How to Build a Startup The Steve Blank
How to Build a Start-up – The Steve Blank Lean Launchpad Session Bio-Link Summer Fellows Forum June 5 -9 2017 James Guenther Principal Investigator NSF ATE (DUE 1600736) Delgado Community College
Target Audience �Students or faculty wanting to build a technology based industry startup �Faculty that want to understand the mindset of a startup business �Faculty developing a program
Partnerships outside of the Building � ''If you have a garden and you want to see things flourish, you have to tend to it, '' George P. Shultz �“World class entrepreneurs are never lucky. NEVER. It’s a big idea. You make your own luck. “ Abbreviated from Steve Blank “How to Build a Startup”
Why do Startups Fail �Co-founders fight �Lack of Customers �Cannot build the product �Lack of funding
Why do Startups Fail �Co-founders fight � Lack of Customers �Cannot build the product �Lack of funding
History of Entrepreneurship �Typical Business Curriculum and MBA- Provide excellent tools for managing and growing established businesses. �Established businesses know the customer needs, startups do not know the customer needs. �Startups are not smaller versions of larger companies. �Startups will search for an operating plan or business plan. �This seminar covers the “business plan” before the “ 5 year business plan”. “No business plan/grant proposal survives first contact with the customer”. �Utilize Alexander Osterwalder Business Model Canvas. �Organize thinking �Get out of the building and turn hypothesis to facts �Use this method to search for a business model or business plan.
What is a startup? �A startup is a temporary organization designed to search for a repeatable and scalable business model. What is a business model? �A design for the successful operation of a business, identifying customer base, revenue sources, products, and details of financing.
Three exercises for today 1. Use this business model canvas for your Biotechnology program. 2. Use this business model canvas for a private startup idea. 3. Help us build a business & organizational Plan for a Bio-Link national Contract Service Organization (CSO) Network. (Large poster)
Contract Service Organization that provides support to the pharmaceutical, biotechnology, and medical device industries in the form of research services outsourced on a contract basis.
Hypothesis �Hypothesis in science �An idea or explanation that you then test through study and experimentation. �Hypothesis in business model canvas �A series of guesses that must be tested for the business model canvas � Who do you think your customers are? � Get out and test the hypothesis. � The founder must get out of the building at least 20% of the time and test the hypothesis. � Turn hypothesis into facts.
Ideas for Business Model Innovation �What if? �What if we did not have a classroom? �What if we do not have a large biotech industry? �What if every one of the 1, 462 Community Colleges participated in this? �How could every community college participate in this?
Market Size �How big is the market �Total addressable market �Served available market � How many can you actually reach �Target market � How many users ? � What is your competition? � How many people are in your market, served available market? � If everyone in served available market bought your product how much would that be?
Company vs. Startup �What is a company �A business organization that sells a product or service in exchange for revenue and profit. �What is a startup�A startup is a temporary organization designed to search for a repeatable and scalable business model. �Searches for a business model �Startup will test the nine components of a company
What is a Business Model �Customer Segments- Who are my customers? �Value Proposition- What are you building and for who? � What problem are you solving, or what need are you fulfilling. �Channels- How do you get product to the customer? �Customer Relationships- How to get, keep, grow customers? �Revenue Streams- How do you make money? �Resources- What assets do you need? �Partnerships- Who are the partners you need? �Activities- What must your company do? �Costs- What are the cost and expenses to operate? The Business Model is like building a house, start with your foundation.
1. Customer Segments �Who are your customers. � Begin with a hypothesis on who your customers are. � Test this hypothesis. �Multiple customer segments. �Two sided market. � Student customers. � Business that employs our students. � Faculty as customers
1. Customer Segments �Who are your customers �Is the user different from the payer? � User- � Influencer � Recommender � Saboteur � Decision maker � Buyer
1. Customer Segments �What are the gains and pains to the customer? �How do they rank the pain or gain you are addressing? �The goal is to draw a day in the life of a customer. �Know everything about what a customer does each day.
1. Customer Segments �Customer Empathy Map �What does the customer see? � Who are the customer’s friends, what offers do they see each day? �What does the customer hear? � Who influences the customer? �What does the customer really think and feel? � What is important, what keeps them up at night, what dreams and aspirations �What does the customer say and do? � What is the customer’s attitude, what are they telling others �What is the customer’s pain? � Customer frustration, obstacles to achievements �What does the customer gain? � What does the customer want or need, how do they measure success
2. Value Propositions �What product or service are you building. �Solving a problem for the customer. �Providing for a need for the customer. �Need to get out of the building and test the hypothesis. �Hypothesis � Produce savings? � Make the customer feel better? � Fix a bad solution? � Impact social status? � Eliminate risk, financial, social, etc.
2. Value Propositions �Problem � Example � Accounting problem �Need � Example � Need to be entertained � Communication �A need is something universal that will open up a much larger market
2. Value Propositions �What gain are you creating �What are the Benefits to the customers �Hypothesis � What makes the customer happy? � Outperform current models? � Provide better outcomes for customers?
2. Value Propositions �You should rank the Pain and Gain relevance to the customer �Take into account the frequency and intensity for ranking the pain and gain �This must be addressed by asking the customer directly, get out of the building and ask the customer �Build a Minimum Viable Product (MVP) to show to the customer and get feedback �The goal is to build a MVP
2. Value Propositions �Questions to ask the potential customer �What are they doing now, what is the competition? �Why is the problem so hard to solve? �What is the market size? �Are you making a more efficient, smaller, faster product? �Are you providing better distribution, branding, etc?
Customer Discovery Model Product market fit, how well does your customer segment match with value propositions Hypothesis- Get out of the building- Test the hypothesis Pivot Agile development process Product market fit Test your solution Verify or pivot Customer Validation On a small scale do you have customers?
3. Channels �How Does the product get to the customer? � Physical � Web � Mobile
3. Channels �Product � Virtual �Web app � Physical �Channel � Direct �Selling directly to consumer �Physical item or component. � Indirect
3. Channels �Direct �Selling directly to consumer �How to calculate the cost for the product �Cost of the item- material, engineers, licensing etc. �Selling costs - commission or salary for human resources �Administration cost (lunches meetings etc. ) �Selling costs are higher than Indirect but profit is also higher
3. Channels �Indirect �Resellers � How to calculate the cost for the product � Cost of the item- material, engineers, licensing etc. � Selling costs – lower because you are using resellers � Profit is lower also �Distributors
3. Channels �Original Equipment Manufacturer (OEM) �Product is made and sold to another company. Ex. Chip manufacturer for an electronic device. �Usually profit is small but volume is large
4. Customer Relationships �How to get customers? �How to keep customers? �How to grow customers?
4. Customer Relationships �How to get customers? �How to keep customers? �How to grow customers?
4. Customer Relationships �Requires a deep understanding of the customer �Picture your customer, post up a picture of the customer and name them.
4. Customer Relationships �How to get customers into the funnel? �Generate demand �Paid � PR agency � Blog � Advertising � Trade shows � Flyers � Direct mail � E-mail � SEM (Search Engine Marketing) �Generate demand �Free �Earned demand creation � Journal articles � Guest blogs/articles � Social media � Sign up for mailing list
4. Customer Relationships �How to keep/grow customers into the funnel? �More expensive to get a customer than to keep/grow a customer �Keep customers �Preferred customers �Customer rewards �Loyalty programs �Product updates �Newsletters �Grow Customers �Cross-selling �Free basic features vs. paid extra features �Discount for referrals
5. Revenue Streams �What value does the customer pay for � Revenue models �Freemium model �Direct sale �License �Subscription
5. Revenue Streams �Strategy to generate revenue from each customer segment. �What value does the customer pay for? �Depends on your understanding of the customer. �How do customers pay for the product � Revenue models �Freemium model �Direct sale �License �Subscription �Renting
5. Revenue Streams �Pricing �Fixed � Cost for the product � Markup of product � Estimate value if you know the customer and product � Volume priced (discount based on quantity) �Dynamic � Negotiation � Yield management �Stock markets �Auctions (ebay)
6. Key Resources �Most important assets to make the business model work �Finance �Physical �Human resources �Intellectual property �Patent
7. Key Activities �What activities need to be accomplished for the business to succeed �Important things for the business model � Intellectual property development � Technology development � Production � Supply chain management
8. Key Partnerships �Shared economics- Must understand what is the advantage to the partner �Why have partnerships �Faster time to market �Broader product offering �Expertise �Access to new markets
8. Key Partnerships �Strategic alliance- partnership to build the whole product �Cooperation- competitors working together, ex. tradeshows �Joint business development- joint promotion of complementary products �Suppliers � Outsource- manufactures of component parts � Direct suppliers-raw materials �Traffic partners- virtual long term agreements to drive customers to your business
9. Cost Structure �Rank the cost from high to low �Consider fixed and variable cost �People �Building �Materials
Additional Resources �www. launchpadcentral. com -allows sharing of work with mentors and instructors �www. steveblank. com �Startup Owners Manual �Business Model Generation
Panel discussion Edgar Troudt Ph. D. Assistant Dean for Research and Strategic Partnerships School of Business, Public Administration and Information Sciences Long Island University, Brooklyn edgar. troudt@liu. edu Sandra Porter, Ph. D. Bio-Link. org Biotech-Careers. org sandy@bio-link. org
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Customer Development Model � Lack of Customers � Customer Development –Must be done by the startup founders, they must get out of the building Customer discovery Customer validation Customer creation Expand on this method to increase base Product market fit Pivot What do you do when the hypothesis does not match reality Company building
Steve Blank Summary
For Information Contact � btech@dcc. edu �Follow us on Facebook �Delgado Community College Biotechnology �Go to dcc. edu under Biotechnology
Growth in Science Technology Engineering Mathematics (STEM) industry � STEM careers estimated to grow 3 times faster than non-STEM careers. � www. whitehouse. gov � New Orleans area 20 year job growth in STEM related fields is predicted to be 20, 000 new positions. � http: //www. scribd. com � The New Orleans Biodistrict estimated an impact of 2 billion dollars of increased personal income. � http: //biodistrictneworleans. org/ � The 2012 Strategic Advisory Council (SAC) chose Bioinnovation and Health Services as the key sectors for growth and expansion in the metro area. � http: //nolaba. com
Predictions and Indicators for Louisiana � Access to Services � Skilled Workers � 44% Entrepreneurs reported difficult to secure � 50% Corporations reported difficult to secure � 56% Research Institutions reported difficult to secure � 29% Venture Capital reported difficult to secure Figures reproduced with permission from Baker Donelson, as published in the 2016 report “State of Life Sciences Entrepreneurship in Louisiana 2016”
Delgado’s Role �Delgado is the only forward thinking STEM program in the region to address the needs of the growing world economy.
Science Laboratory Technology Associates of Applied Sciences Program � 61 hour Associate of Applied Science curriculum with two primary areas of concentration � Biotechnology � Chemical Technology � 2 year, laboratory intensive approach to science technology education �Flexible, Elective rich curriculum strengthens the student’s skill sets and allows for greater opportunities in the workforce.
Delgado SLT program focus �SLT-biotechnology classes provide hands on laboratory experience, directly translating to �Skills needed for advanced laboratory technicians �Transfer students seeking advanced degrees �Entrepreneurship for scientists and business professionals �Delgado’s biotechnology curriculum is designed to be flexible to meet the changing needs in the field.
Recruiting: What is Biotechnology? �the exploitation of biological processes for medical, agricultural, industrial and other purposes, especially the genetic manipulation of microorganisms for the production of: Food Medicine Vitamins Fuels Carpet Plastics Wine AND Medicine Cosmetics Furniture Rubber Cheese Plastics Textiles Polyesters Beer Breads FRANKENFOODS
What does a Biotechnologists do? �Biotechnologists work in laboratories to conduct �Routine testing and analysis �Experimental research �Industrial production and Quality Control � The new Big Thing is: Synthetic Biology
What does a Biotechnologists do? �Work in laboratories in the following settings: �Food � Agriculture � Food production and design � Food testing �Medical � Basic science � Translational research � Pharmaceutical research and production � Analytical labs (drugs, paternity, etc. )
Once again, what exactly does a biotechnologist do? �Grow cells (euk and prok) �Extract, purify, characterize and amplify DNA �Manipulate and transfer genes, while controlling gene expression �Assay for gene expression and enzyme/pathway activity �Analyze quality and quantity of final product �Procedures: Cell culture Cloning Transformation Gel electrophoresis SDS-PAGE Spectrophotometry Immunohistochemistry Microscopy and other forms of Magic!!!
More of what we do” �Work in laboratories in the following settings: �Forensics �Environmental monitoring and bioremediation �Cybernetics and the “blending of people with machines”
What is Biotech: Genetic Manipulation �Artificial Selection: Corn, cows, dogs, horses and people �Cloning genes (using Griffith’s “Transformation”) �Genentech was the first biotech company (1970 s) � Early breakthroughs: Somatostatin and Insulin genes transferred from humans into bacteria � Today, wide ranging treatments from anti-inflammatories to anti- cancer drugs.
Genetic Manipulation Today �Genetically Engineered Machines �Design of novel enzymes and pathways �Biofuels: Joint Bio. Energy Institute �Alcohols like Ethanol �Long chain lipids �d-limonene, a precursor to jet fuel �Terpenes: essential oils, flavorings and cannabis �Analysis of genes, proteins and products
Full Accreditation from LCTCS, Bo. R, and SACS • After three years of piloting the courses, we learned that the final approval from SACS was given to the school in November of 2014
What does the Program Look Like Today?
Science Laboratory Technology Associates of Applied Sciences Program � 60 hour Associate of Applied Science curriculum with two primary areas of concentration � Biotechnology � Chemical Technology � Future Concentrations (Forensic Laboratory Science, Food Sciences) � 2 year, laboratory-intensive approach to science technology education �Flexible, Elective rich curriculum strengthens the student’s skill sets and allows for greater opportunities in the workforce and/or transfer to 4 year programs.
Science Laboratory Technology Associates of Applied Sciences Program • Our SLT-biotechnology classes provide hands on laboratory experience, directly translating to • Workforce development by providing skilled laboratory technicians • Transfer students seeking four year colleges and advanced degrees • Entrepreneurship for scientists and business professionals • What’s new for Spring 2017? • BTEC 283: Biofuels • BTEC 132/130: afternoon/evening courses • SPSM 148: Intro: Forensic Lab Sciences
Community Outreach • Why Science, Technology, Engineering, Math (STEM) Outreach? • ‘I only hope that we don't lose sight of one thing - that it was all started by a mouse. ’ • Walt Disney • The 2014 -16 Summer STEM Challenges Programs introduced over 250 students to the exciting world of technology driven career opportunities. • We believe this forward thinking strategy represents a strong method for establishing Delgado Community College as a local leader in technology-driven fields and future College growth.
Community Outreach • High School: • Unique 3 -week modules that are designed by faculty members • i. GEM (International Genetically Engineered Machine) competition • Middle School: • Traditional multi discipline STEM design with emphasis on Sciences • 3 one week long Cohorts Total • Louisiana Southeast Girl Scouts: • 4 day program designed to promote interest in science to middle and high school aged girls • Youth. Force NOLA: � "The Delgado Summer STEM Challenges program has provided a terrific opportunity for Youth. Force NOLA interns to apply their STEM skills in a real-world setting, and build their soft skills at the same time. -Cate Swinburn, Vice President of Programs for Educate Now! “An investment in knowledge pays the best interest”- Ben Franklin
New for 2017!! • Friends of Lafitte Greenway: • educates visitors about the cultural and economic history of New Orleans and the city's relationship to the larger landscape. Their involvement will be Environmental Science Fridays on the Greenway! • Delgado Fab Lab: • ‘Nola Fab Lab inspires New Orleanians to become the next generation of innovators. Through hands-on learning, we cultivate a passion for science, math, and digital media. Fa • Fab Lab Pics • Grants • Pending: • Chevron ($18 k) • Joe and Dorothy Brown Foundation ($11 k) • NSF ($2 k) • Entergy, GNO Foundation • That’s great Clint, but what can I do to help? • How interested are you? • Marketing • Ideas to share • Join the Team! • Bi-weekly meetings starting in January
Synthetic Biology Focus Bioremediation Biomedicine Biosensors Biofuels Flowers Fragrances Synthetic Biology Novel Chemicals Synthetic Novel Biology Chemicals Biology Bioengineering Biochemistry The design and construction of new biological parts, devices, and systems, and And/or the re-design of existing, natural biological systems for useful purposes.
Laboratory and Equipment �Equipment includes � Autoclaves � Thermocyclers � Real Time PCR � Cell Culture incubators � Biological safety cabinet � Fluorescent Microscopy � FPLC-Fast Protein Liquid Chromatography � UPLC- Ultra Performance Liquid Chromatography � Mass Spectrometry � Bioanalyzer � Centrifuges
Laboratory and Equipment �Bioanalyzer- sizing, quantitation and quality control of DNA, RNA, proteins �Real Time PCR- Quantitation of nucleic acids, commonly used as a laboratory diagnostic instrument �FPLC-Fast Protein Liquid Chromatography- Purification of proteins under native conditions �UPLC- Ultra Performance Liquid Chromatography- Small molecule separation �Mass Spectrometry- accurate identification and quantitation of small molecules. Ex. toxicology and pesticides
Delgado SLT-Biotechnology Funding 2014 -2016
NSF ATE Funding �National Science Foundation –Advanced Technology Education (New to ATE) �“Delgado Community College Biotechnology/Synthetic Biology Initiative and Biotechnology Incubator” �Relatively small 3 year grant �Develop and implement SLT biotechnology curriculum �Establishment of a seminar series �Enhance Summer STEM with programs such as i. GEM
NSF ATE Funding � Follow-up survey to “State of Life Sciences Entrepreneurship in Louisiana 2016” � Large equipment purchase, biological safety cabinet � External Evaluator � Program marketing � Travel and meeting presentations � Summer contracts to execute the proposal � Develop and implement remaining SLT biotechnology curriculum � Summer contracts for development of new courses � Startup supplies for new courses � Establishment of a seminar series � Instructor contract for development of seminar series � Honorarium for outside guest speakers � Enhance Summer STEM with programs such as i. GEM � Summer contract for i. GEM coordinator � Supplies for i. GEM and Summer STEM
i. GEM � The International Genetically Engineered Machine (i. GEM) Competition � Started as independent study at MIT � Currently 280 teams from more than 30 countries � Teams compete to engineer living cells using the new field of synthetic biology � Delgado will sponsor Louisiana's first i. GEM team
Acknowledgments �Habiburrahman Ansari �Clint Coleman �Ashley De. Coux �Leonard Fodera �James Guenther �Peter Hickman �Rebecca Sanchez �Charlene Shunick �Paula Mackel �Sonja Miller �Erica Burns �Christopher Le. Blanc �Andrew Rodriguez �Jeffery Smith �Thomas Gruber �Sarah Camania �Philias Denette �Hilton Guidry �Stanton Mc. Neely �Bridget Peters �Ronald Russo �Leslie Salinero
Breakdown �Introduction �Student recruitment �Opportunities �Curriculum �Summer STEM �Laboratory space �Funding �End slide&questions Jim Brent Clint Jim 5 min 5 min
Rothwell, J. (2013). "The Hidden STEM Economy New Orleans-Metairie-Kenner, LA. " from http: //www. brookings. edu/research/reports/2013/06/10 -stem-economy-rothwell.
Delgado Community College Science Laboratory Technology (SLT) Program Concentration in Biotechnology CSO Summit 2. 0 Austin Community College April 7 -8 2017 James Guenther jguent@dcc. edu Partnering with other Incubators
Delgado Community College Science Laboratory Technology (SLT) Biotechnology Concentration �Delgado total students Fall 2016 � 15, 455 - (Second largest higher education institution in Louisiana) � Science Laboratory Technology (SLT) � Total 47 � Pre program undecided 31 � Biotech -11 • Chemtec -5 2010 Committee formed to explore the need for SLT program 2012 Delgado Curriculum committee endorsement of SLT program 2012 Pilot classes taught at Ochsner 2013 Establishment of SLT advisory committee 2014 Program approval La Board of Regents A. A. S. 2014 Repurposing of new laboratory space 2015 -2017 Rollout remainder of curriculum Fall 2017 Expected first graduate
Louisiana’s Fledgling Technology Sector �Louisiana Economic Development (LED) � LED Fast Start Program - �New Orleans. Entrepreneurship -New Orleans Bio. Innovation Center (NOBIC), Propeller, Idea. Village, Innovation Ochsner � Multiple smaller startup and entrepreneurial ventures � Education- Delgado Community College, Tulane and LSU medical schools and Universities, Loyola, Xavier, UNO, SUNO. � Clinical- VA hospital, Louisiana Cancer Center, Ochsner, University Medical Center, Tulane Medical Center � Business Resources- New Orleans Business Alliance (NOLABA), New Orleans Chamber of Commerce �
New Orleans Bio. Innvation Center (NOBIC) � Founded 2002 � Non profit business incubator with emphasis on the life science sector � Interact with over 100 businesses � Over 30 housed at NOBIC � Facilities and recourses include � Scalable wet lab/ office spaces � Meeting and conference event spaces � Commercialization /consulting teams � Access to Bio. Fund Capital resources � Sponsors “Innovation Louisiana” � Annual conference on life sciences entrepreneurship � November 6 -8, 2017 � Bio. Challenge Competition
Partnerships outside of the Building � ''If you have a garden and you want to see things flourish, you have to tend to it, '' George P. Shultz � “World class entrepreneurs are never lucky. NEVER. It’s a big idea. You make your own luck. “ “You showed up more than other people. You took advantage of other people more. You raised your hand more often. You were there more often. You got on a plane when other people thought: naah, it’s too much of a hassle. ” Abbreviated from Steve Blank “How to Build a Startup” � Possible early interaction scenarios: � I will have my people call your people � Single meeting discussing great ideas, and then nothing � Initial meeting, then follow through with small projects that build on success
Growing Interactions with Business Incubators/Industry �Attend networking events �Host Networking events �Develop an advisory committee �Learn to speak the language of startups and incubators �Contract Research, manufacturing, service, testing, organizations �Adjunct positions, business partners (developing/teaching classes) �Can lead into CXO, CXO Collaborations �Student internships �Workforce survey � Provide feedback on skills necessary for our graduates to succeed. � Increase interactions with local businesses. � Generate a centralized website for biotechnology business in Louisiana.
Partnerships outside of the Building � ''If you have a garden and you want to see things flourish, you have to tend to it, '' George P. Shultz �“World class entrepreneurs are never lucky. NEVER. It’s a big idea. You make your own luck. “ Abbreviated from Steve Blank “How to Build a Startup” �Possible early interaction scenarios: �I will have my people call your people �Single meeting discussing great ideas, and then nothing �Initial meeting, then follow through with small projects that build on success
Partnerships outside of the Building � ''If you have a garden and you want to see things flourish, you have to tend to it, '' George P. Shultz �“World class entrepreneurs are never lucky. NEVER. It’s a big idea. You make your own luck. “ Abbreviated from Steve Blank “How to Build a Startup”
Delgado Community College Science Laboratory Technology (SLT) Program Concentration in Biotechnology
Customer Development Model �What is a company �A business organization that sells a product or service in exchange for revenue and profit. �What is a startup�A startup is a temporary organization designed to search for a repeatable and scalable business model.
1. Customer Segments �Market types � Existing market � Re-segmented market � New market � Clone market
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