Lean Startup: Lessons from the field of 300 Innovation-Corps (Lean LaunchPad) Teams Errol Arkilic (errol@m34capital.com) M34 Capital Founding and Former Lead I-Corps Program Director
How to make your startup not suck I don’t know… How to make your startup not suck Errol Arkilic (errol@m34capital.com) M34 Capital Founding and Former Lead I-Corps Program Director
I don’t know how to make your startup not suck Errol Arkilic (errol@m34capital.com) M34 Capital Founding and Former Lead I-Corps Program Director
How to make your startup not suck Lean LaunchPad: How to make your startup not suck Errol Arkilic (errol@m34capital.com) M34 Capital Founding and Former Lead I-Corps Program Director
This talk borrows heavily from:
Technology Innovation Spectrum -----------II-R---- ------II-B--------------------- ------------- Supplements NSF STTR SBIR GOALI I/UCRC PFI ERC Resources Available ($) Discovery Development Commercialization Level of Development From Angus Kingon Industry I-Corps ENG NSF Investors Academia Valley of Death Unbridgable Gulf of Death Small Business
Innovation* The design, invention, development and/or implementation of new or altered products, services, processes, systems, organizational structures, or business models for the purpose of creating new value for customers and financial returns for the firm *Innovation Measurement A Report to the Secretary of Commerce January 2008
Why most products/companies fail YOU’RE BUILDING SOMETHING NOBODY CARES ABOUT
Why most products/companies fail YOU’RE BUILDING SOMETHING ABOUT WHICH NOBODY CARES
What can you do? Admit there are unknowns Develop hypothesis to probe unknowns Use appropriate metrics to validate Close the hypothesis-testing loop Rinse-and-repeat
Startups Fail because they Confuse Search with Execution -Steve Blank
Where are You in the Life Cycle Execution Search
Execution: Repeatable Internal Processes Knowns: Management: Customers, Features, Channels, Pricing Management: Formal / The Suits Characterized by “Only the Paranoid Survive” Customer Creation + Company Building Goals are set quarterly
Search: What Process? Knowns: Management: Runway Management: No management, but founders with leadership/vision Characterized by “Stark Raving Terror” Collecting and analyzing: Search and Pivot Customer Discovery + Customer Validation Goal: To get to a sustainable business model
What happens when you confuse Execution with Search YOU BUILD SOMETHING NOBODY CARES ABOUT
Data-Centric Approach Applying the Scientific Method Hypothesis: Here’s What We Thought Experiments: Here’s What We Did Results & Insights: Here’s What We Learned Action: Here’s What We Are Going to Do Next
Business Model Canvas ? ? ? ? ? ? ? ----- Meeting Notes (10/31/13 14:01) ----- Identifying partners and buyers -- what's the taxonomy of all I-Corps teams to date by industry/technology/sector -- what's the clustering look like for the most populous w/greatest potential ... e.g., avoid CONSUMER WEB (very efficient eco-system with no competitive advantage for M34) More than 3 and less that 8 categories -- mine the verticals deeply and run the table (materials?) HOW DO NSF GRANTS CLUSTER ?? how does that align with I-Corps impact investments and transactions ... Atrium Capital inside out (not from Corporates to tech, but from Tech to Corporates) ... (talk with Russell?) "facilitated tech transfer from Academia to Corporates ... " We support certain kinds of things because someone at P&G has said green daipers matter, and they are high-tech from a materials point of view, and here's why (...) building the network of buyers and funders is the key thing to realize liquidity for M34 investments ... get ahead of that curve early ... ESPECIALLY IN EUROPE (like SAP and other international tech partners) ? ?
Technology Innovation Spectrum Resources Available ($) Discovery Development Commercialization Level of Development From Angus Kingon Industry Investors Academia Valley of Death Small Business
Building the Nation’s I-Corps “Fabric” - How I-Corps evolved? I-Corps Nodes #2 I-Corps Sites October 2012 I-Corps Nodes I-Corps Mentors #3 January 2013 I-Corps Sites I-Corps Teams This network model was developed by a very small band of instigators at NSF and it was my privalige to be able to lead the team from its inception until the July of 2013. #1 July 2011 I-Corps Teams
Credit: © 2011 JupiterImages Corp. I-Corps Team Entrepreneurial Lead Post-doc or Student to move it forward I-Corps Mentor Volunteer Domain-relevant volunteer guide Proximity is better PI Researcher with current or previous award Credit: © 2011 JupiterImages Corp.
I-Corps Infrastructure Nodes: Ga Tech U. Michigan Bay Area: Berkeley, Stanford, UCSF DMV: UMD, Va Tech, GWU NYCRIN: CUNY, Columbia, NYU Sites: U Akron UCSD UIUC
NSF I-Corps Flow Diagram Pool of eligible PIs & projects: ~50,000 projects (NSF) “Go” Decision (Teams) Strategic Partnership Customer Discovery (Teams/Nodes) Recruiting processes (NSF) Private Capitalization Team Selection (NSF) Node Assignment (NSF) Pool of eligible Teams (NSF) Public Funding (e.g., SBIR, STIR, …. ) Curriculum Delivery & Refinement (Nodes) Business Model Canvasses (Teams) Awarded I-Corps Teams (NSF) “No-Go” Decision (Teams) Pool of eligible Teams (I-Corps Sites) Resource Infusion Private Sector
I-Corps Curriculum Based on hypothesis-driven business-model discovery Pioneered by Stanford and Steve Blank Focuses on addressing market risk Requires getting out of the lab AT LEAST 15 hours of prep per week Mandatory for all I-Corps participants First 3 Days (at one of the five nodes) 5 follow-on webinars with team presentations 2 Days (lessoned learned )
Lean Approach to Product/Company Building New way of looking at Startups and Product Launch It is trendy now, but there is real analysis behind the hype Don’t let cynicism blind you to the value I’ve scratched the surface Study the tool set Become a student
When NOT to use a Lean Launch When it doesn’t matter if your product/company fails When your Technology Risk REALLY is the biggest risk element When doing so causes you to miss the wave (bubble)
Five Takeaways Recognize the Valley of Death Embrace the Scientific Method to probe unkowns Don’t Confuse Search with Execution Use the Business Model Canvas This isn’t going away
Thank You Questions?