CSUF Startup Incubator - Lean Startup PowerPoint by Phillip Stinis
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- Most startups fail within the first few years, with failure rates between 60-90% depending on the sector. However, successful entrepreneurs often do not understand why their businesses succeeded. - The traditional business model of developing a product and then raising money and selling it leads to many pitfalls like escalating commitment to failing ideas and focusing on features rather than customers. - A better approach is to continually test ideas with customers through experiments and iterate based on feedback to understand customer needs before developing the full product or service. This process-based model focuses on execution over searching for the right idea.
![Interview Guide: Grand tour question #1
Would you please tell me what your typical [eating
habits] are like between mealtimes on a typical work
day?
Floating prompts picking up on what they said
Planned prompts zoning in on key issues of interest](https://image.slidesharecdn.com/csufstartupincubator-leanstartuppowerpointbyphillipstinis-181024215026/85/CSUF-Startup-Incubator-Lean-Startup-PowerPoint-by-Phillip-Stinis-22-320.jpg)
CSUF Startup Incubator - Lean Startup PowerPoint by Phillip Stinis
- 5. Most startups will fail 60-70% of new businesses fail within 4 years 60-70% venture funded startups will fail In some sectors up to 90% of startups fail Are we doing something wrong?
- 6. “Most successful entrepreneurs I’ve met have no idea about the reasons for their success. My success was a mystery to me then, and only a little less so now.” Bob Metcalfe, Inventor of Ethernet
- 7. Eric Ries: Achieving Grandiose Failure Eric Ries: Learns His Lesson http://ecorner.stanford.edu/authorMaterialInfo.html?mid=2290 http://ecorner.stanford.edu/authorMaterialInfo.html?mid=2291
- 8. Design experiments and test to validate your hypotheses
- 9. Entrepreneur as Hero Process Myth Money Myth
- 10. For entrepreneurs who have risked their time, reputation, and cash…. Passion can quickly become dogmatism Determination can become commitment to a failing course of action and Vision can lead one down a dead-end road “
- 11. How to build a business 1.0 Reinforced in most universities by the business plan class Entrepreneur has a idea Discuss with / raise money from friends, family and fools Find a location, develop the product Perfect the product and add features for broad appeal Sell the product
- 12. Identify product opportunity Create product specs Build alpha product Test product, build beta product Sell product to customers The Product Development Model Same thing, just on creating a product without consulting the customer first!
- 13. Product Development Model Based on Execution Not Search Entrepreneur has a idea Discuss with / raise money from friends, family and fools Find a location, develop the product Perfect the product and add features for broad appeal Sell the product “Escalation of Commitment” Stage “American Idol” Stage “Midnight Genius” Stage “Feature Lock- in” Stage Russian Roulette “Sales Pipeline Problem” Stage
- 14. Entrepreneur has a idea Test pain and then the solution with customers Develop market strategy and business model with customers Perfect the product with customers Sales Customers
- 15. Entrepreneurs act on assumptions When money arrives, it feels like a validation of those assumptions Should really focus on finding out customer wants Money is too easy to spend Increases distractions and reduces flexibility Need to remain nimble and flexible, don’t let burn rate get too high Premature scaling Increases communication friction and politics
- 16. Entrepreneur as Hero Falling in love with their product and ignoring negative feedback Process Myth Standard entrepreneurial process is almost an exact copy of the product development process Money Myth Increased burn rate and need to stay creative, only constraint is time!
- 18. To create a product/service that addresses the customer’s pain, it helps to understand that pain The long interview is a strategy to help you learn some things you don’t know you don’t know while also overcoming some common pitfalls of interviews: Not first asking about the customer’s needs Biasing the responses by letting your enthusiasm show through Asking leading questions or questions that can be answered by a simple yes or no
- 19. 1. A brief introduction and some biographical questions to put the customer at ease 2. A few (2 or 3) “grand tour” (broad, open-ended) questions to encourage the respondent to tell you Everything that is relevant to them about the occasions in which they might use your product/service Everything that comes to their mind when thinking about your product/service
- 20. 3. ‘Floating’ prompts to get the respondent to say more about something they’ve just mentioned Raising your eyebrows; repeating key words, asking “What do you mean, “_____________?” 4. Planned prompts Lists of what you think you know and don’t know, preceded by the phrase “What about _______?” or “What if ____________?”
- 21. Interview Guide: Introduction (What is the correct spelling of your name?) Where do you live? Do you sometimes eat between meals? Sex Age Others (work or student?, income, size of company, etc.)
- 22. Interview Guide: Grand tour question #1 Would you please tell me what your typical [eating habits] are like between mealtimes on a typical work day? Floating prompts picking up on what they said Planned prompts zoning in on key issues of interest
- 23. Interview Guide: Grand tour question #2 Explain the concept of drinkable yogurt (or e.g., Global Fast Pac) , then ask: What’s your reaction? Floating prompts Planned prompts
- 24. To get the maximum benefit, conduct 20 plus interviews (per team) split by markets Respondents should be strangers and from diverse backgrounds Face-to-face interviews are preferred over phone interviews During the interviews focus on listening (be agreeable and friendly, not aggressive) Open-ended questions!!! The data collection must be “disciplined”: everyone on team asks the same basic questions