Empowering Management

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DISRUPT FACTORY
STARTUP BOOTCAMP
LEAN STARTUP/CUSTOMER
DEVELOPMENT WORKSHOP
3 JULY, 2014

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 20 years in customer-focused roles for high tech companies
 Have worked for Fortune 500 companies such as Microsoft and Cognizant
Technology Solutions
 Provided coaching and consultation for more than 20 start-ups in high-tech,
consumer, B2B and B2C
 Have managed marketing budgets from thousands to millions of Euros
 A mentor at many top accelerator programs in the Netherlands, including
Startupbootcamp, Rockstart, Utrechtinc., ACE Venture Lab, and the
Startupweekend program
MY BACKGROUND

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12.35 – 14:35: Workshop Session 1
1) Lean Startup Methodology introduction
2) Business Model Canvas introduction
3) Business Model Canvas exercise
4) Test your riskiest assumption with customer validation
14.35 – 15.55: Lunch Break – Outside Exercise: Customer Validation
15.55 – 18.25: Workshop Session 2
1) Building the customer journey introduction
2) Customer journey exercise
3) Creating an investor pitch introduction
4) Volunteers from audience present pitches
AGENDA

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OLD “WATERFALL” METHODOLOGY
Only customer
interaction

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LEAN STARTUP METHODOLOGY

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Failure equals progress

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Embrace uncertainty

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Fail fast
and
Fail often
in order to
Succeed soon

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"A startup is a
temporary organization
whose only goal is
to find a repeatable and
scalable business model."
- Steve Blank

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New business planning is problematic
because
it places too much emphasis on the
initial idea

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The difficult discipline is in deciding.
How much effort you want to put into
execution and optimization, before
you are certain that you are on the
right path…

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Proven way to success for startups
(No guarantees!)
1. Explore business model options
2. Know your customer
3. Run experiments and iterate
4. Build a highly-performing team
5. Use tools and capture learning
6. Move fast, fail fast, succeed fast

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"The only way to win is
to iterate faster than the
competition!"
- Eric Ries, The Lean Startup

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A business model describes
the rationale of how an
organization creates, delivers
and captures value.

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Cost
Structure
Revenue
StreamsKey
Resources Channels
Key
Partners
Customer
Segments
Key
Activities
Customer
Relationships
Value
Proposition

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Brainstorm possible models

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Your assumptions
are mostly wrong

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A set of hypotheses

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Focus on riskiest parts first

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Systematically test your model

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Systematically test your model

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Systematically test your model

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Systematically test your model

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The Value Proposition

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Your Turn: Business Model/
Value Proposition Canvas
Goals:
• What are your riskiest assumption(s)?
• What customer assumptions are you
making that you can test?

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Fill in the Business Model Canvas

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Fill in the Value Proposition Canvas

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 What are your riskiest assumptions?
 How can you test these assumptions?
 One way is to talk to customers...
BUT
PEOPLE WILL LIE TO YOU!
TALKING TO CUSTOMERS: THE MOM TEST

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Why do they lie?
Because they:
WANT TO BE NICE TO YOU
DON’T WANT TO SEEM STUPID
WANT TO SEEM BETTER THAN THEY ARE
Bad data is worse than no data

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 Don’t ask closed or leading questions
Ex: “Wouldn’t you like to save time?”
 Do ask open questions
Ex: “What are your biggest challenges?”
 Don’t ask future or theoretical questions
Ex: “Would you use this product?”
 Do ask past behavior questions
Ex: “In the past year, have you tried to solve this problem? If so,
how?”
HOW TO ASK QUESTIONS

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Listen to ALL input, but apply (almost) none of it!
“It’s not the consumer’s job to know what they want.” –
Steve Jobs
Turn the input around and find out the source:
 “Why do you want that?”
 “What would that let you do?”
 “How are you coping without it now?”
WHEN THEY WANT TO GIVE YOU IDEAS

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 In the Business Model Canvas and Value
Proposition Canvas, you started to identify
target customers through their pains and
gains.
 Find target customers with those pains and/or
gains to test your assumptions
WHO DO YOU TALK TO?

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"There are no facts
in the building…
so get the hell out
and talk to
customers."
- Steve Blank

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Your Turn: Lunch Exercise
1)Leave the building
2)Find at least one person who might be in
your target customer group
3)Test one of your riskiest assumptions
with them using the Mom Test approach
If you are not likely to find a customer over
lunch, join a team that can for the exercise.

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AGENDA
15.55 – 18.25: Workshop Session 2
1) Building the customer journey introduction
2) Customer journey exercise
3) Creating an investor pitch introduction
4) Volunteers from audience present pitches

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CUSTOMER DEMOGRAPHICS
B2B versus B2C
• What’s the difference?
• Every sale is made emotionally, to individuals
• The main difference is the number of individuals in the
decision-making process
Who is your customer?
• Age? Gender? Social status? Education? Income?
• Do they understand what you’re selling?
• Are they negative, neutral, or positive about the issue?

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CUSTOMER ADOPTION CURVE
Search
Phase
Scale Phase

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The customers you have in your search
phase will not be the same as in your
scale phase.
Keep talking to customers and keep
using the Business Model Canvas!

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CUSTOMER JOURNEY
The BMC and Value Prop Canvas are
snapshots of where your customer is in a
moment of time...
But now we need to think about the journey your
customers will make with you.

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HOW and WHY does my customer:
FIND ME?
TRY ME?
INTERACT with ME?
LOVE ME?

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WHY is the trigger:
• What pain do they have that drives them?
• What desire do they have that makes them
want to buy?
HOW is the tool, channel or method

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FIND is (mostly) marketing.
• Strangers to acquaintances
TRY is because people want to “try before they
buy”
• Acquaintances to friends
INTERACT is the ongoing relationship they will
have with you.
• Friends to BFFs
LOVE is how they become fanatics!

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Two Examples:

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Your Turn: Customer Journey
1)Choose one target customer segment
(preferably the one who is paying you).
2)Answer at least the first 3 customer journey
questions.
3)If you can begin to think about the 4th, do so!

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HOW and WHY does my customer:
FIND ME?
TRY ME?
INTERACT with ME?
LOVE ME?

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TELLING THE WORLD
Creating a “pitch” is the primary way
to tell the world about your idea
before you have something to show.

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Start with the “Why”

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THE GOLDEN CIRCLE

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Create your “elevator pitch”:
a 1 minute description of your
company, starting with the WHY,
that can be told to anyone,
anywhere, at any time.

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CREATING AN INVESTOR PITCH
The purpose of your pitch is to sell, not to teach.
Your job is to excite, not to educate.

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Investors (mainly) want to know 3 things:
• Is there something unique in the idea?
• Is someone going to pay for it?
• Will I make money from it?

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Something unique can be:
• IP, proprietary technology, patents, etc.
• A new model for an existing solution (i.e.,
SaaS instead of software licenses)
• A disruptive model for an existing industry
(i.e., Netflix versus the video rental industry)
• A strong team

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Is someone going to pay for it?
• A proven product/market fit (research)
• Addressable market figures (how big is the
potential market?)
• Actual, committed (paying) customers

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Will I make money from it?
• (Proposed) business model(s)
• How much of the addressable market will you
own?
• Actual, committed (paying) customers
• Product/service roadmap: where are you
going in 1-3 years?

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SUGGESTED PITCH ORDER FOR INVESTORS (1)
1) Company Overview: what is your Value Proposition?
2) Team
3) Problem/Opportunity
4) Addressable Market
5) Solution (as non-technical as possible, depending on
audience)
6) The “Secret Sauce” (this may need extra emphasis)
7) Solution Delivery

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SUGGESTED PITCH ORDER FOR INVESTORS (2)
8) Benefits/Value to Target Market
9) Competitive Advantage
10) Go to Market Strategy (especially emphasize beta or
interested customers)
11) Business Model
12) Financial Projections
13) Financing Requirements
14) Summary: What 3 points do you want them to remember?

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Your Turn:
Any volunteers want to
pitch their idea to us?

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TEAM DYNAMICS
• Entrepreneurs have strong personalities!
• As your startup grows, and the pace gets faster,
you have even less time to communicate
• Industry Disruptors has developed a tool to help
you understand your team’s strengths and
weaknesses, called Rate Your Startup
• http://industrydisruptors.org/index.php/projects/rat
e-startup-2

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COMING UP NEXT: HOW TO SCALE
• Startups that are successful in their “search” or
“pilot” phase need to scale
• But scaling is not just about selling more products
• Three areas for focus
 Growing the internal organization
 Automating processes where possible
 Improving customer delivery and service
• More info coming in September!

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 The Lean Startup, Eric Ries
 Four Steps to the Epiphany, Steve Blank
 Running Lean, Ash Maurya
 The Startup Owner’s Manual, Steve Blank and Bob Dorf
 Business Model Generation, Alexander Osterwalder
 The Mom Test, Rob Fitzpatrick
 Do More Faster, Brad Feld and David Cohen
 Scaling Up Excellence, Robert Sutton
 And coming... Building the Customer Journey, Lauren Valbert
BIBLIOGRAPHY

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QUESTIONS?