Course 2 - 1st session: Failure

With  the  Support  of:  

www.de-­‐pe.com    @depeteam  

Antofagasta,  Chile,  May  2011  

1  

FAILURE DAY Class  2  

INDEX •  Intro  •  Failure  in  Chile  •  What  is  a  Startup?  •  Why  Most  Startups  Fail?  •  What  is  a  Pivot?  •  Failure,  Pivot  &  Success  Stories  •  Summing  Up  •  Teams  

FAILURE IN CHILE Effects  on  Entrepreneurship  

Failure •  The  Punishment  Culture    

Failure •  Jesse’s  blog:  “He  explained  to  me  that  the  biggest  impediment  for  entrepreneurs  in  Chile  is  the  fact  that  Chilean  culture  harshly  punishes  failure  in  general.  All  the  other  Chileans  in  the  room  concurred…”  

Failure •  “…As  I  spoke  more  with  this  Chilean  businessman,  it  became  truly  apparent  how  debilitaSng  it  would  be  for  entrepreneurs  to  grow  up  in  a  society  that  punishes  failure”.    

Effects on Entrepreneurship •  In  Chile,  what  happens  if  we  punish  failure?  

– We  don’t  share  (fear)  – Country  in  status  quo  -­‐>  zero  innovaSon  – We  don’t  learn  – Cancer  for  Entrepreneurship  

•  AccepSng  failure  is  an  important  characterisSc  of  any  entrepreneur.  

The Truth •  Most  successful  startups  and  successful  people  were  failures  at  one  Sme.  Failure  is  important  learning  process.    The  ability  to  accept  failure  is  an  important  characterisSc  of  entrepreneurs.  

WHAT IS A STARTUP? What  kind  of  Startup  are  we?  

Human institution designed to deliver a new product or service under conditions of extreme uncertainty.��� Eric  Ries,  Lean  Startup  (www.startuplessonslearned.com)  

Why to build a startup? •  Our  goal  is  create  an  InsStuSon  not  just  a  product.  

•  TradiSonal  Management  tacScs  fail.  •  Environment  of  extreme  uncertainty.  •  Not  just  2  people  in  a  garage.  

Different Types of Companies

Different Types of Companies

Different Types of Companies

SO, WHY STARTUPS FAIL?

More startups fail from a lack of customers than from a failure of product development. Steve  Blank,  Four  Steps  to  the  Epiphany  (www.steveblank.com)  

Different Types of Market

Why we fail? •  Nobody  knows  what  the  market  really  needs.(we  cant  predict  the  future)  

•  Entrepreneurs  usually  build  before  test  their  Product/Business  Model  hypothesis.  •  Startups  can  fail  from  unproven  assumpAons.    

– We  believe  that  advancing  the  plan  is  progress.  

•  You  have  to  push  your  product  out  in  order  to  be`er  listen  and  learn  from  the  market.  

The class focuses on using Customer Discovery process to create products that fit with the market. DePe  Team  

Why we fail? •  Mike  Maples:  “You  Have  to  Be  Willing  to  Throw  it  all  away”.    –  InvesSng  a  months  of  Sme  in  an  idea,  it’s  hard  to  let  it  go  and  move  on  to  the  next  one.    

–  Be`er  to  push  a  minimal  viable  product  out  and  validate  your  idea  quickly  –  we’ll  show  you  how  to  do  this.  

•  Most  successful  startups  and  successful  people  were  failures  at  one  Sme.  Failure  is  important  learning  process.  -­‐>  Adapt  and  move  forward  (PIVOT)  

THE PIVOT Build,  Ship,  Pivot,  Repeat  

The Pivot •  Pivot  is  changing  your  business  model  (not  just  iteraSng  on  your  product)  –  It’s the equivalent of taking a hit (no product

traction) and spinning (product pivot) to find another path to the goal (product market fit).  

Defense   Dribbling   Score  

The Pivot •  Change  of  direcSons  but  stay  grounded  in  what  we  have  learned.  

•  If  we  speed  up  the  Sme  between  iteraSons,  we  increase  the  chances  of  success.  

Build  

Measure  Learn  

What can we Pivot?

Some Pivot Examples •  Product  Pivot  

DaSng  Site  

”Who  is  ho`er”  site  

Group  SMS  

Some Pivot Examples •  Fuzhou  HC  Imp.  &  Exp.  

1.  Impo.  Company  based  in  Chile.  a.  High  CompeSSon,  No  Partners,  worthless  revenue  

model-­‐>  FIRST  PIVOT  /  Product  (Service).  

2.  Sourcing  and  Procurement  Outsourcing  Company  based  in  Chile.  a.  No  experSse,  No  partners,  No  Customer  relaSonship,  

No  Channels  -­‐>  SECOND  PIVOT  /  Customer  Segment.  

Some Pivot Examples 3  Sales  (Foreign  Markets)  

Outsourcing  Company  based  in  China.  a.  New  target  market,  new  

revenue  model.  b.  Buyers  and  Sellers  became  

our  customers.  

4  Today’s  PIVOT-­‐>  Sourcing  and  Procurement  Outsourcing  Company  based  in  Chile.  (yeah,  same  as  I  started)  

GRACIAS! Preguntas?