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Lean Startup: Lessons from the field of 300 Innovation-Corps

(Lean LaunchPad) Teams

Errol Arkilic (errol@m34capital.com)

M34 Capital Founding and Former Lead I-Corps Program Director

The views expressed in this material are those of the author and do not necessarily reflect the views of the National Science Foundation

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I don’t know… How to make your startup not suck

Errol Arkilic (errol@m34capital.com)

M34 Capital Founding and Former Lead I-Corps Program Director

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I don’t know how to make your startup not suck

Errol Arkilic (errol@m34capital.com)

M34 Capital Founding and Former Lead I-Corps Program Director

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Lean LaunchPad: How to make your startup not suck

Errol Arkilic (errol@m34capital.com) M34 Capital

Founding and Former Lead I-Corps Program Director

This talk borrows heavily from:

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ENG

NSF GOALI I/UCRC

PFI

ERC

NSF STTR

NSF SBIR

Academia

Small Business

Investors

Industry

Valley of Death

-----------II-R----

------II-B---------------------

------------- Supplements

Res

ourc

es A

vaila

ble

($)

Discovery Development Commercialization

Level of Development From

Angus Kingon

Technology Innovation Spectrum

Unbridgable Gulf of Death

I-Corps

The design, invention, development and/or implementation of new or altered products, services, processes, systems, organizational structures, or business models for the purpose of creating new value for customers and financial returns for the firm

Innovation*

*Innovation Measurement A Report to the Secretary of Commerce January 2008

Why most products/companies fail

YOU’RE BUILDING SOMETHING NOBODY CARES ABOUT

Why most products/companies fail

YOU’RE BUILDING SOMETHING ABOUT WHICH NOBODY CARES

What can you do?

• Admit there are unknowns • Develop hypothesis to probe unknowns • Use appropriate metrics to validate • Close the hypothesis-testing loop • Rinse-and-repeat

Startups Fail because they Confuse Search with Execution

-Steve Blank

Where are You in the Life Cycle

Search

Execution

Execution:

• Repeatable Internal Processes • Knowns:

– Customers, Features, Channels, Pricing

• Management: – Formal / The Suits – Characterized by “Only the Paranoid Survive”

• Customer Creation + Company Building • Goals are set quarterly

Search:

• What Process? • Knowns:

– Runway • Management:

– No management, but founders with leadership/vision – Characterized by “Stark Raving Terror”

• Collecting and analyzing: Search and Pivot • Customer Discovery + Customer Validation • Goal: To get to a sustainable business model

What happens when you confuse Execution with Search

YOU BUILD SOMETHING NOBODY CARES ABOUT

Data-Centric Approach Applying the Scientific Method

• Hypothesis: – Here’s What We Thought

• Experiments: – Here’s What We Did

• Results & Insights: – Here’s What We Learned

• Action: – Here’s What We Are Going to Do Next

Business Model Canvas

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?

?

?

? ?

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Academia

Small Business

Investors

Industry

Valley of Death

Res

ourc

es A

vaila

ble

($)

Discovery Development Commercialization

Level of Development From

Angus Kingon

Technology Innovation Spectrum

Building the Nation’s I-Corps “Fabric” - How I-Corps evolved?

I-Corps Nodes

I-Corps Sites

I-Corps Teams

I-Corps Mentors

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July 2011 I-Corps Teams

October 2012 I-Corps Nodes

January 2013 I-Corps Sites

#1

#2

#3

I-Corps Team

• Entrepreneurial Lead – Post-doc or Student to move it forward

• I-Corps Mentor – Volunteer – Domain-relevant volunteer guide – Proximity is better

• PI – Researcher with current or previous award

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Credit: © 2011 JupiterImages Corp.

I-Corps Infrastructure

• Nodes: – Ga Tech – U. Michigan – Bay Area: Berkeley, Stanford, UCSF – DMV: UMD, Va Tech, GWU – NYCRIN: CUNY, Columbia, NYU

• Sites: – U Akron – UCSD – UIUC

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NSF I-Corps Flow Diagram

Recruiting processes

(NSF)

Pool of eligible Teams (NSF)

Team Selection

(NSF)

Node Assignment

(NSF)

Awarded I-Corps Teams (NSF)

Curriculum Delivery &

Refinement (Nodes)

Customer Discovery

(Teams/Nodes)

Business Model

Canvasses (Teams)

“Go” Decision (Teams)

“No-Go” Decision (Teams)

Resource Infusion

Strategic Partnership

Private Capitalization

Public Funding (e.g., SBIR, STIR, …. )

Private Sector

I-Corps Curriculum • Based on hypothesis-driven business-model

discovery – Pioneered by Stanford and Steve Blank

• Focuses on addressing market risk • Requires getting out of the lab

– AT LEAST 15 hours of prep per week • Mandatory for all I-Corps participants

– First 3 Days (at one of the five nodes) – 5 follow-on webinars with team presentations – 2 Days (lessoned learned )

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Lean Approach to Product/Company Building

• New way of looking at Startups and Product Launch

• It is trendy now, but there is real analysis behind the hype – Don’t let cynicism blind you to the value

• I’ve scratched the surface – Study the tool set – Become a student

When NOT to use a Lean Launch

• When it doesn’t matter if your product/company fails

• When your Technology Risk REALLY is the biggest risk element

• When doing so causes you to miss the wave (bubble)

Five Takeaways

• Recognize the Valley of Death • Embrace the Scientific Method to probe unkowns • Don’t Confuse Search with Execution • Use the Business Model Canvas • This isn’t going away

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Thank You Questions?

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