Starting a new business is not the same as running an operating business. As Steve Blank puts it "a startup is an idea looking for a business model". Over the last decade a number of management practices have emerged that recognizes the particular challenges facing new ventures. In particular, Blank's Customer Development Model and the related "Lean" movement are increasingly popular with entrepreneurs of all sorts. This lecture introduces and define the key concepts of the new entrepreneurial management practices and illustrate how startups can utilize them at any step of their process.

2. Entrepreneurial
Management
Entrepreneurship
101
October
24
2012
Jon
E
Worren

3. About
you
Idea?
Product?
Business?

4. Established
pracBces
not
working
Share
of
Voice
Share
of
Mind
Share
of
Market

5. The
Emergence
of
New
PracBces
2001
1911
Agile
2005
ScienBfic
Develo Customer
Mgmt
pment
Development
1948
2003
2009
Toyota
Lean
Lean
ProducBon
Thinking
Startup
System
Mvmt

6. Entrepreneurial
Management
A
set
of
principles
and
frameworks
that
helps
startups
iden5fy
a
sustainable
business
model
with
the
least
amount
of
waste
possible

7. ApplicaBon
Startup
Phase
Entrepreneurial
ExecuBon
Management
Business
Model?
TradiBonal
Search
Management
Growth
Phase

8. Entrepreneurial
Management
PRINCIPLES

9. ScienBfic
Management
• Time
&
Work
Studies
(measurement)

10. Toyota
ProducBon
System
• Muda
–
EliminaBon
of
waste
• Hansei
-­‐
learning
• Kaizen
–
conBnuous
improvement
• Jidoka
–
self-­‐learning

11. Agile
Development
• Customer
CollaboraBon
• IteraBon
(short
Bme
frames)

12. Lean
Thinking
• GeneralizaBon
of
TPS
• Increased
focus
on
“Value”

13. Customer
Development
• New
1:
De-­‐risking
a
new
venture
by
breaking
up
the
commercializaBon
process
and
prioriBze
business
problems
to
solve
• New
2:
Focus
on
Customer
AcquisiBon
Customer
Customer
Customer
Company
Discovery
ValidaBon
CreaBon
Building

14. Lean
Startup
• Lean
Startup
=
Customer
Development
Build
+
Agile
development
• Strong
build+
measure
Learn
Test
focus
• Popularized
approach
–
created
Lean
Measure
Movement

15. Entrepreneurial
Management
PROCESS

16. Process
AssumpBons
Test
problem
Evaluate
AssumpBons
Measure

17. Step
0-­‐
Describe
Idea
§ What kind of problem do you solve for the
customer? Is this an important problem for these
customers? "
"
§ Is there a big potential market for your idea? "
"
§ What is your competition and how do they solve
this problem for their customers today? "
"
§ What is unique about your way of solving the
problem?"

18. Step
1
–
Review
AssumpBons
• Is
the
customer
problem
you
are
solving
validated
by
a
measurable
fact?
• Are
you
able
to
idenBfy
which
customers
are
suffering
the
most
from
this
problem?
• Do
you
understand
how
the
problem
impacts
the
customer
and
their
business?
• Do
you
have
evidence
that
links
the
customer
problem
to
the
target
customer?

19. Step
2
–Test
• What
key
piece
of
informaBon
would
validate
or
invalidate
the
assumpBon?
• Where
does
that
informaBon
reside?
• What
is
the
best
way
to
gather
that
informaBon?

20. Step
3
&
4
–
Measure
&
Evaluate
• Is
the
customer
problem
urgent?
• Is
the
problem
pervasive?
• Will
customers
pay
to
have
the
problem
solved?
How
do
these
answers
measure
against
your
iniBal
assumpBons?

21. 3
outcomes
Validate:
Confirmed
value
of
MVP
Iterate:
Change
your
Evaluate
product
features
Exit:
Don’t
spend
any
more
money!

22. The
Pivot
Easier
when….
Harder
when…….
• You
have
invested
liile
• High
noise
to
signal
to
this
point
raBo
(
no
clear
• You
are
gejng
feedback)
absolutely
no
tracBon
• Next
step
is
unclear
Entrepreneurs
are
eternal
opBmists
–
choose
to
persist:
-­‐ Tweak
a
liile:
Our
next
version
will
take
off!
-­‐ Easy:
Our
next
campaign/trade
show
will
land
key
customers!

23. The
quest
for
a
Business
Model
THE
3
STAGES
OF
THE
PROCESS

24. The
3
stages
of
the
search
process
Customer
Problem
Product
SoluBon
Business
Model

25. Business
Model
Canvas
Day Month Year
No.
Who are our Key Partners? What Key Activities do our Value Propositions require? What value do we deliver to the customer? What type of relationship does each of our Customer For whom are we creating value?
Who are our key suppliers? Our Distribution Channels? Which one of our customer’s problems are we helping to solve? Segments expect us to establish and maintain with them? Who are our most important customers?
Which Key Resources are we acquiring from partners? Customer Relationships? What bundles of products and services are we offering to each Customer Segment? Which ones have we established?
Which Key Activities do partners perform? Revenue streams? Which customer needs are we satisfying? How are they integrated with the rest of our business model?
How costly are they?
What Key Resources do our Value Propositions require? Through which Channels do our Customer Segments
Our Distribution Channels? Customer Relationships? want to be reached?
Revenue Streams? How are we reaching them now?
How are our Channels integrated?
Which ones work best?
Which ones are most cost-efficient?
How are we integrating them with customer routines?
What are the most important costs inherent in our business model? For what value are our customers really willing to pay?
Which Key Resources are most expensive? For what do they currently pay?
Which Key Activities are most expensive? How are they currently paying?
How would they prefer to pay?
How much does each Revenue Stream contribute to overall revenues?
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26. Value
ProposiBon
• What
you
offer
and
how
you
offer
it
to
customers
• What
type
of
value
or
benefit
is
associated
with
your
offering
(e.g.,
cost
savings,
Bme
savings,
revenue
increase,
customer/employee
saBsfacBon)
and
how
much
of
it
the
customer
can
expect
• How
the
value
is
generated
• Why
it
differs
from
anything
else
on
the
market

27. Examples
Winners
Google
Winners is a department Google is the world s
store that offers fashion largest search engine
conscious consumers that allows internet
the latest brand names users to find relevant
for up to 60 per cent off.
information quickly and
easily

28. Final
two
slides
CONCLUSION
&
SUMMARY

29. Summary
• Startups
are
different
• Test
for
customer
• Search
is
about
learning
problem
first
• Lean
is
about
• Test
soluBon/MVP
minimizing
waste
• Test
customer
• CDM:
De-­‐risk
your
acquisiBon
venture
by
breaking
up
• Human
element:
Give
the
process
someone
the
task
to
keep
you
accountable!

30. Conclusion
• Entrepreneurial
Management
offers
a
set
of
tools
and
processes
that
makes
the
process
of
starBng
up
more
manageable:
• The
philosophy
brings
clarity
to
the
skillset
required
to
succeed:
– Less
persistence
–
more
percepBon
– Stack
the
odds
in
your
favour
–
rather
than
trying
to
win
against
all
odds
– Commit
to
the
process
–
not
the
idea

31. Thank
You!
www.marsdd.com/entrepreneurs-­‐toolkit