Class 1 / 12

January 26, 2015

Jen van der Meer | jd1159 at nyu dot edu

Josh Knowles | chasing at spaceship dot com

LEAN

AT NYU ITP

Rockets Sketches borrowed from Harry Allen Design

6:30 – 7:20

Course overview

7:20- 8:00

Quick concept descriptions business model canvas exercises

8:00 – 8:15

Break

8:15 – 9 ish

Guest Speaker: Tammy Kwan, Cognitive Toy Box

TODAY:

Jen van der Meer, Adjunct Professor at ITP since 2008 ITP courses + workshops: Bodies and Buildings, Products Tell Their

Stories, ITP VC Pitchfest, Reason Street, Angel Investor, Health Data

Challenges, Judge for startup competitions, + SVA PoD

Josh Knowles, ITP ’0715+ years as an independent developer/consultant, working with

numerous brands and start-up clients (currently under the aegis of

Frescher-Southern, Ltd.)

ITP TEACHING TEAM

@CHASING

@JENVANDERMEER

LEAN

OUR APPROACH

LEAN AT NYU ITP

We embrace a creative, iterative, and collaborative

approach to making things -- but launching a product out

into the world takes a somewhat different set of skills.

How do we make sure people want to use what they

make?

How do we create a business plan to support the idea?

Is the idea strong enough to turn into a job -- or a career?

LEAN AT NYU ITP

Experiential course in entrepreneurship

Informed by Steve Blank’s Lean Launchpad and the NYU

Summer Launchpad Accelerator,

We are applying the curriculum developed at Stanford and

Berkeley for the ITP culture and NYU community.

This course has been developed with support from the

NYU Entrepreneurship Initiative, and aims to mix the best

of the methods from the Lean Launchpad methodology with

the best of ITP's culture and practice.

BEST OF BOTH

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THE ONLY TEXTBOOK WE READ:

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12

.

ITERATIVE SEARCH FOR A BUSINESS MODEL

Students work in self-formed teams of 3-4 to develop their

business model and product/service over the course of the

semester.

The focus of the course is the work of:

Customer development, speaking directly to potential

customers to help define opportunities that the startup is

designed to solve. We’ll go deeper into design approaches

to understanding through empathy.

Agile development: utilizing UX methods and tools to

ground teams in an understanding of how to launch a

minimally viable product.

CLASS TIMEFRAME AND

EXPECTATIONS

.

CLASS TIMEFRAME AND CADENCE

Walk through the full canvas

Build to MVP, space for iteration

.

CLASS TIMEFRAME 2015

2/2

Business Models

Customer Development

2/9

Value Proposition

Research tools

2/16

President’s Day

2/23

Customer Segments

Research Tools

3/23

Spring Break

3/9

Customer Relationships

Product Development

3/23

Resources

Activities + Costs

3/30

Product Development

UX and User Interface

Design

4/6

UI UX Part 2

4/13

Product Development

User test

4/20

Product development

4/27

Product MVP

May!

Delicious Celebration

Lessons Learned

3/2

Revenue Streams

Distribution Channels

TEACHERS

MENTORS

AND ADVISORS

MENTOR ROLE

• Mentors play an active role in weekly coaching of a specific team of 3-4 students. The role of the

mentors is to help the teams test their business model hypotheses, and .

• Offer teams strategic guidance and wisdom:

Offer business model suggestions

Identify gaps in the team’s business knowledge and suggest areas of inquiry and

customer development that can help address those gap

Guide you through a pivot

• Provide teams with tactical guidance every week:

Review teams’ weekly presentation before they present in person or over

skype/hangout

Comment weekly on teams’ project blog

Respond to the teaching team’s critique of their team

Offer network help: “Why don’t you call x? Let me connect you” but their job is not to build your

network for you

Coach the teams to make 5 to 10 customer contacts/week

Check in with teaching team twice over the semester to discuss student progress

TEACHERS, MENTORS AND ADVISORS

• Why we are doing this? We all see this class as an opportunity to

help the startup ecosystem of NYU, and NYC

• Teachers are here to provide guidance and support and ensure

you can grasp the practice of customer development and agile

development, and get to an MVP

• Mentors have volunteered to coach a specific team – and provide

guidance with business model development, and prioritizing

features for the MVP

• Advisors have volunteered to be on hand to answer your

questions, provide specific expertise, and connect you to who you

need to know

• Some have experience in Lean, others are here to learn more

about lean and contribute

MENTORS + TEAMS

Team matchup for next week

John Krasnodebski, Shutterstock

John Bachir, Medstro

Sarah Krasley @sarahkrasley

Autodesk, Sustainability, Berkeley

WHAT TO EXPECT OF MENTORS

• Proactively set up office hours here or at their convenience

• Mentors are available to help you through the work of determining

your business model, working through the business model canvas

• Mentors will help connect you to people you need to meet during

customer development (but this responsibility is ultimately yours)

• Later on in the semester, as you continue customer development

but move forward to launch an MVP, mentors are there to coach

you through timing, priorities, and pacing

• They are coaches, but not minders – you have to do the work of

orchestrating to fit into their schedules

WHAT TO EXPECT OF ADVISORS

• Advisors are likely time constrained, but eager to help

• Advisors are available for counsel and advisory, and connections

• We’ll publish a contact list but lean on us to make the first intro

and set context, as each advisor has their unique perspective and

constraints for availability

• Advisors based in NYC will come to the Lessons Learned day at

the end of the semester

WHAT TO EXPECT OF TEACHERS

• We are here to help – reach out whenever you need it within

reason.

• Office hours Jen: 5-6 on Mondays, (but schedule) or schedule

time at my office in Meatpacking: jd1159 at nyu dot edu

• Josh office hours: 5-6 on Mondays

WHAT WE EXPECT FROM YOU

• Humility

• Ask for help

• Tell us who you need to meet with – someone here knows the

person you need to find

• Motivation to try your hand at entrepreneurship

• Look at the videos, they are short

• Get the book, it’s a nice book to have, and it has drawings

• At least 5 interview with customers, per week

• (Last year every team did way more than that)

• Flexibility and collaboration working on a buildable MVP

SHORT HISTORY OF A

MOVEMENT

.

WHAT IS A BUSINESS MODEL?

A business model describes the rationale of how an organization creates,

delivers, and captures value… for companies, customers, and society

Business model canvas : can become a shared language that allows you to

easily describe and manipulate models to create new strategic alternatives

Described through 9 basic building blocks that show the logic of how a

company intends to make money

Business Model Generation

Alexander Osterwalder

BUSINESS MODEL CANVAS

Who are

our key

partners?

What key

activities do our

value

propositions

require?

What key

resources do

our value

propositions

require?

Which one of

our customers

problems are

we helping to

solve?

What needs

are met?

What is the

product/service

?

How will we get

keep and grow

customers?

Through which

channels do

our customer

segments wish

to be reached?

For whom are

we solving a

problem /

needs met

Who are the

customers

Does the value

proposition

match the need

Single sided or

multimarket?

CONCEPT HERE

What are the most important costs in

our business model?

What is the revenue model? What are

our pricing tactics? For what value

are customers willing to pay?

THE SHIFT – FROM PUSH AND MARKET TO

CUSTOMER DEVELOPMENT

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The Four Steps to the Customer Epiphany by Steve Blank

The Customer Development

process changes the way

startups are built

Startups are not smaller

versions of large companies

A startup as a “temporary

organization designed to

search for a repeatable and

scalable business model”

• Co-founded 8 startups.

• 1996: E.piphany

• 1998: $3.4 MM sales

• 1999: IPO raised $72 MM

• Author of Four Steps to the Epiphany, Startup

Owner’s Manual

FIRST CAME STEVE

Continuous customer

interaction

A startup is an experiment

A hypothesis to be tested

Assume customer and

features are unknowns

Low burn by design

Are we on the path to a

sustainable business • Founded IMVU

• Parallels between Lean and Agile, caught fire in

the startup community for software businesses,

particularly mobile and SaaS models.

THEN CAME ERIC

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WHAT CAME BEFORE STEVE AND ERIC

Lean Manufacturing

Total Quality

Management

Kanban

Continuous

Improvement

Agile

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WHAT CAME BEFORE STEVE AND ERIC

The Kanban Method respects the human condition. People resist

change for emotional reasons. When change affects their self-image,

self-esteem, or position with a social group, people will resist and the

resistance will be emotional.

The Kanban Method adopts the Zen Buddhism concept that "water

goes around the rock." Hence, it focuses on changes that can be made

without invoking emotional resistance, while visualization and limiting

work-in-progress raise awareness of deeper issues allowing for an

emotional engagement that helps to overcome resistance.

Now take a deep, cleansing breath. Again.

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KANBAN

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AGILE AND LEAN INFLUENCES

DESIGN RESEARCH(Ethnography)

DESIGN THINKING(IDEO, Dschool)

We’ll work on integrating design thinking practices

Deeper UX methods

Ethnography, particularly participant observation

Customer interview techniques

To get us deeper into unmet needs, latent and hidden needs

Over the course of the semester

And contributing back to how Lean LaunchPad evolves

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LEAN IS NEW AS A MOVEMENT, AND IS EVOLVING

NEXT:

CANVAS WORKSHOP

GUEST SPEAKER:

TAMMY KWAN

COGNITIVE TOY BOX

FOR NEXT WEEK

.

STEP 1: CUSTOMER DISCOVERY

Customer discovery translates a founding team’s vision for the company into a

hypothesis about each component of the business model and creates a set of

experiments to test each hypothesis.

Customer discovery is not about collecting features lists from prospective

customers or running lots of focus groups.

The founders define the product vision and

then use customer discovery to find

customers and a market for that vision. -Steve Blank, The Startup Owner’s Manual

Total addressable

market

Total addressable: how big is the universe?

Served available market: how many can I reach with my sales channel?

Target market: who will be the most likely buyers?

Served available market

Target market

ESTIMATE YOUR TOTAL ADDRESSABLE MAKRET

.

NEXT WEEK PREP:

Alexandar Osterwalder on Business Model Canvas Video

Read: Business Model Generation pp. 14-49.

Video Lecture: Value Proposition

Talk to at least 5 potential customers. Post first discovery narratives on your

team blog.

.

NEXT WEEK PRESENTATION:

Prepare a presentation – guidelines below:

· Cover slide

· Latest version Business Model Canvas with changes marked

· Market size (TAM, SAM, Target Market)

Total addressable: how big is the universe

Served available market: how many can I reach with my sales channel?

Target market: who will be the most likely buyers?

· Propose experiments to test your value proposition. What constitutes a

pass/fail signal for each

test?