1. business and industrial

Why do
startups fail?
Startups fail
because they
make things
nobody
wants to buy
from them
5
The
Startup Competition
is a competition to discover a
compelling
business model
and create a repeatable
sales process
We will use
customer discovery
and
customer validation
In the October and November,
we will do
customer discovery
to discover a
compelling
business model
In the January and February,
we will do
customer validation
to create a repeatable
sales process
What is a
business model?
Why not a business plan?
A business model describes
how an organization
creates, delivers,
and captures value
infrastructure
offer
customers
relationships
activities
customer
segments
value
prop.
partners
channels
resources
financial
cost structure
revenue streams
What is a
customer?
people to
whom you deliver value
Customers are
(not just people who give you money)
value
proposition?
What is a
Why would they buy from you?
Gains
Pains
Jobs
JOBS
What is the customer trying to
get done?
!
!
Source components for manufacturing
Close end of month financials
Share photos with friends
GAINS
better, faster, cheaper
!
improved
performance
more efficient
reduced learning curve
lower
cost
PAINS
Two critical questions to ask:
!
Is it an
important problem?
only important problems change behavior
!
Is it being solved
poorly?
all problems are addressed somehow
Why would they buy from you?
Gains
Jobs
Pains
Who are your
customers?
What is?
Customer Discovery
Customer Discovery is the process of finding a compelling business model
!
Customer Discovery
uses the
scientific method
!
Customer Discovery starts
with a business thesis
Who is your customer, what is your product, why will they buy it?
Business Thesis
Who is your customer, what is your product, why will they buy it?
Idea: Prepare thrombin from the
patient’s own blood to create
platelet gels used to accelerate
wound healing, a safer alternative
to bovine thrombin.
Business Thesis
Who is your customer, what is your product, why will they buy it?
Idea: Prepare thrombin from the
patient’s own blood to create
platelet gels used to accelerate
wound healing, a safer alternative
to bovine thrombin.
Business thesis: Surgeons will select our wound
treatment device to shorten
wound healing time.
Business Thesis
Who is your customer, what is your product, why will they buy it?
Surgeons will select our wound
treatment device to shorten
wound healing time.
Business Thesis
Who is your customer, what is your product, why will they buy it?
Surgeons will select our wound
treatment device to shorten
wound healing time.
Business Thesis
Who is your customer, what is your product, why will they buy it?
Surgeons will select our wound
treatment device to shorten
wound healing time.
!
Validate your
business thesis
by
testing a series of
hypotheses
WHAT IS A HYPOTHESIS?
What must
be true
so that your
thesis is
correct
!
GET OUT OF THE BUILDING
and
TEST YOUR HYPOTHESES
BY CONDUCTING
INTERVIEWS
Won’t someone steal my idea?
34
“The difference between having a
good idea for a movie and a finished
movie is the same as seeing a pretty
girl across the floor at a party and
being there when she gives birth to
your third child. It’s a very long
journey, and my first idea doesn’t bear
much relationship—there are lots of
pretty girls at parties, but not many
will be there when you have your third
child.”
— Richard Curtis
35
INTERVIEW PEOPLE YOU DON’T KNOW
People you know will be nice and tell you what
you want to hear. Those interviews are
possibly harmful
People you don’t know have no relationship to
protect. Only they will tell you
the truth
WHAT KIND OF INTERVIEWS?
!
In person meetings are always best
!
In person
meetings are always best
!
Phone calls are OK only when you must
!
In person meetings are always best
!
Phone calls are OK only when you must
!
Focus groups do not count
Email threads do not count
Surveys are garbage
HOW TO GET AN INTERVIEW
!
Qualify your contacts. Only talk to people that
can help.
network.
Be transparent. Tell them you are
Use your
students, learning about the market. Use Ga Tech for credibility.
Ask for
help. Ask for 5 minutes
Do not sell!
!
Do not sell!
!
The goal of selling is
to change people’s
opinions
Do not sell!
!
The goal of selling is to
change people’s
opinions
!
Your goal is to
learn what
people’s opinions
ARE
Selling is hard
!
Selling is hard
!
Interviewing is easy
Ask about:
!
Jobs
!
Ask how they do their jobs
Ask about the specific steps they take to
accomplish the job.
What tools are required.
!
Ask about their day.
Learn what their life is like.
Ask about:
!
Problems
!
!
What
problems do people have?
!
Are they
big problems? (how do we know?)
!
!
How are their problems
being solved today?
!
!
Your goal:
!
Find big problems
being solved poorly
!
ask
why?
!
then
why? why? again
EACH WEEK
Create one or more hypotheses.
!
Design a test to prove or disprove your
hypotheses.
!
Create a presentation
!
Share your presentation in a small group session
Buzzz Traffic
Vehicle traffic pattern software for construction companies to save time on road projects
Interviews this Week: 15
Interviews Total: 32
!
!
George
Burdell
Bobbie
Dodd
(one slide per hypothesis)
Hypothesis: Here is what we thought
Hypothesis: Construction companies monitor
traffic patterns
Experiments: Here’s what we did
Experiment: Interviewed project managers at 5
construction companies actively engaged in
highway construction projects
Results: We found ... these are facts
Results: Projects are monitored, safety is the
reason. 30-40% of total budget is spent on safety
monitoring
Insights: This is what we learned
Insights: We have added safety monitoring as a
value proposition.
Iterate: Next week we will:
Hypothesis: safety monitoring is
currently performed with manual labor
Experiment: interview safety logistics
managers at highway construction
companies
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Who are our key suppliers?
Which Key Resources are we acquiring from partners?
Which Key Activities do partners perform?
What Key Activities do our Value Propositions require?
Our Distribution Channels?
Customer Relationships?
Revenue streams?
What value do we deliver to the customer?
Which one of our customer’s problems are we helping to solve?
What bundles of products and services are we offering to each Customer Segment?
Which customer needs are we satisfying?
For whom are we creating value?
Who are our most important customers?
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Segments expect us to establish and maintain with them?
Which ones have we established?
How are they integrated with the rest of our business model?
How costly are they?
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Revenue Streams?
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Through which Channels do our Customer Segments
want to be reached?
How are we reaching them now?
How are our Channels integrated?
Which ones work best?
Which ones are most cost-efficient?
How are we integrating them with customer routines?
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What are the most important costs inherent in our business model?
Which Key Resources are most expensive?
Which Key Activities are most expensive?
For what value are our customers really willing to pay?
For what do they currently pay?
How are they currently paying?
How would they prefer to pay?
How much does each Revenue Stream contribute to overall revenues?
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Free editable canvas: http://bit.ly/Q0h2MM
Month
No.
Year
Entry Deadline: Monday October 13
Discovery: October 13 - December 5
Customer interviews
Craft a business model canvas
Weekly small group sessions
Validation: January 5 - February 23
Build a prototype and test a sales process
Weekly small group sessions
Semifinals: March 2
Finals: March 9
2min video on customer discovery
8min pitch on your business