MBA Day 2

1. Bora Özkent
NEW VENTURE
DEVELOPMENT DAY-2

2. WHAT IS A STARTUP?
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3. Why?
Since WW2
startups have
made %50 of all
innovation and
95% of radical
innovation in US.
24 times more
innovation per R&D
dollars.
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4. 4
New Venture Development, Bora Özkent
2014

5. 5

6. 6

7. Startups Are Not Smaller Versions of Big
Companies
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8. 8
WHAT IS A STARTUP?
a human institution
designed to deliver a
product or service
under extreme uncertainty
experiment

12. Companies vs Startups
New Venture Development, Bora Özkent
2014
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13. A startup is a hypothesis
(or a set of hypotheses)

14. Every hypothesis needs testing

15. hypothesis testing methods
New Venture Development, Bora Özkent
2014
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16. LEAN STARTUP
New Venture Development, Bora Özkent
2014
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17. 70%10 % make money
fail
New Venture Development, Bora Özkent
2014
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18. Most
startups
fail from a
lack of
(paying)
customers.
New Venture Development, Bora Özkent
2014
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19. We need
structured
learning before we
execute.
New Venture Development, Bora Özkent
2014
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25. Startups are special creatures
• There Are No Facts Inside
Your Building, So Get
Outside
• Failure is an Integral Part
of the Search for the
Business Model
• If You’re Afraid to Fail
You’re Destined to Do So
• Validate Your Hypotheses
with Experiments
• No Business Plan
Survives First Contact
with Customers
• Startup Metrics are
Different from Existing
Companies
• Fast, Fearless Decision-
Making, Cycle Time, Speed and
Tempo
• If it’s not About Passion, You’re
Dead the Day You Opened your
Doors
• Startup Titles and Functions
Are Very Different from a
Company’s
• Preserve Cash While
Searching. After It’s Found,
Spend
• Communicate and Share
Learning
• Startups Demand Comfort with
Chaos and Uncertainty

26. RUNNING WITH LEAN
CANVAS
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New Venture Development, Bora Özkent
2014

27. Validate Problem/Solution Fit
Problem/Solut
ion Fit
Product/Mar
ket Fit
Scal
e
Do I have a problem worth solving?
Thursday, November 4, 2010

28. Achieve Product/Market Fit
Have I built something people want?
Problem/Solut
ion Fit
Product/Mar
ket Fit
Scal
e
Thursday, November 4, 2010

29. Requireme
nts
Relea
se
Developme
nt
Q
A
Some learning
Very little learning
Most learning happens here
Thursday, November 4, 2010

30. Requireme
nts
Relea
se
Custom
er
Discove
ry
Custom
er
Validati
on
Continuo
us
Deployme
nt
Thursday, November 4, 2010

31. Before Product/Market Fit
Validated Learning
Pivots
Problem/Solut
ion Fit
Product/Mar
ket Fit
Scal
e
Thursday, November 4, 2010

32. After Product/Market Fit
Growth
Optimizations
Validated Learning
Pivots
Problem/Solut
ion Fit
Product/Mar
ket Fit
Scal
e
Thursday, November 4, 2010

33. New Venture Development, Bora Özkent
2014
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34. Business Model vs Business Plan
Adocument investors make you write
that they don’t read
Thursday, November 4, 2010

35. Business Model vs Business Plan
Asingle diagram of your business
Thursday, November 4, 2010

36. New Venture Development, Bora Özkent
2014
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37. Homework for Tomorrow
• Read Running Lean
– Part-2 Create Your Lean Canvas
– Part-3 Identify the Riskiest Parts of Your Plan
• Optional: Visit Ash Maurya’s You Tube Channel and Watch
an extra video and prepare
comments:https://www.youtube.com/channel/UCimRGeoiw
UPmIddym-HdaCg
• Prepare the first version of your Lean Canvas (Use
LeanStack.Com for documentation) and determine the
riskiest parts of your canvas
• Prepare Case Study “Dropbox” with your group and write a
report (Maximum 2 Pages, 12 Font-Arial)
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38. Dropbox Case Questions
1. Dropbox is a late mover in a crowded space. What opportunity did Houston
see? Specifically, what are the key elements of Dropbox’s current business
model?
2. Is Dropbox profitable as of June 2010? Are you optimistic about its prospects?
How does your estimate of Dropbox’s current profitability influence your
evaluation of the venture’s prospects?
3. When he applied to Y Combinator (see case Exhibit 2), what hypotheses did
Houston hold about key elements of Dropbox’s business model? As of June
2010, which of these hypotheses have been confirmed, and which have been
discarded? What is your assessment of the approach Houston used to test
hypotheses? Did he waste time/resources or make notable mistakes? Can you
imagine better ways to test key hypotheses?
4. Imagine that at the same time Dropbox was founded, Google decided to target
the opportunity that Houston had identified. How would Google’s approach to
pursuing “G-Drive” have differed from the approach that Dropbox’s team
followed?
5. What should Houston do about the decision posed at the end of the case, i.e.,
creating a separate version for small and medium-sized business (SMB)
customers? What process should he use to make this decision?
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