Teacher guide syllabus

Lean LaunchPad Syllabus - Using the Startup Owners Manual page 1 of 15
The Lean LaunchPad Class
Course Title: Technology Entrepreneurship and Lean Startups
Designed by: Steve Blank, Ann Miura-Ko, Jon Feiber
Webpage: http://e245.stanford.edu/
Texts: The Startup Owners Manual - Steve Blank
Business Model Generation - Alexander Osterwalder
This curriculum requires in depth preparation and significant effort outside of the lab.
Pre- class Assignments:
Read pages 14-49 of Business Model Generation.
Read pages 22-84 of the Startup Owners Manual
Review course strategy at http://steveblank.com/category/lean-launchpad/
Review I-Corps team presentations http://www.slideshare.net/sblank/tagged/i-corps.
(note the number of customer contacts each team made over the course.)
Each team comes into the 1st day of class:
1. with a Business Model Canvas. You will present for 3-minutes on day 1 (see appendix A)
2. prepared to make 10 or more customer/industry contacts at Stanford/Berkeley/UCSF and
around the San Francisco Bay area, when class is not in session
Prerequisites: 1) passion, curiosity, resilience and agility. Interest in discovering how an idea
can become a real company. 2) Each team member must commit to class time plus 15 additional
hours a week for Customer Discovery.
Curriculum Description: This curriculum provides real world, hands-on learning on what it’s
like to successfully transfer knowledge into products and processes that benefit society. It’s not
about how to write a research paper, business plan or a grant. It’s not an exercise on how smart
you are in a lab or a classroom, or how well you use the research library. The end result is not a
paper to be published or PowerPoint slide deck. Instead the entire team will be engaged with
industry; talking to customers, partners and competitors, as the team encounters the chaos and
uncertainty of transferring knowledge into products and processes that benefit society.
Amount of Work
Getting out of the lab/building is what the effort is about. It’s not about the lectures. You will be
spending a significant amount of time in between each of the lectures outside your lab talking to
customers and testing your hypotheses. If you can’t commit the time to talk to customers, the
this class is not for you.
Class Culture
Startups communicate much differently than inside a university and lab. It is dramatically

different from the university culture most of you are familiar with. At times it can feel brusque
and impersonal, but in reality is focused and oriented to create immediate action in time- and
cash-constrained environments. We have limited time and we push, challenge, and question you
in the hope you will quickly learn. We will be direct, open, and tough – just like the real world.
We hope you can recognize that these comments aren’t personal, but part of the process.
We also expect you to question us, challenge our point of view if you disagree, and engage in a
real dialog with the teaching team. This approach may seem harsh or abrupt, but it is all part of
our wanting you to learn to challenge yourselves quickly and objectively, and to appreciate that
as entrepreneurs you need to learn and evolve faster than you ever imagined possible.
Teams
You’ll work in teams learning how to turn your ideas, research and technology into a product,
service or process that benefits society. You’ll learn how to use a business model to brainstorm each
part of an enterprise and customer development to get out of the lab/building to see whether
anyone other than you would want/use your product. Each week will be new adventure as you
design experiments and run hypotheses tests on each part of your business model and
customers. Finally, you’ll see how agile development can help you rapidly iterate your product to
build something potential customers will use and buy.
Weekly, in a 10-minute presentation you’ll share the hard earned knowledge with the rest of the
class. Working with your team you will encounter issues on how to build and work with a team
and we will help you understand how to build and manage the startup team.
Suggested Projects:
While your first instinct may be a web-based startup we suggest that you consider a subject in
which you are a domain expert, such as your graduate research. In all cases, you should choose
something for which you have passion, enthusiasm, and hopefully some expertise. Teams that
select a web or mobile-based product will have to build the site for the class. Do not select this
type of project unless you are prepared to see it through.
Review http://steveblank.com/category/lean-launchpad/ for a narrative of the class.
See previous team presentations http://www.slideshare.net/sblank/tagged/i-corps
Class Organization:
Three Day I-Corps Workshop:
The class starts with your entire I-Corps team (Principal Investigator, Entrepreneurial Lead,
I-Corps Mentor) at Stanford, March 20th -22nd for the first lectures. In the three-day workshop

your team will present what you are learning to the entire class of 25-teams. (Presentation
formats will be provided.) At the end of each teams presentation we will offer observations and
guidance. When not presenting each member of your team will be grading your peers.
Post Workshop, Out of the Building Effort
When I-Corps teams return to their institutions, you are required to get out of the lab to test their
business model assumptions. This is a team effort. It will take at least 15 hours a week. Your
first slide each week is the number of customers talked to. It is the heart of the class.
Online Curriculum: Weekly Presentations and Progress Tracking
We will split the 25 teams into three groups. Each team will present a 10-minute weekly
progress report to members of the teaching team. (These slides are public. Do not put
proprietary information on them.) At the end of our presentation we will offer observations and
guidance. This is how we monitor your progress and give you guidance. When not presenting
each member of your team will be grading your peers.
Online Curriculum: Weekly Lectures
Immediately following the team presentations, all 25 teams will come together on-line for a class
lecture. The instructors will run five weekly on-line lectures, March 28th – April 12th that will
step through each of the 9 business model canvas hypotheses.
Weekly Blog Tracking
In addition to your presentations, teams will record their customer discovery progress basis
using a Wordpress blog to capture the narrative, contact information, learning and insight. This is
also how we monitor your progress.
I-Corps “Lessons Learned” Presentations
The entire I-Corps team (Entrepreneurial Lead, I-Corps Mentor and Principal Investigator) will
return to Stanford, May 22nd -23rd . There the teams will present to the teaching team and
Venture Capitalists the Lessons Learned in their exploration of commercial feasibility.
Team Organization: This class is team-based. Working and studying will be done in teams. The
teams will self-organize and establish individual roles on their own. There are no formal
CEO/VP’s. All three members of the team; Principal Investigator, Entrepreneurial Lead and
Commercialization Mentor must participate in all out of the building customer discovery activities.
Mentors have additional duties as spelled out in the separate mentor guide. Please read and
review it.

Deliverables:
1) if you’re a physical product you must show us a costed bill of materials and a prototype or
proof demonstration. If you’re a web product you need to build it and have customers using it.
2) Your weekly blog and its narrative of your customer discovery process is an integral part of
your deliverables. It’s how the team’s progress is measured (along with the “Lessons Learned”
presentations.)

Class Roadmap
Each week’s class is organized around:
 A lecture on one of the 9 building blocks of a business model (see diagram below, taken
from Business Model Generation).
 Team presentations on their “lessons learned” from getting out of the building and
iterating or pivoting their business model.
 Each team will capture their progression in Customer Discovery by keeping an on-line
journals/blogs/wiki.
“Genius is the ability to make the most mistakes in the shortest amount of time.” Aspiring
entrepreneurs need to become fast iterators.

Class 1: BusinessModel/Customer Development
Class Introduction
 Teaching Team Introductions
 Team Introduction – by each of the teams presenting their business model canvas
 Class Goals
 Teaching Philosophy
 Expectations of You
Class Lecture: The Business Model/Customer Development
What’s a business model? What are the 9 parts of a business model? What are hypotheses? What
is the Minimum Feature Set? What experiments are needed to run to test business model
hypotheses? What’s “getting out of the building?” What is market size? How to determine
whether a business model is worth doing?
Deliverables for the next class
Read:
 Business Model Generation, pp. 86-111, 135-145
 Startup Owners Manual review pages 53-84
 Steve Blank, “What’s a Startup? First Principles,”
http://steveblank.com/2010/01/25/whats-a-startup-first-principles/
 Steve Blank, “Make No Little Plans – Defining the Scalable Startup,”
http://steveblank.com/2010/01/04/make-no-little-plans-–-defining-the-scalable-
startup/
 Steve Blank, “A Startup is Not a Smaller Version of a Large Company”,
http://steveblank.com/2010/01/14/a-startup-is-not-a-smaller-version-of-a-large-
company/
Team Presentation for the next class
 Market size
 Type of business: IP, licensing, startup, unknown
 Proposed experiments to test customer segment, value proposition, channel and revenue
model of the hypotheses:
 What constitutes a pass/fail signal for each test (e.g. at what point would you say that
your hypotheses wasn’t even close to correct)?
 Start your Customer Discovery Narrative blog in Wordpress
o Email the teaching team your URL

Class 2: Value Proposition
Team Presentations: 5 minutes each (all teams)
 Slide 1: Cover slide (appendix A, slide 1)
 Slide 2: Current business model canvas with any changes marked
 Slide 3: Tell us about your Market size (TAM/SAM/Target)
 Slide 4: What type of business are you building?: IP, licensing, startup, unknown
 Slide 5: What are your proposed experiments to test customer segment, value
proposition, channel and revenue model of the hypotheses:
o What constitutes a pass/fail signal for each test (e.g. at what point would you say that
your hypotheses wasn’t even close to correct)?
Class Lecture: Value Proposition
What is your product or service? How does it differ from an idea? Why will people want it? Who’s
the competition and how does your customer view these competitive offerings? Where’s the
market? What’s the minimum feature set? What’s the Market Type? What was your inspiration
or impetus? What assumptions drove you to this? What unique insight do you have into the
market dynamics or into a technological shift that makes this a fresh opportunity?
Deliverable for the next class
Read:
 Business Model Generation, pages. 146-150, 161-168 and 200-211
 The Startup Owners Manual, pages 85-97
 Get out of the building and talk to as many people as you can
 What were your value proposition hypotheses?
 Get out of the building and begin to talk to customers for March 22nd
o What did potential customers think about your value proposition hypotheses?
o Follow-up with Survey Monkey (or similar service) to get more data
 Update your blog and canvas

Class 3: Customers/Users/Payers
Team Presentations: 10 minutes each (all teams)
 Slide 1: Cover slide
 Slide 3 - n: What did you learn about your value proposition from talking to your first
customers?
o Hypothesis: Here’s What we Thought
o Experiments: So Here’s What we Did
o Results: So Here’s What we Found
o Iterate: So Here’s What we Are Going to Do Next
Class Lecture: Customers/Users/Payers
Who’s the customer? User? Payer? How are they different? Why do they buy? How can you reach
them? How is a business customer different from a consumer? What’s a multi-sided market?
What’s segmentation? What’s an archetype?
Read:
 Business Model Generation, pages 127-133
 Startup Owners Manual, pages 98 – 111, and 189-255, 406-412
 Get out of the building and talk to 10-15 customers face-to-face
 What were your hypotheses about who your users and customers were? Did you learn
anything different?
 Did anything change about Value Proposition?
 What do customers say their problems/needs are? How do they solve this problem(s)
today? Does your value proposition solve it? How?
 What was it about your product that made customers interested? excited?
 If your customer is part of a company, who is the decision maker, how large is their
budget, what are they spending it on today, and how are they individually evaluated
within that organization, and how will this buying decision be made?

Class 4: Distribution Channels
Team Presentations: 10 minutes each
 Slide 3 - n: What did you learn about your customer segments from talking to your first
customers?
Class Lecture: Distribution Channels
What’s a channel? Physical versus virtual channels. Direct channels, indirect channels, OEM.
Multi-sided markets. B-to-B versus B-to-C channels and sales (business to business versus
business to consumer)
Read: Startup Owners Manual pages 227-256, 332-342
 Get out of the building and talk to 10-15 potential channel partners face-to-face
(Salesmen, OEM’s distributors, etc.)
 What were your hypotheses about who/what your channel would be? Did you learn
anything different?
 Did anything change about Value Proposition?
For web teams:
Get a Low-fidelity web site up and running. See Startup Owners Manual page 211-217

Class 5: Customer Relationships: Get/Keep/Grow
 Slide 3 - n: What did you learn about your channel from talking to potential channel
partners?
Class Lecture: Customer Relationships/ Demand Creation
How do you create end user demand? How does it differ on the web versus other channels?
Evangelism vs. existing need or category? General Marketing, Sales Funnel, etc. How does
demand creation differ in a multi-sided market?
Read:
 The Startup Owners Manual, pages 277-331
 Watch: Mark Pincus, “Quick and Frequent Product Testing and Assessment”,
http://ecorner.stanford.edu/authorMaterialInfo.html?mid=2313
 For everyone:
o Present and explain your marketing campaign. What worked best and why?
 For web teams:
o Get a working web site and analytics up and running. Track where your visitors are
coming from (marketing campaign, search engine, etc) and how their behavior
differs. What were your hypotheses about your web site results?
 Actually engage in “search engine marketing” (SEM) spend $20 as a team to test customer
acquisition cost
o Ask your users to take action, such as signing up for a newsletter
o use Google Analytics to measure the success of your campaign
o change messaging on site during the block to get costs lower, team that gets lowest
delta costs wins.
 If you’re assuming virality of your product, you will need to show viral propagation of
your product and the improvement of your viral coefficient over several experiments.
o Submit web data or customer interview notes, present results in class.
o Did anything change about Value Proposition or Customers/Users?

o What is your assumed customer lifetime value? Are there any proxy companies
that would suggest that this is a reasonable number?
 For non-web teams:
o Get prototype demo working
o build demand creation budget and forecast.
o What is your customer acquisition cost?
o Did anything change about Value Proposition or Customers/Users?
o What is your customer lifetime value? Channel incentives – does your product or
proposition extend or replace existing revenue for the channel?
o What is the “cost” of your channel, and it’s efficiency vs. your selling price.
 Everyone: Update your blog and canvas.
o What kind of initial feedback did you receive from your users?
o What are the entry barriers?

Class 6: RevenueModels
 Slide 3 - n: What did you learn about how to Get/Keep and Grow customers?
Class Lecture: Revenue Model
What’s a revenue model? What types of revenue streams are there? How does it differ on the web
versus other channels? How does this differ in a multi-sided market?
Read:
 Startup Owners Manual pages 257-270 and 429 – 459
 Business Model Generation pages 212-225
 What’s the revenue model strategy?
 What are the pricing tactics?
 Draw the diagram of payment flows
 What are the metrics that matter for your business model?
 Test pricing in front of 100 customers on the web, 10-15 customers non-web.

Class 7: Partners
 Slide 3 - n: What did you learn about your Revenue Model?
Class Lecture: Partners
Who are partners? Strategic alliances, competition, joint ventures, buyer supplier, licensees.
Read:
 Business Model Generation pages 200-211
 Startup Owners Manual pages 406-412
What partners will you need?
 Why do you need them and what are risks?
 Why will they partner with you?
 What’s the cost of the partnership?
 Talk to actual partners.
 What are the benefits for an exclusive partnership?
 Did anything change about Value Proposition or Customers/Users, Channel, Demand
Creation?
 What are the incentives and impediments for the partners?

Class 8: Key Resources & Costs
 Slide 3 - n: What did you learn about Partners?
Class Lecture: Resources and Cost Structure
What resources do you need to build this business? How many people? What kind? Any
hardware or software you need to buy? Any IP you need to license? How much money do you
need to raise? When? Why? Importance of cash flows? When do you get paid vs. when do you
pay others?
Read: Startup Owners Manual pages 169-175
What’s your expense model?
 Assemble a resources assumptions spreadsheet:
o people, hardware, software, prototypes, financing, etc.
o When will you need these resources?
 Where is your cash flow break-even point?
 What are the key financials metrics for costs in your business model?
 Costs vs. ramp vs. product iteration?
 Roll up all the costs from partners, resources and activities in a spreadsheet by time.
 Prepare for the final presentations
o 10 –minute Team Lessons Learned Presentation
o 1-2 minute “lessons learned” video
o 5 minute product video

Lessons Learned Presentations
1-2 minute Videos & Lessons Learned Presentations
Deliverable: Each team will present a 10 minute “Lessons Learned” presentation about their
business in front of the teaching team and potential investors.
I-Corps “Lessons Learned” Presentation Format
First Play your video
Slide 1 Team Name, your product, what business you ended up in and number of customers
you talked to.
Slide 2 Team members – name, background, expertise and your role for the team
Slide 3 key NSF funded technology and/or innovation
Slide 4 the size of the opportunity
Slide 5 Business Model Canvas Version 1 (use the Osterwalder Canvas).
So here’s what we did (explain how you got out of the building, experiments you can)
Slide 6 So here’s what we found (what was reality) so then, …
We iterated or pivoted… explain why and what you found.
Slide 8 So here’s what we did (explain how you got out of the building)
Slide 9 So here’s what we found (what was reality) so then,
We iterated or pivoted… explain why and what you found.
Etc…. Every presentation requires at least three Business Model Canvas slides.
Etc…. Every presentation requires a channel diagram, distribution diagram and customer
archetype or customer flow diagram.
Etc…. Every presentation requires hypotheses you tested, experiments you ran and results.
Side n – “So here’s where we ended up.” Talk about:
1. what did you learn
2. whether you think this a viable business,
3. whether you want to purse it after the class, etc.
Final Slides – Click through each one of your business model canvas slides.

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