When The Boardroom is Bits

Steve Blank

www.steveblank.com

Twitter: sgblank

This Talk

• 10 Things We Learned in the Last Year

………………………

• Experienced Advice Matters

• Solving the Early Stage-Experience Gap

• The Boardroom is Bits

First

10 Things We Learned in the Last Year

Business Schools turned 300 years of business experience into an MBA

#1

Business Schools turned 300 years of business experience into an MBA

MBA = Masters of Business Administration

#1

Tech Entrepreneurship + Venture Capital is ~50 Years Old

Startups are Smaller Versions of Large Companies

#2

Tech Entrepreneurship + Venture Capital is ~ 50 Years Old

Startups are Smaller Versions of Large Companies

#2

Tech Entrepreneurship + Venture Capital is ~ 50 Years Old

Startups are Smaller Versions of Large Companies

#2

×oops

Companies execute business models

Startups search for business models

#3

Companies execute business models

Startups search for business models

#3

Companies execute business models

Startups search for business models

#3

✓

A startup is a temporary organization designed to search

for a scalable and repeatable business model

#4

Startups need their own tools, different from those used

in existing companies

#5

Startups need their own tools, different from those used

in existing companies

#5

Customer Development = process to search

Business Model Canvas is the Scorecard

Agile Engineering is How We Build Startups

#6

Customer Development =process to search

Business Model Canvas =the Scorecard

Agile Engineering is How We Build Startups

#7

• Research Labs

• Equipment Manufacturers

• Distribution Network

• Service Providers

• Technology Design

• Marketing

• Demo and customer feedback

• Cost Reduction

• Remove labor force pains

• Eliminate bio-waste hazards

• IP – Patents

• Video Classifier Files

• Robust Technology

• Farming conventions.

• Demo, demo, and demo!!

• Proximity is paramount

• Organic Farmers

• Weeding Service Providers

• Conventional Farmers

• Dealers• Direct

Service• Indirect

Service• … then

Dealers

• Asset Sale• Direct Service with

equipment rental• … then Asset Sale

Value-Driven

Customer Development is the process used to search

Business Model Canvas is the Scorecard

Agile Development is How We Build Startups

#8

Startups that pivot 1 or 2 times:

• raise 2.5x more money

• have 3.6x better user growth

• 52% less likely to scale prematurely

than startups that pivot more than 2 times or not at all

#9

Startup Genome Report

Startups that pivot 1 or 2 times:• raise 2.5x more money• have 3.6x better user growth • 52% less likely to scale prematurely than startups that pivot more than 2 times or not at all

Startups that have:

• helpful mentors

• listen to customers,

• learn from startup thought leaders

Raise 7x more money and have 3.5x better user growth

#9

Startup Genome Report

#10

We’ve cracked the code in teaching entrepreneurship

#10

We’ve cracked the code in teaching entrepreneurship

http://steveblank.com/category/lean-launchpad/

1. Startups ≠ MBA toolset

2. Startup Toolseta) Customer Development

b) Business Model Canvas

c) Agile Development

3. We have real data that this works

4. A Better Way to Teach Entrepreneurship

What Have We Learned in the Last Year?

What’s Next?

Hypothesis:

Experienced Advice Matters

Hypothesis:

Experienced Advice Matters

You 1 board at a time

VC’s 6 - 12 boards at a time

You 1 board at a time

VC’s 6 - 12 boards at a timeX

Avg 4 years per board

You 1 board at a time

VC’s 6 - 12 boards at a timeX

Avg 4 years per boardX

2 VC’s per board

You 1 board at a time

VC’s 6 - 12 boards at a timeX

Avg 4 years per boardX

2 VC’s per board=

~50-100x Pattern Recognition

You 1 board at a time

You 1

VC’s 50 - 100

You 1

VC’s 50 - 100

You 1

(Discount for 7 Deadly Sins)

50 - 100 ≥ 1

50 - 100 ≥ 1

The Early Stage-Experience Gap

Solving the Early Stage-Experience Gap

Venture Funded companies have boards

Angel Funded companies often do not

Experienced Advice is sparse outside of technology clusters

Venture Funded companies have boards

Early Stage companies often do not

Experienced Advice is sparse outside of technology clusters

Venture Funded companies have boards

Angel Funded companies often do not

Experienced Advice is sparse outside of technology clusters

Why Have a Board Meeting?Investor

• Fiduciary Responsibility– Company has asymmetric information– Board has legal responsibility to their Limited Partners

• Maximize Investment Potential– Board has asymmetric knowledge 50-100x experience – Good board asks hard questions

Why Have a Board Meeting?Founder

• Board Guidance– 50-100x more experience = Pattern recognition– Multiple opinions across VC’s

• Board Network – Customers, Partners, Recruiting, Financing

• Obligation– It came with the check

Board Meetings Are Heavyweight Processes

Antithesis of Lean

Board Meetings Are Heavyweight Processes

Antithesis of Lean

Board Meetings Haven’t Evolved

We Act Like It’s the 19th Century

• Why do we need to get together in one room?

• Why do we need to wait a month to see progress?

• Why don’t we have standards for what you want?

• Why haven’t we adopted the tools we build/sell?

How to Run a Board Meeting

• Logistics– Send out board materials 2 days before, have board dinner– Approve minutes, stock grants

• Business Highlights/Lowlights– summary of key events since last meeting

• Financials versus Budget– waterfall charts

• Management asks the board to help– strategy, markets, key hires, introductions.

• Executive session– Meet without management to discuss performance

How to Run a Board Meeting

• Logistics– Approve minutes, stock grants

• Business Highlights/Lowlights– summary of key events since last meeting

• Financials versus Budget– waterfall charts

• Management asks the board to help– strategy, markets, key hires, introductions.

• Executive session– Meet without management to discuss performance

• Misc– Send out board materials 2 days before, have board dinner

Why?

What’s Wrong With a Board Meeting?

• Time between meetings (every 4-6 weeks)– Strategy-to-tactic-to implementation lag– Often no follow-up on the outcomes

• Diffuse board member attention (sits on 6-12 boards)

• Punctuated Exec Staff Performance– “The Get Ready for the Board Meeting” drill– It’s often a performance rather than a snapshot

• No standards for what each side does– What is the entrepreneur supposed to be doing?– What are the board members supposed to be contributing?

What’s Wrong With a Board Meeting?

• Time between meetings (every 4-6 weeks)– Strategy-to-tactic-to implementation lag

• Diffuse board member attention (sits on 6-12 boards

• Punctuated Exec Staff Performance– “The Get Ready for the Board Meeting” drill– It’s often a performance rather than a snapshot

• No standards for what each side does– What is the entrepreneur supposed to be doing?– What are the board members supposed to be contributing?

Why?

Solution:Make The Boardroom Bits

We Can Do This Via the Net

We Can Do This Via the Net

24/7

We Can Do This Via the Net

Connecting Advisors to/from Anywhere

Focus on What’s Important

• It’s about the search for the business model– Not income statement, cash flow, balance sheet

• Advice/Guidance about metrics around the search– What are the Business model hypotheses?– What are the most important hypotheses to test now?– Progress of validating each hypotheses– What are the iterations and Pivots – and why?

Continuous Information Access

• Founders / mgmt team invest 1 hour a week• Structured blog• Unstructured data• Formal business model canvas• Real-time advisor/board feedback

We Made Students Blog Their Progress

How?

• 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

Business Canvas Change Progress

1

Business Canvas Change Progress

2

Business Canvas Change Progress

3

Business Canvas Change Progress

4

Business Canvas Change Progress

5

Business Canvas Change Progress

6

Business Canvas Change Progress

7

Demo

Ben Mappen

Lean LaunchLab

Product Demo

CANVAS diagram is interactive and “stateful”

CANVAS diagram is interactive and “stateful”

Enter your hypotheses here

CANVAS diagram is interactive and “stateful”

Test your hypotheses andrecord learnings in blog format

CANVAS diagram is interactive and “stateful”

Test your hypotheses andrecord learnings in blog format

InterviewsSurveysVideosPhotosetc

CANVAS diagram is interactive and “stateful”

Test your hypotheses andrecord learnings in blog format

Invite your advisors and investors to your project

CANVAS diagram is interactive and “stateful”

Test your hypotheses andrecord learnings in blog format

Invite your advisors and investors to your project

They can view progressby flipping thru your CANVAS diagrams

CANVAS diagram is interactive and “stateful”

Test your hypotheses andrecord learnings in blog format

Invite your advisors and investors to your project

They can view progressby flipping thru your CANVAS diagrams

They can post feedback and leave comments inline

CANVAS diagram is interactive and “stateful”

Test your hypotheses andrecord learnings in blog format

Invite your advisors and investors to your project

They can view progressby flipping thru your CANAVAS diagrams

They can post feedback and leave comments inline

Get email alert when newfeedback comes in

CANVAS diagram is interactive and “stateful”

Test your hypotheses andrecord learnings in blog format

Invite your advisors and investors to your project

They can view progressby flipping thru your CANAVAS diagrams

They can post feedback and leave comments inline

Get email alert when newfeedback comes in

The LeanBoard

Meeting

Sign up for private beta (FREE)http://www.leanlaunchlab.com

@leanlaunchlab

Ben Mappenbenmappen@gmail.com

What Does this Change?For Angel-Funded Startups

• Angel funded startups can now get experienced advice– No longer requires board commitment for involvement

– Encourages investors who need visibility

– Ends repetition at each investor coffee

• Turns adhoc startups into strategy-driven startups– Invites investor participation in the process

– Professionalize the “throw it against the wall and see if it sticks”

• Highly time-efficient for investor and founders

• Eliminates Geography as a barrier to investment!

What Does this Change?For VC’s and Angels

• For the first time a structure for “search”

• Real-time monitoring of startup progress

• Zero-lag for coaching and course-correction

• Immediate follow-up on board meeting outcomes

• Allows a single VC to multiply their reach and/or depth

• Eliminates Geography as a barrier to investment!

Show Me the Money

It’s about time!

Email me jdf@mdv.com

Great Experiment

Email me ann@floodgate.com

This Solves A

Real Problem

This Solves A

Real Problem

I thought it was such a good idea I Just funded the Lean LaunchLab

Email me:shawn@menloventures.com

Lets experiment

with the idea

Email me:Kathryn@gouldinvestments.com

Now at Gould Investments

Wouldn’t miss trying

this!

Email me:eric@ingroup.com

Thanks