Lecture 1 intro bus model cust dev 120411

The Lean LaunchPad

Lecture 1: Business Models and Customer Development

Steve Blank

Jon Feiber

Ann Miura-Ko

John Burke

Jerry Engel

Jim Hornthal

Oren Jacob

This Session

• The teaching team• Course objective(s)• Teaching team philosophy• Our expectations of you

Teaching Team

Steve Blank, Jon Feiber, John Burke

8 startups in Silicon Valley• Semiconductors• Supercomputers• Consumer electronics• Video games• Enterprise software• Military intelligence

sblank@stanford.edu@sgblank

www.steveblank.com

• Yale BS EE• McKinsey and Co.• Charles River Ventures• Stanford Ph.D MS&E• TA: E145, Mayfield Fellows,

MS&E 273• V.C. @ Floodgate

ann@floodgate.com@annimaniac

• BS CS/Astro Physics U of Colorado

• VP Networking SUN• V.C. @ MDV since 1991

8 startups - 32 years in Silicon Valley• Semiconductors• Supercomputers• Consumer electronics• Video games• Enterprise software• Military intelligence

Teach: Stanford, Berkeley, Columbia

Details at www.steveblank.com

• Yale BS EE• McKinsey and Co.• Charles River Ventures• Stanford Ph.D MS&E• V.C. @ Floodgate

ann@floodgate.com@annimaniac

• BS CS/Astro Physics U of Colorado• 50th employee, VP Networking @ Sun• V.C. @ MDV since 1991

jdf@mdv.com

• BS Mech Engineering U.C. Berkeley,

• BA Economics U.C. Santa Cruz, • MBA Harvard Business School• Founder BMI Software• VC at ABS Ventures• Co-founder True Ventures

jburke@trueventures.com@andemca

• BS CS/Astro Physics U of Colorado

• 50th employee, VP Networking @ Su

• V.C. @ MDV since 1991

• jdf@mdv.com

Alexander Osterwalder, Tina Seelig

• Ph.D. in Management Information Systems (MIS) University of Lausanne

• Founder, Business Model Foundry• Author Business Model Generation• Co-founder, The Constellation for AIDS

competence (NGO)

Ph.D. Neuroscience Stanford Med School • Mgmt consultant Booz, Allen, Hamilton• Multimedia producer at Compaq Computer • Founder multimedia company BookBrowser.• Exec Director Stanford Technology

Ventures Program (STVP), EpiCenter• tseelig@stanford.edu

• @tseelig

Oren Jacob, Jim Hornthal

• CEO, stealth startup• EIR, August Capita• lCTO, Pixar• Director, Studio Tools, Pixar• Technical Director, Finding Nemo

• CMEA Capital• Triporati

Oren Jacob, Jim Hornthal

•CTO Pixar

• CMEA Capital• Chairman Triporati

Teaching Assistant

• TA’s role: Class/lecture questions, Grading and attendance

Bhavik Joshi

• Better Place (13th employee, first non-Israeli, non-Jewish, non ex-SAP, Asian employee)• Berkeley/Columbia MBA class of 2008/09• Co-founder: Berkeley Stanford Cleantech Conference Series (since 2007)• 2000 – 2007 Enterprise Software • 1998 – 2000 Tata Motors India

joshibhavik@gmail.comhttp://about.me/bhavikjoshi

Alexander Osterwalder, Tina Seelig

• Ph.D. Neuroscience Stanford Med School • Mgmt consultant Booz, Allen, Hamilton• Multimedia producer at Compaq Computer • Founder multimedia company BookBrowser.• Exec Director Stanford Technology Ventures

Program (STVP), EpiCenter tseelig@stanford.edu

@tseelig

Stephanie Glass

Course Assistant (CA’s)

• MS MS&E 2010

• CA’s role: Class/lecture questions, Grading and attendance

Thomas Haymore

• B.A. in Political Science• Stanford Law (‘06)• J.D. Stanford Law (‘12)

thomas.haymore@gmail.com

Stephanie Glass

Course Assistant (CA’s)

• MS MS&E 2012

• CA’s role: Class/lecture questions, Grading and attendance

Thomas Haymore

B.A. in Political Science• Stanford Law (‘06)• J.D. Stanford Law (‘12)

thomas.haymore@gmail.com srglass@stanford.edu

Mentors

• Mentors are people with real-world experience• Mentors role is to:

– Help you “Get you out of the building”– Share contacts– Offer “Real-world” entrepreneurial advice– Critical feedback

• You arrange your schedule for the mentors, not the other way around

Course Objective: Idea to a Business

• What does it take to go from idea to a business?– Business Model + Customer Development– Hypotheses testing of the business model(s) – Get “out of the building”

Course Objective: Simulate A Startup?

• Create the pressures, uncertainty, and challenges of a real startup– Our expectations are unreasonable, they require

extraordinary effort– We expect failures, iterations and Pivots– Class is a “lab” - books/lectures are tools, not answers– Fail fast, learn quick, push you outside your comfort zone

Teaching team philosophy

• This class is taught using the “Startup Culture”– We’re tough, direct, fair - you need to be the same– Startup culture has no hierarchy - in this class you are an

entrepreneur - not a PI, lab mgr or center director– We’re your biggest supporters – we want you to succeed

• Question us, challenge us, push us as hard as we push you

• We don’t pretend to be domain experts, we know you are smarter than we are

Getting Out of The Building

• This class is not about our lectures• The class is not about your attendance• The class is about the work you do outside the

building• It’s the difference between a vision and a

hallucination

Our Expectations of You

• This is a full-contact, immersive class– All of you will be full participants – here and remotely– You will spend lots of time outside of your university– You all will do all the work assigned (and it is a lot

more than you probably realize)– No “dine and dash”

• If you think you are not learning, or you all cannot commit the time, see your NSF program manager

Team Deliverables

• Each Week– Lessons Learned presentation 5 minutes– Updated Lean LaunchLab blog– Hours of “outside the building” learning

• December Presentation– 20 minute Lessons Learned Summary

What Will you Learn?

• Opportunity evaluation• Search for a Business Model• Customer Discovery and Validation• Operating and decision making in chaos with

insufficient data• Ruthless pursuit of an objective by a team

The Course ‘By the Numbers’

• 4 Instructors, 1 TA, 15+ Mentors, • 8 Lectures• 8 10-minute presentations per class• 1 Final 20 minute presentation• 2 Textbooks

10-15 hours of work a week outside the classroom

This Class is Hard

• You can’t pass by attending the lectures• Your grade is determined by the work you do

outside the class• There’s a lot of it• You are dependent on group success –

communication is critical• You don’t need to be friends you need to be

partners

Class Logistics

Course Reading

• Business Model Generation• Four Steps to the Epiphany

• www.steveblank.com

Class Schedule

Eight (3 hour) Class Sessions: • 1: Sept 1st - Introduction, Business Models, Customer Development• 2: Sept 2nd – Value Proposition/Customer Segment• 3: Sept 22nd – Channels• 4: Sept 23rd - Demand Creation (Customer Relationships)• 5: Oct 13th – Revenue Model• 6: Oct 14th – Key Resources and Activities• 7: Nov 11th - Cost Structure • 8: Nov 12th – Fund Raising

9 & 10: Dec 1st / 2nd – Lessons Learned Presentations

• team size is 4 people• You chose the roles (hint: no org chart)• Present Weekly and for Final

– Weekly lessons learned– Final is demo and summary

• Class is about discovery and fast iteration

Team Projects

• Any for-profit scalable startup• If you are a domain expert, that’s your best bet

(but not required)• If you pick a web project, you have to build it

(and there needs to be some novelty)

Team Deliverables - Presentation

• Each Week– Lessons Learned presentation 10 minutes– Updated business model canvas– Update blog/wiki– 10’s of hours of “outside the building” progress

• Final Presentation– 20 minute Lessons Learned Summary

Team Deliverables - Blog

• Each Week– Business model canvas updates– Interviews– Photos/Videos– A/B tests– Strategy

Grading

Individual - 15%• Participation in class 15%

Team - 85%• 40% out-of-the-building

progress as measured by blog write-ups each week.

• 20% weekly team “lesson learned” summaries

• 25% team final report

Grade is on how much you learn

Grading

Individual - 15%• Participation in class 15%

Team - 80%• 40% out-of-the-building

progress as measured by blog write-ups each week.

• 20% weekly team “lesson learned” summaries

• 25% team final report

You’re graded on how much learn, not how much you sell

Office Hours

• With your team• Before and after class• Look at availability here• Get on the calendar

Intellectual Property - Suggestions

• Make sure your project is OK with your company– disclose to team what IP rights your company has to inventions

• You own what IP you brought to class with you – No team member has claim to anything you brought

• Your team jointly owns any IP developed for the class– If any of you decide to start a company based on the class, you

own only what was developed and completed in the class– You have no claim for work done before or after the class quarter– If a subset of the team decides to start a company they do NOT

“owe” anything to other team members for work done in and during the class

– All team members are free to start the same company, without permission of the others

• You are agreeing to this unless the team decides in writing to do something different

Class Disclosure/NDA’s

• Successful startups are not about the original idea – It’s about learning, discovery and execution– You will not be presenting your IP/technical details

• You get to see how previous teams solved problems by looking at their slides, notes and blogs

Therefore:

• Your slides, notes and blogs will be public• This is an open class. No non-disclosures

What’s A Company?

A business organization which sells a product or service in exchange for revenue

and profit

How Are Companies Organized?

Companies are organized around Business Models

What’s a Business Model?

A business model describes all the parts of the company necessary to make money

What About My Technology?

Your technology is one of the many critical pieces necessary to build a company.

It is part of the “Value Proposition”

What About My Technology?

Customers don’t care about your technology

They are trying to solve a problem

What’s A Startup?

A startup is a temporary organization designed to search for a repeatable

and scalable business model

How to Build A Startup

Business Model

Size Opportunity

Customer Development

IdeaBusiness Model(s)

Size of the Opportunity

Customer Discovery

Customer Validation

IdeaSize of the Opportunity

Business Model(s)

Customer Discovery

Customer Validation

Theory Practice

Business Model(s)

Customer Discovery

Customer Validation

• Web startups get the product in front of customers earlier

Business Model(s)

Customer Discovery

Customer Validation

Business Model(s)

buzzgroup

?A business model describes all the parts of the company necessary to make money

?what are those parts? what parts is a business model composed of?

Business Model Canvas

to describe, challenge, design, and invent business models more systematically

building blocks 9

CUSTOMER SEGMENTS

images by JAM

VALUE PROPOSITIONS

images by JAM

CHANNELS

images by JAM

CUSTOMER RELATIONSHIPS

images by JAM

REVENUE STREAMS

images by JAM

KEY RESOURCES

images by JAM

KEY ACTIVITIES

images by JAM

KEY PARTNERS

images by JAM

COST STRUCTURE

images by JAM

customer segments

key partners

cost structure

revenue streams

channels

customer relationships

key activities

key resources

value proposition

images by JAM

customer segments

key partners

cost structure

revenue streams

channels

customer relationships

key activities

key resources

value proposition

images by JAM

CANVAS OVERLAY

images by JAM

CHANNELS

CUSTOMERSEGMENTS

REVENUE STREAMSCOST STRUCTURE

KEYACTIVITIES

KEYPARTNERS

KEYRESOURCES

images by JAM

CANVAS OVERLAYOFFER

CHANNELS

CUSTOMERSEGMENTS

REVENUE STREAMSCOST STRUCTURE

KEYACTIVITIES

KEYPARTNERS

KEYRESOURCES

building block

building blockbuilding

building block

illustration

?why should some of the smartest scientists in the world waste their time thinking about a business model for coffee?

!not just because most scientists drink a lot of coffee. we can learn a lot from innovative business models across industries

how much did the cost of home coffee consumption change for Swiss households over the last couple of years?

600% to 800% more

Nespresso changed the

business (model) for

espresso

RESULTS

one of the fastest-growing businesses in the Nestlé group

average growth of 30% p.a. since 2000

over 3 billion CHF annual revenue with 1 product line(3.2 bio USD)

buzz group

?Discuss and describe how you would design a business model around Nespresso’s invention

Nespresso machines

retail mailorder

Nespresso

callcenter

Nespresso stores

households

business

1 x machinesales

repetitive pod sales

distribution

channels

coffeeproduction facilites

production

B2C distributi

onbrand

marketing

brandpatents

machine

manufactur

production

distributi

onbrand

marketing

Nespresso club

brandbrand

Nespresso pods

but Nespresso almost failed in 1987 due to a nonperforming business model

Nespresso system

offices

joint venture with

manufacturer

machine

manufactur

?what is the most powerful about using a shared language, such as the Business Model Canvas?

buzz group

possible alternatives

radiation-freedetection of breast cancer

hospitals

proprietary IPmedical device manufacturers

But,Realize They’re Hypotheses

9 Guesses

Guess Guess

GuessGuess

How Does This Really Work?

Stanford Lean LaunchPad Class

8 Weeks From an Idea to a Business

MammOpticsFinal project presentation for E 245 Winter 2011

MammOpticsInitial Idea

Breast cancer

Leading cause of cancer in women190,000 diagnosis every year US41,000 deaths every year USIncreasing diagnosis rates

Mammography

15%-25% false negatives rate25% false positives rateRequires X-ray radiationLow resolution

Novel technology based on RF-modulated optical spectroscopy

MammOptics

- Earlier detection- Non-radiative- Non-invasive

MammOpticsTechnology Comparison

RiskInvasiveness

Resolution

False Pos.

False Neg.

Device Cost

Time Require

MammOptics

Mammography

High High .6 cm 25% 30% 20-50k 20 min.

MRI Medium Medium .1 cm 70% 5% 1000k 45 min.

Ultra-Sound Very Low Very Low >.6 cm >30% >40% 5-15k 20 min.

I.I.T.Y.I.W.H.T.K.Y

MammOpticsBusiness Model Canvas 1 of 4

Radiation-freeEarlier detectionNon-invasive

Pioneering radiologists inhospitals

Direct sales to hospitals

Strong clinical dataTrainingMaintenance

Product DevelopmentClinical trialsOperating Costs Capital equipment

sales and disposable item

Product DevelopmentIPClinical trialsFDA

IP Leading doctorsTechnical Expertise

HospitalsLeading doctors3rd party manufacturersDistributors

Radiation-freeEarlier detectionNon-invasive

Pioneering radiologists inhospitals

Direct sales to hospitals

Product DevelopmentClinical trialsOperating Costs Capital equipment

sales and disposable item

al guess

Test:Customer segment

Value proposition

Finding the right customerFrom radiologists to gynecologists

MammOpticsExcursions into hospitals

Leading doctors

Patients

Hospital Managers

Technicians

Debra Ikeda Jason Davies

Jafi Alissa LipsonSunita Pal

6 women >40 8 women <40

Alicia X-ray mammography

Paul BillingsHolly V. Gautier

MammOpticsHospital purchasing decision tree

Hospitals

Complex purchasing decision

tree. Several saboteours

MammOpticsPrivate practice purchasing decision tree

Private practice

Faster adoption rate

Attractive value proposition✔

Pioneering DoctorsHospitalsOB/GYNsPCPs

Direct Sales to doctors

Product DevelopmentClinical trialsOperating Costs

Capital Equipment Sales and disposable item

Hospitals (Capital Spending Committee)Leading doctors3rd party manufacturersDistributorsResearch Hospitals

Doctors:Earlier detectionPriceAccuracy

Patients:Radiation FreeNon-Invasive

Direct Sales to doctors

How do we get to our customer?

Need sensitivity and specificity

Getting to our customerThe world of direct sales and medical marketing

MammOpticsInterviews

Breast Cancer Advocacy Groups

OB/GYNs

FDA/Clinical Trials

Medical Sales

Be Bright PinkJennifer Glover

Dr. Cindy WooDr. Jags Powers

Dr. Aaron Shuvkan

Katrina BellTanay Dudhela

Jed Hwang

Phyllis WhitelyCarl Simpson

MammOpticsMarketing

Access to ACOG by former member

Strong influence on doctors via ACOG Standard of Care

Strongly influenced by

MammOpticsMarketing

Researchers conducting

important clinical trials

Researchers with numerous

publications

Outsourced survey research

Researchers with strong peer

recommendations

MammOpticsMarketing

Focus on prominent journals Need two big

publications

Choose KOL as Principal Investigators (PI)

MammOpticsMarketing

Effective method for educating doctors

Doctors required to attend workshops

Workshop must be approved by ACOG

Taught by objective medical experts

MammOpticsMarketing

ACOG Annual Clinical Meeting

Miami Breast Cancer Conference

Opportunity for feedback from

doctors

MammOpticsMarketing

Trusted information source for patients

Critical opinion leader for technology adoption

Access to media outlets

MammOpticsMarketing

IndividualDoctors

Purchasing Administrato

High value medical products

(e.g. cardiovascular stents)

Commodity medical products

(e.g. latex gloves)

• Doctor education• Direct feedback from doctors• Very expensive

• No doctor education• No customer feedback• Inexpensive

Direct Sales

Distributors

MammOpticsChannel Strategies and Costs

Individual Doctors

Purchasing Administrato

Channel Strategies and CostsMammOptics

5 dedicated sales people$150,000 each/year

Hire nurses or technicianswith establishedrelationships

Early adopter feedback

Continue with core group of sales people

Use women’s healthcare equipment distributor

Already established network of customers

Sales strategy 1 Sales strategy 2

MammOpticsPricing Strategy

Equipment Lease model

Per-use model

Consumable

Cost of the device

Service per year

Per-use fee

Consumable

$50,000

$3,000

$5,000

$10,000

$5,000

$25,000

MammOpticsPricing Strategy

Equipment Lease model

Per-use model

Consumable

Cost of the device

Service per year

Per-use fee

Consumable

$50,000

$3,000

$5,000

$10,000

$5,000

$25,000

Approved by

customers and

investors

ACOGACS

Doctor specialty

committee

Hospital Administrati

Technician

RadiologistMammography

MammOpticsCustomer Workflow

Current market Insurance

ACOGACS

Doctor specialty

committee

Technician

Current market

But what would happen if we replace mammography?

Insurance

ACOGACS

Doctor specialty

committee

Technician

Radiologist

Mammography

Breast Radiologists

Technicians Hospitals

Loss of jobs

Loss of jobs Eliminates loss leaderPuts emphasis on

biopsies

Insurance

ACOGACS

Doctor specialty

committee

Technician

Radiologist

Mammography

Insurance

ACOGACS

Doctor specialty

committee

Technician

Radiologist

Mammography

InsuranceSame cost as mammography

($140)Reduced number of biopsies

($1000)

ACOG/ACSImproved healthcare(mammography weak

technique)

Insurance

ACOGACS

Doctor specialty

committee

Technician

Insurance

Radiologist

Mammography

Insurance

Doctor specialty

committee

Technician

ACOGACS

MammOptics

Patient

PCPOB/GYN

Insurance

Doctor specialty

committee

Technician

Radiologist

Mammography

ACOGACS

MammOptics

Patient

PCPOB/GYN

Technician

Radiologist

Mammography

MammOptics

Patient

PCPOB/GYN

PCP OB/GYNsIncreased revenue

More complete patient care

PatientImproved healthcare

Comfort

MammOpticsRevenue

ACOGACS

Doctor specialty

committee

Technician

Insurance

Radiologist

Mammography

MammOptics

Patient

PCPOB/GYN

OB/GYNsPCPs

Direct Sales to hospitalsDistributor

Strong clinical dataTrainingMaintenanceConferencesCME courses

Product DevelopmentClinical trialsOperating CostsMarketing Costs

Capital Equipment Sales and disposable itemPer use fees

Product DevelopmentIPClinical trialsFDAPublishing

Leading doctorsKey Opinion Leaders3rd party manufacturersDistributorsBreast Cancer FoundationsACOGACS

OB/GYNsPCPs

Product DevelopmentIPClinical trialsFDAReimbursementPublishing

Learned how to reach the customer

How do we build a company based on this?

Building the companyThe backstage of a medical device company

MammOpticsInterviews

FDA Clinical Trials

Manufacturing

Venture Capitalists

Reimbursement

Stanford Statistics Steve AxelrodMarga Ortigas-

Wedekind

Nick MourlasDon

Archambault

Shannon BergstedtAli Habib

Dana MeadBill Starling

Doctors/Sales

Dr. Aron Shuftan

Jed HwangMichael J. Nohr

Manufacturing

MammOpticsPartners

Choose manufacturing facility close to

Manufacturing Reimbursement

MammOpticsPartners

Difficult to get coverage for new product.

Manufacturing

MammOpticsPartners

Reimbursement PartnersMammOptics

Insurances

CPT Codes$75-$150

MammOpticsPartners

Manufacturing

FDA Clinical Trials

Reimbursement

510K vs. PMALargest cost

Biggest financial risk

Clinical Trials

12/4/2009

Stage 1Pilot trials

50 patients$600K

MammOptics

6 months

FeasibilityComparison

with mammograph

Clinical Trials

12/4/2009

MammOptics

6 months 15 months

Stage 1Pilot trials

Stage 2Interim trials

500 patients$7.2M

Prove superior safety-

efficacy & sensitivity

Clinical Trials

12/4/2009

MammOptics

6 months 15 months

Stage 1Pilot trials

24 months

Stage 3FDA

pivotal trials1500

patients$20.5M

FDA class II, 510(K) w/ trials

Focus on superiority &

economic end-points

Clinical Trials

12/4/2009

MammOptics

6 months 15 months

Stage 1Pilot trials

Stage 3FDA

pivotal trials

Stage 4Post-

market studies2000 patients$26.8M

Specific Cat III CPT/ACP CodesMarket traction

24 months24 months

Clinical Trials

12/4/2009

MammOptics

6 months 15 months

Stage 1Pilot trials

Stage 3FDA

pivotal trials$600K

$20.5M

$26.8M

Stage 4Post-

market studies

24 months 24 months

MammOpticsPartners

Manufacturing

FDA Clinical Trials

Reimbursement

Financial timeline

Funding

Series A $3.5 MM

stones

Initialize

stones

Q1 Q2 Q3 Q4

2013Q1 Q2 Q3 Q4

2014Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4

2015 2016

Series B $9 MM

System

2017Q1 Q2Q1 Q2 Q3 Q4

2018Q3

Launch

Series C $30.5 MM

Regulatory / Clinical

Series D $35

M&A / IPO $50 MM

163 12/4/2009

Proof of Concep

Pilot Studie

IC and Processing Patents

Marketable Product

Provisional Patent

Beta-Versio

n Testin

Application and

System Patents

IRB / IDE

Clinical Results

Second Release

Initial Product Launch

Specific Codes (Cat. I CPT / APC)

Non-Specific Codes

1st Release

2nd Release Test

Publication

Post-Market Clinical Studies

Beta Prototype

US Interim Trials

FDA – Class II – 510 (k) with Clinical Trials

Publication

Financial / Operations Timeline

Cat III

US Pivotal Clinical Trials

Laboratory

Prototype

Technology

Licensing

MammOpticsMammOptics

Financial timeline

stones

Initialize

stones

Q1 Q2 Q3 Q4

2013Q1 Q2 Q3 Q4

2014Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4

2015 2016 2017Q1 Q2Q1 Q2 Q3 Q4

2018Q3

164 12/4/2009

Proof of Concep

Provisional Patent

Technology

Licensing

Series A $3.5 MM

stones

Initialize

stones

Q1 Q2 Q3 Q4

2013Q1 Q2 Q3 Q4

2014Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4

2015 2016

System

2017Q1 Q2Q1 Q2 Q3 Q4

2018Q3

165 12/4/2009

Proof of Concep

Provisional Patent

Beta-Versio

n Testin

Laboratory

Prototype

Beta Prototype

Technology

Licensing

Pilot Studie

Series A $3.5 MM

stones

Q1 Q2 Q3 Q4

2013Q1 Q2 Q3 Q4

2014Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4

2015 2016

Series B $9 MM

System

2017Q1 Q2Q1 Q2 Q3 Q4

2018Q3

166 12/4/2009

Marketable Product

Beta-Versio

n Testin

Application and

System Patents

IRB / IDE

Beta Prototype

Pilot Studie

Laboratory

Prototype

stones

Q1 Q2 Q3 Q4

2013Q1 Q2 Q3 Q4

2014Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4

2015 2016

Series B $9 MM

System

2017Q1 Q2Q1 Q2 Q3 Q4

2018Q3

Series C $30.5 MM

Application and

System Patents

IRB / IDE

Cat III

Second Release

1st Release

US Interim Trials US Pivotal Clinical Trials

Publication

Pilot Studie

stones

Q1 Q2 Q3 Q4

2013Q1 Q2 Q3 Q4

2014Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4

2015 2016 2017Q1 Q2Q1 Q2 Q3 Q4

2018Q3

Launch

Series C $30.5 MM

Series D $35

168 12/4/2009

Clinical Results

Second Release

Non-Specific Codes

2nd Release Test

Publication

US Interim Trials

Publication

stones

Q1 Q2 Q3 Q4

2013Q1 Q2 Q3 Q4

2014Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4

2015 2016 2017Q1 Q2Q1 Q2 Q3 Q4

2018Q3

Launch

Series D $35

M&A / IPO $50 MM

12/4/2009

Clinical Results

Non-Specific Codes

Publication

Financial / Operations TimelineMammOpticsMammOptics

Series A $3.5 MM

stones

Initialize

stones

Q1 Q2 Q3 Q4

2013Q1 Q2 Q3 Q4

2014Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4

2015 2016

Series B $9 MM

System

2017Q1 Q2Q1 Q2 Q3 Q4

2018Q3

Launch

Series C $30.5 MM

Series D $35

M&A / IPO $50 MM

170 12/4/2009

Proof of Concep

Pilot Studie

Marketable Product

Provisional Patent

Beta-Versio

n Testin

Application and

System Patents

IRB / IDE

Clinical Results

Second Release

Non-Specific Codes

1st Release

2nd Release Test

Publication

Beta Prototype

US Interim Trials

Publication

Cat III

Laboratory

Prototype

Technology

Licensing

Radiation-freeEarlier detectionNon invasive

Pioneering DoctorsHospitals

Direct Sales to hospitals

MammOpticsBusiness Model Canvas 1

Radiation-freeEarlier detectionNon invasive

HospitalsLeading doctors3rd party manufacturersDistributorsResearch Hospitals

Hospitals (Capital Spending Committee)Leading doctors3rd party manufacturersDistributorsResearch HospitalsBreast Cancer Foundations

Doctors:Earlier detectionPriceAccuracyImmediate Results

OB/GYNsPCPs

Product DevelopmentIPClinical trialsFDAReimbursementPublishing

OB/GYNsPCPs

Product DevelopmentIPClinical trialsFDAReimbursement Publishing

KOLs3rd party manufacturersDistributorsBreast Cancer FoundationsACOGACS

OB/GYNsPCPs

Per use fees

KOLs3rd party manufacturersDistributorsBreast Cancer FoundationsACOGACSClinical trial designer

OB/GYNsPCPs

Per use fees

KOLs3rd party manufacturers(local)Breast Cancer FoundationsACOGACSClinical trial designer

OB/GYNsPCPs

Per use fees

KOLs3rd party manufacturers(local)Breast Cancer FoundationsACOGACSClinical trial designer

Customer Development

Get Out of the Building and Search for the Business Model

The founders

The Customer Development Process

Customer Discovery

Customer Validation

Customer Creation

Company Building

The Minimum Viable Product (MVP)

• Smallest feature set that gets you the most …

- orders, learning, feedback, failure…

Customer Discovery

Customer Validation

Customer Creation

Company Building

A Pivot is the change of one or more Business Model Canvas Components

The Pivot

• The heart of Customer Development

• Iteration without crisis

• Fast, agile and opportunistic

Customer Discovery

Customer Validation

Customer Creation

Company Building

Pivot Cycle Time Matters

• Speed of cycle minimizes cash needs

• Minimum feature set speeds up cycle time

• Near instantaneous customer feedback drives feature set

Customer Discovery

Customer Validation

Customer Creation

Company Building

186Source: http://giffconstable.com/

The Customer Development ProcessCustomer Discovery

Customer Discovery

Customer Validation

Customer Creation

Company Building

Bus Model Canvas

Extract Hypotheses

Test Problem

Test Solution

Pivot or Proceed

The Customer Development ProcessCustomer Validation

Customer Discovery

Customer Validation

Customer Creation

Company Building

Get Ready to Sell

Sell, Sell, Sell

PositioningPivot or Proceed

Blog Your Progress

• Customer Development– The Process

• Narrative– Interviews– Surveys– Videos– Prototypes

• Business Model Canvas– Scorekeeping

• Real-time Feedback• Physical Reality Checks

– Skype– Face-to-face

We Made Students Blog Their Progress

It Changed Everything

Interview

Photos Videos

Surveys

Interview& Photos

Competitive Analysis

Key Findings

A/B Test Results

Key Question

Strategy

Business Model Canvas as the Scorecard

Market Type

Four Types of Markets

Type of MarketChanges Everything

• Market– Market Size– Cost of Entry– Launch Type– Competitive

Barriers– Positioning

• Sales– Sales Model– Margins– Sales Cycle– Chasm Width

Clone Market

Existing Market Resegmented Market

New Market

• Finance• Ongoing Capital• Time to Profitability

• Customers• Needs• Adoption

Definitions: Four Types of Markets

• 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

Clone Market

Existing Market Resegmented Market

New Market

Size of Opportunity

Market/Opportunity Analysis

How Big is It?: Market/Opportunity Analysis– Identify a Customer and Market Need– Size the Market– Competitors– Growth Potential

How Big is the Pie?Total Available Market

Total Available Market

• How many people would want/need

the product?

• How large is the market be (in $’s) if they all bought?

• How many units would that be?

How Do I Find Out?

• Industry Analysts – Gartner, Forrester

• Wall Street Analysts – Goldman, Morgan

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

• How large would the market be (in $’s) if they all bought?

How Do I Find Out?• Talk to potential customers

Served Available

Market

TotalAvailableMarket

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?

How Do I Find Out?• Talk to potential customers

• Identify and talk to channel partners

• Identify and talk to competitors

TotalAvailableMarket Target

Market

ServedAvailableMarket

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

Team Deliverable by Tomorrow

1. Hypotheses for each part of business model2. 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

Sweet Sensors

Yu Xiang and Yi Lu, Nature Chem. 3, 697-703 (2011).

Glucose Monitor:

• Widely available• Cheap• Quantitative

information• $10 billion market

However, it can detect only one target: glucoseand at very high concentrations

We have developed a novel technology to use any glucose monitor without modifications to detect a wide range of non-glucose targets at very low concentrations(such as diseases (e.g., TB), heavy metal ions (e.g., Pb, Hg), organic toxins, bacteria, viruses and cancers)

Examples

Market size

- 300 million patients worldwide

- Required HbA1C testing every 60-90 days

- Available in-home HbA1C tests today are $100/10 tests

- Assuming $1 per test, TAM = $1.2 billion

- 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

Total available market = $1.2 billion

Serviceable Available Market = $600 million

Target market = $120 million

Market Size

• Growing market– Aging population– Living Style & Diets– Chronic disease

• Driving factors– Healthcare costs– Reimbursement– Healthcare labor shortage

Total Available market 170M (US & EU5)

Target market 3.5M (Resistant Hypertension)$500M

Diabetics

Sweet SensorsYi Lu, Tian LanNeil KaneChris Sorensen

Clinicians (in rural area)

Triage nurses

Pre-diabetics

Product supports

Patient network/community

Retailers (Walgreen)

Online vendors (Amazon)

Direct sales

Disposable test kit (used repeatedly on a regular basis)

At home

Convenient

Less exposure to infectious diseases in the hospital

Cheaper

More frequent

Better indicator of health (diabetic management)

Conferences

Product R&D

Marketing

Personnel

Glucose monitor manufacturers

Kit manufacturers

Reagent suppliers

Reagents

Manufacture

Licensing

FDA certification?

Diabetics

Sweet SensorsYi Lu, Tian LanNeil KaneChris Sorensen

Action Plan

Clinicians (in rural area)

Triage nurses

Pre-diabetics

Product supports

Patient network/community

Retailers (Walgreen)

Online vendors (Amazon)

Direct sales

Disposable test kit (used repeatedly on a regular basis)

At home

Convenient

Less exposure to infectious diseases in the hospital

Cheaper

More frequent

Better indicator of health (diabetic management)

Conferences

Product R&D

Marketing

Personnel

Glucose monitor manufacturers

Kit manufacturers

Reagent suppliers

Reagents

Manufacture

Licensing

FDA certification?

General methodology for adding fluorine to

lead compounds of interest

The Business Model Canvas

Accessibility (RCY)PuritySpeedPET/SPECTMultiplatformSensitivity (nca)Specific compounds

IPPoP dataRegulatory planUnderstanding of the regulatory process

Contract cGMP precursor manufactureSalary, RentsClinical trials

SOPs for precursors and drugsRecruit clinical sitesIn vivo animal studiesDevelop regulatory plan for pre IND meetingID cGMP CROFund-raising

cGMP manufacturerRadiopharmaciesNuclear Medicine and Radiology departments

Technical Assistance (Image Atlas)FDA regulatory support

Radiopharmacies

Equipment producers

Prescribing physicians

Radiologist who perform studies

Sales of intermediates

Technology license

Product license (royalty)

Direct sales of precursor

R&D and clinical studies presented in journals and meetings

Drug developers

Pharmaceutical development companies

IPPoP data

Radiologists

Technical assistance

General methodology for adding fluorine to

lead compounds of interest

The Business Model Canvas

Accessibility (RCY)PuritySpeedPET/SPECTMultiplatformSensitivity (nca)Specific compounds

IPPoP dataRegulatory planUnderstanding of the regulatory process

Contract cGMP precursor manufactureSalary, RentsClinical trials

SOPs for precursors and drugsRecruit clinical sitesIn vivo animal studiesDevelop regulatory plan for pre IND meetingID cGMP CROFund-raising

cGMP manufacturerRadiopharmaciesNuclear Medicine and Radiology departments

Technical Assistance (Image Atlas)FDA regulatory support

Radiopharmacies

Equipment producers

Prescribing physicians

Radiologist who perform studies

Sales of intermediates

Technology license

Product license (royalty)

Drug developers

Pharmaceutical development companies

IPPoP data

Radiologists

Technical assistance

Direct sales of precursor

R&D and clinical studies presented in journals and meetings

Sales of precursor through global finished pharmaceutical distributor

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

Backup

Customer Discovery

Bus Model Canvas

Extract Hypotheses

Test Problem

Test Solution

Pivot or Proceed

Customer Discovery - Physical

Bus Model Canvas

Extract Hypotheses

Test Problem

Test Solution

Pivot or Proceed

• TAM/SAM• Product MVP• Customers• Channel • Market Type• Customer Relationships: Get/Keep/Grow• Key Resources• Partners• Pricing

Customer Discovery - Web

Bus Model Canvas

Extract Hypotheses

Test Problem

Test Solution

Pivot or Proceed

• TAM/SAM• Low Fidelity MVP• Customers/Source• Channel • Market Type• Customer Relationships: Acquire/Activate• Traffic Partners• Pricing

Bus Model Canvas

Extract Hypotheses

Test Problem

Test Solution

Pivot or Proceed

• TAM/SAM• Low Fidelity MVP• Customers• Channel • Market Type• Cust Relationships• Traffic Partners• Pricing

• Customer Contacts• Problem Understanding• Customer Understanding• Market Knowledge

Bus Model Canvas

Extract Hypotheses

Test Problem

Test Solution

Pivot or Proceed

• Customer Engagement• Test Low Fidelity MVP• Customer Understanding• Traffic & Competitive Analysis

Bus Model Canvas

Extract Hypotheses

Test Problem

Test Solution

Pivot or Proceed

• Update Bus Model• Create Prototype/Prod Presentation• Test Solution with Customer• Update Business Model• 1st Advisory Board Members

Bus Model Canvas

Extract Hypotheses

Test Problem

Test Solution

Pivot or Proceed

• Update Bus Model• Test High Fidelity MVP• Measure Customer Behavior• Update Business Model• 1st Advisory Board Members

Customer Discovery – Web/Physical

Bus Model Canvas

Extract Hypotheses

Test Problem

Test Solution

Pivot or Proceed

Verify the:• Value Prop• Cust Segment• Cust Relationships• Channel• Revenue Model• Pivot or Proceed

Customer Validation - Web

Get Ready to Sell

Sell, Sell, Sell

Customer Validation - Physical

Get Ready to Sell

Sell, Sell, Sell

• Craft Positioning• Develop Sales Materials• Hire “Sales Closer”• Sales Channel Action Plan• Refine the Sales Roadmap• Formalize advisory board

Get Ready to Sell

Sell, Sell, Sell

• Craft Positioning• Acquire/Activate Plans and Tools• Build High Fidelity MVP• Build Metrics Toolset• Hire data analytics chief • Formalize advisory board

Customer Validation - Physical

Get Ready to Sell

Sell, Sell, Sell

• Craft Positioning

• Acquire/Activate Plans• Build High Fidelity MVP• Build Metrics Toolset• Hire data analytics chief • Formalize advisory board

• Find Earlyvangelists• Test Sell – Out of the Building• Refine Sales Roadmap• Test Sell Channel Partners

Get Ready to Sell

Sell, Sell, Sell

• Craft Positioning

• Acquire/Activate Plans• Build High Fidelity MVP• Build Metrics Toolset• Hire data analytics chief • Formalize advisory board

• Prepare Optimization Plans & Tools• Out of the building Activation Test• Measure and Optimize Results• Test Sell Traffic Partners

Customer Validation - Physical/Web

Get Ready to Sell

Sell, Sell, Sell

• Craft Positioning• Acquire/Activate Plans• Build High Fidelity MVP• Build Metrics Toolset• Hire data analytics chief • Formalize advisory board

• Prepare Optimization Plans• Out of the building Activation Test• Measure and Optimize Results• Test Sell Traffic Partners

• Company Positioning• Product Positioning• Validate Positioning

Customer Validation - Physical/Web

Get Ready to Sell

Sell, Sell, Sell

• Craft Positioning• Acquire/Activate Plans• Build High Fidelity MVP• Build Metrics Toolset• Hire data analytics chief • Formalize advisory board

• Prepare Optimization Plans• Out of the building Activation Test• Measure and Optimize Results• Test Sell Traffic Partners

• Assemble Data• Validate Business Model• Validate Financial Model• Pivot or Proceed

Lecture 1 intro bus model cust dev 120411

Education

Transcript of Lecture 1 intro bus model cust dev 120411

Cust… · Web vie

Cust Engage

TAXATION AND CUSTOMS UNION DG CUST/DEV – FC …

Cust Satisfaction TVS

Cust retent

NEXT SEA - Cust Dev and Value of Ideas - Week 1

Lecture 8 resources and financing 120411

Technical_Specification SF Cust

Gv Cust Manual

CUST Folder

Lecture 3 customer segments 120411

Advent 2B 120411

Cust Troubleshoot

jr - agrilife.orgagrilife.org/agecoext/files/2013/09/D113.pdf · FURADAN - 3G CUST AIR INSECT. NITROGEN CUST AIR FERT. NITROGEN CUST AIR FERT. PARATHION CUST AIR INSECT. Q u a n t

Cust svc queensy_em_tclass_oct2012

Lecture 1 NSF I-Corps March 2012 bus model cust dev

Bus model and cust dev jan 2013

Lecture 5 customer relationships 120411

Lecture 4 distribution channels 120411

cust satisfaction