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An Introduction and WELCOME!




             BOB DORF
   allegedly retired serial entrepreneur
          bob@kandsranch.com

          www.steveblank.com
                                           1
WELCOME to our journey…

• To help you try to build strong, profitable new businesses
• NOT to guarantee success, but to minimize risk of failure
• …to teach you how to use “startup tools” on YOUR startup
• …get YOU “out of the building” to gain/use customer feedback
• …and to do all we can to help you WIN!

                                                             2
This is
               Damn Hard…
•   Long term success rate in startups is very, very low
•   It’s all about “traction…”- very hard to achieve
•   Competition, investment both extremely challenging
•   You will be outspent, out-engineered, outrun
•   YOUR TEAM AND I will do all we can to help…
•   But most of the success is on your shoulders
                                                           3
Why are we here??
• The odds are very much against your success
• We want to reduce the risk of failure
• And provide support to help you and your team
  build a strong, enduring company!

…What really matters most:
• GREAT companies with long-term potential
• Excited CUSTOMERS who tell their friends

                                                  4
This is NOT a test…

•   Customer Development is in use worldwide
•   Thousands of startups use all or part of the process
•   Adopted by 50+ leading Universities
•   …but this is NOT a class…
•   …the ONLY grade is how successful YOU are!
                                                       5
More startups fail from
a lack of customers than from a
failure of product development




                                  6
Our focus is finding customers
for your product even before
 you have built the product!




                                 7
Very simple business math:
 0 customers= 0 business!




                             8
A bit about me…
•   “Unemployable” since age 22, 4 decades ago(!!)
•   7 startups: 2 homeruns, 2 base hits, 3 tax losses
•   >20x startups Investor/coach: 7 IPO’s, 6 disasters
•   3 years almost living with Steve, writing, teaching
•   Adjunct Professor, Columbia Business School
•   1 great kid, PhD, mom, proudest startup of all!



                                                     9
The best “tuition” of all…




                             10
500 startup misteaks in 608 pages….




                                      11
A bit about you…
•   First-time entrepreneurs?
•   Engineers?
•   Marketeers?
•   Third startup?
•   Cloners?
•   “Keeping my Day Job” for now
•   Ready to work 80 hours a week?
•   ..for the glory?
•   …for the $?

                                     12
Questions?




             13
We’ve learned a lot about
   entrepreneurship




                            14
15
Part 1

What We Used to Believe
 What We Now Know



                          16
What We Used to Believe




                          17
There is one type of startup and
   one type of entrepreneur




                                   18
What We Now Know:
There are many types of startups




                                   19
Scalable Startup
               Why most of you are here today!
    Search                                   Execute

    Scalable                                   Large
    Startup                                  Company



Goal is to solve for:
 unknown customer and
 unknown features




                                                       20
Scalable Startup
    Search                              Execute

    Scalable                              Large
    Startup                             Company



Goal is to solve for:    Exit Criteria
 unknown customer and   - Business model found
 unknown features       - Total Available Market > $500m
                        - Can grow to >$100m/year
                        - Can be Venture capital funded

                                                     21
But startups may be…




                       22
Lifestyle Startups
                 Work to Live your Passion



     Startup




• Serve known customer with known product
• Work for their passion
• NOT “Mark Zuckerberg”
• YET can employ many in a very profitable
  long-term enterprise

                                             23
Small Business Startups
                Work to Feed the Family


                                           Small
     Startup
                                          Business



• Serve known customer with
  known product
• Feed the family




                                                     24
Small Business Startups
                    Work to Feed the Family



                                               Small
      Startup
                                              Business


                    Exit Criteria
• known customer    - Business Model found
  known product
                    - Profitable business
• Feed the family
                    - Existing team
                    < $500K in revenue
                    - Not venture-backable

                                                         25
Social Entrepreneurship Startups


      Social                            Large
     Startup                          Non-Profit



• Solve pressing social problems
• Social Enterprise: Profitable
• Social Innovation: New Strategies
   • Not venture-backable


                                                   26
Buyable Startup


     Search                                 Sell
     Scalable                            $2 to $50M
     Startup                             Acquisition




Goal is to solve for:            - Sell to larger company
 Internet, Mobile, Gaming Apps   - Angel or early stage VC




                                                       27
:
what matters most
KNOW your GOAL at the start
SHARE it with coaches, team, investors
     (it’s always easier to make it bigger later)




                                                    28
Teaching Entrepreneurs:
What We Used to Believe




                          29
What a Startup Really Looks Like




                                   30
Startups are About Vision &
   Ideas, sweat and luck




                              31
What We Now Know




                   32
Most visions are very blurry at best




                                   33
What We Used to Believe




                          34
Startups are a Smaller Version
     of a Large Company




                                 35
What We Now Know




                   36
Startups Search
Companies Execute




                    37
What We Used to Believe

        Strategy




                          38
Start With a Business Plan
  and a Financial Model




                             39
All You Need to Do is Execute the Plan




                                    40
And You Need to Make the Forecast




                                41
All You Need to Do: Execute the Plan




                                   42
What We Now Know

     Strategy




                   43
No Business Plan survives
first contact with customers




                               44
Planning comes before the
           plan




                            45
Some Ground Rules
• Interrupt me ANYTIME
• This is HARD
   – Unpredictable
   – Accept and learn from failure
   – All must agree we’re on a “search”

• YOU will customize our agenda as we go…using the
  “Customer Development” process
• Try to generalize your issues/questions
• Please say “go faster,” “go slower,” or “wait a minute!”
• …and feel free to throw things if I don’t hear you!
                                                             46
What’s A Startup?
  Search                                Execute

  Scalable                              Large
  Startup                              Company


- Business  Model found
- i.e. Product/Market fit
- Repeatable sales model
- Managers hired
   A Startup is a temporary organization used to
  search for a repeatable and scalable business
                      model
                                                   47
Scalable Startup
   Search

  Scalable                            Large
  Startup                            Company



Goal is to solve for:
 unknown customer and unknown features
…New customers unknown in many markets
…Desired features unknown in many markets


                                               48
Scalable Startup
Search                                  Execute

Scalable                                 Large
Startup                                 Company


       Exit Criteria
      - Business model found
      - Total Available Market > $500m -$1B
      - Can grow to $100m/year
      Criteria: can it get BIG??
      …not quite today…but is it on the path?


                                                  49
Why 95+% of startups die?

•   All product, no customers
•   No problem
•   The “lock step”
•   Premature scaling
•   No product/market fit
•   No more dough
•   …some of us will fail. Certainly it’s not YOU!


                                                     50
Questions?



             51

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Happy farm intro BD

  • 1. An Introduction and WELCOME! BOB DORF allegedly retired serial entrepreneur bob@kandsranch.com www.steveblank.com 1
  • 2. WELCOME to our journey… • To help you try to build strong, profitable new businesses • NOT to guarantee success, but to minimize risk of failure • …to teach you how to use “startup tools” on YOUR startup • …get YOU “out of the building” to gain/use customer feedback • …and to do all we can to help you WIN! 2
  • 3. This is Damn Hard… • Long term success rate in startups is very, very low • It’s all about “traction…”- very hard to achieve • Competition, investment both extremely challenging • You will be outspent, out-engineered, outrun • YOUR TEAM AND I will do all we can to help… • But most of the success is on your shoulders 3
  • 4. Why are we here?? • The odds are very much against your success • We want to reduce the risk of failure • And provide support to help you and your team build a strong, enduring company! …What really matters most: • GREAT companies with long-term potential • Excited CUSTOMERS who tell their friends 4
  • 5. This is NOT a test… • Customer Development is in use worldwide • Thousands of startups use all or part of the process • Adopted by 50+ leading Universities • …but this is NOT a class… • …the ONLY grade is how successful YOU are! 5
  • 6. More startups fail from a lack of customers than from a failure of product development 6
  • 7. Our focus is finding customers for your product even before you have built the product! 7
  • 8. Very simple business math: 0 customers= 0 business! 8
  • 9. A bit about me… • “Unemployable” since age 22, 4 decades ago(!!) • 7 startups: 2 homeruns, 2 base hits, 3 tax losses • >20x startups Investor/coach: 7 IPO’s, 6 disasters • 3 years almost living with Steve, writing, teaching • Adjunct Professor, Columbia Business School • 1 great kid, PhD, mom, proudest startup of all! 9
  • 10. The best “tuition” of all… 10
  • 11. 500 startup misteaks in 608 pages…. 11
  • 12. A bit about you… • First-time entrepreneurs? • Engineers? • Marketeers? • Third startup? • Cloners? • “Keeping my Day Job” for now • Ready to work 80 hours a week? • ..for the glory? • …for the $? 12
  • 14. We’ve learned a lot about entrepreneurship 14
  • 15. 15
  • 16. Part 1 What We Used to Believe What We Now Know 16
  • 17. What We Used to Believe 17
  • 18. There is one type of startup and one type of entrepreneur 18
  • 19. What We Now Know: There are many types of startups 19
  • 20. Scalable Startup Why most of you are here today! Search Execute Scalable Large Startup Company Goal is to solve for: unknown customer and unknown features 20
  • 21. Scalable Startup Search Execute Scalable Large Startup Company Goal is to solve for: Exit Criteria unknown customer and - Business model found unknown features - Total Available Market > $500m - Can grow to >$100m/year - Can be Venture capital funded 21
  • 22. But startups may be… 22
  • 23. Lifestyle Startups Work to Live your Passion Startup • Serve known customer with known product • Work for their passion • NOT “Mark Zuckerberg” • YET can employ many in a very profitable long-term enterprise 23
  • 24. Small Business Startups Work to Feed the Family Small Startup Business • Serve known customer with known product • Feed the family 24
  • 25. Small Business Startups Work to Feed the Family Small Startup Business Exit Criteria • known customer - Business Model found known product - Profitable business • Feed the family - Existing team < $500K in revenue - Not venture-backable 25
  • 26. Social Entrepreneurship Startups Social Large Startup Non-Profit • Solve pressing social problems • Social Enterprise: Profitable • Social Innovation: New Strategies • Not venture-backable 26
  • 27. Buyable Startup Search Sell Scalable $2 to $50M Startup Acquisition Goal is to solve for: - Sell to larger company Internet, Mobile, Gaming Apps - Angel or early stage VC 27
  • 28. : what matters most KNOW your GOAL at the start SHARE it with coaches, team, investors (it’s always easier to make it bigger later) 28
  • 29. Teaching Entrepreneurs: What We Used to Believe 29
  • 30. What a Startup Really Looks Like 30
  • 31. Startups are About Vision & Ideas, sweat and luck 31
  • 32. What We Now Know 32
  • 33. Most visions are very blurry at best 33
  • 34. What We Used to Believe 34
  • 35. Startups are a Smaller Version of a Large Company 35
  • 36. What We Now Know 36
  • 38. What We Used to Believe Strategy 38
  • 39. Start With a Business Plan and a Financial Model 39
  • 40. All You Need to Do is Execute the Plan 40
  • 41. And You Need to Make the Forecast 41
  • 42. All You Need to Do: Execute the Plan 42
  • 43. What We Now Know Strategy 43
  • 44. No Business Plan survives first contact with customers 44
  • 45. Planning comes before the plan 45
  • 46. Some Ground Rules • Interrupt me ANYTIME • This is HARD – Unpredictable – Accept and learn from failure – All must agree we’re on a “search” • YOU will customize our agenda as we go…using the “Customer Development” process • Try to generalize your issues/questions • Please say “go faster,” “go slower,” or “wait a minute!” • …and feel free to throw things if I don’t hear you! 46
  • 47. What’s A Startup? Search Execute Scalable Large Startup Company - Business Model found - i.e. Product/Market fit - Repeatable sales model - Managers hired A Startup is a temporary organization used to search for a repeatable and scalable business model 47
  • 48. Scalable Startup Search Scalable Large Startup Company Goal is to solve for: unknown customer and unknown features …New customers unknown in many markets …Desired features unknown in many markets 48
  • 49. Scalable Startup Search Execute Scalable Large Startup Company Exit Criteria - Business model found - Total Available Market > $500m -$1B - Can grow to $100m/year Criteria: can it get BIG?? …not quite today…but is it on the path? 49
  • 50. Why 95+% of startups die? • All product, no customers • No problem • The “lock step” • Premature scaling • No product/market fit • No more dough • …some of us will fail. Certainly it’s not YOU! 50