engineering 245 the lean launchpad

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Engineering 245 The Lean LaunchPad. Lecture 6: Partners Professors Steve Blank, Ann Miura-Ko, Jon Feiber http://e245.stanford.edu/. value proposition. key activities. customer relationships. key partners. customer segments. cost structure. revenue streams. key resources. channels. - PowerPoint PPT Presentation

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Slide 1

Engineering 245

The Lean LaunchPad

Lecture 6: Partners

Professors Steve Blank, Ann Miura-Ko, Jon Feiberhttp://e245.stanford.edu/

01

images by JAMcustomer segmentskey partnerscost structurerevenue streamschannelscustomer relationshipskey activitieskey resourcesvalue proposition

KEY PARTNERSwhich partners and suppliers leverage your model? who do you need to rely on?Test Hypotheses: Key Partners3

What defines a Partner?4Shared economicsMutual success / failureCo-development/inventionCommon customer

But remember - youre a startupWhy have partners?5Faster time to marketBroader product offeringMore efficient use of capitalUnique customer knowledge or expertiseAccess to new markets(need to do this as a build)5Partners Physical Channels6Strategic alliancesJoint new business development effortsCoopetition, (cooperation between competitors) Key supplier relationships Partners Strategic Alliances7Reduce the list of things your startup needs to build or provide to offer a complete product or service. Use partners to build the whole product using 3rd parties to provide a customer with a complete solution complement your core product with other products or servicesTraining, installation, service, etcPartners Joint Business Development8Joint promotion of complementary productsShare advertising, marketing, and sales programsOne may be the dominant playerIntel offered advertising fees to PC Vendors

Partners Coopetition9Joint promotion of competitive productsCompetitors might join together in programs to grow awareness of their industryTradeshowsIndustry AssociationsPartners Key Suppliers10Outsource suppliersBackoffice, supply chain, manufacturingDirect suppliersComponents, raw materials, etc.11Startup mistakeStrategic alliances and joint partnerships

Not needed for EarlyvangelistsAre needed for Mainstream customers

Usually fail

Traffic Partners Virtual Channels12Long-term agreements with other companies deliver long-term, predictable levels of customers Cross referral or swapping basisPaid on a per-referral basisPartners drive traffic using text-links, with onsite promotions, and with ads on the referring sitePartners sometimes exchange email lists

Partnership Disaster: Boeing13

CollaborativeLooked great on paper.

Worst business decision of the 21st century (so far!)Mobile Location Based ApplicationsCollaborative Partner14

Managing partners - risksImpendence mismatchLongest of partners schedule becomes your longest itemNo clear ownership of customerProducts lack vision shared product designDifferent underlying objectives in relationshipChurn in partners strategy or personnelIP issues Difficult to unwind or endWhy Will a Large Company Partner? You give them a competitive leg-up In sales Or halo-effect You are on their technology road-map Youre an economic opportunity for them potential customer of large company can leverage their existing products and sales Change agent for the large company

You need to understand their motivationShould I take an investment from a Large Company? They are interested in their bottom line, not yours Their objectives are not to make you a large company Whos the sponsor? Whats the motivation? Needs to come from the business side Not the venture side Try to get sales deals not investment Or try to offer warrants based on sales success

Startup Partner Strategies18Dont confuse partners for Earlyvangelists vs. mainstreamDont confuse big company partnering with startup strategyFind the one that gives you an unfair advantageAir Supply strategyRecognize you dont matter to a large partner

Team Deliverable for Next WeekWhat partnerswill you need?Whydoyouneed them Whywill theypartnerwithyou?Whatsthe costofthe partnership?Talk to actual partners

Summarized in a 5 Minute PowerPoint Presentation

19Ground Fluor PharmaceuticalsThis is your brain on fluorine

Team: Kiel Neumann (EL)Stephen DiMagno (PI)Allan Green (Mentor)

I-Corps 11/15/112021PET is a non-invasive medical diagnostic technique for cardiac, brain, and tumor imaging GFP technology makes imaging agents available for clinical use, often for the first time.Initial target indications: pediatric neuroblastoma, Parkinsons disease.

Ground Fluor PharmaceuticalsI-Corps 11/1/112122Key PartnersI-Corps 11/15/11Manufacture

GMP precursor manufacturesGMP cassette manufacturersRadiopharmaciesClinical Trials

St. Jude Childrens Research HospitalSloan KetteringUCSF22General methodology for adding fluorine to lead compounds of interest

The Business Model CanvasAccessibility (RCY)PuritySpeedPET/SPECTMultiplatformSensitivity (nca)Specific compounds

IPPoP dataRegulatory planUnderstanding of the regulatory processContract cGMP precursor manufactureSalary, RentsClinical trialsSOPs for precursors and drugsRecruit clinical sitesIn vivo animal studiesDevelop regulatory plan for pre IND meetingID cGMP CROFund-raisingNuclear Medicine and Radiology departmentsTechnical Assistance (Image Atlas)FDA regulatory supportRadiopharmacies

Equipment producers

Prescribing physicians

Radiologist who perform studiesSales of intermediates

Technology license

Product license (royalty)Drug developers

Pharmaceutical development companies

IPPoP dataRadiologists

Technical assistancecGMP manufacturersRadiopharmaciesDirect sales of precursorSales of packaged precursor in cassettesCassette manufacturersI-Corps 11/15/1123Food Chain24We provide accessibilityOnly want GMP precursor in cassettes without developmentCould license precursor synthesis for incorporation in cassettesRequire GMP precursor (or cassette) to develop our product with their synthesizerI-Corps 11/15/11I-Corps Presentation 11/1525GMPPrecursorCurrent Income ModelGMPCassetteFinished Imaging Agent$10s per cassette$300 per cassetteFinished Imaging AgentFinished Imaging AgentFinished Imaging AgentFinished Imaging AgentFinished Imaging Agent$1700 per dose~100 doses/cassetteOne time setup $140,000Revenue neutral thereafterLicensing fee or nominal royalty ($50) per cassette$500 fee per dose at existing price structurePatientsHospitalsGFPGFPGFPI-Corps Presentation 11/15Manufacturing PartnersOne time setup $50-140KContract ManufactureGFPI-Corps Presentation 11/1527GMPPrecursorCurrent Income ModelGMPCassetteFinished Imaging Agent$10s per cassette$300 per cassetteFinished Imaging AgentFinished Imaging AgentFinished Imaging AgentFinished Imaging AgentFinished Imaging Agent$1700 per dose~100 doses/cassetteOne time setup $140,000Revenue neutral thereafterLicensing fee or nominal royalty ($50) per cassette$500 fee per dose at existing price structurePatientsHospitalsGFPGFPGFPI-Corps Presentation 11/15Manufacturing PartnersPrecursor use licenseGFPI-Corps Presentation 11/1529GMPPrecursorCurrent Income ModelGMPCassetteFinished Imaging Agent$10s per cassette$300 per cassetteFinished Imaging AgentFinished Imaging AgentFinished Imaging AgentFinished Imaging AgentFinished Imaging Agent$1700 per dose~100 doses/cassetteOne time setup $140,000Revenue neutral thereafterLicensing fee or nominal royalty ($50) per cassette$500 fee per dose at existing price structurePatientsHospitalsGFPGFPGFPCustomer/PartnersFee per doseTechnology licenseGFP312.2 million doses per year%10 of the market is 200,000 doses$500 per dose = $100 million

Current sales $2 M/year because production is limited and costs are high.Confidential financial Gannt chart preparedPotential MarketI-Corps 11/15/1131I-Corps 10/11/1132Getting out of the buildingRadiologists and Nuclear Medicine PhysiciansRadiopharmacy companies (Cardinal Health, Siemens, GE Healthcare, IBA, AAA)Equipment manufacturers (GE, Philips, IBA, Advion)cGMP manufacturersPharmaceutical companiesRadiologists and Nuclear Medicine PhysiciansFace to face with attending Radiologist at Stanford UniversityFace to face with radiopharmacist at UCSFConference call with Nuclear Radiologist at Memorial Sloan Kettering Conference call with president of medium size drug company with PET product at the FDATelephone conference with cGMP facility

Out of the BuildingI-Corps 10/12/1133Out of the Building

I-Corps 10/12/1134Immediate need for our productCurrently used SPECT product for neuroblastoma is limited by absence of correlative CT dataOur lead PET agent would provide more information on existing imaging equipment baseTwo customers offered to participate in clinical trialsPotential for further development of other tracers identified in interviewsActual need for the general procedureAllow access to previously unknown tracers

35Product Food ChainI-Corps 11/15/1135Key meetings with two radiopharmacy companies, one large, one small. Shift in emphasis of the first product to the potentially more profitable application (Parkinsons imaging).Small player has only regulatory license to use the compound for clinical imaging, but is currently production limited. Sales are limited by chemistry and by the number of cyclotron facilities. Potential for ~50 fold improvement in sales.Our IP is being scrutinized seriously by interested parties.Large player desires interaction with company only (no academic tie in.)Preferred deliverable from us is a cassette and technical expertise.Pricing structure is right for lead compound.

Out of the Building36I-Corps 11/1/11Face to Face meeting with president of small radiopharmaceutical companyFace to face with a clinician at Memorial Sloan-KetteringFace to face with Global Production Manager of Molecular imaging for one of worlds largest radiopharmaceutical companiesOncoKinib collaboration between Geurbet, OncoDesign, and Ariana pharmaceuticalsFace to face meeting with head of R & D and International Production Manager from Linz, AustriaEckert and Zeigler German PET m