Startup Thinking 101 for Libraries: Workshop

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MONTEREY

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CALIFORNIAIL 2014startup

thinking 101M.J. D’ELIA & HELEN KULA UNIVERSITY OF GUELPH UNIVERSITY OF TORONTO MISSISSAUGA

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MCS*4100 ENTREPRENEURSHIP

welcome1

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MCS*4100: ENTREPRENEURSHIP

agenda

welcome explore the challenge

biz model canvas !

customer development discovery & validation

wrap

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objectives

★ apply principles of startup thinking ★ map out a model for a new idea ★ develop a plan to validate your idea ★ focus on creating value

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APRIL 8, 2014

Helen Kula

Head, Learning & Curriculum Support Team University of Guelph [email protected]

@mjdelia

Librarian, Institute for Management and Innovation U of Toronto Mississauga [email protected]

@helenkula

M.J. D’Elia

about us

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plans vs. models

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poor biz plan process

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built on assumptions

(secondary data)

assumptions considered

“facts”

“facts” are not challenged or

altered> > >


poor biz plan process

8

plan becomes static (it is not

rewritten)

company-centric

approach

productivity is measured against

plan> >


first contact

!

“no plan survives first contact with its customers.”

~ Steve Blank

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biz model approach

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built on assumptions

(secondary data)

assumptions considered

“facts”

“facts” are not challenged or

altered

built on observation

(primary data)

assumptions are

acknowledged

assumptions altered based on

new learning

> > >

> > >


biz model approach

1 1

plan becomes static (it is not

rewritten)

company-centric

approach

productivity is measured against

plan

model continues to be rewritten

(dynamic)

customer-centric

approach

productivity is measured by performance

> >

> >

the scenariopractice startup thinking


recommendations

★ choose a: ★ user/patron focused product or service ★ new idea or approach ★ challenge that targets a subset of your

user population

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scenario

★ public library partnership with local hotels to offer library collections to hotel guests

★ hotels can sign guests up for a free library card during their stay

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explore the challenge

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customers / users

★ who do you expect will use your product or service?

★ what problem(s) are you solving for your potential users?

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problem / solution

★ what do your potential users do right now to solve those same problems?

★ why would they choose your solution over their current solutions?

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analogs

★ successful predecessor examples ★ who do you want to emulate/copy? ★ what elements of their approach can you

borrow?

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antilogs

★ predecessor examples that did not work ★ what do you want to do differently?

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biz model canvas

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APRIL 8, 2014

customer segments

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customer segments

“...defines the different groups of people or organizations an enterprise aims to reach and serve.”

~BMG, p. 20

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customer segments > questions

★ for whom does the company/project create value?

★ who are their most important customers/users?

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value proposition

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value proposition

“...describes the bundle of products and services that create value for a specific customer segment.”

~BMG, p. 22

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value proposition > questions

★ what value does the idea deliver? ★ which problem is getting solved? ★ which needs will be satisfied? ★ what bundles of products/services do

they offer each customer segment?

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channels

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channels

“...describes how a company communicates with and reaches its customer segments to deliver a value proposition.”

~BMG, p. 26

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channels > questions

★ how do the segments want to be reached?

★ how are they reached now? ★ how is the company integrating with

customer routines?

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customer relationships

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customer relationships

“...describes the types of relationships a company establishes with specific customer segments.”

~BMG, p. 28

3 1


customer relationships > questions

★ what type of relationship does each segment expect?

★ which relationships have been established?

★ how are they integrated with the rest of the model?

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revenue streams / return

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revenue streams / return

“...represents the cash a company generates from each customer segment (costs must be subtracted from revenues to create earnings).”

~BMG, p. 30

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revenue streams > questions

★ for what value are customers really willing to pay?

★ for what do they currently pay? ★ how are they currently paying? ★ how much does each revenue stream

contribute to overall revenue?

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key resources

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key resources

“...the most important assets required to make the business model work.”

~BMG, p. 34

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key resources > questions

★ what key resources do your value propositions require? ★ distribution channels? ★ customer relationships? ★ revenue streams?

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key activities

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key activities

“...describes the most important things a company must do to make its business model work.”

~BMG, p. 36

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key activities > questions

★ what key activities do your value propositions require? ★ distribution channels? ★ customer relationships? ★ revenue streams?

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key partnerships

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key partnerships

“...describes the network of suppliers and partners that make the business model work.”

~BMG, p. 38

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key pARTNERSHIPS > questions

★ who are the key partners? ★ who are the key suppliers? ★ which key resources do you need from

someone else? ★ which key activities do partners

perform?

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cost structure

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cost structure

“...describes all costs incurred to operate the business model.”

~BMG, p. 40

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cost structure > questions

★ what are the most important costs inherent in our business model?

★ which key resources are most expensive?

★ which key activities are most expensive?

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customer development

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KP KA VP

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BMG

, p. 7

4-75

biz model

KP KA VP

KR

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CH

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C$ R$

BMG

, p. 7

4-75

biz model

ASSUMPTIONS

(LEAPS OF FAITH)



★ four-step framework ★ discover and validate your market ★ built the right product features ★ solve customers’ needs ★ tested methods for acquiring customers ★ deployed resources to scale business

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★ process by which you question and test the core assumptions of your idea

5 2


cust dev > 1. customer discovery

5 3

customer discovery

problem-solution fit

proposedmvp

★ a product solves a problem for an identified group of users


cust dev > 2. customer validation

5 4

customer validation

product-market fit

biz model

sales map

★ the market is large enough to build a viable business


cust dev > 3. company creation

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company creation

scale execution

★ the business is scalable through repeatable sales


cust dev > 4. company building

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company building

scaleorganization

scaleoperations

★ company grows and operational processes are created to support growth


cust dev > framework

5 7

customer discovery

customer validation

company creation

company building


proposedmvp

product-market fit

biz model

sales map

scale execution

scaleorganization

scaleoperations


cust dev > pivot

5 8

customer discovery

pivot

company creation

company building


proposedmvp

product-market fit

biz model

sales map

scale execution

scaleorganization

scaleoperations

customer validation


pivot

“...a structured course correction designed to test a new fundamental hypothesis about the product, strategy, and engine of growth.”

~ Eric Ries, The Lean Startup

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pivot > based on learning

“A pivot requires that we keep one foot rooted in what we’ve learned so far, while making a fundamental change in strategy in order to seek even greater validated learning.”


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discovery + validation

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cust dev > first stage

6 2

customer discovery

pivot

company creation

company building


proposedmvp

product-market fit

biz model

sales map

scale execution

scaleorganization

scaleoperations

customer validation


empathy map > bonus worksheet

★ understanding the mindset of the user ★ influences ★ pressures ★ pains, gains

★ anticipating their needs

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BMG, p. 131

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wrap6

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instinct

“There is no way to remove the human element--vision, intuition, judgment--from the practice of entrepreneurship, nor would that be desirable.”

!


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reminders for application

There are no facts inside your

building, so get outside.

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The best startup ideas ideas come

from noticing.



Determine what you want to learn before you build.

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Build a minimum viable product

with the smallest possible feature

set.



No business plan survives first contact with customers.

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Failure is an integral part of

the search.

evaluationwhat did you think?

O

APRIL 8, 2014

Helen Kula

Head, Learning & Curriculum Support Team University of Guelph [email protected]

@mjdelia

Librarian, Institute for Management and Innovation U of Toronto Mississauga [email protected]

@helenkula

M.J. D’Elia

contact info

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references

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Blank, S. & Dorf, B. (2012). The Startup Owner’s Manual. Pescadero, CA: K&S Ranch.Cooper, B. & Vlaskovits, P. (2010). The Entrepreneur’s Guide to Customer Development. Newport Beach, CA: Cooper-VlaskovitsGreenberg, D., McKone-Sweet, K. & Wilson, H. J. (2011). The New entrepreneurial leader. San Francisco: Berrett-Koehler Publishers.Kiefer, C. F., Schlesinger, L. A. & Brown, P. B. (2010). Action trumps everything. Duxbury, MA: Black Ink PressKomisar, J. & Mullins, R. (2009). Getting to Plan B. Cambridge, MA: Harvard Business.Martin, R. (2009). The design of business. Boston: Harvard Business Press. Osterwalder, A. & Pigneur, Y. (2010). Business model generation. Hoboken, NJ: Wiley.Ries, E. (2011). The Lean Startup. New York: Crown Business.

Education

Startup Thinking 101 for Libraries: Workshop