

subscriptions• Additional products

Market Size

Total Addressable Market

(how big is universe)

150 Million Americans watch the 5 major team sports (in some capacity)

Served Available Market

(how many can I reach with my sales channel)

11 Million NY Metro Area watch the 5 major team sports (in some capacity)

Target Market (who will be most likely buyers)

Based only Yankee Stadium Research:11.7% of SAM showed strong interest

1.3 Million People - Half subscription / Half Pay Per Rental

• Teenager Customer Discovery

• Customer Acquisitiono More Google Adwords Testingo More Website Conversion Testing

• LISTEN TO/OBSERVE OUR CUSTOMERS

Next Steps

Who Is the Team?500 CUSTOMERS

TEAM MEMBERS

Degree program and Department/Major

Provide your LinkedIn public profile URL

Are you the subject matter expert (SME) for this team?

Pick a role you think you most likely will play on this team (Hustler, Hacker, Designer or Product Picker)

Anything interesting we should know about you (be brief)

Star

tup

Ecos

yste

m

Corporate

Higher

Education

Adul

t

Lear

ning

/

Skills

Institutions

What’s the Competitive Landscape?

What’s Your Business Model?

What happens next?

Applications will be reviewed and accepted on a rolling basis - first come-first served. Finalists will be notified by email.

Step 1: Review Course Websitehttp://www8.gsb.columbia.edu/entrepreneurship/leanlaunchpad/

Step 2: Form a Team (Use above website to form or join a team)

Step 3: Submit Application (Team submission, not Individual)

Step 4: Each Team Member must Acknowledge and Accept Class Requirements by Email (Sent by Jay Mehta)

Step 5: Application is Reviewed for completeness and Individual Eligibility is VerifiedStep 6: Notification of Acceptance, Registration and Bid Point Reduction (MBA/EMBA only)

• January 12 INITIAL CANVAS DUE by 6pm ET• January 13 Class starts 8:30am ET

Turning great ideas into great businesses

Syllabus and more course info:http://www8.gsb.columbia.edu/entrepreneurship/leanlaunchpad/General Lean LaunchPad background:http://steveblank.com/category/lean-launchpad/Startup Tools:http://steveblank.com/tools-and-blogs-for-entrepreneurs/

In Conclusion…• Questions about the course or process?• Looking for Team Members?• Looking for a Team to Join?First look here: http://www8.gsb.columbia.edu/entrepreneurship/leanlaunchpad/

Still need help?• Also: Ashley Zwick… az2335@columbia.edu• OR if needed… bobdorf@gmail.com