National governors association july 2012
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National governors association july 2012
- 1. Growing The Next Big Idea What We’ve Learned About Startups
- 2. What Have We Learned?
- 3. What Have We Learned? Lesson 1: Types of Startups Lesson 2: Ecosystem Lesson 3: How to Fail Less Lesson 4: Can we Teach Entrepreneurship?
- 4. Lesson 1: Types of Startups
- 5. Lifestyle Startups Work to Live their Passion
- 6. Lifestyle Startups Work to Live their Passion Startup • Serve known customer with known product • Work for their passion
- 8. Social Entrepreneurship Startups Social Large Startup Non-Profit • Solve pressing social problems • Social Enterprise: Profitable • Social Innovation: New Strategies
- 9. Small Business Startups Work to Feed the Family
- 10. Small Business Startups Work to Feed the Family Small Startup Business • Serve known customer with known product • Feed the family
- 11. Small Business Startups Work to Feed the Family Small Startup Business Exit Criteria • known customer - Business Model found known product - Profitable business • Feed the family - Existing team < $500K in revenue
- 12. Small Business Startups Small Startup Business • 5.7 million small businesses in the U.S. <500 employees • 99.7% of all companies • ~ 50% of total U.S. workers http://www.sba.gov/advo/stats/sbfaq.pdf
- 13. Scalable Startup
- 14. Scalable Startup Search Execute Scalable Large Startup Company • In contrast a scalable startup is designed to grow big • Typically needs risk capital • What Silicon Valley means when they say “Startup”
- 15. Scalable Startup Search Scalable Large Startup Company Goal is to solve for: unknown customer and unknown features
- 16. Scalable Startup Born to Be Big Search Execute Scalable Large Startup Company Exit Criteria - Business model found - Total Available Market > $500M - Can grow to $100M/year
- 17. Buyable Startup Born to Sell
- 18. Buyable Startup Born to Sell Search Sell Scalable $5 to 50M Startup Acquisition Typically: Internet, Mobile, Gaming Apps
- 19. Buyable Startup Search Sell Scalable $5 to 50M Startup Acquisition Goal is to solve for: Sell to larger company Internet and Mobile Apps
- 20. Large Company Sustaining Innovation Innovate or Evaporate Sustaining Innovation Scalable Large Transition Startup Company • Existing Market / Known customer •Known product feature needs
- 21. Large Company Disruptive Innovation New Large Transition Division Company Disruptive Innovation •New Market •New tech, customers, channels
- 22. Large Company Disruptive Innovation New Large Transition Division Company Disruptive Innovation •Build •Partner •Acquire - IP - Talent - Product - Customers - Business
- 23. Large Company Disruptive Innovation New Large Transition Division Company Disruptive Innovation • Build • Partner •Acquire = an internal corporate startup
- 24. Summary Lesson 1: Multiple Types of Startups Policies, Funding and Tactics Differ Techniques to build them are the same
- 25. Lesson 2: History of a Startup Ecosystem
- 26. Silicon Valley Was a Series of Unintended Consequences
- 27. Outward-Facing Research University Building Weapons System 1946 – 1968 WWII/Cold War
- 28. Massive Government R&D Investment in Weapons Systems 1956 – 1980’s Cold War
- 29. One Professor Changes The System 1925 – 1965 University/Military/Industry
- 30. Sputnik Launches Venture Investing 1958 – SBIC Program
- 31. Regulatory Change Accelerates Venture Capital 1979 – Change in Employee Retirement Income Security Act Pension Funds Pile In
- 32. Culture Embraced Technology Risk 1958 – Today Recognized that 90% of startups fail
- 33. Culture Embraced Financial Risk 1968 – Today Experienced Advice Tolerance For Risk Long Term Interest Aligned
- 34. So What Lessons Can We Learn To Build Innovation? Without Cold War Funding
- 35. Technology Ecosystem: Infrastructure Venture Entrepreneurs Finance Motivation Crisis Profit Management Customer Agile Business Model Tools Development Development Design Culture Risk Taking Entrepreneurial Outward-Facing Free flow of Tech Universities People/Info Infrastructure Research Predictable Stable 24/7 Utilities Universities Economic System Legal System
- 36. Technology Ecosystem: Culture Venture Entrepreneurs Finance Motivation Crisis Profit Management Customer Agile Business Model Tools Development Development Design Culture Accelerators, Outward-Facing Free flow of Risk Taking Incubators Tech Universities People/Info Infrastructure Research Predictable Stable 24/7 Utilities Universities Economic System Legal System
- 37. Technology Ecosystem: Tools Entrepreneurs Risk Capital Motivation Crisis Profit Management Customer Agile Business Model Tools Development Development Design Culture Accelerators, Outward-Facing Free flow of Risk Taking Incubators Tech Universities People/Info Infrastructure Research Predictable Stable 24/7 Utilities Universities Economic System Legal System
- 38. Technology Ecosystem: Motivation Entrepreneurs Risk Capital Motivation Crisis Profit Management Customer Agile Business Model Tools Development Development Design Culture Accelerators, Outward-Facing Free flow of Risk Taking Incubators Tech Universities People/Info Infrastructure Research Predictable Stable 24/7 Utilities Universities Economic System Legal System
- 39. Technology Ecosystem Entrepreneurs Risk Capital Motivation Crisis Profit Management Customer Agile Business Model Tools Development Development Design Culture Risk Taking Accelerators, Outward-Facing Free flow of Incubators Tech Universities People/Info Infrastructure Research Predictable Stable 24/7 Utilities Universities Economic System Legal System
- 40. Lesson 3: Making Startups Fail Less Lessons From Silicon Valley and the National Science Foundation
- 41. After 50 years of Silicon Valley We Now Know How To Build Startups
- 42. More startups fail from a lack of customers than from a failure of product development
- 43. What We Used to Believe
- 44. Startups are Smaller Versions of Large Companies
- 45. What We Now Know
- 46. Startups are Not Smaller Versions of Large Companies
- 47. Startups Search Large Companies Execute
- 48. What We Used to Believe
- 49. All I Need to Do is Execute the Plan
- 50. Actual Photo of What Happens When Plan Meets First Contact With Customers
- 52. All I Need is the 5- Year Forecast
- 54. What We Now Know
- 55. No Business Plan Survives First Contact With Customers
- 56. Searching comes before the plan
- 58. A temporary organization designed to search for a repeatable and scalable business model
- 59. A temporary organization designed to search for a repeatable and scalable business model
- 60. A temporary organization designed to search for a repeatable and scalable business model
- 61. A temporary organization designed to search for a repeatable and scalable business model
- 62. © 2012 Steve Blank
- 65. Customer Development is how you search for the model
- 67. Summary Lesson 3: Making Startups Fail Less 1. Startups Are Not Smaller Versions Of Large Companies 2. Customer Development & Business Models – Replace Business Plans
- 68. Lesson 4: Can We Teach This?
- 69. Can We Teach This? Lean LaunchPad Class 8 Weeks, 100 Customer Calls
- 70. Can We Teach This? Lean LaunchPad Class National Science Foundation
- 71. The Data Says Yes You Can
- 72. Knowledge about Startups? Coming Into the Class
- 73. Knowledge About Startups? After the Class
- 74. The Data Says It Will Create New Companies
- 75. Knowledge About Building a Company Coming Into the Class
- 76. Knowledge About Building a Company After the Class
- 77. What About the Other 99% Will this Work on Main Street?
- 78. Small businesses are being built with business tools from the 1950’s
- 79. These Techniques Now Can Help Small Business Fail Less
- 80. In Closing: So What Can States Do?
- 81. Recommendation 1 EncourageFail Fast and Move Fast Culture
- 82. Recommendation 2 Encourage Incubators / Accelerators
- 83. Recommendation 3 Incent Risk Capital to Locate Next to Your Entrepreneurial Centers
- 84. Recommendation 4 Encourage Your Universities to build 21st Century Entrepreneurship Curriculum +
- 85. Recommendation 5 Encourage Small Business Initiatives to Adopt these Same Techniques
- 86. I’ve open-sourced all this material Happy to share it www.steveblank.com sblank@kandsranch.com Curriculum, Syllabus, Slides, Teaching Guide and On-line Courses all available for free www.steveblank.com