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@NYUEntrepreneur
Venture Secrets:
Building a Compelling
Value Proposition for
Your Research
Frank Rimalovski
Executive Dir...
@NYUEntrepreneur2
April&8th:&Meet&an&Entrepreneur:&Rachel&Meyer!
Co$Founder!Shoots!&!Roots!
Upcoming!Series!@!the!Leslie!e...
@NYUEntrepreneur
Agenda
3
1.  What makes for a successful
startup?
2.  What we used to believe
3.  What we now know: The r...
@NYUEntrepreneur
What makes for a successful
startup?
@NYUEntrepreneur
Commercialization Myth
5
Basic &
Applied
Research
Scientific
Discovery/
Invention/
IP Creation
Venture
Fo...
@NYUEntrepreneurThe “valley of death”
Commercialization Reality
Basic &
Applied
Research
Scientific
Discovery/
Invention/
...
@NYUEntrepreneur
Two parts to
Translational Medicine
1.  Advancing the science/technology
2.  Finding a repeatable busines...
@NYUEntrepreneur
Answers are Outside Your Lab
u  You may be smartest person in your lab
u  Not smarter than collective i...
@NYUEntrepreneur
It’s Bigger Than the Revenue Model
u  Testing hypotheses makes substantive changes to
biz model before y...
@NYUEntrepreneur
Need to do this before
finishing the science or
building/designing the product
@NYUEntrepreneur
Evidence-based
Entrepreneurship
(aka the Lean Startup)
11
@NYUEntrepreneur
What We Used to Believe
@NYUEntrepreneur
Startups are a Smaller Version
of a Large Company
@NYUEntrepreneur
Start with an Operating Plan
and Financial Model
@NYUEntrepreneur
@NYUEntrepreneur
	
  
All I Need to Do is Make the Forecast
@NYUEntrepreneur
What We Now Know
@NYUEntrepreneur
@NYUEntrepreneur
“Everyone
has a plan
until they get
punched in
the face!”
@NYUEntrepreneur
@NYUEntrepreneur
Planning comes before the plan
@NYUEntrepreneur
Business Model Canvas
@NYUEntrepreneur
“More startups
fail from a lack
of customers
than from a
failure of
product
development.”
@NYUEntrepreneur24
So what do we do?
@NYUEntrepreneur
Customer Development
@NYUEntrepreneur
A temporary organization
designed to search
for a repeatable and scalable
business model
A startup is…
@NYUEntrepreneur
What is a Business Model?
How a company
creates value for itself
while delivering
products or services fo...
@NYUEntrepreneur
What is a Business Model?
@NYUEntrepreneur
9 Guesses
29
Guess
Guess
Guess
Guess
Guess
Guess
Guess
Guess Guess
@NYUEntrepreneur
@NYUEntrepreneur
Testing Hypotheses
u Apply the scientific method to
customer discovery
31
Observe
phenomena
Formulate
hyp...
@NYUEntrepreneur
Customer Development is how you
search for the business model
@NYUEntrepreneur
First test the problem,
then test the solution
Customer Development
33
@NYUEntrepreneur
	
  
	
  
Value Proposition
What Problem Are You Solving?
@NYUEntrepreneur
Value Proposition
describes the benefits
customers can expect
from a bundle of
products and services
@NYUEntrepreneur
	
  
	
  
Customer Segment
Who Cares?
@NYUEntrepreneur
Customer Profile
Who are they and
why would they buy?
@NYUEntrepreneur
Problem-Solution Fit
Fit
@NYUEntrepreneur
So where does my
technology come in?
@NYUEntrepreneur
It’s not about your technology!
40
@NYUEntrepreneur
So where does my
technology come in?
Customers don’t care about technology
They are trying to solve a pro...
@NYUEntrepreneur
	
  
	
  
Value Proposition
What Problem Are You Solving?
@NYUEntrepreneur
Key Questions for Value Prop
u  Problem Statement: What is the problem?
u  Technology / Market Insight:...
@NYUEntrepreneur
	
  
	
  
Customer Segment
Who Cares?
@NYUEntrepreneur
Define Customer Archetype
u  Who are they?
o  Position / title / age / sex / role
u  How/where do they b...
@NYUEntrepreneur
What is your potential customer
trying to get done?
Jobs to be Done
46
@NYUEntrepreneur
…they want
a quarter-inch hole!"
People don't want to buy
a quarter-inch drill…
SOLUTION
(WHAT)
JOB
(WHY)...
@NYUEntrepreneur
Who has what job to be done?
48
@NYUEntrepreneur
“Make me efficient at
my work”
FUNCTIONAL
“Convey my
professional status”
SOCIAL
“Make me confident
that I c...
@NYUEntrepreneur
Customer Profiles
Innosight	
  LLC	
  
@NYUEntrepreneur
put yourself in
the customers’
shoes
@NYUEntrepreneur
Who’s the Customer in a Company?
@NYUEntrepreneur
Reimbursement!
@NYUEntrepreneur
Who’s the Customer in a Company?
@NYUEntrepreneur
Who’s the Customer in a Company?
@NYUEntrepreneur
Who’s the Customer in a Company?
@NYUEntrepreneur
How Do They Interact to Buy?
u  Organization Chart
u  Influence Map
u  Sales Road Map
@NYUEntrepreneur58
@NYUEntrepreneur
Customer
Ecosystem of people you need
to understand, satisfy and
appeal to
in order to get them
to buy yo...
@NYUEntrepreneur
Technology Lifecycle Adoption Curve
60
@NYUEntrepreneur
Your Business Model Will Change…
61
@NYUEntrepreneur
Product / Solution Fit
@NYUEntrepreneur
Case Study: The Smart Needle
Source: Paul Yock, NIH I-Corps 2014
@NYUEntrepreneur
Great concept: transducer inside
needle
…just listen to localize
blood vessel
Source: Paul Yock, NIH I-Co...
@NYUEntrepreneur
Source: Paul Yock,
NIH I-Corps 2014
@NYUEntrepreneur
What’s the need?
A way to localize arteries and
veins to improve the speed and
accuracy of needle sticks
...
@NYUEntrepreneur
A way to localize arteries and veins
to improve the speed and accuracy
of needle sticks
Need statement:
•...
@NYUEntrepreneur
What we missed!
The existing approach was cheap!
Source: Paul Yock, NIH I-Corps 2014
@NYUEntrepreneur
A cost-effective way to localize
arteries and veins to improve the
speed and accuracy of needle sticks
Ne...
@NYUEntrepreneur
For most patients it’s not worth it to
add the expense of extra technology
to save a little time
The real...
@NYUEntrepreneur
A cost-effective way to localize arteries and
veins to improve the speed and accuracy of
needle sticks in...
@NYUEntrepreneur
We missed something else!
The technique must
be user-friendly and
easy to learn
Source: Paul Yock, NIH I-...
@NYUEntrepreneur
A cost-effective way to localize arteries and
veins to improve the speed and accuracy of
needle sticks in...
@NYUEntrepreneur
The Bottom Line
Validating your need at the outset
is the single most cost-effective
strategy for minimizi...
@NYUEntrepreneur
I’ve figured out who I’m selling to
and what pain point I’m solving!
I’m ready to start building and
selli...
@NYUEntrepreneur
? ✔ ✔
?
?
?
?
? ?
Not so fast!
@NYUEntrepreneur
? ✔ ✔
?
?
?
?
? ?
Especially in the Life Sciences…
You can’t have a valid
business until you test
both si...
@NYUEntrepreneur
Key Activities
What’s Most Important for the Business?
•  Pre-clinical
studies
•  Clinical Trials
•  FTO
...
@NYUEntrepreneur
Key Resources
What are your most important assets?
•  Data
package
•  Intellectual
Property
•  Non-diluti...
@NYUEntrepreneur
Key Partners
Who are your Partners and Suppliers?
•  Patent counsel
•  Clinical sites
•  CROs/
designers
...
@NYUEntrepreneur
Channels
How does your product get to customers?
•  Distributors
•  Direct sales
•  Business
development
@NYUEntrepreneur
Customer Relationships
How do you Get, Keep and Grow Customers?
•  SAB
•  KOLs
•  Papers
•  Conferences
•...
@NYUEntrepreneur
Revenue Streams
How do you make money?
•  Reimbursement?
•  Capital purchase/lease
•  ???
@NYUEntrepreneur
Cost Structure
What are the Costs and Expenses?
@NYUEntrepreneur
The Minimum Viable Product
Customer Development
85
@NYUEntrepreneur
Help start the process of learning
as quickly & cheaply as possible
The Minimum Viable Product
86
@NYUEntrepreneur
What is this?
87
@NYUEntrepreneur
What is this?
88
@NYUEntrepreneur
What is this?
89
@NYUEntrepreneur
Why create an MVP?
u  Answer questions & generate new ones
u  Validate your assumptions
u  Compare alt...
@NYUEntrepreneur
Why use this approach?
@NYUEntrepreneur
1. Find go-to-market strategy…
92
@NYUEntrepreneur
…and do it more quickly
93
@NYUEntrepreneur
2. Design an MVP
94
Start the process of
learning as quickly &
cheaply as possible
Minimum Viable Product
@NYUEntrepreneur
3. Build a Team
95
“Co-founder skills are the first derivative of
the business model canvas”
SteveBlank.com
@NYUEntrepreneur
4. Raise Funds
96
POC	
  Grants	
  
Compe99ons	
  
Seed	
  Funds	
  
@NYUEntrepreneur
5. Launch a better business
97
@NYUEntrepreneur
What’s next?
Leslie eLab
• 6,000 sq ft NYU
Startup Hub
• Daily workshops
& speakers
• Collaborative
works...
@NYUEntrepreneur
Questions?
entrepreneur@nyu.edu
@nyuentrepreneur
nyu.edu/entrepreneur
nyuentrepreneur.com
16 Washington P...
@NYUEntrepreneur
Helping startups start up
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Venture Secrets—Building a Compelling Value Proposition for Your Research

Slides from my March 25, 2015 NYU BioVentures talk: Venture Secrets—Building a Compelling Value Proposition for Your Research

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Venture Secrets—Building a Compelling Value Proposition for Your Research

  1. @NYUEntrepreneur Venture Secrets: Building a Compelling Value Proposition for Your Research Frank Rimalovski Executive Director, NYU Entrepreneurial Institute Managing Director, NYU Innovation Venture Fund Instructor, NSF Innovation Corps (I-Corps) Mar 25, 2015
  2. @NYUEntrepreneur2 April&8th:&Meet&an&Entrepreneur:&Rachel&Meyer! Co$Founder!Shoots!&!Roots! Upcoming!Series!@!the!Leslie!eLab! Mid&May:&Life&Science&VC&1st&Pitch& Invita?on&Only& Preference&for&BioVenture&Speaker&Series&ADendees!
  3. @NYUEntrepreneur Agenda 3 1.  What makes for a successful startup? 2.  What we used to believe 3.  What we now know: The right way to start (up) 4.  Benefits to this approach
  4. @NYUEntrepreneur What makes for a successful startup?
  5. @NYUEntrepreneur Commercialization Myth 5 Basic & Applied Research Scientific Discovery/ Invention/ IP Creation Venture Formation & Growth
  6. @NYUEntrepreneurThe “valley of death” Commercialization Reality Basic & Applied Research Scientific Discovery/ Invention/ IP Creation Customer Discovery & Prototype Dev Business Model & Team Formation Venture Formation & Growth • Customer/market discovery • Engineering/prototypes • Mentors and advisors • Collaborative spaces • Business leadership • Legal counsel • Capital
  7. @NYUEntrepreneur Two parts to Translational Medicine 1.  Advancing the science/technology 2.  Finding a repeatable business model u  Current efforts focus on #1 u  Successful efforts require both 7
  8. @NYUEntrepreneur Answers are Outside Your Lab u  You may be smartest person in your lab u  Not smarter than collective intelligence of your potential customers, partners, payers & regulators u  Can’t learn by reading papers or lectures u  Experts are overrated You need to get outside your building
  9. @NYUEntrepreneur It’s Bigger Than the Revenue Model u  Testing hypotheses makes substantive changes to biz model before you do science/design o  Define clinical utility o  Who core & tertiary users/buyers/payers are o  Sales & marketing process required for initial revenues and downstream commercialization o  Data required for future partnerships/collaborations o  Intellectual property risks o  Regulatory pathways o  Reimbursement strategies o  Roles of partners u  Affects your biological & clinical hypotheses 9
  10. @NYUEntrepreneur Need to do this before finishing the science or building/designing the product
  11. @NYUEntrepreneur Evidence-based Entrepreneurship (aka the Lean Startup) 11
  12. @NYUEntrepreneur What We Used to Believe
  13. @NYUEntrepreneur Startups are a Smaller Version of a Large Company
  14. @NYUEntrepreneur Start with an Operating Plan and Financial Model
  15. @NYUEntrepreneur
  16. @NYUEntrepreneur   All I Need to Do is Make the Forecast
  17. @NYUEntrepreneur What We Now Know
  18. @NYUEntrepreneur
  19. @NYUEntrepreneur “Everyone has a plan until they get punched in the face!”
  20. @NYUEntrepreneur
  21. @NYUEntrepreneur Planning comes before the plan
  22. @NYUEntrepreneur Business Model Canvas
  23. @NYUEntrepreneur “More startups fail from a lack of customers than from a failure of product development.”
  24. @NYUEntrepreneur24 So what do we do?
  25. @NYUEntrepreneur Customer Development
  26. @NYUEntrepreneur A temporary organization designed to search for a repeatable and scalable business model A startup is…
  27. @NYUEntrepreneur What is a Business Model? How a company creates value for itself while delivering products or services for customers
  28. @NYUEntrepreneur What is a Business Model?
  29. @NYUEntrepreneur 9 Guesses 29 Guess Guess Guess Guess Guess Guess Guess Guess Guess
  30. @NYUEntrepreneur
  31. @NYUEntrepreneur Testing Hypotheses u Apply the scientific method to customer discovery 31 Observe phenomena Formulate hypothesis Test hypothesis via rigorous experiments Establish theory based on repeated validation of results Modify hypothesis PIVOT!
  32. @NYUEntrepreneur Customer Development is how you search for the business model
  33. @NYUEntrepreneur First test the problem, then test the solution Customer Development 33
  34. @NYUEntrepreneur     Value Proposition What Problem Are You Solving?
  35. @NYUEntrepreneur Value Proposition describes the benefits customers can expect from a bundle of products and services
  36. @NYUEntrepreneur     Customer Segment Who Cares?
  37. @NYUEntrepreneur Customer Profile Who are they and why would they buy?
  38. @NYUEntrepreneur Problem-Solution Fit Fit
  39. @NYUEntrepreneur So where does my technology come in?
  40. @NYUEntrepreneur It’s not about your technology! 40
  41. @NYUEntrepreneur So where does my technology come in? Customers don’t care about technology They are trying to solve a problem Customer discovery is about identifying that problem & exploring how you could solve it
  42. @NYUEntrepreneur     Value Proposition What Problem Are You Solving?
  43. @NYUEntrepreneur Key Questions for Value Prop u  Problem Statement: What is the problem? u  Technology / Market Insight: Why is the problem so hard to solve? u  Product: How do you solve it today? u  Competition: Who is delivering that solution? u  Clinical utility: What level of improvement in efficacy/safety/cost/etc. is needed? u  Market Size: How big is this problem?
  44. @NYUEntrepreneur     Customer Segment Who Cares?
  45. @NYUEntrepreneur Define Customer Archetype u  Who are they? o  Position / title / age / sex / role u  How/where do they buy? o  Discretionary budget (name of budget and amount) u  What matters to them? o  What motivates them? u  Who influences them? o  What do they read/who do they listen to?
  46. @NYUEntrepreneur What is your potential customer trying to get done? Jobs to be Done 46
  47. @NYUEntrepreneur …they want a quarter-inch hole!" People don't want to buy a quarter-inch drill… SOLUTION (WHAT) JOB (WHY) Innosight  LLC  
  48. @NYUEntrepreneur Who has what job to be done? 48
  49. @NYUEntrepreneur “Make me efficient at my work” FUNCTIONAL “Convey my professional status” SOCIAL “Make me confident that I can get the job done” EMOTIONAL “Help me perform like a professional” JOB •  Prestigeà show that I use the latest starting with my equipment •  Valueà demonstrate my ability to recognize value •  Confidenceà ensure that I can count on my equipment •  Versatilityà give me the ability to work in different conditions •  Accuracy à the ability to only effect targeted tissue •  Speedà help me complete the task quickly Innosight  LLC  
  50. @NYUEntrepreneur Customer Profiles Innosight  LLC  
  51. @NYUEntrepreneur put yourself in the customers’ shoes
  52. @NYUEntrepreneur Who’s the Customer in a Company?
  53. @NYUEntrepreneur Reimbursement!
  54. @NYUEntrepreneur Who’s the Customer in a Company?
  55. @NYUEntrepreneur Who’s the Customer in a Company?
  56. @NYUEntrepreneur Who’s the Customer in a Company?
  57. @NYUEntrepreneur How Do They Interact to Buy? u  Organization Chart u  Influence Map u  Sales Road Map
  58. @NYUEntrepreneur58
  59. @NYUEntrepreneur Customer Ecosystem of people you need to understand, satisfy and appeal to in order to get them to buy your product.
  60. @NYUEntrepreneur Technology Lifecycle Adoption Curve 60
  61. @NYUEntrepreneur Your Business Model Will Change… 61
  62. @NYUEntrepreneur Product / Solution Fit
  63. @NYUEntrepreneur Case Study: The Smart Needle Source: Paul Yock, NIH I-Corps 2014
  64. @NYUEntrepreneur Great concept: transducer inside needle …just listen to localize blood vessel Source: Paul Yock, NIH I-Corps 2014
  65. @NYUEntrepreneur Source: Paul Yock, NIH I-Corps 2014
  66. @NYUEntrepreneur What’s the need? A way to localize arteries and veins to improve the speed and accuracy of needle sticks Source: Paul Yock, NIH I-Corps 2014
  67. @NYUEntrepreneur A way to localize arteries and veins to improve the speed and accuracy of needle sticks Need statement: •  fast •  accurate •  needle size no bigger than current •  maintain sterility Need criteria: Source: Paul Yock, NIH I-Corps 2014
  68. @NYUEntrepreneur What we missed! The existing approach was cheap! Source: Paul Yock, NIH I-Corps 2014
  69. @NYUEntrepreneur A cost-effective way to localize arteries and veins to improve the speed and accuracy of needle sticks Need statement: •  (where is there real value in time saved?) •  Accurate •  Needle size no bigger than current •  Maintain sterility Need criteria: Source: Paul Yock, NIH I-Corps 2014
  70. @NYUEntrepreneur For most patients it’s not worth it to add the expense of extra technology to save a little time The real need is in high-risk patients: trauma, acute MI, neonatal ICU     amico.com   Dovemed.com   Source: Paul Yock, NIH I-Corps 2014
  71. @NYUEntrepreneur A cost-effective way to localize arteries and veins to improve the speed and accuracy of needle sticks in high-risk patients Need statement: •  Less than $25 additional per patient •  Accurate •  Needle size no bigger than current •  Maintain sterility Need criteria: Source: Paul Yock, NIH I-Corps 2014
  72. @NYUEntrepreneur We missed something else! The technique must be user-friendly and easy to learn Source: Paul Yock, NIH I-Corps 2014
  73. @NYUEntrepreneur A cost-effective way to localize arteries and veins to improve the speed and accuracy of needle sticks in high-risk patients Need statement: •  Less than $25 additional per patient •  Require minimal new skill & training •  Accurate •  Needle size no bigger than current •  Maintain sterility Need criteria: Source: Paul Yock, NIH I-Corps 2014
  74. @NYUEntrepreneur The Bottom Line Validating your need at the outset is the single most cost-effective strategy for minimizing risk! It provides the basis for all subsequent technical, clinical and business strategy decisions Source: Paul Yock, NIH I-Corps 2014
  75. @NYUEntrepreneur I’ve figured out who I’m selling to and what pain point I’m solving! I’m ready to start building and selling… Right?!
  76. @NYUEntrepreneur ? ✔ ✔ ? ? ? ? ? ? Not so fast!
  77. @NYUEntrepreneur ? ✔ ✔ ? ? ? ? ? ? Especially in the Life Sciences… You can’t have a valid business until you test both sides of the canvas!
  78. @NYUEntrepreneur Key Activities What’s Most Important for the Business? •  Pre-clinical studies •  Clinical Trials •  FTO •  Regulatory Pathway •  CPT Coding
  79. @NYUEntrepreneur Key Resources What are your most important assets? •  Data package •  Intellectual Property •  Non-dilutive funding
  80. @NYUEntrepreneur Key Partners Who are your Partners and Suppliers? •  Patent counsel •  Clinical sites •  CROs/ designers •  Contract Mfg •  Foundations •  Patient Adv Groups How will these relationships work?
  81. @NYUEntrepreneur Channels How does your product get to customers? •  Distributors •  Direct sales •  Business development
  82. @NYUEntrepreneur Customer Relationships How do you Get, Keep and Grow Customers? •  SAB •  KOLs •  Papers •  Conferences •  PR
  83. @NYUEntrepreneur Revenue Streams How do you make money? •  Reimbursement? •  Capital purchase/lease •  ???
  84. @NYUEntrepreneur Cost Structure What are the Costs and Expenses?
  85. @NYUEntrepreneur The Minimum Viable Product Customer Development 85
  86. @NYUEntrepreneur Help start the process of learning as quickly & cheaply as possible The Minimum Viable Product 86
  87. @NYUEntrepreneur What is this? 87
  88. @NYUEntrepreneur What is this? 88
  89. @NYUEntrepreneur What is this? 89
  90. @NYUEntrepreneur Why create an MVP? u  Answer questions & generate new ones u  Validate your assumptions u  Compare alternatives u  Fail early & cheaply u  Visualize your ideas & share with others o  Team o  Customers o  Investors 90
  91. @NYUEntrepreneur Why use this approach?
  92. @NYUEntrepreneur 1. Find go-to-market strategy… 92
  93. @NYUEntrepreneur …and do it more quickly 93
  94. @NYUEntrepreneur 2. Design an MVP 94 Start the process of learning as quickly & cheaply as possible Minimum Viable Product
  95. @NYUEntrepreneur 3. Build a Team 95 “Co-founder skills are the first derivative of the business model canvas” SteveBlank.com
  96. @NYUEntrepreneur 4. Raise Funds 96 POC  Grants   Compe99ons   Seed  Funds  
  97. @NYUEntrepreneur 5. Launch a better business 97
  98. @NYUEntrepreneur What’s next? Leslie eLab • 6,000 sq ft NYU Startup Hub • Daily workshops & speakers • Collaborative workspaces • Prototyping lab • Entrepreneur-in- residence • 16 Washington Pl 10am-10pm M-F Innovation Corps (I-Corps) • Prior NSF (& soon NIH) grantees • 7-weeks • $50,000 for NSF I-Corps • Immersive, experiential startup training Rolling Applications 5-Day Lean Launchpad Class • 5-day immersive class (for credit) • Grad students • Co-taught by Steve Blank • Applied learning for your startup • Team-based Offered last week in Aug (24-28) Summer Launchpad Accelerator • 10-week program • For graduating students • $7,500 & space • Entrepreneur & investor mentors • Lean Startup bootcamp Apps due Apr 17 98
  99. @NYUEntrepreneur Questions? entrepreneur@nyu.edu @nyuentrepreneur nyu.edu/entrepreneur nyuentrepreneur.com 16 Washington Place 99
  100. @NYUEntrepreneur Helping startups start up

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