The Lean Startup Paradigm New tools and approaches that change the way we work with entrepreneurs

Transcription

1 The Lean Startup Paradigm New tools and approaches that change the way we work with entrepreneurs Ada L. Stein GrowthWheel International Inc. Partner Relations EBN Tech Camp 2014

2 Work that matters Making a difference

3 My advisor made all the difference to me

4 The Problem Advisors told us their experience with business plans

5 Nobody likes to write a business plan!

6 Nobody likes to read a business plan!

7 Why don t Business Plans work? Here is what advisors said...

8 Business plans are fiction Business plans are a distraction Business Plans are static

9 In 2010 this was news.. But not so much anymore

10 Students come in here saying they want to write a business plan, but that s the last thing they need to do. The only way to get to a point where you have a truly entrepreneurial idea is to use a creative approach. Candida Brush, Chair of the entrepreneurship division and director of the Arthur M. Blank Center for Entrepreneurship at Babson College in Wellesley, Massachusetts

11 This idea that the future is predictable and that there is this perfect plan that you can write and then implement, I think that is a real dangerous way to think about it. Saras Sarasvathy

12 A paradigm shift

13 Customer Development Methodology Steve Blank Lean Startup Erik Ries 5 new ideas Effectual Entrepreneurship Saras Sarasvathy Business Model Generation Alex Osterwalder GrowthWheel Toolbox David Madié

14 The Lean Startup Paradigm A likely title for the new paradigm due to the popularity of Eric Ries s book by this title

15 BUSINESS PLAN PARADIGM Planning Market projections Perfect design Vision Strategy Planning Long-term planning Executing plans Executing B. models LEAN STARTUP PARADIGM Experimentation Customer Feedback Iterative design Deliverables Operations Execution Short-term planning Developing plans Looking for B.models Summary The paradigm shift in developing start-ups

16 Customer Development Steve Blank 2003

17 Steve Blank Customer Development

18 History Serial entrepreneur turned professor 2005 path to epiphany

19 Product Development Customer Development

20 No business plan survives first contact with a customer Steve Blank, Silicon Valley based retired serial entrepreneur.

21 Lean Startup Eric Ries, 2011

22 Eric Ries The Lean Startup

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24 The future is unpredictable Yet most startups still are managed by using detailed business plans. Eric Ries

25 Effectual Entrepreneurship Saras Sarasvathy

26 Saras Sarasvathy Effectual Entrepreneurship

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29 Business plans have their time and place, though perhaps not in planning a business. Saras Sarasvathy Professor, Co-Author Effectual Entrepreneurship

30 Business Model Generation Alexander Osterwalder

31 Alex Osterwalder Business Model Generation

32 Business Model Generation (Tool) Osterwalder

33 "People put too much detail into a business plan. [..] No matter what you write and the numbers you derive for your business plan, the reality is in fact different to Text what you imagined. So business plans don't work. We need to burn them!" Dr. Alex Osterwalder University of Lausanne, Switzerland

34 GrowthWheel Started in 2005

35 An attractive BUSINESS CONCEPT Lasting CUSTOMER RELATIONS A strong ORGANIZATION Profitable OPERATIONS GrowthWheel challenges for all businesses All industries. All life-stages. All sizes.

36 An attractive BUSINESS CONCEPT Lasting CUSTOMER RELATIONS External focus: How to create value

37 Internal focus: How to be efficient A strong ORGANIZATION Profitable OPERATIONS

38 An attractive BUSINESS CONCEPT A strong ORGANIZATION Business Design focus

39 Lasting CUSTOMER RELATIONS Business Development focus Profitable OPERATIONS

40 An attractive BUSINESS CONCEPT Lasting CUSTOMER RELATIONS A strong ORGANIZATION Profitable OPERATIONS

41 Photo Avoiding blind spots

42 I think sometimes as counselors we pick our own favorite topics when we talk to the client Rich SBDC Advisor in Arizona

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44 Breaking down the 4 challenges into 20 focus areas 360 view on business decisions

45 GrowthWheel All business decisions in one single toolkit

46 Growing the company with GrowthWheel Brick by brick. Decision by Decision. Action by Action.

47 Challenging the first Results Looking for causes behind the symptoms

48 360 Screening Pad Get focus

49 2 3 1

50 Call client with questions Research Google for information Screening Tool Handout

51 GrowthWheel Worksheets Make Decisions

52 Startup Company NYC Inc. All rights reserved. May not be reproduced without permission from Startup Company. WORKSHEET BUSINESS CONCEPT Intention By expanding our product portfolio we can attract more customers and increase the revenue on existing customers. Process Start by listing all of your company s core products and services. Note in which (new) ways the product or the service can be offered in different variations. Also consider whether you are able to offer a service to a physical product, or a physical product to a service. Continue by listing all current and maybe even new introductory products and services. These might be the first purchases of new customers. Evaluate your options for defining add-on products and services that can change or improve the core products. Finally define the most extended or luxurious flagship product that your company is able to offer customers. Product Definition Find ways to expand the product portfolio INTRODUCTORY PRODUCTS CORE PRODUCTS Variations: BUSINESS CONCEPT Y2.01 :: Product Portfolio CHECKLIST FOR PRODUCT AND SERVICE VARIATIONS Variation options for services Duration (short, medium, long) Level (low, medium, high) Quality (low/good/high) Staffing Scope Variation options for products Color (red/green/blue, etc.) Size (S/M/L) Materials (wood/plastic/metal) Quality (low/good/high) ADD-ON PRODUCTS FLAGSHIP PRODUCTS Variation options for products and services Price (low/medium/high) Technology (low-tech/high-tech) Packaged solutions Next Step Produce an action plan to develop new products and services that will expand your company s product portfolio. v1.8 Date: Name: Company:

53 Startup Company NYC Inc. All rights reserved. May not be reproduced without permission from Startup Company. WORKSHEET ORGANIZATION Employee Profile Describe the ideal profile of the next employee ORGANIZATION R2.21:: Employees Intention POSITION Mind-set By determining a profile for the type of person we would like for a new available position we increase the probability of finding just the right person for the job. Title: Will refer to: Process Start by writing the job title and who the new employee will refer to. Continue by putting into words how you imagine the next employee in terms of education, professional and personal skills, knowledge, mind-set etc. Also try to imagine what kind of career the person has built so far. Finish by trying to map how the future career of this person will turn out in the company. Knowledge Professional skills Personal skills FUTURE CAREER PATH Next year 2 years 5 years Next Step Use the profile to write the job advertisement. Also use it as inspiration for the questions for the job interview. CAREER SO FAR Last job Last job Job today Education v1.8 Date: Name: Company:

54 Startup Company NYC Inc. All rights reserved. May not be reproduced without permission from Startup Company. CUSTOMER G3.01 RELATIONS :: Sales and Service WORKSHEET CUSTOMER RELATIONS Sales Chain Find ways to strengthen each part of the sales process How good are we at it? (1-5 crosses) Who should be responsible for this from now on? What can be done in this field? Intention #1 Planning of sale By systematically going through all of our processes in sales, we can find new ways of developing our sales skills and thereby increase our revenue. PREPARATION OF THE SALE #2 Prospect definition Process #3 Sales materials Start by assessing how good your organization is today at performing the 12 different links in the sales chain. Place a cross in the boxes to score (1-5) your performance, with 5 being the highest. Some links will be more relevant than others, and there might be different situations for different customer segments or product areas. OPENING OF THE SALE #4 Networking #5 Customer dialogue Then decide which person in the organization should be responsible for what process from now on. Some links in the sales chain can perhaps be outsourced. #6 Customer meetings Finish off with suggestions of how the sales chain could be strengthened at each link. #7 Proposal and offer Next Step CLOSING OF THE SALE #8 Negotiation Implement the suggestions to strengthen the sales effort. #9 Order/Invoice/Contrac t #10 After sale MAINTENANCE OF THE SALE #11 Client care v1.8 #12 Repeat sale Date: Name: Company:

55 Startup Company NYC Inc. All rights reserved. May not be reproduced without permission from Startup Company. OPERATIONS B1.11 :: Financials WORKSHEET OPERATIONS Cash Management Find the best ways to improve short-term and long-term cash flow Intention Growth puts strain on liquidity, but several initiatives can generate a better cash flow. By improving cash flow we generate more liquidity to be used for the growth of the company. Process CATEGORY Debtors ALTERNATIVE WAYS TO IMPROVE CASH FLOW Shorten terms of payment Digital invoicing Introduce advance payment Improve reminder procedures Introduce interest payment on overdue receivables Offer cash discount for immediate payments SUITABILITY Low Medium High INITIATIVES TO BE COMPLETED Start by getting an overview of alternative ways of improving the cash flow in the company. Add more opportunities yourself. Evaluate how suitable each initiative is. Creditors Extend terms of payment Form installment agreements with creditors Form installment agreements with tax authorities Reduce costs and spending Describe the initiatives that need to be completed in order to improve the cash flow. Next Step Schedule time to carry out the various initiatives, or delegate the assignments to other employees. Stock Tied-up capital Cut current stocklevels Reduce order sizes to suppliers Reduce minimum stock for re-orders Increase turnover rate Reduce stock through consignment Sell assets Take loans against assets Leasing of production equipment, inventory or cars Get granted an overdraft Take out a bank loan Loans Get a loan from personal contacts Make a factoring deal Negotiate extension of payments on bank loans Loans from stockholders v1.8 Raising capital Capital injection from investors Date: Name: Company:

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57 Can the tools be used together? Let s compare

58 Same line of thinking What does the tools have in common? Less trying to predict the future More planning. Not less. But different In constant development Exploring

59 Lean Startup A set of principles for exploring business issues How the tools are different Business Model Generation A tool to find the right business model by combining elements GrowthWheel A tool to make decisions and take action with 360 perspective

60 TOOLS PRINCIPLES STRATEGIC OPERATIONAL Concepts in the Lean Startup Paradigm New principles and new tools

61 In Conclusion Inventor Team-builder Rainmaker Administrator Four Entrepreneurial Archetypes Entrepreneurs see themselves in GrowthWheel

62 Make Decisions. Take Action

63 Thank you Let s continue the conversation growthwheel.com