Stephen Fleming - Workshop Internacional

Georgia Tech and I-Corps: Customer Discovery and Business Model Generation Stephen Fleming Vice President fleming@gatech.edu @stephenfleming Download this presentation at http://files.academicvc.com/ Š 2013, Georgia Institute of Technology

Stephen Fleming 17+ years investment experience.

– General Partner, Alliance Technology Ventures (affiliated with Georgia Research Alliance).

– 18 investments as lead investor, 11 profitable exits incl. 4 IPOs, $650M acquisition

BS, Physics, Georgia Tech (Highest Honors).

15 years operational experience at AT&T Bell Labs, Nortel, LICOM (venture-backed startup).

– Supervised startups developing first ADSL modem and one of the first cablemodems in early 1990s.

Multiple advisory boards at Georgia Tech; endowed chair in telecomm; occasional instructor in undergrad & MBA entrepreneurship programs.

Joined Ga. Tech staff in 2005; now Vice President, EI2.

Atlanta native; regional technology leader.

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National Rankings U.S. News & World Report, America’s Best Engineering Graduate Schools 2012 1

Massachusetts Institute of Technology

2

Stanford University

3

University of California — Berkeley

4

Georgia Institute of Technology

5

California Institute of Technology (CalTech)

6

University of Illinois — Urbana-Champaign

7

Carnegie Mellon University

8

University of Michigan — Ann Arbor

9

University of Texas — Austin

10

Cornell University

Eighth Year!

http://grad-schools.usnews.rankingsandreviews.com/grad/eng/search 5/7/2013

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International Rankings Times Higher Education –World University Rankings –Engineering & Technology , 2012-2013 1 California Institute of Technology (CalTech)

United States

2 Princeton University

United States

3 Massachusetts Institute of Technology (MIT)

United States

4 University of California, Berkeley

United States

5 University of Cambridge

United Kingdom

6 Stanford University

United States

7 University of California, Los Angeles

United States

8 ETH Zurich (Swiss Federal Institute of Technology)

Switzerland

9 Georgia Institute of Technology

United States

10 Imperial College London

United Kingdom

http://www.timeshighereducation.co.uk/world-university-rankings/2012-13/ 5/7/2013

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April 2013

12 Business Incubators That Are Changing the World

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NSF I-Corps

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Agenda Role of the University What We Now Know!

Business Models & Customer Discovery Developing the Canvas Telling Your Story Execution Examples Q&A 5/7/2013

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Agenda Role of the University What We Now Know!

Business Models & Customer Discovery Developing the Canvas Telling Your Story Execution Examples Q&A 5/7/2013

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Role of the University Three distinct stages of university evolution:

Reference: Jan Youtie & Philip Shapira, Building an Innovation Hub: A Case Study of the Transformation of University Roles in Regional Technological and Economic Development, 2006 5/7/2013

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Role of the University Knowledge storehouse

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Role of the University Knowledge factory

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Georgia Tech History

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Role of the University Knowledge factory

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Role of the University Knowledge hub

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GT as a Knowledge Hub Local Communities

Faculty Staff

National and International

Students

Industrial Partners

Technology Community

Federal Agencies

Entrepreneurs

State Government

Venture Capitalists Angel Investors

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Innovation

“Innovation” is our middle name...

What do we mean by “innovation”?

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Innovation Environment

“The first step in winning the future is encouraging American innovation.”

–President Barack Obama State of the Union, 25 January 2011 5/7/2013

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Innovation Environment

“After all, innovation is what America has always been about.”

–President Barack Obama State of the Union, 24 January 2012 5/7/2013

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Innovation...

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...and More Innovation!

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What is Innovation?

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GT Innovation Ecosystem On Campus...

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In the Community...

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...and Beyond!

VentureLab Educate Curate Create

Turning Georgia Tech’s most promising research into dynamic startup companies.

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VentureLab Stats 2012 Inventions reviewed annually

250+

New projects annually

25+

Ongoing projects

70+

New spinout companies created annually External investment attracted to VentureLab companies 5/7/2013

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15-20 ~$700M

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GRA Commercialization Grants Available on a competitive basis to all VentureLab projects –Phased process shared with other research universities in Georgia

Up to $400K based on meeting hurdles –Up to $150K in grants (to GT laboratory) –Up to $250K in loans (to company)

No equity—non-dilutive 5/7/2013

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Commercialization Process Faculty-friendly process Designed to minimize friction, not maximize licensing revenues Three paths: –Startup –Industrial license –Consulting

Different paths for different inventions.

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GT Innovation Ecosystem On Campus...

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In the Community...

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...and Beyond!

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ATDC Offerings Coaching –Strategic business advice

Community –Interaction with other entrepreneurs

Connections –Connections to people and resources

Commons –Facilities designed for startups

Credibility –Instant recognition 5/7/2013

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ATDC Member Companies Helping Georgia entrepreneurs build and launch great technology companies.

Currently over 300 member companies

~250 from the larger innovation ecosystem ~40 GT spinouts 5/7/2013 4/11/2013 2/7/2013

Georgia The University’s Tech:Georgia HubRole of Atlanta’s Tech in anand Innovation Innovation I-Corps Ecosystem Ecosystem

Flashpoint Entrepreneurial education –Experienced mentors –Presentations by veteran entrepreneurs, investors

Shared learning in a flexible dedicated space Competitive, accelerated environment for business model and technology development

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Startup Gauntlet Six week bootcamp for entrepreneurs.

–Modeled on NSF I-Corps program.

–Experienced teaching team.

–Difficult workload.

Available to all Atlanta technology entrepreneurs.

Free.

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Simplified version of Customer Discovery and Customer Validation process.

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GT Innovation Ecosystem On Campus...

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In the Community...

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...and Beyond!

NSF I-Corps

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About the NSF U.S. National Science Foundation –Invested $7.0 billion in 2012.

–Supports ~20% of all Federally-supported basic research at U.S. colleges and universities.

–Cross-disciplinary: Arctic/Antarctic Astronomy & Space Biology Chemistry & Materials Computing Earth & Environment 5/7/2013

Education Engineering Mathematics Nanoscience People & Science Physics

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NSF I-Corps National Science Foundation Innovation Corps –Developing entrepreneurial knowledge in university scientists and engineers –Built on Stanford’s Lean LaunchPad course –Curriculum initially led by Silicon Valley investors and entrepreneurs –Georgia Tech is one of first two universities chosen by NSF to scale I-Corps nationwide

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Agenda Role of the University What We Now Know!

Business Models & Customer Discovery Developing the Canvas Telling Your Story Execution Examples Q&A 5/7/2013

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What We Now Know!

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What We Now Know!

Since 1995, the U.S. has conducted a trillion-dollar experiment in how to launch and scale successful companies.

NASDAQ

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What We Now Know!

We know something now that we didn’t know before...

We know how to build startups.

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What We Now Know!

We know something now that we didn’t know before...

We know how to build startups.

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What We Used to Believe...

A startup is a smaller version of a large company.

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What We Used to Believe...

A startup is a smaller version of a large company.

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Old Tools, Old Skill Sets...

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Waterfall / Product Mgmt.

Only works when you know the problem and you know the solution!

Product Features: known

Requirements Design Implement

Verification

Customer Problem: known

Maintenance

Source: Eric Ries http://startuplessonslearned.blogspot.com

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Waterfall / Product Mgmt.

Only works when you know the problem and you know the solution!

Product Features: known

Requirements Design Implement

Verification

Customer Problem: known

Maintenance

Source: Eric Ries http://startuplessonslearned.blogspot.com

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What We Now Know!

“A startup is a temporary organization designed to search for a repeatable and scalable business model.” —Steve Blank

Startup

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Company

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What We Used to Believe...

“Plan the work, and work the plan.”

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What We Used to Believe...

“All I need to do is meet the forecast.”

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What We Now Know!

“No business plan survives first contact with the customer.”

– Field Marshal Helmuth von Moltke (slightly modified!)

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Planning Precedes The Plan

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Business Plans Have a Place • • • • • • • • • • • • •

Cover Page Table Of Contents Executive Summary Business Description Business Environment Analysis Industry Background Competitor Analysis Market Analysis Marketing Plan Operations Plan Management Summary Financial Plan Attachments And Milestones

A business plan is a good place to collect all of your (current) hypotheses and your rationales for them.

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What We Now Know!

Startups don’t fail because they fail to make something.

Startups fail because they fail to make something someone wants to buy.

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What We Now Know!

“A startup is a temporary organization designed to search for a repeatable and scalable business model.” —Steve Blank

Startup

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Company

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Agenda Role of the University What We Now Know!

Business Models & Customer Discovery Developing the Canvas Telling Your Story Execution Examples Q&A 5/7/2013

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What is a Business Model?

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Business Model Canvas

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Business Model Canvas

Adapted from Business Model Generation by Alexander Osterwalder and Yves Pigneur 5/7/2013

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Evolution of a Model

Guess

Guess

Guess

Guess Guess

Guess

Guess

Guess Guess

Start with a work of breathtaking fiction...

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Evolution of a Model

Fact

Fact

Fact

Fact

Fact

Fact

Fact Fact

Fact

...and transform it to a collection of facts!

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Evolution of a Model

The rationale of how an organization creates, delivers, and captures value

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Customer Development

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The Scientific Method

Š 2006 Jorge Cham, www.phdcomics.com

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The Scientific Method

Š 2006 Jorge Cham, www.phdcomics.com

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The Scientific Method

Š 2006 Jorge Cham, www.phdcomics.com

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Testing Hypotheses

? ? ?

Make a hypothesis about an element of your business model canvas.

–Tip: If it can’t be easily falsified, it’s probably not a good hypothesis.

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Testing Hypotheses

? ? ?

Develop a controlled experiment –Change only one variable at a time –Experimental vs. control samples

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Testing Hypotheses

? ? ?

Conduct that experiment against real-world customers of your product or service. –Don’t sell.

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Testing Hypotheses

? ? ?

Fact!

Congratulations!

You have learned something.

Now, do it again.

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The Big Secret...

Do this over 100 times.

(Really.)

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There Is No Substitute!

“A man who carries a cat by the tail learns something he can learn in no other way.”

– Mark Twain

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Iterate Discovery Process...

Startup

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Company

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...Then Execute!

Startup

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Company

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Customer Development

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Minimum Viable Product

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Applying the Process

Technology

Market

People

Startup

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Financial

Company

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Decisions

{

LICENSE Inform Office of Technology Licensing

75%

STARTUP Assign to Staff Principal

15%

LIFESTYLE COMPANY

Research

Advise team on viable commercialization strategies.

SCIENCE PROJECT Put technology on hold Contact professor every six months for an update

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10%

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Decision Criteria Basics

Market

Ownership

Is there one?

Is a startup viable there?

What exit opportunities?

Restrictions Conflict of Interest

Technology

Team

State of the invention Importance of the technology

Research about professor, students, others involved Understand motivations Multiple lab visits

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Technology

Market

People

Startup

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Financial

Company

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Customer Development A startup wants to be a business.

We keep them in search mode until they are ready for it.

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Break

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Agenda Role of the University What We Now Know!

Business Models & Customer Discovery Developing the Canvas Telling Your Story Execution Examples Q&A 5/7/2013

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Developing the Canvas

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1: Value Propositions

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1: Value Propositions

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1: Value Propositions Common mistakes: –It’s just a feature of someone else’s product.

–It’s a “nice to have” instead of a “got to have.”

• Candy?

• Vitamin?

• Painkiller?

• Addictive painkiller?

–Not enough customers care.

• Dominance of a small market means a small company!

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1: Value Propositions Problem Statement: What is the problem?

Ecosystem: For whom is this relevant? Do they have any money?

Competition: What do customers do today?

Technology / Market Insight: Why is this problem so hard to solve?

Market Size: How big is this problem?

Timing: Why now?

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2: Customer Segments

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2: Customer Segments

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2: Customer Segments Understanding their pain: What do your customers find too costly?

–Takes a lot of time, costs too much, requires substantial efforts...

How are current solutions underperforming?

–Lack of features, performance, malfunctioning...

What are the customers main difficulties and challenges?

–Difficulties getting things done, resistance...

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2: Customer Segments Understanding their pain (cont.): What’s keeping your customer awake at night?

–Big issues, concerns, worries...

What barriers are keeping customers from adopting?

–Upfront investment costs, learning curve, resistance to change...

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2: Customer Segments Understanding their pain (cont.): What makes your customers feel bad? –Frustrations, annoyances, things that give them a headache...

What risks do customers fear? –Financial, social, technical risks, or what could go awfully wrong...

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3: Channels

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3: Channels

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3: Channels

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4: Customer Relationships

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4: Customer Relationships

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Mid-Course Correction?

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Iterate Discovery Process...

Startup

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What We Now Know!

“Success consists of going from failure to failure without loss of enthusiasm.”

– Winston Churchill

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5: Revenue Streams

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5: Revenue Streams

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6: Key Resources

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6: Key Resources

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7: Key Partners

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7: Key Partners

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8: Key Activities

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8: Key Activities

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9: Cost Structure

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9: Cost Structure

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Agenda Role of the University What We Now Know!

Business Models & Customer Discovery Developing the Canvas Telling Your Story Execution Examples Q&A 5/7/2013

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The Elevator Pitch

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The Networking Pitch

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“So, what do you do?”

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Start with a strong opening sentence...

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company name My company, _______________, something is developing ______________ someone to help ________________ solve some problem _____________________ with secret sauce _____________________.

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Sound Simple? It’s Not!

company name My company, _______________, something is developing ______________ someone to help ________________ solve some problem _____________________ with secret sauce _____________________.

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Who Are You?

company name My company, _______________, something is developing ______________ to help ________________ someone solve some problem _____________________ _____________________. with secret sauce

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Pronounceable Memorable Can be spelled Can be Googled

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Multiculturalism

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Value Proposition

company name My company, _______________, something is developing ______________ to help ________________ someone solve some problem _____________________ _____________________. with secret sauce

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Be specific No jargon No adjectives

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Customer Segment

company name My company, _______________, something is developing ______________ to help ________________ someone solve some problem _____________________ _____________________. with secret sauce

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Identify them Be very specific Clarify the buyer

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Problem Statement

company name My company, _______________, something is developing ______________ to help ________________ someone solve some problem _____________________ _____________________. with secret sauce

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Clarify the problem Hint at revenue

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Key Resources

company name My company, _______________, something is developing ______________ to help ________________ someone solve some problem _____________________ _____________________. with secret sauce

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Why different?

Why you?

Why now?

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A Few Hints on Slides

Few words, big fonts, less complexity, and lots of pictures.

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Example 1

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Example 2 •

Assume that this slide conveys critically-important information.

Unfortunately, it is too wordy.

•

People who create slides tend to put every word that they are going to say on their slides. Although this does eliminate the need for you to memorize your talk, ultimately this makes your slides look crowded, wordy, and boring.

Remember, people can read far faster than you can talk, by a typical ratio of at least 10 to 1. So, by the time you’ve bothered saying this out loud, your audience has finished reading it and has gone from paying rapt attention to checking their email, checking Twitter, and updating their Facebook with a status about the most ridiculous meeting they’ve ever been trapped in and how they need a phone call from somebody — anybody — to help them escape from what’s sure to be a continual onslaught of poorly conceived slides such as this.

Don’t create slides like this. Ever.

•

•

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The 30-Point Rule This text is 10 point

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The 30-Point Rule This text is 10 point

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Keep It Short

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The Baker’s Dozen Pitch Closer Requirements Projections Model Strategy Advantage 13 Secrets 12 Value 11 Solution 10 Problem 9 Overview 8 Team 7 6 5 4

Title

3 2

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13 slides... no more!

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The Baker’s Dozen Pitch Closer Requirements Projections Model Strategy Advantage 13 Secrets 12 Value 11 Solution 10 Problem 9 Overview 8 Team 7 6 5 4

Title

3 2

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Title

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Title

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The Baker’s Dozen Pitch Closer Requirements Projections Model Strategy Advantage 13 Secrets 12 Value 11 Solution 10 Problem 9 Overview 8 Team 7 6 5 4

Title

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Title

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The Baker’s Dozen Pitch Closer Requirements Projections Model Strategy Advantage 13 Secrets 12 Value 11 Solution 10 Problem 9 Overview 8 Team 7 6 5 4

Title

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The Baker’s Dozen Pitch Closer Requirements Projections Model Strategy Advantage 13 Secrets 12 Value 11 Solution 10 Problem 9 Overview 8 Team 7 6 5 4

Title

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The Baker’s Dozen Pitch Closer Requirements Projections Model Strategy Advantage 13 Secrets 12 Value 11 Solution 10 Problem 9 Overview 8 Team 7 6 5 4

Title

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And you’re done!

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Agenda Role of the University What We Now Know!

Business Models & Customer Discovery Developing the Canvas Telling Your Story Execution Examples Q&A 5/7/2013

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Execution

“Vision without execution is hallucination.”

—Thomas Edison

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We’re Not the Valley

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What Worked in the Valley?

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What Works?

Free markets Availability of capital Intellectual property protection Collaborative culture & social networks Flexible career paths Welcoming to outsiders & immigrants Meritocratic advancement Acceptance of failure as learning experience Continuous replenishment –Of bright young people –Of interesting new technologies 5/7/2013

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National Rankings U.S. News & World Report, America’s Best Engineering Graduate Schools 2012 1.

Massachusetts Institute of Technology

2.

Stanford University

3.

University of California — Berkeley

4.

Georgia Institute of Technology

5.

California Institute of Technology (CalTech)

6.

University of Illinois — Urbana-Champaign

7.

Carnegie Mellon University

8.

University of Michigan — Ann Arbor

9.

University of Texas — Austin

10.

Cornell University

Eighth Year!

http://grad-schools.usnews.rankingsandreviews.com/grad/eng/search 5/7/2013

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International Rankings Times Higher Education –World University Rankings –Engineering & Technology , 2012-2013 1 California Institute of Technology (CalTech)

United States

2 Princeton University

United States

3 Massachusetts Institute of Technology (MIT)

United States

4 University of California, Berkeley

United States

5 University of Cambridge

United Kingdom

6 Stanford University

United States

7 University of California, Los Angeles

United States

8 ETH Zurich (Swiss Federal Institute of Technology)

Switzerland

9 Georgia Institute of Technology

United States

10 Imperial College London

United Kingdom

http://www.timeshighereducation.co.uk/world-university-rankings/2012-13/ 5/7/2013

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National Rankings U.S. News & World Report, America’s Best Engineering Graduate Schools 2012 Strength across the board!

Aerospace

#4

Biomedical

#2

Chemical

#10

Industrial

#1

Civil

#3

Materials

#7

Computer

#6

Mechanical

#6

Electrical

#5

Nuclear

#5

Environmental

#6

Agricultural

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NSF I-Corps

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I-Corps Course Objective What does it take to go from idea to a business?

–Business Model + Customer Development –Hypothesis testing –Get out of the building!

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I-Corps Course Objective Create the pressures, uncertainty, and challenges of a real startup –Our expectations are unreasonable, they require extraordinary effort –All three team members must participate fully • Principal Investigator • Entrepreneurial Lead • Mentor

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I-Corps Course Objective We expect failures, iterations and pivots Class is a lab Books/lectures are tools, not answers Fail fast, learn quick, push you outside your comfort zone

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Teaching Philosophy We’re tough, direct, fair — you need to be the same We’re your biggest supporters – we want you to succeed We don’t pretend to be domain experts; we know you are smarter than we are

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Get Out of the Building!

There are no facts here The class is about the work your entire team does outside the building It’s the difference between a hallucination and a vision

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Our Expectations of You This is a full-contact, immersive class –You will spend most of your time outside of your office, your lab, your University –You all will do all the work assigned (and it is a lot more than you probably realize)

If you think you are not learning, or you cannot commit the time, see your NSF program manager 5/7/2013

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Team Deliverables Each Week – 10 minute webex –Lessons learned presentation - 5 minutes • Instructor critique - 5 minutes

–Launchpad Central continuously updated –Tens of hours of outside the building learning

Final week — in person –10 minute “lessons learned” presentation –2 minute science video

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Each Week Get out of the building Test your hypotheses Watch the Steve Blank lectures Update your canvas Present what you learned Discuss the lectures

Repeat for 6 weeks 5/7/2013

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NSF I-Corps So Far (2Q13) 171 awards (3 team members per award) –160 / 171 have pivoted to date

97 different institutions 41 states Teams have submitted 55 SBIR proposals –32 awards to date

5 external financings (Angel and VC) 1 acquisition to date –Anchovi Labs acquired by Dropbox –CalTech team focused on image annotation 5/7/2013

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NSF I-Corps So Far (2Q13) 171 awards (3 team members per award) –160 / 171 have pivoted to date

97 different institutions 41 states Teams have submitted 55 SBIR proposals –32 awards to date

5 external financings (Angel and VC) 1 acquisition to date –Anchovi Labs acquired by Dropbox –CalTech team focused on image annotation 5/7/2013

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Example: Anchovi Labs

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Example: Anchovi Labs

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Example: Anchovi Labs

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Example: Anchovi Labs

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Example: Anchovi Labs

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I-Corps Team Members

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Agenda Role of the University What We Now Know!

Business Models & Customer Discovery Developing the Canvas Telling Your Story Execution Examples Q&A 5/7/2013

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Suniva

GT conducted 30 years of Federally-funded research GT VentureLab formed company GT ATDC startup incubator GT now assisting with manufacturing process improvement in Norcross Georgia success story!

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Pindrop Security

NSF-funded Georgia Tech research into phone fraud detection and caller authentication Process: VentureLab, Flashpoint, ATDC Series A: Andreessen Horowitz First customer: Top 5 bank Potential applications:

we stop phone fraud 5/7/2013

–Verify Caller ID –Detect spoofing –Prevent account takeover

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Whisper Communications Securing NFC-based Mobile Payments: Adds security to the physical layer, where no security exists today GT wireless research commercialized through VentureLab & ATDC

“The Cone of Silence�

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Potential applications: Enhanced privacy/ security for all forms of mobile commerce/ proximity marketing/ healthcare

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ImmondoTech Increases sensitivity of chemical sensors using Metal Organic Frameworks –Minimizes false positives; protects sensors from destructive agents Faculty: Dr. Krista Walton & Dr. David Sholl, School of Chemical and Biomolecular Engineering, Georgia Tech –30+ years experience with porous materials, adsorption and separations technologies NSF I-Corps participant: 1Q ’13 # of customer contacts: 108 5/7/2013

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TabAccess Wireless controller for individuals with muscle impairments.

Faculty: Dr. Ayanna Howard and Hae Won Park, School of Electrical and Computer Engineering, Georgia Tech NSF I-Corps participant: 2Q ’12 # of customer contacts: 106

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Agenda Role of the University What We Now Know!

Business Models & Customer Discovery Developing the Canvas Telling Your Story Execution Examples Q&A 5/7/2013

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For Further Information Stephen Fleming Vice President, Enterprise Innovation Institute Georgia Institute of Technology http://innovate.gatech.edu

Personal blog: http://www.academicvc.com Email: fleming@gatech.edu Twitter: @stephenfleming

Download this file at http://files.academicvc.com/ 5/7/2013

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For Further Information Stephen Fleming Vice President, Enterprise Innovation Institute Georgia Institute of Technology http://innovate.gatech.edu

Personal blog: http://www.academicvc.com Email: fleming@gatech.edu Twitter: @stephenfleming CC BY-NC-SA 3.0

Download this file at http://files.academicvc.com/ 5/7/2013

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