Why do we start startups? A good question for the inaugural class of the NYC Media Lab: The Combine. Covering Motivation, Lean, Business Model Canvas, the Rich/King Dilemma, and Scale Outcomes

1. STARTUP:
WHY?
By Jen van der Meer

2. Hi I’m Jen.

3. What Lean* is Great For:
Figuring out if you should pursue this path (or not)
and under what conditions
Figuring out your path to growth
*Lean LaunchPad, Lean Startup, Agile, Move Fast/Break Things

4. What Lean*
Doesn’t Cover
Why you are doing this?
What are the tradeoffs: investment vs.
customer funded?
How to trade off competing values, particularly
if you are primarily driven by impact and
outcomes?
How do you form teams? Deal with team
dynamics?

5. MOTIVATION
Why are you doing this?

6. Why are you doing this?

7. Why are you doing this?
More time
More money
Can’t work for other people
Social impact
Huge financial returns
Control over my own destiny
I want to have CEO in my title
Control over product, autonomy
No one looking over my shoulder
Freedom
I see a huge opportunity
Hungry to learn
Uber feminism - defining my own rules
I’m not employable
It’s my family business, my legacy
Environmental impact
I want to be a founder
No one would hire me
I am creating art / culture / music
What else?________________________

8. What is a startup?
(according to 3 w.m.)
“A startup is a human institution designed to deliver a
new product or service under conditions of extreme
uncertainty.” – Eric Ries
“A startup is a company designed to grow fast.” –Paul
Graham. Y Combinator.
“A startup is a temporary organization designed
formed to search for a scalable repeatable business
model.” – Steve Blank.
“”Most startups change their business model multiple
times. A scalable startup is a special class of startup –
world class team, large vision, large target market,
passionate belief and a reality distortion field.”

9. Motivation & Ambition
“The most important factor for business success was
ambition with those firms starting out with high growth
expectations performing most strongly. Indeed, motivations
influence business success mainly by driving differences in
growth expectations, which in turn drive success.”
Entrepreneurship Understanding Motivations
UK Survey 2015

10. Rich V. King
Founders choices are straightforward: Do they want to be rich or king?
Few have been both. - Noam Wasserman
Fail Rich
King Exception
Well below potential Close to potential
LittleComplete
Controlovercompany
Financial gains
The Founder’s Dilemma at HBR.org.

11. FUNDING
PHILOSOPHY
Not every dollar is the same

12. Forms of Funding
Angel
Incubators
Venture
Customer-funded revenue
SBIR Grants
Prizes and Other Grants
Loans
Private Equity
Corporate VC

13. The Wonders of
Customer Revenue
It’s revenue!
You need less capital!
You can hire a team,
invest profits into
product

14. The Hidden Risks of Early
Needy Customers
The best early customer is a risk taker, who is an early adopter,
who others tend to follow.
A lighthouse customer.
A reference customer.
A slide full of logos.
“Oh if Target / GE / Red Bull use it, so should I”
And who defines the patterns for the industry.
The worst first customer: so need-specific, so custom, so high
maintenance - nothing can be built that will serve more
customers, and serve your product plan

15. Let’s Sketch our First
Canvas, Together

16. Key Partners Key Activities
Value
Propositions
Customer
Relationships
Channels
Revenue StreamsCost Structures
Key Resources Key Channels
Customer
Segments

17. 2 simple warm up exercises:
Who?
What?

18. Who?

19. You can’t aim at
everyone, first
“Serve a unique customer
segment”
“Target a specific niche”
“Aim for your most
profitable segment”
“It’s better to dominate a
micro segment than to aim
for everyone and hit
nobody”
“Define your Archetypes”

20. Use Personas to
Find the Pain
From: Business Model Canvas, Value Proposition Design,
Alexander Osterwalder, The Innovators’s Solution, Clay
Christensen and Michael Raynor

21. Uncover the
“job to be done”
Fast Food Milkshake
40% of milkshakes
purchased by commuters
in the morning - to go
What job customers hire milkshakes to do: On a a long, boring commute,
customers “needed something to keep that extra hand busy and to make the
commute more interesting.” - Clayton Christensen, HBR
http://hbswk.hbs.edu/item/clay-christensens-milkshake-marketing

22. Uncover the
“job to be done”
Soylent

23. Uncover the
“job to be done”
DIY
Soylent

24. Discovering Pain:
Plans Known needs
Behavior

25. Values
Norms
Assumptions
Taboo Beliefs
Unknown Needs
Go deeper to find unmet
needs, hidden pains:

26. Persona Tool
Context:
#stillathome
#notanadultyet
Name:
Peyton
Age:
24
Living with
Mom at
home
Motivations/Goals:
Independence
Freedom
Apartment
Bike to work
Pay off college loan
Interests:
Roller derby
Raising money for
breast cancer
Jewelry making
Pains:
Can’t seem to save
At breakeven/loss
each month
Bad credit rating
Fears + Secrets:
Afraid of getting
rejected for an
apartment
Really likes
mom’s support

27. Persona Tool
Context:
Name:
Age:
Living:
Motivations/Goals:
Interests:
Pains:
Fears + Secrets:
Draw pic
Tribes/Hashtags

28. What?

29. Value Proposition
Silicon Valley / Tech Version
“Who do you want to create value for
and what jobs need to be done?”
Value proposition(s) outline how
exactly your products and services
create value for one or more of your
customer segments.
- Alexander Osterwalder, Value
Proposition Design.
Madison Avenue / Branding
“A statement of the benefits delivered
by the brand that provide value to the
customer.
Communicates the benefits that add
value, why we are different, the
brand-customer relationship, and
gives customers an “RTB” - reason to
buy (or believe).
-David Aacker,
Building Strong Brands.

30. Value Proposition
My company __(company name)_______________________________
is developing _(defined offering)_______________________________
to help __(a target audience)___________________________________
_(solve this problem / pain) ____________________________________
(with this secret sauce)_______________________________________
(with this proof point to the customer)______________________
Jen van der Meer, Reason Street Revenue Steps

31. Let’s Commercialize!
Researchers use chemicals
to manipulate the behavior
of mice
with effects that last up to
an hour…
to control the hunger and
activity levels of mice
The Scientist, 2015.
http://www.the-scientist.com/?articles.view/
articleNo/42878/title/Mouse-Mind-Control/

32. Value Proposition
My company __MINDTETHER_________________
is developing _a mind tether spray_____________
to help __busy moms_________________________
_compel their children to complete homework____
with our proprietary mind control chemicals____
effects last up to an hour with minor side effects!
Jen van der Meer, Reason Street Revenue Steps

33. Who + What
Custom Offer Scalable Offer
LargeNeedSmallmarket
CustomerSegment
Value Proposition

34. Who + What
Eek
High
potential
startup
“Lifestyle”
Begin here,
cross the
chasm
Custom Offer Scalable Offer
LargeNeedSmallmarket
CustomerSegment
Value Proposition

35. 10X

36. Scale
Impact. Scale. Envisioning Big Outcomes. If it is
clear enough and compelling enough AND BIG
ENOUGH it will attract the SCALE AND IMPACT-
SEEKING people and resources (VCs, angels, future
partners and team members)
What does it mean to seek a 10x return?

38. Unicorn question
How pissed would you be if some other
company was anointed the chosen one? And
blew you out of the water?

39. Yesterday news broke of General
Motor’s acquisition of Sidecar assets.
Why the sale? In short, we were forced
to shut down operations and sell. We
were unable to compete against Uber, a
company that raised more capital than
any other in history and is infamous for
its anti-competitive behavior. The legacy
of Sidecar is that we out-innovated Uber
but still failed to win the market. We
failed — for the most part — because
Uber is willing to win at any cost and
they have practically limitless capital to
do it.
Sunil Paul, Founder, Sidecar
Jan 20, 2016
Medium (Post Mortem)

40. How fast?
My current user base of _______ would be on
track to grow to ____________ in 5 years to be
considered worthy of growth investment (VC,
angel) today.

41. What kinds of returns?

42. The Ask
My company __(company name)_____________________________________
is developing _(defined offering)_____________________________________
to help __(a target audience)_________________________________________
_(solve this problem / pain) __________________________________________
(with this secret sauce)_____________________________________________
(we already experiencing this much traction)_____________________
(and we’ll seeking this much growth capital to get there faster__

43. Now multiply by 10.
(the impact you’ll achieve. the money you’ll
need).

44. And again.
x10.

46. Purpose of Why We Search
While you are here…
Learning how helpful humans are when you ask them.
Run through the exercise of seeing how you could achieve scale.
Defining a hidden unmet need, and a scalable solution.
Uncover your blinders, limiting beliefs, and see how big you can
think.
Realize you can’t really control for anything, so follow the water
around the rock.

48. Thanks
@jenvandermeer
Reason Street