lean startups, autm 2014 startup class

Keith McGreggor, Ph.D. Director of VentureLab

evidence-based entrepreneurship

Lean Startups

#1 early stage incubator#1 engineering/science incubator

#2 overall

innovations reviewed 250+/year

new projects 35+/year

current projects 100+ active

companies created 150+

total of angel & VC investments in VL companies $730M+

13 cohorts / 5 nodes300+ NSF teams12+ teams

since June 2012

22+ cohorts / 7 locations250+ teams

400+ entrepreneurs

since May 2012

Lean Startup?

Lean Startup is now known as

Evidence-based Entrepreneurship

A new way of thinking about and designing startups

engineering

three big ideas

a definitiona framework

a methodology

three big ideas : Definition

what is a startup?

three big ideas : Definition

We used to think A startup is a smaller

version of a large company.

? ✓

Startups Companies

A startup is a temporary organization designed to search for a repeatable and scalable business model. - Steve Blank

three big ideas : Definition

Search Execute

Startups Companies

A startup is a temporary organization designed to search for a repeatable and scalable business model. - Steve Blank

three big ideas : Definition

Core Idea or TechnologyResearch Team

Core Idea or TechnologyResearch Team Company

Not everyone can or should be a founder. !

Professors are terrible as CEOs (but great as advisors).

three big ideas : Definition

three big ideas : Framework

How do we share our thinking?

three big ideas : Framework

What we used to do Write a business plan.

Make a five-year forecast. Pitch for investors.

Fiction Fantasy

Business plan? 5 year forecast?

three big ideas : Framework

What we do now Focus on the business model.

Talk about evidence, not belief.

Use the business model canvas

VP CS

C

P

KA

KR

C$ R$

As a Startup Engine…

… and as Investment Readiness

✓✓

✓✓

✓✓

✓

✓✓

three big ideas : Methodology

How can we be assured?

Startups fail, often. Even yours. Even ours.

Startups are risky.

Product Market

Team Financial

Four Existential Startup Risks

Four Startup Risks: Product

Every startup can make something.

Can you transform that great technology into a product someone wants to

buy from you?

Core Idea or Technology CustomersStartup

?

$

Most startups fail because they fail to find their customer.

The common denominator of every business is a customer.

Four Startup Risks: Market

Can your team execute? Do they have the network?

Can they attract & hire talent? Can they get the funding?

Four Startup Risks: Team

Is the model capital efficient? Revenue in year 1?

Repeatable sales process by 2? Organic growth or investment?

Four Startup Risks: Financial

Team FinancialProduct Market

three big ideas : Methodology

Systematic reduction of startup risk

Do this first. Then, do this.

three big ideas : Methodology

Connected & Primary Risks

Product Market

three big ideas : Methodology

Customer Development

Customer Development

Customer Discovery

Customer Validation

? ✓

Customer Creation

Company Building

Startup Company

Alignment & Sequence

Customer Discovery

Customer Validation

? ✓

ProductMarketRisk

Process

However…

Customer Discovery

Customer Validation

? ✓

ProductMarketRisk

Process

Assume you can

transform technology into product

…

… and

Customer Discovery

Customer Validation

? ✓

ProductMarketRisk

Process

… Address Market Risk

before doing Anything

Else

Why?

?

$

Customers, not Technology

Job / Task

Pain

Desire

✓

How?

?

$

WHO CARES? WHY will they BUY?

three big ideas : Methodology

Answer these questions:

There are NO facts in your buildings or labs.

Get out into the world and find out what’s true.

the real key:

100+ Interviews

three big ideas : Methodology

A man who carries a cat by the

tail learns something he

can learn in no other way.

You cannot outsource the discovery process.

!

Your startup team must gather the evidence

themselves (but you can guide them).

three big ideas : Methodology

You should expect: Deadends & Pivots

Complaints Frustration

and then, finally, Evidence

three big ideas : Methodology

Evidence-based entrepreneurship and these processes will make yours

fail less.

Startups are risky.

venturelab.gatech.edu

@venturelab / @keithmcgreggor

keith@venturelab.gatech.edu

75 Fifth St NW, Suite 415, Atlanta GA 30308