12. What’s A Startup?
A startup is a temporary organization
designed to search for a repeatable
and scalable business model
13. How to Build A Startup
Idea
Business Model
Size Opportunity
Customer Development
14. How to Build A Startup
Business Size of the Customer Customer
Idea Model(s) Opportunity Discovery Validation
15. How to Build A Startup
Size of the
Business Size of the
Business Customer Customer
Idea Opportunity
Model(s) Opportunity
Model(s) Discovery Validation
Theory Practice
16. How to Build A Startup
Size of the
Business Size of the
Business Customer Customer
Idea Opportunity
Model(s) Opportunity
Model(s) Discovery Validation
• Web startups get the product in
front of customers earlier
17. How to Build A Startup
Size of the
Business Size of the
Business Customer Customer
Idea Opportunity
Model(s) Opportunity
Model(s) Discovery Validation
44. Business Model Canvas
building
block building
block building
block
building
building block
block building
block
building
block building
block
building building
block block
building building building building
block block block block
61. Nespresso
club
production
Nespresso
machines
Nespresso
pods
distribution
Nespresso
channels
.com
production
coffee
facilites
1x
B2C machine
distribution sales
61
147. The Customer Development Process
Customer Customer Customer Company
Discovery Validation Creation Building
Pivot
148. The Minimum Viable Product (MVP)
Customer Customer Customer Company
Discovery Validation Creation Building
Pivot
•Smallest feature set that gets you the most …
- orders, learning, feedback, failure…
149. A Pivot is the change of one or
more Business Model Canvas
Components
150. The Pivot
Customer Customer Customer Company
Discovery Validation Creation Building
Pivot
•The heart of Customer Development
•Iteration without crisis
•Fast, agile and opportunistic
151. Pivot Cycle Time Matters
Customer Customer Customer Company
Discovery Validation Creation Building
Pivot
•Speed of cycle minimizes cash needs
•Minimum feature set speeds up cycle time
• Near instantaneous customer feedback drives feature set
152. The Customer Development Process
Customer Discovery
Customer Customer Customer Company
Discovery Validation Creation Building
Bus Model Extract Pivot or
Test Problem Test Solution
Canvas Hypotheses Proceed
153. The Customer Development Process
Customer Validation
Customer Customer Customer Company
Discovery Validation Creation Building
Get Ready to Pivot or
Sell, Sell, Sell Positioning
Sell Proceed
168. Type of Market
Changes Everything
Clone Market Existing Market Resegmented New Market
Market
• Market • Sales • Customers
– Market Size – Sales Model • Needs
– Cost of Entry – Margins • Adoption
– Launch Type – Sales Cycle
– Competitive – Chasm Width
Barriers •Finance
• Ongoing Capital
– Positioning
• Time to Profitability
169. Definitions: Four Types of Markets
Clone Market Existing Market Resegmented New Market
Market
• Clone Market
– Copy of a U.S. business model
• Existing Market
– Faster/Better = High end
• Resegmented Market
– Niche = marketing/branding driven
– Cheaper = low end
• New Market
– Cheaper/good enough, creates a new class of product/customer
– Innovative/never existed before
171. Market/Opportunity Analysis
How Big is It?: Market/Opportunity Analysis
– Identify a Customer and Market Need
– Size the Market
– Competitors
– Growth Potential
172. How Big is the Pie?
Total Available Market
• How many people would want/need
the product?
• How large is the market be
(in $’s) if they all bought?
Total Available Market • How many units would that be?
How Do I Find Out?
• Industry Analysts – Gartner, Forrester
• Wall Street Analysts – Goldman, Morgan
173. How Big is My Slice?
Served Available Market
• How many people need/can use product?
• How many people have the money to
buy the product
Total • How large would the market be (in $’s)
Available Served if they all bought?
Market
Available • How many units would that be?
Market
How Do I Find Out?
• Talk to potential customers
174. How Much Can I Eat?
Target Market
• Who am I going to sell to in year 1, 2 & 3?
• How many customers is that?
• How large is the market be
(in $’s) if they all bought?
Total Served
• How many units would that be?
Available Available
Market Market
Target
Market How Do I Find Out?
• Talk to potential customers
• Identify and talk to channel partners
• Identify and talk to competitors
175. Market Size: Summary
• Market Size Questions:
– How big can this market be?
– How much of it can we get?
– Market growth rate
– Market structure (Mature or in flux?)
• Most important: Talk to Customers and Sales Channel
• Next important: Market size by competitive approximation
– Wall Street analyst reports are great
• And : Market research firms Like Forester, Gartner
176. Team Deliverable by Tomorrow
1. Hypotheses for each part of business model
2. Test for each of the hypotheses
What constitutes a pass/fail signal for the test (e.g. at
what point would you say your hypotheses
wasn’t even close to correct?
3. Plan to get out of the building to test the hypotheses
• Summarized in a 5 Minute PowerPoint Presentation
– Business Model Canvas
– Market Size
– Getting out of the building plan
Don’t Over Think Your Hypotheses
177. Sweet Sensors
Glucose Monitor: We have developed a
novel technology to use
• Widely available any glucose monitor
• Cheap without modifications to
• Quantitative detect a wide range of
information non-glucose targets at
• $10 billion market very low concentrations
(such as diseases (e.g.,
However, it can detect TB), heavy metal ions
only one target: glucose (e.g., Pb, Hg), organic
and at very high toxins, bacteria, viruses
concentrations and cancers)
Yu Xiang and Yi Lu, Nature Chem. 3, 697-703 (2011).
179. Market size
Total available
market = $1.2 billion - 300 million patients worldwide
- Required HbA1C testing every
60-90 days
Serviceable Available
Market = $600 million - Available in-home HbA1C tests today
are $100/10 tests
Target market - Assuming $1 per test, TAM = $1.2 billion
= $120 million
- Assuming 50% people have the access
to a HbA1c test, SAM = $600 million
- Assuming we can capture 20% of SAM
(high-end diabetics and early
adopters), Target market = $120 million
181. Business Model Canvas
Yi Lu, Tian Lan
Sweet Sensors Neil Kane
Chris Sorensen
Conferences
Product R&D Diabetics
At home Product supports
Glucose monitor QC Clinicians (in rural area)
Convenient Patient
manufacturers
Marketing network/community Triage nurses
Less exposure to
Kit manufacturers infectious diseases Pre-diabetics
in the hospital
Reagent suppliers
Cheaper
More frequent Retailers (Walgreen)
IP
Personnel Better indicator of Online vendors (Amazon)
health (diabetic
management) Direct sales
Reagents
Manufacture
Disposable test kit (used repeatedly
Licensing on a regular basis)
FDA certification?
182. Action Plan
Yi Lu, Tian Lan
Sweet Sensors Neil Kane
Chris Sorensen
Conferences
Product R&D Diabetics
At home Product supports
Glucose monitor QC Clinicians (in rural area)
Convenient Patient
manufacturers
Marketing network/community Triage nurses
Less exposure to
Kit manufacturers infectious diseases Pre-diabetics
in the hospital
Reagent suppliers
Cheaper
More frequent Retailers (Walgreen)
IP
Personnel Better indicator of Online vendors (Amazon)
health (diabetic
management) Direct sales
Reagents
Manufacture
Disposable test kit (used repeatedly
Licensing on a regular basis)
FDA certification?
183. The Business Model Canvas
Technical Assistance
cGMP manufacturer SOPs for precursors
(Image Atlas) Radiopharmacies
Radiopharmacies and drugs Accessibility (RCY) FDA regulatory support
Nuclear Medicine and Recruit clinical sites Purity Equipment producers
Radiology In vivo animal studies Speed
departments Develop regulatory PET/SPECT Prescribing physicians
plan for pre IND Multiplatform
meeting Technical assistance
Sensitivity (nca) Radiologist who
ID cGMP CRO Specific compounds
Pharmaceutical perform studies
Fund-raising
development
companies
General
IP methodology for
PoP data Direct sales of Drug developers
adding fluorine to
precursor
lead compounds of
IP interest
PoP data R&D and clinical
studies presented in Radiologists
Regulatory plan
Understanding of journals and meetings
the regulatory
process
Sales of intermediates
Contract cGMP precursor manufacture
Salary, Rents
Technology license
Clinical trials
Product license (royalty)
184. The Business Model Canvas
Technical Assistance
cGMP manufacturer SOPs for precursors
(Image Atlas) Radiopharmacies
Radiopharmacies and drugs
Accessibility (RCY) FDA regulatory support
Nuclear Medicine and Recruit clinical sites
Purity Equipment producers
Radiology In vivo animal studies
Develop regulatory Speed
departments PET/SPECT Prescribing physicians
plan for pre IND
meeting Multiplatform Technical assistance
Sensitivity (nca) Radiologist who
ID cGMP CRO
Pharmaceutical Specific compounds perform studies
Fund-raising
development
companies
General Direct sales of
IP methodology for precursor
PoP data adding fluorine to Drug developers
lead compounds of R&D and clinical
IP interest studies presented in
PoP data journals and meetings Radiologists
Regulatory plan
Understanding of Sales of precursor
the regulatory through global finished
process pharmaceutical
distributor
Sales of intermediates
Contract cGMP precursor manufacture
Salary, Rents
Technology license
Clinical trials
Product license (royalty)
185. Critical Success Factors
• Validation of the need
– By talking to diabetic patients, clinician and
nurses
• Validation of the customer segmentation
– By talking to glucose monitor and kit
manufactures
• Evidence of market accessibility
– By talking to glucose monitor and kit
distributors
188. Customer Discovery - Physical
Bus Model Extract Pivot or
Test Problem Test Solution
Canvas Hypotheses Proceed
• TAM/SAM
•Product MVP
• Customers
•Channel
•Market Type
• Customer Relationships: Get/Keep/Grow
• Key Resources
• Partners
• Pricing
189. Customer Discovery - Web
Bus Model Extract Pivot or
Test Problem Test Solution
Canvas Hypotheses Proceed
• TAM/SAM
•Low Fidelity MVP
• Customers/Source
• Channel
•Market Type
• Customer Relationships: Acquire/Activate
•Traffic Partners
• Pricing
190. Customer Discovery - Physical
Bus Model Extract Pivot or
Test Problem Test Solution
Canvas Hypotheses Proceed
•TAM/SAM
• Low Fidelity MVP
•Customer Contacts
• Customers •Problem Understanding
• Channel
•Market Type • Customer Understanding
•Cust Relationships
• Traffic Partners
•Market Knowledge
• Pricing
191. Customer Discovery - Web
Bus Model Extract Pivot or
Test Problem Test Solution
Canvas Hypotheses Proceed
•TAM/SAM
• Low Fidelity MVP
•Customer Engagement
• Customers •Test Low Fidelity MVP
• Channel
•Market Type • Customer Understanding
•Cust Relationships
• Traffic Partners
•Traffic & Competitive Analysis
• Pricing
192. Customer Discovery - Physical
Bus Model Extract Pivot or
Test Problem Test Solution
Canvas Hypotheses Proceed
• TAM/SAM
• Low Fidelity MVP
•Update Bus Model
• Customers •Create Prototype/Prod Presentation
• Channel
•Market Type •Test Solution with Customer
•Cust Relationships
• Traffic Partners
• Update Business Model
• Pricing • 1st Advisory Board Members
193. Customer Discovery - Web
Bus Model Extract Pivot or
Test Problem Test Solution
Canvas Hypotheses Proceed
• TAM/SAM • Customer Engagement
• Low Fidelity MVP • Test Low Fidelity MVP
• Update Bus Model
• Customers • Customer Understanding •Test High Fidelity MVP
• Channel • Traffic & Competitive Analysis
•Market Type • Measure Customer Behavior
•Cust Relationships
• Traffic Partners
• Update Business Model
• Pricing • 1st Advisory Board Members
194. Customer Discovery – Web/Physical
Bus Model Extract Pivot or
Test Problem Test Solution
Canvas Hypotheses Proceed
• TAM/SAM • Customer Engagement
• Low Fidelity MVP • Test Low Fidelity MVP
Verify the:
• Customers • Customer Understanding •Value Prop
• Channel • Traffic & Competitive Analysis
•Market Type •Cust Segment
•Cust Relationships
• Traffic Partners
•Cust Relationships
• Pricing • Channel
• Revenue Model
• Pivot or Proceed
195. Customer Validation - Web
Get Ready to Pivot or
Sell, Sell, Sell Positioning
Sell Proceed
Pivot
196. Customer Validation - Physical
Get Ready to Pivot or
Sell, Sell, Sell Positioning
Sell Proceed
•Craft Positioning
•Develop Sales Materials
•Hire “Sales Closer”
•Sales Channel Action Plan
• Refine the Sales Roadmap
• Formalize advisory board
197. Customer Validation - Web
Get Ready to Pivot or
Sell, Sell, Sell Positioning
Sell Proceed
•Craft Positioning
•Acquire/Activate Plans and Tools
• Build High Fidelity MVP
• Build Metrics Toolset
• Hire data analytics chief
• Formalize advisory board
198. Customer Validation - Physical
Get Ready to Pivot or
Sell, Sell, Sell Positioning
Sell Proceed
•Craft Positioning
•Acquire/Activate Plans
• Build High Fidelity MVP •Find Earlyvangelists
• Build Metrics Toolset
• Hire data analytics chief
• Test Sell – Out of the Building
• Formalize advisory board • Refine Sales Roadmap
• Test Sell Channel Partners
199. Customer Validation - Web
Get Ready to Pivot or
Sell, Sell, Sell Positioning
Sell Proceed
•Craft Positioning
•Acquire/Activate Plans •Prepare Optimization Plans & Tools
• Build High Fidelity MVP
• Build Metrics Toolset
• Out of the building Activation Test
• Hire data analytics chief • Measure and Optimize Results
• Formalize advisory board
• Test Sell Traffic Partners
200. Customer Validation - Physical/Web
Get Ready to Pivot or
Sell, Sell, Sell Positioning
Sell Proceed
•Craft Positioning
• Acquire/Activate Plans • Prepare Optimization Plans • Company Positioning
• Build High Fidelity MVP • Out of the building Activation Test
• Measure and Optimize Results
• Product Positioning
• Build Metrics Toolset
• Hire data analytics chief • Test Sell Traffic Partners • Validate Positioning
• Formalize advisory board
201. Customer Validation - Physical/Web
Get Ready to Pivot or
Sell, Sell, Sell Positioning
Sell Proceed
•Craft Positioning
• Acquire/Activate Plans • Prepare Optimization Plans • Assemble Data
• Build High Fidelity MVP • Out of the building Activation Test
• Measure and Optimize Results
• Validate Business Model
• Build Metrics Toolset
• Hire data analytics chief • Test Sell Traffic Partners • Validate Financial Model
• Formalize advisory board
• Pivot or Proceed