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Transcript of Steve blank sxsw new rules for the new bubble 031211
New Rules for the New Bubble
Stanford - School of Engineering
U.C. Berkeley - Haas School Of Business
www.steveblank.comTwitter: sgblank
Steve Blank
I Write a Blog www.steveblank.com
I Drew This
CustomerDiscovery
CustomerValidation
Company Building
Customer Creation
Pivot
I Called It:
Customer Development
CustomerDiscovery
CustomerValidation
Company Building
Customer Creation
Pivot
I Wrote This
A Few People Read It
This Talk is Based On• Business Model Generation• Four Steps to the Epiphany
• Lean Startup
Premise
• Beginning of another tech bubble• Rules are different in a bubble• What are they?• How do they differ from what you did before?
A Few Short Stories
How Did We Get Here?
Paths to Startup Liquidity
• 1970 – 1995 build a business (revenue)• 1995 – 2000 flip the business (concept IPO)• 2001 – 2010 build a business (M&A)• 2011 – 2014 flip a built business (M&A / IPO)
1970 – 1995
Building a Business
Startups Are Small Versions of A Large Company
1970 - 1995 Building a Startup the Hard Way
• $Millions’s to start (Proprietary hdwr/sftwr)
• Long product dev cycle (Waterfall)
• Thousands customers (Businesses)
• Liquidity = IPO (5 qtrs revenue/profit)
• No repeatable methodology (Smaller big company)
1970 - 1995Making Money the Hard Way
• Goal was long term company success• VC’s/Founders were company builders• Exits were IPO’s• Founders and VC success ≤ $10 million
1970 – 1995 Playbook
Product Introduction Model
Concept/Seed
Round
Product Dev.
Alpha/Beta Test
Launch/1st Ship
Product Introduction Model
Concept/Seed
Round
Product Dev.
Alpha/Beta Test
Launch/1st Ship
The Leading Cause of Startup Death
Product Introduction Model:Two Implicit Assumptions
Customer Problem: known
Product Features: known
Concept/Seed
Round
Product Dev.
Alpha/Beta Test
Launch/1st Ship
Tradition – Hire Marketing
Concept/Seed
Round
Product Dev.
Alpha/Beta Test
Launch/1st Ship
- Create Marcom Materials- Create Positioning
- Hire PR Agency- Early Buzz
- Create Demand- Launch Event- “Branding”
Marketing
Tradition – Hire Sales
Concept/Seed
Round
Product Dev.
Alpha/Beta Test
Launch/1st Ship
- Create Marcom Materials- Create Positioning
- Hire PR Agency- Early Buzz
- Create Demand- Launch Event- “Branding”
• Build Sales Organization
Marketing
Sales• Hire Sales VP• Hire 1st Sales
Staff
Tradition – Hire Bus Development
Concept Product Dev.
Alpha/Beta Test
Launch/1st Ship
- Create Marcom Materials- Create Positioning
- Hire PR Agency- Early Buzz
- Create Demand- Launch Event- “Branding”
• Hire Sales VP• Pick distribution
Channel
• Build Sales Channel / Distribution
Marketing
Sales
• Hire First Bus Dev
• Do deals for FCS
Business Development
Tradition – Hire Engineering
Concept Product Dev.
Alpha/Beta Test
Launch/1st Ship
- Create Marcom Materials- Create Positioning
- Hire PR Agency- Early Buzz
- Create Demand- Launch Event- “Branding”
• Hire Sales VP• Pick distribution
Channel
• Build Sales Channel / Distribution
Marketing
Sales
• Hire First Bus Dev
• Do deals for FCS
Business Development
Engineering • Write MRD
• Waterfall
• Q/A • Tech Pubs
More startups fail from a lack of customers than from a failure of product development
1995 – 2000
Flipping A Business
The Dot.com Bubble
1995 - 2000The Dot-com Bubble
• 10’s $millions to start (get big fast, create a brand)
• Long product dev cycle (ship beta, 1st mover adv)
• Millions customers (1st consumer internet wave)
• Liquidity - IPO (Little/no revenue, no profits)
• Repeatable methodology (brand, hype, flip or IPO)
1995 - 2000The Dot-com Bubble – Making Money
• Goal = short term exit• VC’s engineering financial transactions• Founders hyped their company• “Musical Chairs” – last one standing looked dumb• Everyone else got absurdly rich
1995 – 2000 Playbook
Netscape
2001 – 2010
Why Startups Are Not Small Versions of A Large Company
2001 - 2010The Lean Startup
• ≤ $½ million to start (open source, commodity hdwr)
• Short product dev cycle (Agile Development)
• 100’s millions Customers (Social networks, consumer)
• Liquidity -M&A (revenue & network of users)
• Repeatable methodology (Agile + Cust Dev)
ScalableStartup
Large Company
- Business Model found- i.e. Product/Market fit- Repeatable sales model- Managers hired
What’s A Startup?
A Startup is a temporary organization used to search for a repeatable and scalable business model
Search Execute
ScalableStartup
Large CompanyTransition
- Founders depart- Professional Mgmt- Process- Beginning of scale
What VC’s Don’t Tell You:The Transition – Founders Leave
Build
ScalableStartup
Large CompanyTransition
Business Model found by founders- customer needs/product features found i.e. Product/Market fit- Repeatable sales model- Managers hired
The Search for the Business Model
Startups Search and Pivot
ScalableStartup
Large CompanyTransition
- Business Model found- Product/Market fit- Repeatable sales model- Managers hired
- Cash-flow breakeven- Profitable- Rapid scale- New Senior Mgmt~ 150 people
The Search for the Business Model The Execution of the Business Model
Startups Search, Companies Execute
ScalableStartup
LargeCompanyTransition
Traditional Accounting- Balance Sheet- Cash Flow Statement- Income Statement
The Execution of the Business Model
Metrics Versus Accounting
ScalableStartup
LargeCompanyTransition
Startup Metrics- Customer Acquisition Cost- Viral coefficient- Customer Lifetime Value- Average Selling Price/Order Size- Monthly burn rate- etc.
Traditional Accounting- Balance Sheet- Cash Flow Statement- Income Statement
The Search for the Business Model The Execution of the Business Model
Metrics Versus Accounting
ScalableStartup
LargeCompanyTransition
Sales- Sales Organization- Scalable- Price List/Data Sheets- Revenue Plan
The Execution of the Business Model
Customer Validation Versus Sales
ScalableStartup
LargeCompanyTransition
Customer Validation- Early Adopters- Pricing/Feature unstable- Not yet repeatable- “One-off’s”
Sales- Sales Organization- Scalable- Price List/Data Sheets- Revenue Plan
The Search for the Business Model The Execution of the Business Model
Customer Validation Versus Sales
ScalableStartup
Large CompanyTransition
The Execution of the Business Model
Engineering Versus Agile Development
Engineering- Requirements Docs.- Waterfall Development- QA - Tech Pubs
ScalableStartup
Large CompanyTransition
Agile Development- Continuous Deployment- Continuous Learning- Self Organizing Teams- Minimum Feature Set- Pivots
The Search for the Business Model The Execution of the Business Model
Engineering Versus Agile Development
Engineering- Requirements Docs.- Waterfall Development- QA - Tech Pubs
ScalableStartup
Large CompanyTransition
Business Plan- describes “knowns”- features- customers/markets- business model
The Execution of the Business Model
Startups Model, Companies Plan
ScalableStartup
Large CompanyTransition
- Business Model- describes “unknowns”- customer needs- feature set- business model- found by iteration
The Search for the Business Model
Startups Model, Companies Plan
The Execution of the Business Model
- Plan describes “knowns”- Known features for line extensions- Known customers/markets- Known business model
2001 - 2010The Lean Startup
• IPO market ~closed, M&A liquidity path• Build for long term but take short term sale• Founders learn Lean skills• Focus on building customers• Minimum hype
2001 - 2010 Playbook
• Four Steps to the Epiphany• Many Agile Texts
But We Were Still Using This
No Business Plan survives first contact with customers
So Search for a Business Model
The Business Model:
Any company can be described in 9 building blocks
CUSTOMER SEGMENTS
which customers and users are you serving? which jobs do they really want to get done?
VALUE PROPOSITIONS
what are you offering them? what is that getting done for them? do they care?
CHANNELS
how does each customer segment want to be reached? through which interaction points?
CUSTOMER RELATIONSHIPS
what relationships are you establishing with each segment? personal? automated? acquisitive? retentive?
REVENUE STREAMS
what are customers really willing to pay for? how? are you generating transactional or recurring
revenues?
KEY RESOURCES
which resources underpin your business model? which assets are essential?
54
KEY ACTIVITIES
which activities do you need to perform well in your business model? what is crucial?
KEY PARTNERS
which partners and suppliers leverage your model?
who do you need to rely on?
COST STRUCTURE
what is the resulting cost structure? which key elements drive your costs?
57images by JAM
customer segments
key partners
cost structure
revenue streams
channels
customer relationships
key activities
key resources
value proposition
How Do Startups Search For A Business Model?
• The Search is Customer Development• The Implementation is Agile Development• The Sum is the Lean Startup
Customer Development
Customer Development
Get Out of the BuildingThe founders
^
Customer DevelopmentThe Search For the Business Model
CompanyBuilding
Customer
Discovery
Customer
Validation
Customer Creation
Pivot
• Stop selling, start listening• Test your hypotheses• Continuous Discovery• Done by founders
Customer Discovery
CustomerDiscovery
CustomerValidation
CompanyBuilding
CustomerCreation
Test Hypotheses:• Product• Market Type• Competition
Turning Hypotheses to Facts
Test Hypotheses:• Problem• Customer• User• Payer
Test Hypotheses:• Channel
Test Hypotheses:• Problem• Customer• User• Payer
Test Hypotheses:• Demand
Creation
Test Hypotheses:• Channel
Test Hypotheses:• Product• Market Type• Competitive
Test Hypotheses:• Pricing Model / Pricing
Test Hypotheses:• Size of Opportunity/Market• Validate Business Model
Test Hypotheses:• Channel• (Customer)• (Problem)
Test Hypotheses:• Problem• Customer• User• Payer
Test Hypotheses:• Demand
Creation
Test Hypotheses:• Channel
Test Hypotheses:• Product• Market Type• Competitive
Test Hypotheses:• Pricing Model / Pricing
Test Hypotheses:• Size of Opportunity/Market• Validate Business Model
Test Hypotheses:• Channel• (Customer)• (Problem) Customer
Development Team
Agile Development
Test Hypotheses:• Problem• Customer• User• Payer
Test Hypotheses:• Demand
Creation
Test Hypotheses:• Channel
Test Hypotheses:• Product• Market Type• Competitive
Test Hypotheses:• Pricing Model / Pricing
Test Hypotheses:• Size of Opportunity/Market• Validate Business Model
Test Hypotheses:• Channel• (Customer)• (Problem) Customer
Development Team
Agile Development
The Minimum Viable Product (MVP)
• Smallest feature set that gets you the most …orders, learning, feedback, failure…
• MVP + Customer are the first two you need to nail
• MVP is just 1 of the 9 parts of your model
The Pivot
• The heart of Customer Development
• Iteration without crisis
• Fast, agile and opportunistic
How Does This Really Work?
Stanford Lean LaunchPad Class
Pivot ExampleOn-line Social Buying Platform
Talked to 250 Customers in 8 weeks
OURCRAVE is an online social shopping platform where customers can make their own deals on products or services of their
choosing with sellers who can offer them in bulk at a discounted price.
Business Canvas #1
- Powerful sellers
- Server providers
- Variable costs: server and traffic maintenance costs
- Fixed Cost: rent, salaries
Seller side:
- transaction fees
Buyer side:
- targeted ads
- Maintaining online
buyer/seller communities
and credibility of
transactions
- Promotion of website and
brand
- Physical resources (IT
infrastructure)
- Existing social
networks -Buyer and
seller communities,
- Brand awareness
- Web & App sales
- Online social networks
Seller:
- Access to large online
customer pool
- Bulk sales with
reduced commission
Buyer:
- Better discounts
- Automated services
- Communities of buyers
and sellers
- Co-creation of value
through customer
feedback
Multi-sided platform
Seller:
Pro-sellers in Amazon
and eBay who sell
electronics
Buyer:
Online shoppers
Seller Side Test with a fake E-MAIL
57%showed interest
Give me a quotefor a bulk sale!
Electronics Sellers on
Amazon/Ebay
FAKE CEO(Steve Feiberg)
90%sell products on Amazon
• 56% paid 10~20% transaction fee
• 22% paid 5~10% transaction fee
• 78% agreed it was too much
• 33% actually provided discount proportional to group size
Seller SideInterview with Industry Specialist (LG Electronics)
BestbuyTarget, Walmart Associations of
Regional Big Sellers25%25% 40%
Main Target
User Side
Discount on products Power to choose products
Buyer community feedback
: Online User Survey
Business Canvas #2
- Powerful sellers
- Sellers who need more
traffic
- Server providers
- Variable costs: server and traffic maintenance costs
- Fixed Cost: rent, salaries
Seller side:
- transaction fees
Buyer side:
- targeted ads
- Maintaining online
buyer/seller communities
and credibility of
transactions
- Promotion of website and
brand
- Physical resources (IT
infrastructure)
- Existing social
networks -Buyer and
seller communities,
- Brand awareness
- Web & App sales
- Online social networks
Seller:
- More customer traffic
- Bulk sales with
reduced commission
Buyer:
- Better discounts
- Power to choose
product deal
- Buyer community
feedback on products
and sellers
- Automated services
- Communities of buyers
and sellers
- Co-creation of value
through customer
feedback
Multi-sided platform
Seller:
Trustworthy online sellers
with verifiable websites
Buyer:
Online shoppers who are
willing to wait to get
significant discounts on
products
Key Question for Business Canvas #2
HOW CAN WE ATTRACT BUYERS?
CUSTOMER ACQUISION COST?
Best Marketing Channel for having buyers is Facebook Wall : 144 Unique Visits, 10 e-mail subscriptions for 3 days
Facebook Wall Google Adwords Facebook Ads
5%
0.08% 0.005%(CTR)
$0 $4.88
$7.52
(COST)
Buyer Demand Test
Business Canvas #3
- Sellers who need more
traffic
-Server providers
Established services
- Online Marketing :
Google/Facebook
-Variable costs: server and traffic maintenance costs
- Fixed Cost: rent, salaries
- Online ad campaigns
Seller side:
- transaction fees
Buyer side:
- targeted ads
- Maintaining online
buyer/seller communities
and credibility of
transactions
- Promotion of website and
brand
- Physical resources (IT
infrastructure)
- Existing social
networks -Buyer and
seller communities,
- Brand awareness
- Web & App sales
- Online social networks
- Online advertising
Seller:
- More customer traffic
- Bulk sales with
reduced commission
Buyer:
- Better discounts
- Power to choose
product deal
- Buyer community
feedback on products
and sellers
- Automated services
- Communities of buyers
and sellers
- Co-creation of value
through customer
feedback
Multi-sided platform
Seller:
Trustworthy online sellers
with verifiable websites
Buyer:
Online shoppers who are
willing to wait to get
significant discounts on
products
Key Question for Business Canvass #3
HOW CAN WE ATTRACT SELLERS?
COOPERATION WITH SELLERS?
Seller Contact
Deal with sellers failed because no group pricing or discount too low.
Contact popular online sellers 3 products: HD camera, protein drink, videogame Videogame was for pre-order
Most sellers: no group discounts Discounts offered < 10% With shipping and tax still >= Amazon price David vs. Goliath problem
Organize Real Group Deal
Result
To Pivot or Not to Pivot?Although dismayed at seller response, we did not give up.
Deal with sellers disappointing Seller problem intractable? Teaching staff: Pivot or else…
Lost one battle, but not the war! Only contacted larger sellers Sellers need more value Show them a real website
Beaten, but not defeated
What do do?
Filter advice and stay determined!
No Pivot
Yet
Solution 1 : Rapid Implementation
Implement seller & buyer side features to give sellers fuller experience.
Improved site design Buyer facebook login Online social networking integration Seller login and registration Seller bidding Seller group deal creation page
Site Upgrade Frenzy
Solution 1 : Rapid ImplementationHumble beginnings
Solution 1 : Rapid ImplementationThe Real Deal
Deal creation by sellers Bidding dialog
Main page Facebook connect
Solution 1 : Rapid Implementation
Solution 2 : More seller value & spammingAdd value for sellers based on mentor and industry expert interviews
Massive seller e-mail campaign (16,000 in total) Stanford takes notice and issues warning (oops) Enumerate value propositions Show live website Hand out registration codes
Low transaction fees Customer contact information Cross-selling products Ad banners Power to create group deal
Add Seller Value
The Art of Spam
Seller Invitation Result
# of sellers who signed up 180 sellers
# of deals made by sellers
80 deals(below Amazon price)
Seller Invitation Result
# of sellers who replied to our email
200 sellers# of sellers who made suggestions on OURCRAVE
50 sellers
Business Canvas #4
- Sellers who need more
traffic
-Server providers
Established services
- Online Marketing :
Google/Facebook
-Payment Gateway :
Paypal
- Customer Service
(Front side
webservice) : Self
- Customer Service
(Product side) : Sellers
- Delivery : Sellers
-Variable costs: server and traffic maintenance costs
- Fixed Cost: rent, salaries
- Online ad campaigns
Seller side:
- transaction fees
Buyer side:
- targeted ads
- Maintaining online
buyer/seller communities
and credibility of
transactions
- Promotion of website and
brand
- Physical resources (IT
infrastructure)
- Existing social
networks -Buyer and
seller communities,
- Brand awareness
- Web & App sales
- Online social networks
- Online advertising
Seller: - More customer traffic
-Bulk sales with reduced commission
- Access to customer contact information
- Cross-sell their products.- Site advertising- Power to create deals
Buyer: - Better discounts
- Power to choose product deal
- Buyer community feedback on products and sellers
- Automated services
- Communities of buyers
and sellers
- Co-creation of value
through customer
feedback
Multi-sided platform
Seller:
Trustworthy online sellers
with verifiable websites
Buyer:
Online shoppers who are
willing to wait to get
significant discounts on
products
Key Question for Business Canvass #4
Key Activities for Next Stage
Can we make enough money?
Key Activity – Seller ManagementWe should manage main feedbacks from sellers by making basic function,
1. Convenient System
2. Building credibility
• Auto Sales Tax Calculator
• Bulk List Uploading Function
• Notification to Sellers for relevant cravebags
• Cross selling Option
• Seller Advertisement Feature
• FAQ List for Sellers
• Share buyer information
• F2F meeting with big sellers
3. More Incentives
Key Activity – Initial AdvertisementBy price comparison site and online ads, test our early service model. Then, Crazy deals needed for jumping
1st Passive : Online Ads
2nd Active : Crazy Deals
• Google / Facebook / Yahoo Ads
• Price Comparison Site ( very important)
• 20~30 % sales for Promotion Deals
• Very very very famous products
Key Activity – Encouraging Buyer’s ViralWe will implement incentive system for sharing deals and help buyers communicate with each other in our service
Incentive for sharing Buyer Community
• OurCrave Point
• Extra Discount
• Free shipping or tax Coupon
22% 14%People who willing to share deals in FB*
People who shared dealsIn FB*
* OurCrave User Survey in 2/3 weeks
• Live comment on cravebags
• Weekly Best cravebag vote
• Youtube Ads Competition
Revenue / Cost Source
Revenue Cost
Product Ads
Transaction Fee ( Main )
Float Money
Site Maintenance
Marketing ( Main )
Customer Support
15% of transaction
3~5% ( paypal)
Server/Traffic/Mobie Apps
Outsourcing20%/60days*
* google/groupon’s rule, we are asking sellers about this rule.
Ads for buyerSeller Management
Business Canvas Final
- Sellers who need more
traffic
-Server providers
Established services
- Online Marketing :
Google/Facebook
- Payment Gateway :
Paypal
- Customer Service
(Front side
webservice) : Self
- Customer Service
(Product side) : Sellers
- Delivery : Sellers
-Variable costs: server and traffic maintenance costs
- Fixed Cost: rent, salaries
- Online ad campaigns
Seller side:
- transaction fees
Buyer side:
- targeted ads
- float money
- Growing and maintaining online buyer/seller communities and credibility of transactions- Promotion of website and brand
- Establishing credibility
- Physical resources (IT
infrastructure)
- Existing social
networks -Buyer and
seller communities,
- Brand awareness
- Web & App sales
- Online social networks
- Online advertising
Seller: - More customer traffic
-Bulk sales with reduced commission
- Access to customer contact information
- Cross-sell their products.- Site advertising- Power to create deals
Buyer: - Better discounts
- Power to choose product deal
- Buyer community feedback on products and sellers
- Automated services
- Communities of buyers
and sellers
- Co-creation of value
through customer
feedback
Multi-sided platform
Seller:
Trustworthy online sellers
with verifiable websites
Buyer:
Online shoppers who are
willing to wait to get
significant discounts on
products
Business Canvas – Week 1
- Powerful sellers
- Server providers
- Variable costs: server and traffic maintenance costs
- Fixed costs: rent, salaries
Seller side:
- transaction fees
Buyer side:
- targeted ads
- Platform/Network
management (maintaining
online buyer/seller
communities and credibility)
- promotion of website and
brand
- Physical resources (IT
infrastructure)
- Existing social networks -
Buyer and seller communities,
- Brand awareness
- Web & App sales
- Online social networks
Seller :
- More customer traffic
- Bulk sales
- Lower transaction fees
Buyer :
- Better discounts
- Automated services
- Communities of buyers and
sellers
- Co-creation of value through
customer feedback
Multi-sided platform
Seller : pro-sellers on Amazon
and eBay
Buyer :
Online shoppers
Business Canvas – Week 2
- Powerful sellers
- Server providers
- Variable costs: server and traffic maintenance costs
- Fixed costs: rent, salaries
Seller side:
- transaction fees
Buyer side:
- targeted ads
- Platform/Network
management (maintaining
online buyer/seller
communities and credibility)
- promotion of website and
brand
- Physical resources (IT
infrastructure)
- Existing social networks -
Buyer and seller communities,
- Brand awareness
- Web & App sales
- Online social networks
Seller :
- More customer traffic
- Bulk sales
- Lower transaction fees
- Brand name marketing
Buyer :
- Better discounts
- Power to choose product
deal
- Automated services
- Communities of buyers and
sellers
- Co-creation of value through
customer feedback
Multi-sided platform
Seller : pro-sellers on Amazon
and eBay
Buyer :
Online shoppers
Business Canvas – Week 3
- Powerful sellers
- Regional sellers
- Server providers
- Variable costs: server and traffic maintenance costs
- Fixed costs: rent, salaries
Seller side:
- transaction fees
Buyer side:
- targeted ads
- Platform/Network
management (maintaining
online buyer/seller
communities and credibility)
- promotion of website and
brand
- Physical resources (IT
infrastructure)
- Existing social networks -
Buyer and seller communities,
- Brand awareness
- Web & App sales
- Online social networks
Seller :
- More customer traffic
- Bulk sales
- Lower transaction fees
- Brand name marketing
Buyer :
- Better discounts
- Power to choose product
deal
- Buyer community
feedback on products and
sellers
- Automated services
- Communities of buyers and
sellers
- Co-creation of value through
customer feedback
Multi-sided platform
Seller :
Sellers on Amazon and eBay
Buyer :
Online shoppers who are
willing to wait to get significant
discounts on products
Business Canvas – Week 4
- Sellers who need more
traffic
- Regional sellers
- Server providers
- Variable costs: server and traffic maintenance costs
- Fixed costs: rent, salaries
Seller side:
- transaction fees
Buyer side:
- targeted ads
- Platform/Network
management (maintaining
online buyer/seller
communities and credibility)
- promotion of website and
brand
- Physical resources (IT
infrastructure)
- Existing social networks -
Buyer and seller communities,
- Brand awareness
- Web & App sales
- Online social networks
- Online advertising
Seller :
- More customer traffic
-Bulk sales
- Lower transaction
fees
- Brand name
marketing
Buyer :
- Better discounts
- Power to choose product
deal
- Buyer community
feedback on products and
sellers
- Automated services
- Communities of buyers and
sellers
- Co-creation of value through
customer feedback
Multi-sided platform
Seller :
Sellers on Amazon and eBay
Buyer :
Online shoppers who are
willing to wait to get significant
discounts on products
Business Canvas – Week 5
- Sellers who need more
traffic
- Regional sellers
- Server providers
- Variable costs: server and traffic maintenance costs
- Fixed costs: rent, salaries
- Online ads
Seller side:
- transaction fees
Buyer side:
- targeted ads
- Platform/Network
management (maintaining
online buyer/seller
communities and credibility)
- promotion of website and
brand
- Physical resources (IT
infrastructure)
- Existing social networks -
Buyer and seller communities,
- Brand awareness
- Web & App sales
- Online social networks
- Online advertising
Seller :
- More customer traffic
- Bulk sales
- Lower transaction fees
- Brand name marketing
- Access to customer
contact information
- Ability to cross-sell
products
- Site advertising
Buyer :
- Better discounts
- Power to choose product
deal
- Buyer community
feedback on products and
sellers
- Automated services
- Communities of buyers and
sellers
- Co-creation of value through
customer feedback
Multi-sided platform
Seller :
Sellers on Amazon and eBay
Buyer :
Online shoppers who are
willing to wait to get significant
discounts on products
Business Canvas – Week 6
- Sellers who need more
traffic
- Regional sellers
- Server providers
- Variable costs: server and traffic maintenance costs
- Fixed costs: rent, salaries
- Online ads
Seller side:
- transaction fees
Buyer side:
- targeted ads
- float money
- Platform/Network
management (maintaining
online buyer/seller
communities and credibility)
- promotion of website and
brand
- Physical resources (IT
infrastructure)
- Existing social networks -
Buyer and seller communities,
- Brand awareness
- Web & App sales
- Online social networks
- Online advertising
- Automated services
- Communities of buyers and
sellers
- Co-creation of value through
customer feedback
Multi-sided platform
Seller :
Sellers on Amazon and eBay
Buyer :
Online shoppers who are
willing to wait to get significant
discounts on products
Seller :
- More customer traffic
- Bulk sales
- Lower transaction fees
- Access to customer
contact information
- Cross-sell their products.
- Site advertising
- Power to create deals
Buyer :
- Better discounts
- Power to choose product
deal
- Buyer community
feedback on products and
sellers
Business Canvas – Week 7
- Sellers who need more
traffic
- Regional sellers
- Server providers
Established services
- Online Marketing :
Google/Facebook
-Payment Gateway : Paypal
- Customer Service (Front
side webservice) : Self
- Customer Service (Product
side) : Sellers
- Delivery : Sellers
- Variable costs: server and traffic maintenance costs
- Fixed costs: rent, salaries
- Online ads
Seller side:
- transaction fees
Buyer side:
- targeted ads
- float money
- Platform/Network
management (maintaining
online buyer/seller
communities and credibility)
- Promotion of website and
brand
- Physical resources (IT
infrastructure)
- Existing social networks -
Buyer and seller communities,
- Brand awareness
- Web & App sales
- Online social networks
- Online advertising
- Automated services
- Communities of buyers and
sellers
- Co-creation of value through
customer feedback
Multi-sided platform
Seller : Sellers on Amazon and
eBay
Seller:
Trustworthy sellers with
verifiable websites.
Buyer :
Online shoppers who are
willing to wait to get significant
discounts on products
Seller :
- More customer traffic
- Bulk sales
- Lower transaction fees
- Access to customer
contact information
- Cross-sell their products.
- Site advertising
- Power to create deals
Buyer :
- Better discounts
- Power to choose product
deal
- Buyer community
feedback on products and
sellers
Business Canvas – Week 8
- Sellers who need more
traffic
Established services
- Online Marketing :
Google/Facebook
-Payment Gateway : Paypal
- Customer Service (Front
side webservice) : Self
- Customer Service (Product
side) : Sellers
- Delivery : Sellers
- Variable costs: server and traffic maintenance costs
- Fixed costs: rent, salaries
- Online ads
Seller side:
- transaction fees
Buyer side:
- targeted ads
- float money
- Platform/Network
management (maintaining
and growing online
buyer/seller communities
and credibility)
- Promotion of website and
brand
- Establishing credibility
- Physical resources (IT
infrastructure)
- Existing social networks -
Buyer and seller communities,
- Brand awareness
- Web & App sales
- Online social networks
- Online advertising
- Automated services
- Communities of buyers and
sellers
- Co-creation of value through
customer feedback
Multi-sided platform
Seller:
Trustworthy sellers with
verifiable websites.
Buyer :
Online shoppers who are
willing to wait to get significant
discounts on products
Seller :
- More customer traffic
- Bulk sales
- Lower transaction fees
- Access to customer
contact information
- Cross-sell their products.
- Site advertising
- Power to create deals
Buyer :
- Better discounts
- Power to choose product
deal
- Buyer community
feedback on products and
sellers
Pivot ExampleRobotic Weeding
Talked 75 Customers in 8 Weeks
OUR INITIAL PLAN
Confidential
20 INTERVIEWS, 6 SITE VISITS…WE GOT OUR BOOTS DIRTY
WeedingVisited two farms in Salinas Valley to better understand problem
Interviewed:• Bolthouse Farms, Large Agri-Industry in Bakersfield• White Farms, Large Peanut farmer in Georgia• REFCO Farms, large grower in Salinas Valley• Rincon Farms, large grower in Salinas Valley• Small Organic Corn/Soy grower in Nebraska• Heirloom Organics, small owner/operator, Santa Cruz Mts• Two small organic farmers at farmers market• Ag Services of Salinas, Fertilizer applicator
MowingInterviewed:• Golf: Stanford Golf course • Parks: Stanford Grounds Supervisor, head of maintenance
and lead operator (has crew of 6)• Toro dealer (large mower manufacturer) • User of back-yard mowing system• Maintenance Services for City of Los Altos• Colony Landscaping (Mowing service for stadiums)
Confidential
BUSINESS PLAN AUTONOMOUS VEHICLES FOR MOWING & WEEDING
We reduce operating cost- Labor reduction- Better utilization of assets (eg mow or weed at nights)- Improved performance (less rework, food safety)
Mowing- Owners of public or commercially used green spaces (e.g. golf courses)- Landscaping service provider
Weeding- Farmers with manual weeding operations
Dealers sell, installs and supports customer
Co. trains dealers, supports dealers
- Mowing Dealers- Ag Dealers
- Innovation- Customer Education- Dealer training
Dealer discount COGS seek a 50-60% Gross MarginHeavy R&D investment
- Dealers (Mowing and Ag)- Vehicle OEMs (John Deere, Toro, Jacobsen, etc)
- Research labs
Asset saleOur revenue stream derives from selling the equipment
Engineers on Autonomous vehicles, GPS, path-planning
AUTONOMOUS VEHICLES WEEDING
We reduce operating cost- Labor reduction (100 to 1)- Reduced risk of contamination- Mitigate labor availability concerns
- Low density vegetable growers- High density vegetable growers- Thinning operations- Conventional vegetables
Dealers sell, installs and supports customer
Co. trains dealers, supports dealers
- Ag Dealers- Ag Service providers
- Innovation- Customer Education- Dealer training
Dealer discount COGS seek a 50-60% Gross MarginHeavy R&D investment
- Ag Dealers- Ag Service providers
- Research labs
Asset saleOur revenue stream derives from selling the equipment
Engineers on Machine VisionTwo problems:- Identification- Elimination
1 Week – 1 CarrotBot
Confidential
THE BUSINESS PLAN CANVAS UPDATED
• Research Labs
• Equipment Manufacturers
• Distribution Network
• Service Providers
• Technology Design
• Marketing• Demo and
customer feedback
• Cost Reduction
• Remove labor force pains
• Eliminate bio-waste hazards
• IP – Patents• Video
Classifier Files
• Robust Technology
• Farming conventions.
• Demo, demo, and demo!!
• Proximity is paramount
• Organic Farmers
• Weeding Service Providers
• Conventional Farmers
• Dealers• Direct Service• Indirect
Service• … then
Dealers• Asset Sale• Direct Service
with equipment rental
• … then Asset Sale
Value-Driven
THE BUSINESS PLAN CANVAS UPDATED
• Research Labs
• Equipment Manufacturers
• Distribution Network
• Service Providers
• Technology Design
• Marketing• Demo and
customer feedback
• Cost Reduction
• Remove labor force pains
• Eliminate bio-waste hazards
• IP – Patents• Video
Classifier Files
• Robust Technology
• Farming conventions.
• Demo, demo, and demo!!
• Proximity is paramount
• Mid/Large Organic Farmers
• Agricultural corporations
• Weeding Service Providers
• Mid/Large Conventional Farmers
• Direct Service• Indirect
Service• … then
Dealers
• Direct Service with equipment rental
• ($1,500/d; 120d/yr )• Low density:
$1,500/d• High density:
$6,000/d
Value-Driven
WORLD AG EXPO INTERVIEWS:THE NEED IS REAL AND WIDE SPREAD
10+ interviews at show Everyone confirmed the need Robocrop, UK based, crude
competitor sells for $171 K
Revenue Stream Mid to small growers prefer a
service Large growers prefer to buy,
but OK with service until technology is proven
Charging for labor cost saved is OK, as we provide other benefits (food safety, labor availability)
Confidential
THE BUSINESS PLAN CANVAS UPDATED
• Research Labs
• Equipment Manufacturer
• Distribution Network
• Service Providers
• 2 or 3 Key Farms
• Technology Design
• Marketing• Demo and
customer feedback
• Cost Reduction
• Remove labor force pains
• Eliminate bio-waste hazards
• IP – Patents• Video
Classifier Files
• Robust Technology
• Farming conventions.
• Demo, demo, and demo!!
• Proximity is paramount
• Mid/Large Organic Farmers
• Agricultural corporations
• Weeding Service Providers
• Mid/Large Conventional Farmers
• Direct Service• Indirect
Service• … then
Dealers
• Direct Service with equipment rental
• Low density: $1,500/d
• High density: $6,000/d
Value-Driven• R&D• Bill of Materials• Training &
Service• Sales
AUTONOMOUS WEEDING - FINAL
We reduce operating cost- Labor reduction (100 to 1)- Reduced risk of contamination- Mitigate labor availability concerns
- Low density vegetable growers- High density vegetable growers- Thinning operations- Conventional vegetables
Direct- Provide high quality service at competitive price
Direct - Alliance with service providers- Eventually sell through dealers
- Innovation- Customer Education- Dealer training
Costs for service provisionCOGS seek a 50-60% Gross MarginHeavy R&D investment
- Ag Service providers
- Research Institutes (eg UC Davis, Laser Zentrum Hannover)
- 3-4 key farms
Service provision- Charge by the acre with modifier according to weed density - Eventually move to asset sale
Engineers on Machine VisionTwo problems:- Identification- Elimination
2011 – 2014
Rules for the New Bubble
New Bubble Hypotheses
• We’re in one• Rules are different in 2011 then 2006• Exits will be IPO and M&A
– Unlike last bubble initial IPO’s will be “real”– Quality of IPO pipeline will diminish rapidly– Acquirers can be “targeted”
• You can “engineer for an acquisition”
2011 – 2014The New Bubble
• Short product dev cycle (Agile Development)
• Customers 10’s/100’s millions (Social networks, consumer)
• Liquidity through M&A & IPO (revenue & network of users)
• Repeatable methodology (Agile + Cust Dev + Bus Model)
• Target acquirers (Adoption, Visibility, order of battle)
2011 - 2014Rules for the New Bubble
• Founders/VC’s can engineer financial transactions
• Transactions economically or usage accretive• Still require Agile, Cust Dev & Bus Model• Add: Adoption, Order of Battle and Visibility
2011 - 2014 Playbook• Business Model Generation• Four Steps to the Epiphany
• Lean Startup• Liquidity Strategy
Lean & Pivots is the Minimum Entry
• Continuous Customer Discovery• Rapid Bus Model iteration• Extreme Agile Development
2011 – 2014Order of Battle
• Each market has a finite number of acquirers• Each with a finite number of deal makers• Each looking to fill specific product/market holes• Each read/go to finite number of blogs/conferences
• This is not an NP-complete problem
2011 – 2014Adoption
• Get wide adoption (freemium, low costs, etc) • Go for massive distribution• Monetize later• Can only be done Lean, requires Pivots
2011 – 2014Visibility
• Be everywhere• Look larger than life• Conference, blogs, social networks• PR is your best friend, invest in it
Closing Thoughts
• We’re at the beginning of another tech bubble• Rules for making money are different in a bubble• Founders & VC’s can engineer financial transactions• Transactions need to be economically or usage accretive• Still require Agile, Cust Dev & Bus Model• Add: Adoption, Order of Battle and Visibility
Thanks
www.steveblank.com
BACKUP
Pivot ExamplePersonal Libraries
Talked to 75 Customers in 8 weeks
Version 1.0: Personal Libraries
something-something-something.com
Original idea
SHORT TERMResearchersLawyersScientists
LONG TERMAvid book readersProfessionals
Import, organize and share thousands of papers
FB/TW posts from users you know
Company blog, FB, TW, support forums
Affiliate program
SEO/SEM/SM
IE/FF/Chrome App Stores
Targeted marketing
Product development
Constant iteration & testing
DevelopersMarketers
Libraries, Universities, Research Centers
Bloggers and media targeting customer segment
Academic Database providers
Affiliate program feesLicensingSubscription feesAd revenue
AWS InfrastructureSEMEng & Marketing OpEx
Invincible Business Model: Version 1.0
Got out of the building
• 100+ Interviews• Extensive Surveys• 33,000+ Adwords• Compete Review• Market Sizing• 50 bloggers• 6 Social Networks• Usability Tests• Rapid Iteration
Version 2.0: Trusted Advice
something-something-something.com
Original idea
Upwardly mobile young professionals making $2-10K of discretionary online purchases a year (excluding travel)
Discover online goods recommended by friends at the lowest possible price from trusted vendors
FB/TW posts from users you know
Company blog, FB, TW accounts
Affiliate program
SEO/SEM/SM
IE/FF/Chrome App Stores
Developing trusted advice and advisors
Web marketing
Affiliate partnerships
Constant iteration & testing
DevelopersMarketersContent LibraryInstall baseReadership base
Bloggers and Media targeting customer segment
Retail marketing partners
IE/FF/Chrome teams
Affiliate Program Providers
Affiliate program feesLicensingSubscription feesAd revenue
AWS InfrastructureSEMEng & Marketing OpEx
Invincible Business Model: Version 2.0
New Hypotheses
Here’s What We DidVersion 2.0: Trusted Advice
Got out of the building, again
• 40+ Interviews• Extensive Surveys• Landing Page Tests• Market Research• Compete Research• Revenue Analysis• Two Prototypes• Refined Personas
Version 2.0: Trusted AdviceTop ~6M US Influentials (~$9B/year)
something-something-something.com
Original idea
Upwardly mobile young professionals making $2-10K of discretionary online purchases a year (excluding travel)
Discover online goods recommended by friends at the lowest possible price from trusted vendors
FB/TW posts from users you know
Company blog, FB, TW accounts
Affiliate program
SEO/SEM/SM
IE/FF/Chrome App Stores
Developing trusted advice and advisors
Web marketing
Affiliate partnerships
Constant iteration & testing
DevelopersMarketersContent LibraryInstall baseReadership base
Bloggers and Media targeting customer segment
Retail marketing partners
IE/FF/Chrome teams
Affiliate Program Providers
Affiliate program feesLicensingSubscription feesAd revenue
AWS InfrastructureSEMEng & Marketing OpEx
Invincible Business Model: Version 2.0
The adventure continues
Trusted Advice 2.0
Protection against SEO-spammers
Next Experiments: • Trusted Lead Gen • Trusted Advice
website powered by Shopping Add-in
something-something-something.com
Original idea
PAT THE PROFESSIONALUpwardly mobile young professionals making $2-10K of discretionary online purchases a year (excluding travel)
TRUSTED ADVICE Discover online goods recommended by friends at the lowest possible price from trusted vendors
Foil advertorial spammers polluting the Interweb with toxic pseudo-content
FB/TW posts from users you know
Company blog, FB, TW accounts
Affiliate program
SEO/SEM/SM
IE/FF/Chrome App Stores
Developing trusted advice and advisors
Web marketing
Affiliate partnerships
Constant iteration & testing
DevelopersMarketersContent LibraryInstall baseReadership base
Bloggers and Media targeting customer segment
Retail marketing partners
IE/FF/Chrome teams
Affiliate Program Providers
Affiliate program feesLicensingSubscription feesAd revenue
AWS InfrastructureSEMEng & Marketing OpEx
Invincible Business Model: Version 3.0
Pivot ExampleCloud Services
Talked to 50 Customers in 8 weeks
Week 1
Cloud compute marketplace
Build a cloud marketplace
Direct sales to both
buyers and sellers
Many different customer segments on buy-side and sell-sideHuge
dependency on technical
platform
Week 2
Cloud Services Match Maker
Pivot away from technical platform
Help buyers find the best
provider Removed financial, consumer segmentsAct as
channel for sellers
Week 3
Automated Cloud Capacity Planning
Pivot 1:Capacity Planning Pivot 2:
Focus on enterprises
with variable workload
Week 4
Week 5
Week 6
Week 7
Capacity Planning· High variability in usage Service Matching• Companies
unfamiliar with using cloud infrastructure
SLA Monitoring• Companies
with high SLA requirements with their customers
· Integrators / consultants specialized in cloud infrastructure
• Inside sales and field sales· Development Costs· Infrastructure costs – AWS· Support costs
• Subscription charge to buyers• Pricing table scales based on # of servers
and # of seats, with tiers
· For enterprise segment, higher touch model with field sales force
· Reduced cloud infrastructure cost· Better compute needs matching· Increased visibility on service level
Integrators:· Increased budget for consulting services
• Design and refine capacity planning and match making algorithms
• Develop and maintain cloud infrastructure vendors relationships
• Develop brand as go-to place for cloud lifecycle management
· Technology partners – cloud vendors, management tools· System integrators / Consultants · Intellectual property –
prediction algorithm· Developers· Inside sales force· Field sales force · Biz dev (channel partners and technology partners)
Week 8
Capacity Planning· High variability in usage Service Matching• Companies
new to cloudSLA Monitoring• Companies
with high SLA requirements
· IaaS Integrators / consultants
• Inside and field sales· Development Costs· Infrastructure costs – AWS· Support costs
• Subscription charge to buyers• Pricing table scales based on # of servers
and # of seats, with tiers
· For enterprise, higher touch model with field sales
Customers· Reduced cloud infrastructure cost· Increased visibility on service level
Integrators:· Increased revenue
• Develop capacity planning algorithm
• Develop IaaS vendor relationships
• Marketing and sales
· Technology partners – cloud vendors, management tools· System integrators / Consultants
· IP– prediction · Developers· Inside sales force· Field sales force · Biz dev (channel and technology partners)
Agora – FINAL
Cloud Lifecycle Management
Partner with Integrators
Leverage both inside and field
sales
Position product for
lifecycle management
Pivot ExampleUser Generated
Real-Time Traffic Info
Talked to 150 Customers in 8 weeks
Initial Product Idea
Shanghai Lahore
Bangkok Jakarta
Mobile application providing crowd-sourced real time traffic map in
developing countries
Business Canvas Change Progress
1
Business Canvas Change Progress
2
Business Canvas Change Progress
3
Customer Segment: Corporate
Users
Influencers and Recommenders
Economic Buyers, Decision Makers
Archetypes
Saboteurs
The Drivers:Are you questioning our expertise?
International, local, large, and small companies
Pass/Fail
FAIL
Business Canvas Change Progress
4
Business Canvas Change Progress
5
Business Canvas Change Progress
6
Business Canvas Change Progress
7
Business Canvas Change Progress
FINAL
Pivot Example
Residential Wind Turbines
Talked to 100 Customers in 8 weeks
Business Model Canvas #1
• Cheap wind• Green status
symbol• Diversify energy
portfolio • Faster payback
than alternatives
• Single family homeowner
• House rental groups
• Contractors in home remodeling
• Direct sales• Web site• Home Depot
• 5 yr full service Warranty
• Want re-buy from customers
• Asset sales
• Wind• Cheap manufacturing
process - Intellectual property
• Need Initial capital• Endorsements by
environmental groups, and local governments
• Continue R&D• Get certifications• Get approvals from
city councils
• Environmental, bird, wildlife groups (regulations, publicity)
• City councils (new regulations, permits).
• Contractors
• Cost-driven model to provide inexpensive, quality product
• Single family homeowner
• Direct sales
• City councils (new regulations, permits).
• Faster payback than alternatives
Initial Idea
Affordable
New home appliance
Status
Business Model Canvas # 2
• Retrofit wind turbine for street and highway lamps.
• Create own wind turbines with pole manufacturers
• Be owner of cheap green status symbol
• Diversify green energy portfolio
• Fast payback than alternatives
• Single family wealthy, green home and land owner in CA, TX ,CO, WI, NY
• Cities• Lighting
Companies• Direct sales to
cities • Web site• Home Depot
• 5 year full service Warranty
• After 5 years, service charge
• Utility to manage after warranty expiration
• Extended warranty option
• Direct Sales• Service Calls• Leasing
• Cheap manufacturing process - Intellectual property
• $1.5 MM of capital to start manufacturing and distribution for year 1 and 2
• Manufacturing Parts• Endorsements by
environmental groups, and local governments
• Continuous advertise and recruit new customers (city councils)
• Build relationship with city engineers and council members
• Understand customer, influencers, motivations, problems, competitors
• Form partnerships for maximum reach
• Submit bids for city RFPs• Continue R&D• Get certifications• Gain Credibility
• Environmental, bird, wildlife groups (regulations, publicity)
• City councils not HOA(new regulations, permits).
• Lighting Manufacturers
• Electricians and Contractors for Installation/Maintenance
• Research Labs• Turbine Certifiers
• Cost-driven model to provide inexpensive, quality product• Manufacturing costs and customer acquisition costs. • May consider in-house leasing option, if upfront costs is large
obstacle for customer and sufficient funding obtained (must be in future)
• Cities
• Retrofit wind turbine for street and highway lamps.
• Build relationship with city engineers and council members• City councils not
HOA
City Process
Learn about city approval Process
City Values
• Policies• Community Culture• State Mandates• City Budget Plan
Back to the envelop metrics
Request for
Quote
Technical Evaluation and Recommendati
on
City Council Approval
IDEA
City Council “Pet-
Project”
Finance Approval
Planning Commission
Business Model Canvas – Final
• Retrofit wind turbine for street and highway lamps.
• Create own wind turbines with pole manufacturers
• Be owner of cheap green status symbol
• Diversify green energy portfolio
• Fast payback than alternatives
• Cities (pilot)• Cities leasing• Lighting
Companies• Developer ->
Utilities -> City
• Direct sales to cities (long term) PILOTS
• Small Wind Developer
• 5 year full service Warranty,
• After 5 years, service charge
• Utility to manage after warranty expiration
• Extended warranty option
• Leasing, PPA• Direct Sales to wind developers?
• Cheap manufacturing process - Intellectual property
• R&D talent• Endorsements by
environmental groups, and local governments
• Finance
• Continuously advertise and recruit new customers (city councils)
• Build relationship with city engineers and council members
• Understand customer, influencers, motivations, problems, competitors
• Form partnerships (developers, cities, installers, maintenance) for maximum reach
• Submit bids for city RFPs• Continue R&D• Get certifications• Gain Credibility
• City council (new regulations, permits).
• Environmental, bird, wildlife groups (regulations, publicity)
• Lighting Manufacturers
• Electricians and Contractors for Installation/Maintenance
• Research Labs• Turbine Certifiers• Small Wind
Developers• Utilities
• Cost-driven model to provide inexpensive, quality product• Manufacturing costs and customer acquisition costs. • May consider in-house leasing option, if upfront costs is large
obstacle for customer and sufficient funding obtained (must be in future)
• Cities leasing
• Developer -> Utilities -> City
• Leasing, PPA• Direct Sales to wind developers?
• Finance
Business Model Canvas – Week 1
• Cheap affordable wind turbine for the everyday American
• Be owner of cheap green status symbol
• Diversify energy portfolio,
• Fast payback than alternatives, < 5 yrs
• Single family homeowner
• House rental groups
• Contractors in home remodelling
• Direct sales• Web site• Home Depot
• 5 year full service Warranty
• Want re-buy from customers
• Sale of Product
• Cheap manufacturing process - Intellectual property
• Need initial capital• Endorsements by
environmental groups, and local governments
• Continue R&D• Get certifications• Get approvals from
city councils
• Environmental, bird, wildlife groups (regulations, publicity)
• City councils (new regulations, permits).
• Contractors
• Cost-driven model to provide inexpensive, quality product
Business Model Canvas – Week 2
• Cheap affordable wind turbine for the everyday American
• Be owner of cheap green status symbol
• Diversify energy portfolio,
• Fast payback than alternatives
• Single family homeowner in CA, TX ,CO, WI, NY
• House rental groups
• Contractors in home remodelling
• Direct sales• Web site• Home Depot
• 5 year full service Warranty
• Want rebuy from customers
• Direct Sales• Leasing• Service Calls
• Cheap manufacturing process - Intellectual property
• Need Iniitial capital• Endorsements by
environmental groups, and local governments
• Continuous advertise and recruit new customers
• Continue R&D• Get certifications• Get approvals from
city councils
• Environmental, bird, wildlife groups (regulations, publicity)
• City councils and neighborhood/??? (new regulations, permits).
• Contractors
• Cost-driven model to provide inexpensive, quality product • May consider in-house leasing option, if upfront costs is large
obstacle for customer and sufficient funding obtained.
Business Model Canvas – Week 3
• Cheap affordable wind turbine for the everyday American
• Be owner of cheap green status symbol
• Diversify energy portfolio,
• Fast payback than alternatives
• Single family wealthy, green home and land owner in CA, TX ,CO, WI, NY
• House rental groups
• Contractors in home remodelling
• Direct sales• Web site• Home Depot
• 5 year full service Warranty
• Additional Maintenance after
• Want rebuy from customers
• Direct Sales• Leasing• Service Calls
• Cheap manufacturing process - Intellectual property
• Need Iniitial capital (600k)• Manufacturing Facilities and
Areas• Endorsements by
environmental groups, and local governments
• Continuous advertise and recruit new customers
• Continue R&D• Get certifications• Get approvals from
city councils • Gain Credibility
• Environmental, bird, wildlife groups (regulations, publicity)
• City councils and neighborhood/??? (new regulations, permits).
• Contractors
• Cost-driven model to provide inexpensive, quality product • May consider in-house leasing option, if upfront costs is large
obstacle for customer and sufficient funding obtained.
Business Model Canvas – Week 4
• Cheap affordable wind turbine for the everyday American
• Cheap product more readily available
• Be owner of cheap green status symbol
• Diversify energy portfolio,
• Fast payback than alternatives
• Single family wealthy, green home and land owner in CA, TX ,CO, WI, NY
• House rental groups
• Contractors in home remodelling
• Direct sales• Web site• Home Depot
• 5 year full service Warranty
• Additional Maintenance after
• Want rebuy from customers
• Direct Sales• Leasing• Service Calls
• Cheap manufacturing process - Intellectual property
• Need Iniitial capital (600k)• Manufacturing Parts• Endorsements by
environmental groups, and local governments
• Continuous advertise and recruit new customers
• Continue R&D• Get certifications• Get approvals from
city councils • Gain Credibility
• Environmental, bird, wildlife groups (regulations, publicity)
• City councils and neighborhood/??? (new regulations, permits).
• Contractors
• Cost-driven model to provide inexpensive, quality product• Manufacturing costs and customer acquisition costs. • May consider in-house leasing option, if upfront costs is large
obstacle for customer and sufficient funding obtained (must be in future)
Business Model Canvas – Week 5
• Cheap product more readily• Retrofit wind turbine for street
and highway lamps. • Create own wind turbines with
pole manufacturers• Be owner of cheap green
status symbol• Diversify green energy
portfolio• Fast payback than alternatives
• Single family wealthy, green home and land owner in CA, TX ,CO, WI, NY
• Cities• Lighting
Companies• Utilities
• Direct sales to cities (long term)
• Web site• Home Depot
• 5 year full service Warranty
• After 5 years, service charge
• Utility to manage after warranty expiration
• Extended warranty option
• Direct Sales• Service Calls• Leasing
• Cheap manufacturing process - Intellectual property
• $1.5 MM of capital to start manufacturing and distribution for year 1 and 2
• Manufacturing Parts• Endorsements by
environmental groups, and local governments
• Continuous advertise and recruit new customers (city councils)
• Build relationship with city engineers and council members
• Understand customer, influencers, motivations, problems, competitors
• Form partnerships for maximum reach
• Submit bids for city RFPs• Continue R&D• Get certifications• Gain Credibility
• Environmental, bird, wildlife groups (regulations, publicity)
• City councils and neighborhood/??? (new regulations, permits).
• Lighting Manufacturers
• Electricians and Contractors for Installation/Maintenance
• Cost-driven model to provide inexpensive, quality product• Manufacturing costs and customer acquisition costs. • May consider in-house leasing option, if upfront costs is large
obstacle for customer and sufficient funding obtained (must be in future)
• Retrofit wind turbine for street and highway lamps.
• Use competitive, local, renewable energy, strong green symbol
• Diversify energy portfolio,
• Fast payback than alternatives.
• Cities• Lighting
Companies• Utilities• County –
State Level
• Direct sales to the city or utility, and forming long term relationship for maintenance and replacements.
• 5 year maintenance and warranty
• After 5 years, service charge• Utility to manage after warranty
expiration• Extended warranty option
• Asset sales and service calls• Leasing and PPA? (under review)
• Cheap manufacturing process - Intellectual property
• $1.5 MM of capital to start manufacturing and distribution for year 1 and 2
• Endorsements by environmental groups, city consortiums for renewable energy, public utilities, city council planning department
• Build relationship with city engineers and council members
• Understand customer, influencers, motivations, problems, competitors
• Form partnerships for maximum reach
• Submit bids for city RFPs
• Environmental, bird, wildlife groups (regulations, publicity)
• City councils (new regulations, permits).
• Light manufacturers, installers to package product/services
• Electricians, contractors, light maintenance for additional workforce
• Cost-driven model to provide inexpensive, quality product • Manufacturing costs and customer acquisition costs. • May consider in-house leasing option, if upfront costs is large
obstacle for customer and sufficient funding obtained.
Business Model Canvas – Week 6
• Retrofit wind turbine for street and highway lamps.
• Use competitive, local, renewable energy, strong green symbol
• Diversify energy portfolio,
• Fast payback than alternatives.
• Cities• Utilities• County –
State Level
• Direct sales to the city or utility, and forming long term relationship for maintenance and replacements.
• 5 year maintenance and warranty
• After 5 years, service charge• Utility to manage after warranty
expiration• Extended warranty option
• Asset sales and service calls• Leasing and PPA (Future)
• Cheap manufacturing process - Intellectual property
• $1.5 MM of capital to start manufacturing and distribution for year 1 and 2
• Endorsements by environmental groups, city consortiums for renewable energy, public utilities, city council planning department
• Build relationship with city engineers and council members
• Understand customer, influencers, motivations, problems, competitors
• Form partnerships for maximum reach
• Submit bids for city RFPs
• Environmental, bird, wildlife groups
• City councils (new regulations, permits).
• Light manufacturers, • Installers/maintainers• Research Labs• Turbine Certifiers
• Cost-driven model to provide inexpensive, quality product • Manufacturing costs and customer acquisition costs. • May consider in-house leasing option, if upfront costs is large
obstacle for customer and sufficient funding obtained.
Business Model Canvas – Week 7
Business Model Canvas – Final
• Retrofit wind turbine for street and highway lamps.
• Create own wind turbines with pole manufacturers
• Be owner of cheap green status symbol
• Diversify green energy portfolio
• Fast payback than alternatives
• Cities (pilot)• Cities leasing• Lighting
Companies• Developer ->
Utilities -> City
• Direct sales to cities (long term) PILOTS
• Small Wind Developer
• 5 year full service Warranty,
• After 5 years, service charge
• Utility to manage after warranty expiration
• Extended warranty option
• Leasing, PPA• Direct Sales to wind developers?
• Cheap manufacturing process - Intellectual property
• R&D talent• Endorsements by
environmental groups, and local governments
• Finance
• Continuously advertise and recruit new customers (city councils)
• Build relationship with city engineers and council members
• Understand customer, influencers, motivations, problems, competitors
• Form partnerships (developers, cities, installers, maintenance) for maximum reach
• Submit bids for city RFPs• Continue R&D• Get certifications• Gain Credibility
• City council (new regulations, permits).
• Environmental, bird, wildlife groups (regulations, publicity)
• Lighting Manufacturers
• Electricians and Contractors for Installation/Maintenance
• Research Labs• Turbine Certifiers• Small Wind
Developers• Utilities
• Cost-driven model to provide inexpensive, quality product• Manufacturing costs and customer acquisition costs. • May consider in-house leasing option, if upfront costs is large
obstacle for customer and sufficient funding obtained (must be in future)
• Leasing, PPA• Direct Sales to wind developers?