Deck I used several times for teaching an intro to startup methods, incl Business Model Generation, Customer Development, Lean Startups, and others.

1. Introduction to Startups │ Puja Abbassi │
Business Model Generation,
Customer Discovery, &
Lean Startup Principles
Introduction to Startups

2. Introduction to Startups │ Puja Abbassi │
Researcher & PhD Candidate - University of Cologne
▪Entrepreneurship & Venture Capital
▪Diversity
▪Cyber Security
▪Supply Chain (& Food) Security
Work in and advise startups since 2004
Organizer, Speaker, Startup Mentor
Puja Abbassi http://pujaabbassi.com @puja108
Who am I
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3. Introduction to Startups │ Puja Abbassi │
A business organization, which sells a
product or service in exchange for revenue
and profit.
A company is executing a proven business
model.
What is a Company?
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Quelle: Steve Blank – How to build a startup

4. Introduction to Startups │ Puja Abbassi │
Not the smaller version of a big company!
What is a Startup?
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Quelle: Steve Blank – How to build a startup

5. Introduction to Startups │ Puja Abbassi │
Not the smaller version of a big company!
A temporary organization designed to search
for a repeatable and scalable business
model. These companies, generally newly
created, are in a phase of development and
research for markets.
Repeat!
What is a Startup?
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Quelle: Steve Blank – How to build a startup

6. Introduction to Startups │ Puja Abbassi │
▪Search for business model vs. Executing business model
▪Not a smaller version of a large company
▪Business Model Generation vs. Business Plans & Forecasts
▪Customer Development vs. Product Development
▪Agile Build-Measure-Learn vs. Waterfall Model
▪Organizational structures and roles are different
Startups vs. Company
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7. Introduction to Startups │ Puja Abbassi │
Startups...
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Quelle: Yevgeniy Brikman - Startup DNA

8. Introduction to Startups │ Puja Abbassi │
▪Co-Founders fight
▪Cannot build initial spec
▪No one will fund the idea
▪Too few people buy or use the product or service
▪Premature scaling (scaling organization before
product/market or problem/solution fit is properly validated)
Why do Startups Fail?
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9. Introduction to Startups │ Puja Abbassi │
“Startups don’t fail because they lack a
product; they fail because they lack
customers and a profitable business model”
- Steve Blank
Why Startups Fail
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Quelle: Steve Blank – How to build a startup

10. Introduction to Startups │ Puja Abbassi │
“No business plan ever survives first contact
with a customer!”
- Steve Blank
Business Plans
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11. Introduction to Startups │ Puja Abbassi │
A business model describes the rationale of
how an organization creates, delivers and
captures value while delivering products or
services to customers.
What is a Business Model?
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Quelle: Business Model Generation - Alexander Osterwalder & Yves Pigneur

12. Introduction to Startups │ Puja Abbassi │
Business Models – Bottom Line
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Source: Timmers (1998), Magretta (2002)
PURPOSE
• Consequent, exact evaluation of a business idea
• Attention to all relevant elements and their interconnection
• Base for business plans and strategies
ANSWERS THE QUESTIONS
• Who is the customer?
• What does the customer value?
• How do we make money in this business?
• What is the underlying economic logic that explains how we can
deliver value to customers at an appropriate cost?
ORIENTATED AT A GENERIC VALUE CHAIN
Making
something
Selling
something

13. Introduction to Startups │ Puja Abbassi │
There are several frameworks that can be used
Business Model Frameworks
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Source: Dubosson-Torbay et al. (2001); Magretta (2002); Wirtz (2010); Business Model Foundry;
Decomposition into multiple parts is typical

14. Introduction to Startups │ Puja Abbassi │
Key
Activities
Key
Resources
Cost
Structure
Revenue
Flows
Distribution
Channels
Client
Segments
Partner
Network
Client
Relationships
Source: What is a business model? Alex Osterwalder , 5-10-2005, http://business-model-design.blogspot.com/2005/11/what-is-business-model.html
Value
Proposition
Business Model Canvas
A business model is nothing else than a representation of how an
organization makes (or intends to make) money. This can be nicely
described through the 9 building blocks illustrated in the graphic
below, which we call "business model canvas”.

15. Introduction to Startups │ Puja Abbassi │
„Business Model Generation“ - Alexander Osterwalder & Yves
Pigneur (first chapter for free)
• http://www.businessmodelgeneration.com/downloads/businessmo
delgeneration_preview.pdf
Online Course from Steve Blank on Udacity
• http://www.udacity.com/view#Course/ep245/
Recommended Book and Video Course
Business Model Canvas
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16. Introduction to Startups │ Puja Abbassi │
▪No business plans survive first contact with customers
▪Business plans are static faith-based monoliths
▪Business Model Generation is a dynamic and iterative process to
discover a fact-based repeatable and scalable business model
▪The BMC is a communication tool to help you think, talk and share about
your business model
Business Model Generation vs. Business
Plans
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17. Introduction to Startups │ Puja Abbassi │
Product/Market Fit
Being in a good market
with a product that can satisfy that market.
- Marc Andreessen
Startups are Looking for Product/Market Fit
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18. Introduction to Startups │ Puja Abbassi │
Customer Development
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Quelle: Steve Blank

19. Introduction to Startups │ Puja Abbassi │
Value Proposition + Customer Segment = Product/Market Fit
Value Proposition Canvas
Remember this one thing!
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Quelle: Business Model Generation

20. Introduction to Startups │ Puja Abbassi │
Market Size and Competition are missing!
Business Model Canvas
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Market Size Competition

21. Introduction to Startups │ Puja Abbassi │
Total Available Market (TAM)
▪Theoretical total market size or
customer mass with problem
Serviceable Available Market
(SAM)
▪Theoretical total market size or
customer mass that can use your
solution
Serviceable Obtainable Market
(SOM)
▪Your target market cap or customer
base for the next 2-3 years
Market Size
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22. Introduction to Startups │ Puja Abbassi │
▪There is no such thing as “I have no competitors”
▪Anything or anyone standing in between the money and you is a
competitor
Competition
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23. Introduction to Startups │ Puja Abbassi │
▪Customers want to "hire" a product to do a job
▪"People don't want to buy a quarter-inch drill. They want a
quarter-inch hole!“ - Theodore Levitt (HBS)
▪The job, not the customer, is the fundamental unit of
analysis
▪Framework for practice:
1. What are the high-level jobs-to-be-done?
2. What are the current approaches and what pain points
result?
3. What benchmarks exist in the full range of competing
offerings and analogies?
4. What performance criteria do customers use?
5. What prevents new solutions from being adopted?
6. What value would success create for customers?
Clayton M. Christensen
Jobs to be done
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Video: http://www.youtube.com/watch?v=KYVdf5xyD8I

24. Introduction to Startups │ Puja Abbassi │
Simon Sinek – The Golden Circle
Start with the Why
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Quelle: http://www.ted.com/talks/simon_sinek_how_great_leaders_inspire_action.html

25. Introduction to Startups │ Puja Abbassi │
Get-Keep-Grow
Customer Relationships
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26. Introduction to Startups │ Puja Abbassi │
Customer Lifecycle: 5 Steps to Success
Startup Metrics for Pirates: AARRR
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Quelle: http://slideshare.net/dmc500hats/startup-metrics-for-pirates-long-version
Acquisition: users come to the site from various channels
Activation: users enjoy 1st visit: "happy" user experience
Retention: users come back, visit site multiple times
Referral: users like product enough to refer others
Revenue: users conduct some monetization behavior
AARRR!

27. Introduction to Startups │ Puja Abbassi │
Draw the Diagram
Revenue Model
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Quelle: https://www.udacity.com/course/viewer#!/c-ep245/l-48730232/m-48624673

28. Introduction to Startups │ Puja Abbassi │
▪The discovery process of validating the product/market fit by conducting
customer interviews
▪Requires you to get out of the building and find the facts, because inside
there’s only faith and opinions
Customer Development
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29. Introduction to Startups │ Puja Abbassi │
1. Define your hypothesis: map out your guesses about your business
model using a Business Model Canvas as your communication and
tracking tool
2. Test the problem you think you are solving by getting out of the
building and talking to and listening to potential customers, partners
and resources – real people
Test the Problem
Customery Discovery
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30. Introduction to Startups │ Puja Abbassi │
▪No Selling Allowed - Ever! Listen, listen, listen.
▪Frequency - You need to do at least 15-20 customer interviews a week,
50-150 in total to notice meaningful patterns
▪No friends, colleagues or family - only real potential customers
▪You must define pass/fail tests in advance, results cannot just be
anecdotes and after-the-fact feel-good fakery
▪Your goal is: Test for the problem, not for the details
Customer Discovery Interview Dos & Don’ts
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31. Introduction to Startups │ Puja Abbassi │
1. Test the solution you think solves the problem to a known set of
customers by building a minimum viable product (MVP) containing just
the minimum features needed to allow you to start learning, to start an
iterative build-measure-learn cycle
2. Iterate or pivot your business model repeating the steps until you have
validated it
Test the Solution
Customer Validation
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32. Introduction to Startups │ Puja Abbassi │
Innovation Accounting:
▪Build a Minimal Viable Product, the minimal thing you need to have to get
real data, start validating learning and to start the build-measure-learn
cycle
▪Using metrics, measure the right and important things, not randomness.
How do we know that the changes we’ve made are related to the results
we’re seeing?
▪Move the product from the baseline to the ideal, set a path to a
sustainable product to reach a decision point
▪Pivot or persevere? Continue doing the same or trying something else.
Key Concepts
The Lean Startup – Eric Ries
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33. Introduction to Startups │ Puja Abbassi │
▪A Pivot is when you fundamentally change one or more element(s) in
your Business Model Canvas
▪It is not a minor change or iteration of existing element(s)
The Pivot
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34. Introduction to Startups │ Puja Abbassi │
Waterfall is not for Startups
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35. Introduction to Startups │ Puja Abbassi │
Lean and Agile are for Startups
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36. Introduction to Startups │ Puja Abbassi │
Build – Measure – Learn
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