when the boardroom is bits 052111
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When The Boardroom is Bits
Steve Blank
www.steveblank.com
Twitter: sgblank
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This Talk
10 Things We Learned in the Last Year
Experienced Advice Matters Solving the Early Stage-Experience Gap The Boardroom is Bits
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First
10 Things We Learned in the Last Year
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#1
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Business Schools turned 300 years of
business experience into an MBA
MBA = Masters of Business
Administration
#1
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Tech Entrepreneurship +
Venture Capital is ~50 Years Old
Startups are Smaller Versions of
Large Companies
#2
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Tech Entrepreneurship +
Venture Capital is ~ 50 Years Old
Startups are Smaller Versions of
Large Companies
#2
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Tech Entrepreneurship +
Venture Capital is ~ 50 Years Old
Startups are Smaller Versions of
Large Companies
#2
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Companies execute
business models
Startups search
for business models
#3
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Companies execute
business models
Startups search
for business models
#3
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Companies execute
business models
Startups search
for business models
#3
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A startup is a temporary
organization designed to search
for a scalable and repeatablebusiness model
#4
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Startups need their own tools,
different from those usedin existing companies
#5
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Startups need their own tools,
different from those usedin existing companies
#5
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Customer Development =
process to search
Business Model Canvas is the
Scorecard
Agile Engineering is How
We Build Startups
#6
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Customer Development =
process to search
Business Model Canvas =
the Scorecard
Agile Engineering is How
We Build Startups
#7
ResearchLabsEquipmentManufacturers
Distribution Network
ServiceProviders
TechnologyDesign
MarketingDemo andcustomer
feedback
CostReduction
Removelabor force
pains
Eliminatebio-wastehazards
IP Patents
VideoClassifierFiles
RobustTechnology
Farmingconventions.
Demo,demo, and
demo!!
Proximity isparamount
OrganicFarmers
WeedingService
Providers
Conventional FarmersDealersDirect Service
Indirect Service then Dealers
Asset SaleDirect Service withequipment rental
then Asset Sale
Value-
Driven
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Customer Development is
theprocess used to search
Business Model Canvas is
the Scorecard
Agile Development is How
We BuildStartups
#8
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Startups that pivot 1 or 2 times:
raise 2.5x more money have 3.6x better user growth 52% less likely to scale prematurelythan startups that pivot more than 2 times or not at all
#9
Startup Genome Report
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Startups that pivot 1 or 2 times: raise 2.5x more money have 3.6x better user growth 52% less likely to scale prematurelythan startups that pivot more than 2 times or not at all
Startups that have:
helpful mentors listen to customers, learn from startup thought leadersRaise 7x more money and have 3.5x better user growth
#9
Startup Genome Report
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#10
Weve cracked
the code in
teaching
entrepreneurship
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#10
Weve cracked
the code in
teaching
entrepreneurship
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1. Startups MBA toolset2. Startup Toolset
a) Customer Developmentb) Business Model Canvasc) Agile Development
3. We have real data that this works4. A Better Way to Teach Entrepreneurship
What Have We Learned in the Last Year?
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Whats Next?
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Hypothesis:
Experienced Advice Matters
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Hypothesis:
Experienced Advice Matters
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You 1board at a time
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VCs 6 - 12 boards at a time
You 1board at a time
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VCs 6 - 12 boards at a time
XAvg 4 years per board
You 1board at a time
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VCs 6 - 12 boards at a time
XAvg 4 years per board
X
2 VCs per board
You 1board at a time
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VCs 6 - 12 boards at a time
XAvg 4 years per board
X
2 VCs per board
=
~50-100x Pattern Recognition
You 1board at a time
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You 1
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VCs 50 - 100
You 1
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VCs 50 - 100
You 1
(Discount for 7 Deadly Sins)
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50 - 100 1
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50 - 100 1
The Early Stage-Experience Gap
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Solving the Early Stage-Experience Gap
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Venture Funded companies have boards
Angel Funded companies often do not
Experienced Advice is sparse outside of
technology clusters
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Venture Funded companies have boards
Early Stage companies often do not
Experienced Advice is sparse outside of
technology clusters
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Venture Funded companies have boards
Angel Funded companies often do not
Experienced Advice is sparse outside of
technology clusters
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Why Have a Board Meeting?Investor
Fiduciary Responsibility Company has asymmetric information Board has legal responsibility to their Limited Partners
Maximize Investment Potential Board has asymmetric knowledge 50-100x experience Good board asks hard questions
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Why Have a Board Meeting?Founder
Board Guidance 50-100x more experience = Pattern recognition Multiple opinions across VCs
Board Network Customers, Partners, Recruiting, Financing
Obligation It came with the check
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Board Meetings Are Heavyweight
Processes
Antithesis of Lean
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Board Meetings Are Heavyweight
Processes
Antithesis of Lean
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Board Meetings Havent Evolved
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We Act Like Its the 19th Century
Why do we need to get together in one room? Why do we need to wait a month to see progress? Why dont we have standards for what you want? Why havent we adopted the tools we build/sell?
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How to Run a Board Meeting
Logistics Send out board materials 2 days before, have board dinner Approve minutes, stock grants
Business Highlights/Lowlights summary of key events since last meeting
Financials versus Budget waterfall charts
Management asks the board to help strategy, markets, key hires, introductions.
Executive session Meet without management to discuss performance
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How to Run a Board Meeting
Logistics Approve minutes, stock grants
Business Highlights/Lowlights summary of key events since last meeting
Financials versus Budget waterfall charts
Management asks the board to help strategy, markets, key hires, introductions.
Executive session Meet without management to discuss performance
Misc Send out board materials 2 days before, have board dinner
Why?
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Whats Wrong With a Board Meeting?
Time between meetings (every 4-6 weeks) Strategy-to-tactic-to implementation lag Often no follow-up on the outcomes
Diffuse board memberattention (sits on 6-12 boards) Punctuated Exec Staff Performance
The Get Ready for the Board Meeting drill Its often a performance rather than a snapshot
No standards for what each side does What is the entrepreneur supposed to be doing? What are the board members supposed to be contributing?
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Whats Wrong With a Board Meeting?
Time between meetings (every 4-6 weeks) Strategy-to-tactic-to implementation lag
Diffuse board memberattention (sits on 6-12 boards Punctuated Exec Staff Performance
The Get Ready for the Board Meeting drill Its often a performance rather than a snapshot
No standards for what each side does What is the entrepreneur supposed to be doing? What are the board members supposed to be contributing?
Why?
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Solution:
Make The Boardroom Bits
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We Can Do This Via the Net
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We Can Do This Via the Net
24/7
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We Can Do This Via the Net
Connecting Advisors to/from
Anywhere
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Focus on Whats Important
Its about the search for the business model Not income statement, cash flow, balance sheet
Advice/Guidance about metrics around the search What are the Business model hypotheses? What are the most important hypotheses to test now? Progress ofvalidating each hypotheses What are the iterations and Pivots and why?
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Continuous Information Access
Founders / mgmt team invest 1 hour a week Structured blog Unstructured data Formal business model canvas Real-time advisor/board feedback
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We Made Students
Blog Their Progress
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How?
Customer Development The Process
Narrative Interviews Surveys Videos Prototypes
Business Model Canvas Scorekeeping
Real-time Feedback Physical Reality Checks
Skype Face-to-face
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We Made Students
Blog Their Progress
It Changed Everything
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Interview
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Photos Videos
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Surveys
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Interview
& Photos
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Competitive
Analysis
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Key Findings
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A/B Test
Results
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Key Question
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Strategy
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Business Model Canvas
as the Scorecard
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Business Canvas Change Progress
1
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Business Canvas Change Progress
2
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Business Canvas Change Progress
3
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Business Canvas Change Progress
4
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Business Canvas Change Progress
5
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Business Canvas Change Progress
6
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Business Canvas Change Progress
7
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Demo
Ben Mappen
Lean LaunchLab
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Product Demo
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CANVAS diagram is
interactive and stateful
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CANVAS diagram is
interactive and stateful
Test your hypotheses and
record learnings in blogformat
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CANVAS diagram is
interactive and stateful
Test your hypotheses and
record learnings in blogformat
Interviews
Surveys
Videos
Photos
etc
CANVAS di i
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CANVAS diagram is
interactive and stateful
Test your hypotheses and
record learnings in blogformat
Invite your advisors and
investors to your project
CANVAS di i
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CANVAS diagram is
interactive and stateful
Test your hypotheses and
record learnings in blogformat
Invite your advisors and
investors to your project
They can view progress
by flipping thru your
CANVAS diagrams
CANVAS di i
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CANVAS diagram is
interactive and stateful
Test your hypotheses and
record learnings in blogformat
Invite your advisors and
investors to your project
They can view progress
by flipping thru your
CANVAS diagrams
They can post feedback
and leave comments inline
CANVAS di i
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CANVAS diagram is
interactive and stateful
Test your hypotheses and
record learnings in blogformat
Invite your advisors and
investors to your project
They can view progress
by flipping thru your
CANAVAS diagrams
They can post feedback
and leave comments inline
Get email alert when new
feedback comes in
CANVAS di i
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CANVAS diagram is
interactive and stateful
Test your hypotheses and
record learnings in blogformat
Invite your advisors and
investors to your project
They can view progress
by flipping thru your
CANAVAS diagrams
They can post feedback
and leave comments inline
Get email alert when new
feedback comes in
The LeanBoard
Meeting
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Sign up for private beta (FREE)
http://www.leanlaunchlab.com
@leanlaunchlab
Ben Mappen
What Does this Change?
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What Does this Change?For Angel-Funded Startups
Angel funded startups can now get experienced advice No longer requires board commitment for involvement Encourages investors who need visibility Ends repetition at each investor coffee
Turns adhoc startups into strategy-driven startups Invites investor participation in the process Professionalize the throw it against the wall and see if it sticks
Highly time-efficient for investor and founders Eliminates Geography as a barrier to investment!
What Does this Change?
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What Does this Change?For VCs and Angels
For the first time a structure for search Real-time monitoring of startup progress Zero-lag for coaching and course-correction Immediate follow-up on board meeting outcomes Allows a single VC to multiply their reach and/or depth Eliminates Geography as a barrier to investment!
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Its about
time!
Email me
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Great
Experiment
Email me
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This
Solves AReal
Problem
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This
Solves AReal
Problem
I thought it was
such a good ideaI Just funded the
Lean LaunchLab
Email me:
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Lets
experimentwith the
idea
Email me:
Now at Gould Investments
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Wouldnt
miss tryingthis!
Email me:
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Thanks