startup: why?

STARTUP: WHY?

By Jen van der Meer

Hi I’m Jen.

What Lean* is Great For:

Figuring out if you should pursue this path (or not) and under what conditions

Figuring out your path to growth

*Lean LaunchPad, Lean Startup, Agile, Move Fast/Break Things

What Lean* Doesn’t Cover

Why you are doing this?

What are the tradeoffs: investment vs. customer funded?

How to trade off competing values, particularly if you are primarily driven by impact and outcomes?

How do you form teams? Deal with team dynamics?

MOTIVATION

Why are you doing this?

Why are you doing this?

Why are you doing this?More time

More money

Can’t work for other people

Social impact

Huge financial returns

Control over my own destiny

I want to have CEO in my title

Control over product, autonomy

No one looking over my shoulder

Freedom

I see a huge opportunity

Hungry to learn

Uber feminism - defining my own rules

I’m not employable

It’s my family business, my legacy

Environmental impact

I want to be a founder

No one would hire me

I am creating art / culture / music

What else?________________________

What is a startup? (according to 3 w.m.)

“A startup is a human institution designed to deliver a new product or service under conditions of extreme uncertainty.” – Eric Ries

“A startup is a company designed to grow fast.” –Paul Graham. Y Combinator.

“A startup is a temporary organization designed formed to search for a scalable repeatable business model.” – Steve Blank.

“”Most startups change their business model multiple times. A scalable startup is a special class of startup – world class team, large vision, large target market, passionate belief and a reality distortion field.”

Motivation & Ambition

“The most important factor for business success was ambition with those firms starting out with high growth

expectations performing most strongly. Indeed, motivations influence business success mainly by driving differences in

growth expectations, which in turn drive success.”

Entrepreneurship Understanding Motivations

UK Survey 2015

Rich V. King Founders choices are straightforward: Do they want to be rich or king?

Few have been both. - Noam Wasserman

Fail Rich

King Exception

Well below potential Close to potentialLi

ttle

Com

plet

e

Con

trol

ove

r com

pany

Financial gains

The Founder’s Dilemma at HBR.org.

FUNDING PHILOSOPHY

Not every dollar is the same

Forms of FundingAngel

Incubators

Venture

Customer-funded revenue

SBIR Grants

Prizes and Other Grants

Loans

Private Equity

Corporate VC

The Wonders of Customer Revenue

It’s revenue!

You need less capital!

You can hire a team, invest profits into

product

The Hidden Risks of Early Needy Customers

The best early customer is a risk taker, who is an early adopter, who others tend to follow.

A lighthouse customer.

A reference customer.

A slide full of logos.

“Oh if Target / GE / Red Bull use it, so should I”

And who defines the patterns for the industry.

The worst first customer: so need-specific, so custom, so high maintenance - nothing can be built that will serve more

customers, and serve your product plan

Let’s Sketch our First Canvas, Together

Key Partners Key Activities Value Propositions

Customer Relationships

Channels

Revenue StreamsCost Structures

Key Resources Key Channels

Customer Segments

2 simple warm up exercises:

Who? What?

You can’t aim at everyone, first

“Serve a unique customer segment”

“Target a specific niche”“Aim for your most profitable segment”

“It’s better to dominate a micro segment than to aim

for everyone and hit nobody”

“Define your Archetypes”

Use Personas to Find the Pain

From: Business Model Canvas, Value Proposition Design, Alexander Osterwalder, The Innovators’s Solution, Clay Christensen and Michael Raynor

Uncover the “job to be done”

Fast Food Milkshake

40% of milkshakes purchased by commuters

in the morning - to go

What job customers hire milkshakes to do: On a a long, boring commute, customers “needed something to keep that extra hand busy and to make the

commute more interesting.” - Clayton Christensen, HBR

http://hbswk.hbs.edu/item/clay-christensens-milkshake-marketing


Soylent


DIY Soylent

Discovering Pain:

Plans Known needs

Behavior

Values Norms Assumptions

Taboo BeliefsUnknown Needs

Go deeper to find unmet needs, hidden pains:

Persona ToolContext:

#stillathome #notanadultyet

Name: Peyton

Age: 24

Living with Mom at home

Motivations/Goals: Independence Freedom Apartment Bike to work Pay off college loan

Interests: Roller derby Raising money for breast cancer Jewelry making

Pains: Can’t seem to save At breakeven/loss each month Bad credit rating

Fears + Secrets: Afraid of getting rejected for an apartment Really likes mom’s support

Persona ToolContext:

Name:

Age:

Living:

Motivations/Goals:

Interests:

Pains:

Fears + Secrets:

Draw pic

Tribes/Hashtags

Value Proposition Silicon Valley / Tech Version

“Who do you want to create value for and what jobs need to be done?”

Value proposition(s) outline how exactly your products and services create value for one or more of your customer segments.

- Alexander Osterwalder, Value Proposition Design.

Madison Avenue / Branding

“A statement of the benefits delivered by the brand that provide value to the customer.

Communicates the benefits that add value, why we are different, the brand-customer relationship, and gives customers an “RTB” - reason to buy (or believe).

-David Aacker, Building Strong Brands.

Value PropositionMy company __(company name)_______________________________

is developing _(defined offering)_______________________________

to help __(a target audience)___________________________________

_(solve this problem / pain) ____________________________________

(with this secret sauce)_______________________________________

(with this proof point to the customer)______________________

Jen van der Meer, Reason Street Revenue Steps

Let’s Commercialize!Researchers use chemicals to manipulate the behavior of mice

with effects that last up to an hour…

to control the hunger and activity levels of mice

The Scientist, 2015.

http://www.the-scientist.com/?articles.view/articleNo/42878/title/Mouse-Mind-Control/

Value PropositionMy company __MINDTETHER_________________

is developing _a mind tether spray_____________

to help __busy moms_________________________

_compel their children to complete homework____

with our proprietary mind control chemicals____

effects last up to an hour with minor side effects! Jen van der Meer, Reason Street Revenue Steps

Who + WhatCustom Offer Scalable Offer

Larg

e N

eed

Smal

l mar

ket

Cus

tom

er S

egm

ent

Value Proposition

Who + What

Eek High

potentialstartup

“Lifestyle”Begin here, cross the chasm

Custom Offer Scalable OfferLa

rge

Nee

dSm

all m

arke

t

Cus

tom

er S

egm

ent

Value Proposition

ScaleImpact. Scale. Envisioning Big Outcomes. If it is clear enough and compelling enough AND BIG ENOUGH it will attract the SCALE AND IMPACT-SEEKING people and resources (VCs, angels, future partners and team members)

What does it mean to seek a 10x return?

Unicorn question

How pissed would you be if some other company was anointed the chosen one? And blew you out of the water?

Yesterday news broke of General Motor’s acquisition of Sidecar assets. Why the sale? In short, we were forced to shut down operations and sell. We were unable to compete against Uber, a company that raised more capital than any other in history and is infamous for its anti-competitive behavior. The legacy of Sidecar is that we out-innovated Uber but still failed to win the market. We failed — for the most part — because Uber is willing to win at any cost and they have practically limitless capital to do it. Sunil Paul, Founder, Sidecar Jan 20, 2016 Medium (Post Mortem)

How fast?

My current user base of _______ would be on track to grow to ____________ in 5 years to be considered worthy of growth investment (VC, angel) today.

What kinds of returns?

The AskMy company __(company name)_____________________________________

is developing _(defined offering)_____________________________________

to help __(a target audience)_________________________________________

_(solve this problem / pain) __________________________________________

(with this secret sauce)_____________________________________________

(we already experiencing this much traction)_____________________

(and we’ll seeking this much growth capital to get there faster__

Now multiply by 10.

(the impact you’ll achieve. the money you’ll need).

And again.

x10.

Purpose of Why We Search While you are here…

Learning how helpful humans are when you ask them.

Run through the exercise of seeing how you could achieve scale.

Defining a hidden unmet need, and a scalable solution.

Uncover your blinders, limiting beliefs, and see how big you can think.

Realize you can’t really control for anything, so follow the water around the rock.

Thanks @jenvandermeer

Reason Street

startup: why?

Education