No startup business experiences the same journey to success, but there are general stages that most companies move through as they grow: 1) Validation 2) Product Development 3) Commercialization 4) Scale/Growth The Center for Entrepreneurial Innovation (CEI) helps its clients through these stages of business development and offers best practices for each stage. Represented by an amazing lineup of speakers, including Hart Shafer (Innovation Coach / Founder, Theraspecs), Eric Miller (Principal, PADT Inc.), Nate Curran (Entrepreneur-in-Residence, CEI) and Russ Yelton (CEO, Pinnacle Transplant Technologies, "The Startup Lifecycle" presentation offers unique insights and best practices for entrepreneurs growing their business.

1. the startup lifecycle
presented by the center for entrepreneurial innovation & friends

2. about cei | business incubator
we support technology-based businesses that
create quality, high-wage jobs for the region.

3. about cei | business incubator
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5. about cei | business incubator
we help companies through all stages of the startup lifecycle
validation product
development
commercialization
scale

6. ceo & founder | theraspecs
lean startup & innovation
coach | adobe
lead mentor | adobe kickbox
selection committee | cei
stage one: validation

7. SEARCHING FOR PRODUCT/MARKET FIT
Customer discovery and product validation
© 2013-2015 J. Hart Shafer
hart@theraspecs.com

9. What they
wanted:
“Tire swing”
What we
heard:
“Tier swing”

10. FIRST, A QUESTION
Edward Hicks.
"Noahs Ark”

11. TWO THINKING SYSTEMS
System 1 runs the show
by default
Kahneman. Thinking, Fast and Slow
System 1:
Fast, effortless, pattern
matching to norms
System 2
Slow, effortful, logical
We need to consciously
activate our system 2

12. YOU ARE NOT RATIONAL
¤ Anchoring
¤ Availability
¤ Bandwagon
¤ Belief
¤ Cheerleader
¤ Clustering
¤ Confirmation
¤ Congruence
¤ Contrast
¤ Consistency
¤ Expectation
¤ Framing effect
¤ Gambler’s
¤ Heuristic
¤ Information
¤ Observation
¤ Priming
¤ Status Quo
http://en.wikipedia.org/wiki/List_of_cognitive_biases
Availability
Confirmation
Priming

13. NEW PRODUCTS TODAY
$
!!!!

14. NEW PRODUCTS TODAY
$
!!!!

15. ¤ Steve Blank: 4 Steps to the Epiphany, Startup Owners Manual
¤ Eric Reis: Lean Startup
THE LEARNING LOOP
Ideas
Build
Product
Measure
Data
Learn
Experiment
Hypotheses
Pivot?

16. THE MANTRA
THERE ARE NO
FACTS INSIDE
THE BUILDING

17. (SO GET
OUTSIDE THE
BUILDING)
THE MANTRA

18. OBJECTION!
“If I had asked people what they wanted,
they would have said, ‘faster horses.’”
–Henry Ford

19. OBJECTION!
“If I had asked people what they wanted,
they would have said, ‘faster horses.’”
–Henry Ford
Don’t ask. Find out.

20. DECLARE YOUR PLAN
¤ Step way back: examine all sides of business
¤ Business model canvas or lean canvas
¤ BMC: Alexander Osterwalder, Business Model Generation
¤ LC: Ash Maurya, Running Lean

21. LEAN CANVAS
Customer
Segments
Target Customers
Early adopters?
Problem
Top 3 Problems
Existing
Alternatives
Solution
Top 3 Features
Unique Value
Proposition
Clear, compelling
message. What
makes you
different?
Key Metrics
e.g. AARRR
Channel
Path to
Customers
Revenue Streams
Revenue Model, life time value, revenue,
gross margin
Cost Structure
Customer acquisition, distribution,
people, etc.
Unfair
Advantage
Not easily
copied or
bought
Pivot?
Pivot? Pivot? Pivot?
Pivot?
Pivot? Pivot?
Pivot?Pivot?
Skinned knee
Broken leg

22. 22
IDENTIFY & RANK ASSUMPTIONS
1. Problem/solution fit
2. Product/market fit
3. Scale
Ash Maurya, Running Lean
Risk
Uncertainty
Risk
Uncertainty
Risk
Uncertainty

23. CREATE HYPOTHESES
“If you torture the data long
enough, it will confess.”
–Ronald Coase
Economist, University of Chicago

24. FALSIFIABLE HYPOTHESES
Specific, repeatable action
will result in
Expected, measurable customer action
Making our headline more engaging
will result in
More customers signing up

25. FALSIFIABLE HYPOTHESES
Specific, repeatable action
will result in
Expected, measurable customer action
Making our headline more engaging
will result in
More customers signing up

26. FALSIFIABLE HYPOTHESES
Changing our headline to focus on in-
studio music recording
will result in
A 10% increase in customer conversions
Specific, repeatable action
will result in
Expected, measurable customer action

27. RUN EXPERIMENTS
investment

28. 28
Alternate Background, Dark, Bullet,
full screen graphic
Picture: “what’s the cheapest thing I could
do” (search: piggy bank)
Appropriately sized investment

29. 29
Alternate Background, Dark, Bullet,
full screen graphic
Picture: “no single big bets”
No big bets

30. 30
Alternate Background, Dark, Bullet,
full screen graphic
Picture: “good experiments are additive, not
monolithic”
Ekaterina
Minaeva
Additive, not monolithic

31. WHAT YOU ARE LOOKING FOR

32. A/B TESTING

33. INTERVIEWS
Problem Solution

34. INTERVIEWS
Problem Solution
Hypothesis:
Asking target customers to describe their workflow
will result in
Spontaneous description of file-level
collaboration as a major pain point

35. FOCUS GROUPS
DON’T USE
FOCUS
GROUPS

36. GAMES - SAIL BOAT
© Innovationgames.com

37. GAMES - BUY A FEATURE
© Innovationgames.com

38. SURVEYS
DON’T USE
SURVEYS

39. BEST USE FOR SURVEYS
Qualitative
Quantitative

40. PAPER PROTOTYPES
Maximum resolution: thick Sharpie on 8½x11” paper

41. BEHAVIOR TESTS & MVPs
Measured behavior
over
Predicted behavior

42. WRAP UP
The “right thing” is not a yes-or-no
problem
80% right is more than 20% waste
42

43. SO…
GET OUT OF
THE BUILDING!

44. NEVER STOP EXPERIMENTING
hart@theraspecs.com
@j3hs

45. principal and co-owner | padt
former engineer | honeywell
project lead | padt
startuplabs at cei
bachelor of science |
mechanical engineering
stage two: product development

46. PRODUCT
DEVELOPMENT
Lean
Manufacturing
Principals
and
Minimum
Viable
Product
Development
Eric
Miller,
Principal
PADT,
Inc.

47. Goal
1:
Get
Your
Product
Developed
• A
significant
effort
• Requires
lots
of
people,
Gme,
and
money
• If
you
think
you
are
starGng
with
a
developed
product
that
needs
to
be
perfected
– You
are
Wrong
• Product
Develop
is
hard
work
that
requires
focus
and
structure

48. Goal
2:
Make
Your
Product
• Get
your
product
in
producGon
at
your
price
goal
• Do
it
yourself
or
find
partners
• Everything
from
materials
to
distribuGon
• If
you
can’t
make
it,
you
can’t
sell
it.

49. Minimum
Viable
Product
Development

50. Minimum
Viable
Product
Development
• Key
part
of
Lean
• DefiniGon
of
a
MVP:
“…that
product
which
has
just
those
features
and
no
more
that
allows
you
to
ship
a
product
that
early
adopters
see
and,
at
least
some
of
whom
resonate
with,
pay
you
money
for,
and
start
to
give
you
feedback
on”

51. Why
a
MVP?
• Time
and
Money
• Developing
a
full
product
takes
Gme
and
effort
you
probably
don’t
have
• Get
interest,
get
money,
buy
yourself
Gme
with
an
MVP
• Get
feedback
from
your
customers
early
• A
way
to
bootstrap
your
company

52. Types
of
MVP’s
• Not
a
Product
– Video
• Sell
your
design
and
features
• Get
interest
and
funding
– Futures
• AdverGse
and
sell
the
product
before
you
actually
create
it
–
risky,
you
need
to
deliver
– Fundraiser
• Kickstarter,
etc…
May
contain
Video
and
is
sort
of
like
Futures.
– Service
• Do
what
your
product
will
do
as
a
service
• The
best
of
the
opGons:
money,
experience,
reputaGon

53. Types
of
MVP’s
• SoWware
– Give
it
away
as
beta,
alpha,
or
open
source
• Gives
you
experience
and
brand
building
plus
great
feedback
– Single
feature
• Find
that
one
thing
that
people
want
and
deliver
that
• Google,
Dropbox,
etc…
– A
true
MVP
• IdenGfy
the
key
feature
you
must
have
and
develop
for
those

54. Types
of
MVP’s
• Hardware
– Only
opGon
is
to
limit
your
first
release
to
the
absolute
minimum
of
features
– Focus
on
building
early
success

55. Success
with
a
Minimum
Viable
Product
Development
• Do
the
step
before
right
– Get
the
true
requirements
of
your
customers
– Rank
them
accurately
– Pick
the
absolute
minimum
of
features
• Don’t
go
off
on
tangents
– SGck
to
the
plan
• Apply
lean
product
development
principles

56. Use
the
Lean
Product
Development
Process
• Lean
Product
Development
(Eric’s
Top
10)
1. Clearly
define
requirements
and
design
to
them
2. Requirement
should
be
focused
on
customer
value
3. Frontload
the
process
with
exploraGon
and
iteraGons
4. Create
a
level
PD
process
5. Balance
experGse
and
cross-­‐funcGon
integraGon
6. Design
quality
in
to
the
product
7. Involve
suppliers
in
the
process
8. Develop
experGse
in
your
technical
staff
9. Build
in
a
culture
of
excellence
and
relentless
pursuit
of
conGnuous
improvement
10. Use
standardizaGon
when
possible,
without
blocking
flexibility

57. Use
a
Process
• Design
a
process
• Document
it
and
teach
it
• SGck
to
it
• ConGnually
improve
on
it

58. Lean
Manufacturing

59. Lean
Manufacturing
• Toyota
dominates
in
manufacturing
because
of
these
principles
• The
long
term
cost
of
a
physical
product
is
driven
by
manufacturing
costs
• The
reputaGon
of
a
company
is
controlled
by
the
product
quality
and
performance
• This
stuff
works,
and
works
well

60. For
Mass
ProducGon
• As
a
startup,
you
need
to
be
careful
• These
principles
were
developed
for
a
large,
established,
mass
producGon
company
• They
can
be
applied
to
a
startup,
lower
volumes,
and
simpler
parts
• Just
ask
“Does
this
add
value?”

61. Basic
Principal
• Eliminate
Waste
– Many
types
of
waste,
all
bad
– Review,
idenGfy,
reduce
or
eliminate
• ConGnuous
Improvement
– Should
be
throughout
your
organizaGon
– Built
in
to
your
manufacturing
planning
and
execuGon
• People
– Honor
and
respect
your
workers
– Train,
communicate,
praise
• Just
in
Time
– Too
detailed
and
complex
to
talk
about
here
– Understand,
plan,
communicate
• Quality
Built
In

62. Lean
Manufacturing
and
the
Startup
• What
part
of
the
process
will
you
do,
what
will
you
outsource
– It
is
rare
for
a
startup
today
to
do
their
own
manufacturing
• Find
a
vendor
that
applies
the
principles
and
work
with
them
• Integrate
with
your
vendor
– Be
part
of
the
process
– Pay
to
have
someone
be
your
liaison
and
be
there
with
them
and
you
• Bolom
line:
Throwing
things
over
the
wall
is
not
lean
manufacturing
• Bolom
line
2:
Find
the
right
vendor
and
work
with
them,
not
against
them.

63. Some
General
Advice
• First
Gme:
– Product
Development
and
Manufacturing
will
take
longer
and
cost
more
than
you
thought
• SGcking
to
lean
principles
will
minimize
Gme
and
cost
and
maximize
value
• Listen
to
the
experts
• Develop
key
requirements
and
laser
focus
on
delivering
those

64. Why
Things
Go
Bad
• Desire
for
features
and
lack
of
desire
or
ability
to
pay
for
them
– Biggest
cause
of
unhappy/fired
customers
at
PADT
• “It
didn’t
work”
– Find
a
problem
and
need
to
redesign
– Or
no
way
to
meet
requirement
• VariaGon
from
requirements
• Loss
avoidance

65. SuggesGons
• PrioriGze
Product
Development
and
Manufacturing
– Market
research,
sales,
markeGng,
etc..
are
a
lot
more
glamorous
– Hire
or
outsource
–
then
listen
to
them
– Its
about
process
• Successful
products
all
share
one
thing
– Good
design
and
successful
manufacturing

66. entrepreneur-in-residence |
cei
former senior manager |
godaddy
black belt, six sigma |
ge consumer finance
15+ years experience |
fortune 100 companies
stage three: commercialization

67. commercialization
(aka “start selling sh!t”)

68. textbook definition
nate’s definition
introducing a new product or product
method into commerce
building a business around your
product

69. if you are lucky
commercialization is ongoing!

70. the big difference between…

71. go-to-market strategy =
business model
marketing strategy =
engaging your customers

72. outbound
marketing strategy
active
interruptive
expensive
inbound
passive
holistic
inexpensive

73. telling your story
who = target persona
what = problem
why = solution benefits
how = solution features
when = call-to-action
where = engagement channel

74. pricing strategy
luxury
retail
wholesale
value
based on types of markets
convenience

75. test, test, test
become a student
of your business

76. chief executive officer |
pinnacle transplant
former president / ceo | nacet
board chair | azbio,
flinn foundation
board of directors | nbia
stage four: scale

77. Scaling
and
Growth
Russ
Yelton,
CEO
MBA,
CTBS

78. 1. Assessing
Where
Your
Culture
Is
2. Ensuring
CommunicaGon
3. Leading
and
Embracing
Failure
4. Invest,
Invest
and
Invest
in
Your
People
(they
are
the
only
thing
that
malers)

79. “Good
teams
become
great
ones
when
they
trust
each
other
enough
to
surrender
the
“me”
for
“we”.
-­‐Phil
Jackson

80. Culture
Reset
Pinnacle
Transplant
Technologies
is
a
regeneraGve
medical
company
with
a
focus
on
providing
safe,
quality
driven
products
to
improve
lives
through
innova@on,
collabora@on
and
teamwork.

81. CommunicaGon
• Monthly
e-­‐newsleler
• New
Associates
• Work
Anniversaries
• SuggesGons
• Sharing
awards
• Safety
SuggesGons
• HR
Reminders

82. Let
Your
People
Lead
• Created
mid-­‐level
management
• Social
Commilee
• Associates
alend
external
events
• Share
the
success
and
failures

83. Create
Accountability
but…..

84. Invest
in
Your
Associates
• 401K
Match
• Health
Insurance
• Career
Paths
• Pay
Alignment
• Annual
Corporate
Retreat
• Quarterly
SaGsfacGon
Surveys

85. Let
them
express
themselves….

86. Results
• 97%
retenGon
rate
• 95%
of
suggesGons
are
related
to
quality
improvement
• Culture
of
accountability
throughout
organizaGon
• 80
associates,
110
EoY
• Our
people
are
happy

87. Closing
Thoughts
• Never
to
early
• Culture
will
create
itself
if
leW
alone
• New
people
bring
new
ideas,
thoughts,
behaviors
• Must
constantly
reinforce
• Never
lose
vision

88. learn more
ceigateway.com