J. Bruce Hughes* Senior Project Manager * includes material from Manuel J. Battle & Lisha Adela García

Transcription

1 J. Bruce Hughes* Senior Project Manager * includes material from Manuel J. Battle & Lisha Adela García

2 About You and Me

3 Six Types of Startups Lifestyle startup work your passion Small business make a living for you and your family Buyable startup sell to a larger company for $5$50 M Large company startup innovate or evaporate Social startup driven to make a difference Scalable startup Born to be BIG

4 What a Scalable Startup Is 1. A team of people (you and others) 2. Attempting to find, formulate, and validate a business model based on a 3. Proprietary Technology* that can solve a problem for a 4. Large and rapidly growing market segment.

5 Not This This.

6 Business Plan Mission Vision Project Description Assumptions Conclusion

7 What Is A Business Plan? A document A set of spreadsheets A story It is all of these things, and none of them What you really need before any of these is:

8 A Theory of the Business A comprehensive, communicable, understandable explanation of WHAT IS OUR BUSINESS PURPOSE? HOW DO WE CREATE AND DELIVER VALUE? HOW AND WHY DO WE MAKE MONEY?

9 UNTIL YOU GATHER FACTS, ALL YOU HAVE ARE HYPOTHESES WRITE THEM ALL DOWN!

10 The Most Important Market Entry Question: Market Type* Existing Market Resegmented Market New Market Customers Existing Existing New / New Usage Customer Needs Performance 1. Cost 2. Perceived need Simplicity & convenience Performance Better / faster 1. Good enough at the low end 2. Good enough for the niche Low in traditional attributes, improved by new customer metrics Competition Existing incumbents Existing incumbents Non-consumption / other startups Risks Existing incumbents 1. Existing incumbents 2. Niche strategy fails Market adoption *source: The Four Steps to the Epiphany, Steven Gary Blank

11 Business Model Generation

12 Required to make everything work Suppliers and Allies Products/Ser vices that create value for a customer segment. -Quantitative -Qualitative Most Important Assets All Costs Incurred Type of Relationship established with a customer How you communicate and reach customer segments to deliver Value Proposition Groups of People or Orgs a company hopes to reach and serve -Common Needs -Common Behaviors - Other Cash generated from customer segments

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14 Value Propositions What value do we deliver to the customer? Which 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? characteristics Newness Performance Customization Getting the Job Done Design Brand/Status Price Cost Reduction Risk Reduction Accessibility Convenience/Usability

15 Customer Segments For whom are we creating value? Who are our most important customers? Mass Market Niche Market Segmented Diversified Multi-sided Platform

16 For EACH Customer Type! The Value Proposition Canvas Value Proposition Customer Segment Gain Creators Gains Products & Services Customer Job(s) Pain Relievers copyright: Strategyzer AG The makers of Business Model Generation and Strategyzer Pains strategyzer.com

17 How your Outcomes products and customers want services createyou to clearly articulate the problems Allows you are customer gainsfor the client and how they interact with your solving List of your offerings product or service. Benefits customers Answers questions seeklike: What customer is For whom are we creating value? Who are our most important customers? Bad outcomes, risk, What value do we deliverobstacles to the customer? What problems are we hoping to solve? How your products and services alleviate customer pains related to customer jobs trying to get done

18 Customer Relationships What type of relationship does each of our Customer 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? examples Personal assistance Dedicated Personal Assistance Self-Service Automated Services Communities Co-creation

19 Channels 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?

20 Channels channel phases: 1. Awareness How do we raise awareness about our company s products and services? 2. Evaluation How do we help customers evaluate our organization s Value Proposition? 3. Purchase How do we allow customers to purchase specific products and services? 4. Delivery How do we deliver a Value Proposition to customers? 5. After sales How do we provide post-purchase customer support?

21 Adoption Model Everett Rogers, Diffusion of Innovations (New York: The Free Press, 1983.

22 The Target Customer Has the / a problem your product solves Knows he / she has the problem Feels the pain severely enough that he / she is already trying to solve it Has a budget to solve it May already have cobbled together a solution from piece parts GO OUT AND FIND ONE!

23 Key Activities What Key Activities do our Value Propositions require? Our Distribution Channels? Customer Relationships? Revenue streams? categories Production Problem Solving Platform/Network

24 Key Resources What Key Resources do our Value Propositions require? Our Distribution Channels? Customer Relationships? Revenue Streams? types of resources Physical Intellectual (brand, patents, copyrights, data) Human Financial

25 Key Partners Who are our Key Partners? Who are our key suppliers? Which Key Resources are we acquiring from partners? Which Key Activities do partners perform? motivations for partnerships: Optimization and economy Reduction of risk and uncertainty Acquisition of particular resources and activities

26 Revenue Streams 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? types: Asset sale Usage fee Subscription Fees Lending/Renting/Leasing Licensing Brokerage fees Advertising fixed pricing List Price Product feature dependent Customer segment dependent Volume dependent dynamic pricing Negotiation( bargaining) Yield Management Real-time-Market

27 Cost Structure What are the most important costs inherent in our business model? Which Key Resources are most expensive? Which Key Activities are most expensive? is your business more: Cost Driven (leanest cost structure, low price value proposition, maximum automation, extensive outsourcing) Value Driven ( focused on value creation, premium value proposition) sample characteristics: Fixed Costs (salaries, rents, utilities) Variable costs Economies of scale Economies of scope

28 CWT 1dbX]Tbb <^ST[ 2P]ePb 3TbXV]TS U^a) >]) 3TbXV]TS Qh) Day 8cTaPcX^]) :Th?Pac]Tab :Th 0RcXeXcXTb EP[dT?a^_^bXcX^]b 2dbc^\Ta AT[PcX^]bWX_b 2dbc^\Ta BTV\T]cb Who are our Key Partners? 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? \^cxepcx^]b U^a _Pac]TabWX_b) >_cx\xipcx^] P]S TR^]^\h ATSdRcX^] ^U axbz P]S d]rtacpx]ch 0R`dXbXcX^] ^U _PacXRd[Pa atb^dartb P]S PRcXeXcXTb RPcTV^aXTb?a^SdRcX^]?a^Q[T\ B^[eX]V?[PcU^a\ =Tcf^aZ RWPaPRcTaXbcXRb =Tf]Tbb?TaU^a\P]RT 2dbc^\XiPcX^] {6TccX]V cwt 9^Q 3^]T 3TbXV] 1aP]S BcPcdb?aXRT 2^bc ATSdRcX^] AXbZ ATSdRcX^] 0RRTbbXQX[Xch 2^]eT]XT]RT DbPQX[Xch What type of relationship does each of our Customer 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? TgP\_[Tb?Tab^]P[ PbbXbcP]RT 3TSXRPcTS?Tab^]P[ 0bbXbcP]RT BT[U BTaeXRT 0dc^\PcTS BTaeXRTb 2^\\d]XcXTb 2^ RaTPcX^] :Th ATb^daRTb 2WP]]T[b What Key Resources do our Value Propositions require? Our Distribution Channels? Customer Relationships? Revenue Streams? 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? ch_tb ^U atb^dartb?whbxrp[ 8]cT[[TRcdP[ QaP]S _PcT]cb R^_haXVWcb SPcP 7d\P] 5X]P]RXP[ <Pbb <PaZTc =XRWT <PaZTc BTV\T]cTS 3XeTabX TS <d[cx bxsts?[pcu^a\ RWP]]T[ _WPbTb) 0fPaT]Tbb 7^f S^ ft apxbt PfPaT]Tbb PQ^dc ^da R^\_P]hzb _a^sdrcb P]S btaexrtb.! 4eP[dPcX^] 7^f S^ ft WT[_ Rdbc^\Tab TeP[dPcT ^da ^avp]xipcx^]zb EP[dT?a^_^bXcX^]. "?darwpbt 7^f S^ ft P[[^f Rdbc^\Tab c^ _darwpbt b_trx R _a^sdrcb P]S btaexrtb. # 3T[XeTah 7^f S^ ft ST[XeTa P EP[dT?a^_^bXcX^] c^ Rdbc^\Tab. $ 0UcTa bp[tb 7^f S^ ft _a^exst _^bc _darwpbt Rdbc^\Ta bd ^ac. 2^bc BcadRcdaT ATeT]dT BcaTP\b 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? Xb h^da QdbX]Tbb \^at) 2^bc 3aXeT] [TP]Tbc R^bc bcadrcdat [^f _axrt ep[dt _a^_^bxcx^] \PgX\d\ Pdc^\PcX^] TgcT]bXeT ^dcb^darx]v EP[dT 3aXeT] U^RdbTS ^] ep[dt RaTPcX^] _at\xd\ ep[dt _a^_^bxcx^] bp\_[t RWPaPRcTaXbcXRb) 5XgTS 2^bcb bp[paxtb at]cb dcx[xcxtb EPaXPQ[T R^bcb 4R^]^\XTb ^U brp[t 4R^]^\XTb ^U br^_t fff QdbX]Tbb\^ST[VT]TaPcX^] R^\ ch_tb) 0bbTc bp[t DbPVT UTT BdQbRaX_cX^] 5TTb ;T]SX]V AT]cX]V ;TPbX]V ;XRT]bX]V 1a^ZTaPVT UTTb 0SeTacXbX]V gts _axrx]v ;Xbc?aXRT?a^SdRc UTPcdaT ST_T]ST]c 2dbc^\Ta btv\t]c ST_T]ST]c E^[d\T ST_T]ST]c Sh]P\XR _axrx]v =TV^cXPcX^] QPaVPX]X]V HXT[S <P]PVT\T]c ATP[ cx\t <PaZTc This work is licensed under the Creative Commons Attribution-Share Alike 3.0 Unported License. To view a copy of this license, visit or send a letter to Creative Commons, 171 Second Street, Suite 300, San Francisco, California, 94105, USA. Month No. Year

29 We are not here to immanentize the eschaton. We are here to solve some real problem for more than one real person. Who is the customer? What jobs are they trying to get done? What pains are they enduring in trying to get things done? What more could they get done if your product or service made doing things easier, faster, cheaper?

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31 Not relatives friends, or roommates At least one degree of separation Look for patterns Prepare an interview guide Ask open questions Design pass/fail tests Talk to one person at a time, not focus groups Get them to tell a story Listen, don t talk

32 44 Checklists in the back cover the entire process of the Lean Launchpad methodology from setting up the Customer Discovery Team to pivot or Proceed. If you follow the guidance of this book, you may or may not succeed, but you will avoid many mistakes and wasting a lot of money along the way.

33 Summary You will need a business model canvas to help you think and communicate It starts with a Value Proposition You cannot know if your Value Proposition makes sense until you Talk to Humans LISTEN! Write down your assumptions and test them! Perform experiments, record the results, think about what they mean. Use checklists for Customer Discovery, Customer Validation Pivot or Proceed?

34 Questions?

35 SBDC Technology Commercialization Center Programs And Services Mentorship Strategic advising Technology Readiness Level assessment Enterprise Value estimation Business Model Canvas design & review Value Proposition design & review Customized market research reports! SBIR / STTR topic search SBIR / STTR Proposal review and assistance Commercialization Readiness Level assessment Education Workshops on funding, startup valuation, pitching to investors, and government funding opportunities Online entrepreneurial training & certification Network Collaboration

36 If I can help you further, please sign up as a client of the SBDC Technology Commercialization Center and make an appointment. Thank you! J. Bruce Hughes, MBA Senior Project Manager SBDC Technology Commercialization Center 501 W. César E. Chávez Blvd San Antonio, TX Main Direct Cell mailto:bruce.hughes@utsa.edu