3. Build the tallest freestanding structure The entire marshmallow must be on top Use as much or as little of the kit Break up the spaghetti, string or tape The challenge lasts 18 minutes

6. Uncertainty / Unknown Certainty / Known Traditional Management Entrepreneurial Management

7. Uncertainty = Assumptions

10. “Get the heck outside the building!” –Steve Blank

11.  The goal is to fail fast and inexpensively  Redefine failure  The only failure is wasting your time and money when you could avoid it ▪ 1000 Markets Example

12.  Common Learning Traps  Confirmation bias  Motivation bias  Familiarity bias  Superstitious learning  Goal: Listen to understand the world as it really is  Attitude of wisdom  Willingness to be wrong and to fail  Example: Mike Cassidy, Xfire

13.  Experiment with virtual prototypes  Identify your assumptions and turn them into facts  Power in low cost, simple, rapid  Example: Jam experiment  Example: Classtop and the $300 software package

15. Which Problem Is Worth Solving (Nail the Pain) Which Solution Solves that Problem (Nail the Solution)

17.  Objective:  Discover the Monetizable Market Pain ▪ Discover the “job” your customer is trying to get down without being biased by the solution  Develop the Big Idea Prototype  Steps: ▪ Step 1: Don’t build anything ▪ Step 2: Write down Monetizable Pain hypothesis ▪ Step 3: Write down Big Idea Prototype ▪ Step 5: Quick test with customers ▪ Step 5: Quick exploration of markets  Test:  Customers return your cold call

18.  The bigger the pain the easier to build a business  Motive Communications ▪ Problem search What about Instagram?

19.  Customer observation and empathy  Put yourself in your customers shoes?  What keeps them up at night, causes them trouble, leads them to develop work-around?  Test your assumption with customers  Example: Motive Communications

21.  Step 1: Profile customer segment  I am ___________________________(who, with at least 3 characteristics)  I am trying to ___________________ (outcome/job trying to solve)  But it’s difficult because ___________(identify problems/barriers)

22.  Step 2  Story board of the journey of how customer solves  Step 3  Identify biggest pain … do root cause (five whys)  Step 4  Identify most important root cause  Step 5  What questions do you need to answer about the root cause  Who could you talk to in order to answer these questions?

24.  Objective:  Discover the Minimum Feature Set that drives purchase  Steps: ▪ Test 1: Virtual Prototype Test ▪ Test 2: Prototype Test ▪ Test 3: Solution test  Test:  Customers purchase

25. Most entrepreneurs build products … Customers don’t want

26.  Achieve Product / Market Fit  Exact match between pain and solution

27.  Prototypes  From virtual prototypes to actual prototypes

28.  Minimum Feature Set

29.  Can be  Drawing  Powerpoint  Video  Test  What will customers purchase ▪ Even before you build it

32.  If you had to sell a customer today …  For the skeptics … AtTask

33.  Objective:  Discover customer buying process and unique sales process for your customers  Steps: ▪ Test 1: Buying process discovery ▪ Test 2: Market infrastructure discovery ▪ Test 3: Pilot customer validation

34. Customer Awareness Customer Evaluation Customer Purchasing Customer Use

35. Company 1 1 Partners 2 2 Influencers 3 3 Advertising / Marketing / Social Media 4 4 Target Customer 5 5

36.  Draw a map of customer buying process  Prioritize 3 most important inflection points  Set two dates on your calendar to investigate

37.  Objective:  Validate financial model & ignite business model  Steps ▪ Leverage customer conversations to predict business model ▪ Validate the financial model ▪ Iteratively launch product and go-to-market strategy ▪ Business dashboard with continuous information flow ▪ Adjust speed depending on market type  Examples:  Webvan  Webmetrics, Knowlix, Yahoo

39.  Objective:  Scale discovered model until it breaks ▪ Phase change recognition & management ▪ Recognize changes ▪ Shift process, structure and employees ▪ Emphasize with visual management ▪ Consciously define culture ▪ Succession and transition ▪ Leaping between markets  Examples:  Intuit, Fusionsoft, Craigslist, SodaStart, IMVU

40. Product development  Before you build anything:  Identify hypotheses about customers  Test those hypotheses as cheaply as possible  Identify exactly customer pain and your solution with customer  Use a virtual prototype  Sales development  Discover exactly how customers buy  Develop a replicable sales model