GDC„s I-NCUBATE Program

- A Presentation -

March 2019

Gopalakrishnan - Deshpande Centre for Innovation & Entrepreneurship

Agenda

About GDC

About I-NCUBATE

Structure and Pedagogy of I-NCUBATE

Role of Key Participants in I-NCUBATE

Discussions

3

GDC - Overview

LAUNCH

• An alumni-funded Centre for Innovation & Entrepreneurship at IIT Madras • Launched in Jan 2017; Commenced operations in Aug 2017 • Funded by grants from three illustrious alumni: Dr. Gururaj Deshpande, Mrs. Jaishree Deshpande and Mr. ‘„Kris„„

Gopalakrishnan

4

CHARTER

To work with STEM colleges across India to implement a ‘Lab to Market„ mission by helping faculty, researchers, students and entrepreneurs commercialise their research ideas by enabling them develop robust start-ups that positively impact India

Why GDC?

• Most technology developed in the West ( where per capita income > $40,000)

• At <$1000 per capita income, more than 1 billion Indians will not benefit from technology solutions of the West

• Inadequate capabilities and lack of R&D orientation in corporate India to develop technological solutions

• Under BAU conditions, India will be swamped with foreign technology; core problems in Healthcare, Energy, Education, Environment et al. for most Indians will not be addressed

• Role of Indian academic institutions changing: Teaching + Research + Entrepreneurship

• In the last few years, we have had some innovations in India in multiple sectors – e.g. Healthcare, Aviation, Payments, Mobile, E-commerce, EdTech - Low ticket size and scaling to hundreds of millions of users

5

Can research at India’s scientific academic institutions spawn robust start-ups that create positive impact at scale?

Usual Start-up Process at Universities

6

• Embryonic business idea • Options and possibilities • Idea development • Will it work? – Prototype development • Is there a market?

• Start-up in early phase • Establish office, Expand staff • Product development • Customer acquisition • Scale operations

Pre – Incubation Stage Post – Incubation Stage

LAB INCUBATOR Incorporation

IDEA

Ideation • Grant funding • Project budget • Own funds

Growth • Soft loans • Angels • Venture capital

Financing

hopefully…

Start-ups are a risky proposition

• More than 80% of start-ups fail

• Those that succeed, make a big impact; sometimes they are disruptive

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Top 20 reasons that start-ups fail

7 out of top 10 reasons for failure of start-ups have to do with inadequate Appreciation of the customers’ needs or of the market dynamics

Addressing Customer Development is vital for start-ups

8

Pre – Incubation Stage

Post – Incubation Stage

IDEA

• Customer discovery • Customer validation • Business model • Entrepreneurial skill set • Inputs for an MVP

• Start-up in early phase • Establish office, Expand staff • Product development • Customer acquisition • Scale operations

Incorporation

Ideation • Grant funding • Project budget • Own funds

Growth • Soft loans • Angels • Venture capital

Financing

Customer Development • Grants? • Seed capital • Anyone?

• Embryonic business idea

• Options and possibilities • Idea development • Will it work? – Prototype development • Is there a market?

Agenda

About GDC

About I-NCUBATE

Structure and Pedagogy of I-NCUBATE

Role of Key Participants in I-NCUBATE

Discussions

9

I-NCUBATE - Overview • I-NCUBATE is a faculty-centric initiative to curate robust tech start-ups.

• GDC„s objective is to help university spin-outs achieve better outcomes with Incubators and Investors.

• The principal targeted outcomes of the I-NCUBATE program:

o To gain a deep understanding of Customer needs based on first hand evidence

o To enable the team to arrive at a Go or No-Go decision

o To obtain inputs for formulating an MVP, a Business Model, and a Product-Market Fit

o To enable Faculty, Researchers, Students, and Entrepreneurs develop entrepreneurial skills and mind-set

• The underlying goals and benefits of I-NCUBATE are equally important to GDC.

• GDC does not invest in or incubate start-ups.

• GDC has started at IIT Madras and is looking to work with other IITs, IISc, engineering colleges across India to create “nodes” that can strengthen the ecosystem for innovation and entrepreneurship.

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GDC – We„ve just started our journey…

SYMPOSIUMS • 1st Deshpande-Gopalakrishnan Symposium at IIT Madras in Jan 2018 • 2nd Deshpande-Gopalakrishnan Symposium at IIT Bombay in Jan 2019, co-hosted with IITB

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PROGRAMMES: I-NCUBATE

• Cohort 1 at IIT Madras - 7 start-up teams; 35 entrepreneurs

• Cohort 2 at IIT Madras - 10 start-up teams; 66 entrepreneurs

• Cohort 3 at IIT Bombay - 10 start-up teams; 50 entrepreneurs

• Cohort 4 at IIT Madras - 13 start-up teams; 70 entrepreneurs *

* Started on 16th February 2019

Composition of a typical team in an I-NCUBATE program

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Faculty Mentor

Entrepreneur

I-NCUBATE Team

1-2 Faculty Leads (FL)

1 Business Mentor

3-4 Entrepreneurs (EL)

• Around 10 teams per cohort

I-NCUBATE – Programme Structure

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2 days

CLOSING WORKSHOP

• Teams outline next steps • Classroom sessions

3 days

OPENING WORKSHOP

• Teams build commercial orientation • Classroom sessions

2 days

PRE-COURSE

• Teams are oriented to think ‘business„

• Classroom sessions

1 week

• Teams start with 5 - 10 customer interviews

8 Weeks

7 weeks

CUSTOMER DISCOVERY

• Teams ‘get out of the building„ • They conduct >100 interviews with customers • From these interviews, teams derive insights, consolidate learnings,

and build MVP/ Business Model

W1 W7

Agenda

About GDC

About I-NCUBATE

Structure and Pedagogy of I-NCUBATE

Role of Key Participants in I-NCUBATE

Discussions

14

Based on the Lean Start-up Methodology

• Lean start-up management was introduced by Eric Ries in his book ‘„The Lean Start-up„„ in 2011

• Prof. Steve Blank of Stanford University came up with the Customer Development Methodology

• Alex Osterwalder developed the Value Proposition Canvas

• Steve Blank combined the three and came up with the I-Corps program of the National Science Foundation (NSF)

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I-Corps Program

• Innovation Corps program of the NSF

• Founded in 2011 as a public/private partnership

• Founding members:

NSF

Deshpande Foundation

Kauffmann Foundation

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I-Corps: Uses the Lean Methodology

Key Objectives

• Entrepreneurial training for researchers

• Orient researchers towards understanding and solving real-world problems

• Increase the impacts and the odds of success of commercialization activities

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Why the Lean Startup Changes Everything - HBR

Lean Start-up : Key Elements 1. Technology is usually not the cause for failure of start-ups.

2. Researchers are passionate about their technologies; however, customers do not buy technology – they are looking to satisfy their needs.

3. Founders cannot understand customer needs by sitting inside their labs or offices; they must get out of the building and meet as many prospects as possible.

4. A start-up is not a smaller version of a large organisation; instead, a large organisation executes a business plan, while a start-up is searching for a business model.

5. A start-up is a temporary organisation in search of a repeatable and scalable business model; it goes from failure to failure until it finds something that works.

6. Lean Start-up does not guarantee success; instead, it reduces the odds of failure.

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Lean Start-up Method

Customer Discovery

Customer Validation

Search

Pivot

Customer Development Agile Product Development

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Who are your most

important customers?

What are their

archetypes?

What job do they want

you to get done for

them?

How will you

get, keep,

and grow

customers? What customer

problems are you

helping to solve ?

What customer needs

are you satisfying?

Through which

channels (sales,

distribution, support)

do your customers

want to be reached?

How will you make

money?

What is revenue model?

What are pricing tactics?

Who are your Key

Partners?

Who are your key

suppliers?

What are you getting

from them…and giving

to them?

What Key Activities do

you require?

Manufacturing?

Software development?

Personal concierge

service? Etc.

What are most important

costs inherent in your

business model?

What is mix of fixed and

variable costs?

What Key Resources

do you require?

Financial? Physical?

Intellectual property?

Human resources?

What are key features

of your product/service

that match customer

problems/needs?

Business Model Canvas as a Tool

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The Customer Development Framework

Customer Discovery

Customer Validation

Customer Creation

Company Building

Search Execution

Pivot

P-S Fit? P-M Fit? Develop MVP Business Model Fit?

Scaling

4 3 2 1

P-S Fit: Problem-Solution Fit P-M Fit: Product-Market Fit

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IDEA

I-NCUBATE – Programme Structure

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7 weeks 2 days

CLOSING WORKSHOP

3 days

OPENING WORKSHOP

2 days

PRE COURSE

1 week

• Conduct 100 customer interviews

• Update business model canvas week-on-week based on customer interviews

• Attend weekly meetings/webinars to share learnings and insights

• Participate in OH (Office Hours) with instructors

• Use LaunchPad Central to track progress and engage with mentors, instructors and peers

8 Weeks

I-NCUBATE – Classroom Sessions

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Entrepreneurial Skills Business Tools & Techniques

Interviewing & Communication Skills

Building Commercial Orientation

• Value Proposition (Features vs. Benefits)

• Business Model Canvas • Business Thesis • Empathy Map

• Dealing with ambiguity • Creative thinking/Non-linear thinking • Overcoming fear of failure • Persistence in the face of failure • Working cohesively as a team • Reaching out to people

• Clarity of thought and precision • Framing questions

• Interviewing people / Connecting to people • Presentation skills

Agenda

About GDC

About I-NCUBATE

Structure and Pedagogy of I-NCUBATE

Role of Key Participants in I-NCUBATE

Discussions

24

I-NCUBATE – Team Structure

25

Faculty Mentor

Entrepreneur

I-NCUBATE Team

1-2 Faculty Leads (FL)

1 Business Mentor

3-4 Entrepreneurs (EL)

• Around 10 teams per cohort

I-NCUBATE: Key role of the Faculty Lead (FL)

• FL is the main repository of the core science & technology underlying the idea, for the team

• Guiding their team on what works (and what will not) from an science/technology perspective

• Guiding their ELs on how to frame hypotheses (about their product/business) in a manner that is consistent with the technology

• Helping the ELs analyse & interpret the data/feedback received from customer interviews

• Providing active feedback and course correction to the ELs from time to time, as new data/findings emerge

• Motivating their team to follow the flipped classroom approach

• Boosting the morale of ELs when contrarian findings emerge from customer interaction

• Commenting on technology aspects of other teams, where domain overlaps

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I-NCUBATE: What we expect of ELs

• Understand how a flipped classroom works; Self-study is key as there is little teaching in the classroom

• Learning from peers; commenting on peers„ work - this needs conscious effort

• Leveraging the experience of Mentors and Instructors

• Having an open mind to learn new business concepts and techniques

• Framing hypotheses (about their business) and gathering evidence (for/against)

• ‘Get out of the Building„ and meet at least 100 customers, and LISTEN, LISTEN, LISTEN

• Understand the features of Launchpad Central and use it to the hilt

• Staying on course

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Why Customer Development is Done by Founders – Steve Blank

I-NCUBATE: Role of Mentors

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I-NCUBATE Team

ROLE OF MENTORS

ROLE OF INSTRUCTORS

• Extension of instructors outside of the classroom

• Provide business mentorship to team

• Inspire and coach team

• Act as sounding board for team

• Not offer solutions, but ask questions to direct thinking and guide towards clarity

• Instil discipline

• Boost team morale

• Help with contacts/network

What Happens Post I-NCUBATE?

At the end of an I-NCUBATE program, each team has a clear Go or No-Go decision.

Team has a good idea of their Minimum Viable Product (MVP) and Product-Market Fit.

At this stage, the team„s capabilities include:

• A good understanding of their business model

• They know how to continue to work on customer development and customer creation

• The team is aware of the key entrepreneurial skills that are required to succeed

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Benefits of I-NCUBATE Program

• Transformational experience - 60 persons more entrepreneurial or trained for becoming entrepreneurs

• Faculty who are not likely to have brought ideas to market , start to do so

• Faculty start to design courses and projects from an “impact” perspective

• Teaching in classrooms starts getting a flavour of real-life problems

• Mentors carry the training and lessons of Lean Start-up to other interventions

• For students, we have trained them for a lifetime

• Investors get curated ideas and entrepreneurial teams

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Thank you For clarifications, please contact:

R. Raghuttama Rao Shiva Subramaniam Chief Executive Officer, GDC Chief Innovation Officer, GDC ceogdc@iitm.ac.in cinogdc@iitm.ac.in

Gopalakrishnan - Deshpande Centre for Innovation & Entrepreneurship