Entrepreneur’s Hazard

• “Six years of miserable life…”• According to the U.S. Census, 48.8 percent of the new

businesses were alive at age five.

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Valley of Death=DEBT!

The Lean Startup:College EditionDr. Amy SauersCollege of BusinessSt. Petersburg College

WIIFM?• Fail forward, not epically• The key to success is failure

• How to fail towards success in a 4-step lean progression

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WIIFM?• How to fail towards success in a 4-step progression

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Dream big, start small

Sell “Minimum Viable Product"

(MVP)• Feature added is

an experiment

Learn from and build with customers

• Test, adjust, and iterate

Fail more, fail more quickly, and move on

(pivot)

Overview

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Crisis & Paradigm Shift

Old Business School VS. New Lean Modeling

Theoretical Underpinnings of New Lean Paradigm

Lean Startup Hypotheses Applied to Course

Pretest Results

How To: Teaching the Lean Startup in 8 Weeks

Post-Test Results

Next Steps: Paired-Samples T-Test; Startup Weekend Next

Crisis & Paradigm Shift

• Crisis: • 50% batting average• New product failure = 75%

• Old: Standard business school is inadequate• How to manage people• How to get things done more efficiently• How to cut costs and reduce waste• How to buy advertising for your market• How to budget

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Crisis & Paradigm Shift

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Crisis & Paradigm Shift• New: Startup = operate

under conditions of extreme uncertainty

• What market? “I never want to make

something someone doesn’t want to buy!”

– Thomas Edison

• Pivot before run out of $

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Old VS. New

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Old VS. New

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• Perfectionism• Expensive• “We know what customer’s want”• Believing our projections• Strat Plan: Make linear progress• Execute the plan• Closed system

Naïve Business School

• RERO• No to little waste• Ask customers• Believe the sales you actually

make• Iterate• Experiment to find a business

model that’s valid• Open system

Lean Business Modeling

Theoretical Underpinnings of New Lean Paradigm• Crossing the Chasm (1991), Geoffrey Moore• How to cross the valley of death? Win your niche target

market

• The Art of the Start (2004), Guy Kawasaki• Make meaning• Raising money warps you; bootstrap

• Business Model Generation (2010), Alexander Osterwalder• Business Model: Render your view of your business on a

page

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Theoretical Underpinnings of New Lean Paradigm

• The Lean Startup (2011), Eric Ries• Pivot• Sell Minimum Viable Product (MVP)

• Running Lean (2012), Ash Maurya

• The Startup Owner’s Manual (2012), Steve Blank• Get outside the building and talk to

customers!• Product-market fit

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Lean Startup Hypotheses Applied to Course• Entrepreneurs will have more success, less wastefully and

sooner (than traditional business) if…

• Entrepreneurs do not waste time over-planning in the beginning->Entrepreneurs start their own business on day 1

• Entrepreneurs first ask customers before creating solution-> Get out of the building-> Talk to 3+ customers about their pain point

• Entrepreneurs do not assume they know the answer-> Test logical solution to the pain with customers

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Lean Startup Hypotheses Applied to Course• Entrepreneurs will have more success, less wastefully and sooner

(than traditional business) if…

• The entrepreneur makes their business model visible and testable-> Map about all business assumptions and test each

• Entrepreneurs are not perfectionists: Release early to customer-> Minimum viable product is sold/given to customers to learn

from them• Minimum of time and money is spent (while still learning)

-> Without making sales, entrepreneurs cannot know what the sales forecast will be

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Pretest ResultsBefore my Lean Startup Entrepreneurship course:½ of my students got Lean Startup assessment items incorrect:

• Entrepreneurs must risk their entire savings and their livelihoods to be real entrepreneurs.

• There is no particular curriculum to teach entrepreneurship.

• If you don't have or can get $1 million, you can't really start a company today.

• Entrepreneurship requires both dreaming big to motivate oneself and others and then starting small on one executable milestone.

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How To: Teaching the Lean Startup in 8 Weeks• Startup Spiral• Week 1: Customer Pain Point focus

• "Get out of the building" and ask target customers their pain points.

• Do a first pass filling in of your spiral as a draft.

• Pitch it to your class partner, using the Fundability Rubric.

• Written Reflection: List assumptions and pivots.

• Submit entire (revised) PowerPoint.

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How To: Teaching the Lean Startup in 8 Weeks• Week 2: Solution focus

• Quickly mock up 2 different flyers to test possible solutions• Each flyer should start with a different hunch as to the

customer pain point

• Fill in your Strategic Solution quadrants

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How To: Teaching the Lean Startup in 8 Weeks• Week 3: Target Market focus

• Research your Niche Target Market.

• Send out and collect data from customer surveys.

• Include a customer profile story.

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How To: Teaching the Lean Startup in 8 Weeks• Week 4: Demo & Sell today• Pitch, then plan. • Demo the offering (MVP).• Test market through selling.

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Prospect name

Contacted how

Need USP Outcome of selling?

How To: Teaching the Lean Startup in 8 Weeks• Week 5: Marketing & Sales

• Create 3-4 SMART Marketing Goals based on strategy statement.

• Create your Top 10 Target Sales Contacts Table - who you will personally ask to join/invite to solve their customer problem.

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Contact name

Contact Info

Need USP Start date – End date

Outcome of selling?

1.

2.

3.

How To: Teaching the Lean Startup in 8 Weeks• Week 6: Value Chain Processes

• Draw your value chain process/distribution flow chart.

• Identify your top 5 critical processes • Create a checklist for each of the 5 critical processes • (Often these processes are order taking, security of

customer order and information, fulfillment/delivery, customer servicing, after-sales care)

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Supply of product

How transformed

into value

Delivered to customer

How To: Teaching the Lean Startup in 8 Weeks• Week 7: Team & Delegation

• Create your bottom-up org chart where the customer is at the top. "Management" supports/is under the doers.

• Delegate the top 5 processes to the doers. Create a Roles and Responsibilities Job Description for each Team Member.

• Who is in your support network?

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Customer

Customer Service

Management Support

How To: Teaching the Lean Startup in 8 Weeks• Week 8: Revenue Model, Financials and Health Metrics• State your revenue model.

• Create your 3 financial spreadsheets from a bootstrapping paradigm.

• What will your startup capital be (money you have personally saved that you would not mind risking and losing it all).

• Key Health SMART Goals with Metrics. • 3 Community Benefit Events held in year 1;• My plan for Giving Back includes ___."

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Post-Test Results

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• 9/10 students got a 100% in a post-course test of Lean Startup concepts.

• Post-Lean Startup Course: student startups are much more feasible.

• Student Take-Away Quotes:“Make your startup a story and show your customers that you are ‘one of them’ and want to provide them with a solution to the same pain point that you yourself had. I will use this information to help make my business plan stronger and build a better customer base.”

Post-Test Results

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• Student Take-Away Quote:

“I think the one big thing that sticks with me …is the idea that anybody can start his or her own business. It doesn’t take someone with tons of green to make a business. The smallest ideas can be started slowly (bootstrapping) and turn into a big ideas that can lead you to a fortune 500 company.”

Post-Test Results

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• Student Take-Away Quote:

“I think the art of writing a business plan lies in attention to detail but also attainable goals. It is easy to create a great sounding plan on paper, but harder to turn it into a reality. Staying grounded is key.. that is an ideal I will take away from this course.”

“This course has helped me with brainstorming and problem resolution, also how to respond to feedback. I liked that we had to adjust our ideas each week based on feedback from partners and the instructor.”

Achieving Goal Learning!

Next Steps: Paired-Samples T-Test (for pre- and post- course)

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Validating questions…

• Which of the following choices best describes the lean, agile startup methodology to this entrepreneurial problem:

• "Pablo wants to start a pita sandwich lunch shop. His first step should be…A) Save up $500,000.00 dollars for startup capital.B) Ask target customers about their pain point with this offering. C) Get a co-founder to handle the financial side.D) Write a 50-page business plan. E) Try to get an SBA loan.

Review & Call to Action• Crisis & Paradigm Shift• Old/Naïve Business School VS. New/Lean Business Modeling• Theoretical Underpinnings of New Lean Paradigm• Lean Startup Hypotheses Applied to Course• Pretest Results• How To: Teaching the Lean Startup in 8 Weeks (Spiral)• Post-Test Results• Next Steps: Paired-Samples T-Test; Startup Weekend Next!

So take one step today to START LEAN. And teach your students!

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