IT Track Module 1

Float like a butterfly Sting like a bee

By Camilo LopezNew Venture Challenge

Tonight’s Points

• Introduction 1min

• Personal Story 4 min

• Motivation to Start a Company 5 min

• Idea Generation 10 min

• Customer Development 30 min

• Lean Canvas 30 min

• Go do it!

@camiloalopez

[email protected]

720.333.7473

Customer Intelligence that Matters

Looking for an software development intern

NewVenture Challenge

$800 million in funding

IPO

Goo

d Ex

ecuti

on T

eam

Great Idea

VC Contacts

Break Even

5 Qrts

18 Months Market Research

Product Development

Product DevelopmentVs

Customer Development

Steve Blank

Ash Mauraya

http://steveblank.com/

NVC

Customer Development

Any Ideas?

Idea 1 Idea 2 Idea 3

What

Economics

Competitors

Personal Passion

Idea 1 Idea 2 Idea 3

What

Economics

Competitors

Nice to Have vs.

Must Have

• Reading• Watching TV• Family Time• Going to Movies• Fishing• Computer• Gardening• Renting Movies• Walking• Exercise• Listening to Music• Entertaining• Hunting

• Team Sports• Shopping• Traveling• Sleeping• Socializing• Sewing• Golf• Church Activities• Relaxing• Playing Music

Idea 1 Idea 2 Idea 3

What

Economics

Competitors

How big is the market

TAM = # of Potential Customers X Value of each customer

How big is the market

Number of Potential Customers X

Value of each customer=

Total Available Market

Top Down Bottom Up

Number of customers I can get today

Growth

Projected Customers with expected growth

Total Available Market

Attainable Market Share

Projected Customers with target share

Idea 1 Idea 2 Idea 3

What

Economics

Competitors

Idea 1 Idea 2 Idea 3

What

Economics

Competitors

Motivation

WhatHowYou

Idea 1 Idea 2 Idea 3Rank3 1 2

What

Economics

Competitors

Motivation

Validate Idea✓

Ideas

Build

Measure

Learn

Adjust

It is about LearningYou must go through the cycle 2 to 3 Phases

NVC

Customer Development

Problem Solution Fit

State your assumptions: • The Product Hypothesis• Customer Hypothesis– ROI

• Channel and Pricing Hypothesis• Demand Creation Hypothesis • Market Type Hypothesis• Competitive Type Hypothesis

Product

• Problem you are solving• Product Features• Product Benefits• Intellectual Property• Product Delivery Schedule– MVP

• Total cost of ownership/adoption

Customer• Types of customers

– Decision Maker– Economic Buyer– Recommender– Influencer– User

• Customer Problems• A day in the life of your customer• Customer Influence Map• ROI Justification

– Cost of Problem vs Cost of your solution• Minimum Feature Set

Distribution

• System Integrators• Direct Sales Force• Value added resellers• Dealers• Distributors• Retail • Online / Direct

Demand Creation• How would you create demand for your product to your chosen

channels– Advertising– Social Media– PR– Promotions– Spam– Web Site– Word of Mouth– Seminars– Telemarketing– Partners – INFLUENCERS

Market Hypothesis

• Existing vs Resegmented vs New

Benefit

Cost

High

High

Low

Low

Competitive Hypothesis

Unique Value Proposition

Easily explain why you exist “We help X do Y by doing Z”

Lean Canvas

Problem

Top 3 Problems

SolutionsTop 3 features

MetricsKey activities you measure

Unique Value Proposition

Single, clear compelling, message that states why you are different and worth buying

Unfair Advantage

Can NOT be easily copied or bought

ChannelsPath to customers

Customer Segments

Target customer

Cost Structure

-Customer acquisitionDistribution costHostingPeople

Revenue Streams

-Revenue model Lifetime valueRevenueGross Margin

New Co. New Co. Great IdeaClear message of what you do, tag line

Execute

Wireframe

Customer Engagement

1. Start showing the site to potential customers, testing customer segment and value proposition

2. Use Ads, textlinks or Google AdWords, Facebook ads and natural search to drive people to your Minimally Viable web site

3. Use your network to find target customers – ask your contacts, “Do you know someone with problem X? If so, can you forward this message on to them?” and provide a 2-3 sentence description

4. For B2B products, Twitter, Quora, and industry mailing lists are a good place to find target customers. Don’t spam these areas, but if you’re already an active participant you can sprinkle in some references to your site or you can ask a contact who is already an active participant to do outreach for you.

5. Use Mailchimp, Postmark or Google Groups to send out emails and create groups

6. Create online surveys with Wufoo or Zoomerang7. Get feedback on your Minimum Viable Product (MVP) features and

User Interface

Next Steps

• Test hypothesis by talking to customers– Start Building a landing page– Make progress toward your MVP– Talk to customers– Collect Data– Ask for Money

• Iterate

Tools

Must Read Blogs• Fred Wilson – A VC• SK Murphy• Marc Andreessen• Paul Graham• Hacker News• Brad Feld• Chris Dixon• OnStartups-Dharmesh Shah• Both Sides of the Table – Mark Suster• 37signals• Eric Ries – Startup Lessons Learned• Venture Hacks and http://twitter.com/venturehacks• Andrew Chen• Dave McClure• Venture Made Transparent

Co-founders

• TechCoFounder - directory of developers• Foundrs - recruit co-founders• StartupLinkup - recruit co-founders• FoundersHookUp - Invite-only find a co-founder• CoFounder Network• PartnerUp-

• Meetup – go to a Meetup!

$8 Billion