Feedback form – http://goo.gl/forms/b6H9VIX1GA

Monday – We start by pairing each startup with a small group of GA students who are currently in the Product Management Immersive. The goal for each team is to create their Kanban board (or todo list) of ideas/products/features that need to be tested during the week.

After creating the list, the teams need to decide 2-5 things that they want to accomplish during the week, and 1 thing they want to have done by Tuesday morning.My core teaching principle is GA’s “learning by doing” so we will be operating on one-day sprints during the week. This is because the main takeaway from the week will be to set specific learning goals and achieve them in a specified window of time (a sprint).

We will then walk through a rapid prototyping cycle to decide how to test that one thing. Each team will present, in 60 second or less, their product, what they want to test, how they will test it, and what a pass/fail looks like (pre-commitment).

Slides for day 1 – 500 Startups Day 1

Tuesday/Wednesday/Thursday – The group of ten is broken into sub-groups of two or three. Each mini-group presents the experiment they ran, the results, and their learnings. The teams then take a 20 minute break to setup new experiments for the day. They re-convene, present their experiments, refine, and prepare their pitch. We end each day with the same thing – each team gets 60 seconds to present their experiment.

Wednesday – We will partner with the current User Experience Design Immersive students to give the startups a huge, 50+ pool of users for their afternoon testing. Since the students aren’t necessarily part of each team’s target audience, the test will have to be about some general principle of UX, versus demand for a particular feature. We will focus on usability of the product.

Slides from UX presentation – Usability walkthroughs for 500 Startups

Friday – After the teams present the results of their Thursday experiments in mini-groups, we send them into a 30 minute break to prepare a lessons-learned presentation. The presentation can be max 2-3 minutes. I love Steve Blank’s format from Lean Launchpad and the students will follow that rough guideline, but very compressed and without a video.

————————————————————–

The following section is taken from my book “Lean Accelerator” and discusses Steve Blank’s lesson learned prep guide.

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Lessons Learned

Steve Blank uses the last official class session to have the teams present their lessons learned. Here are his exact instructions on how to prepare a lessons-learned video, copied directly from the Lean Launchpad. I thought the instructions were so good that I could not further improve on them. And from the quality of the responses, it seems that was a good instinct to have.

Note: The following is taken from Blank’s Lean Launchpad Educator’s Guide, which you can find in its entirety here.

Loads of examples and info for lessons learned

http://www.youtube.com/watch?v=ZyGr-eoONqo

http://www.youtube.com/watch?v=7bJ8rd1dxy8

http://www.youtube.com/watch?v=S7H0LZWVt0I

1. RedOx team from Yale:

http://www.slideshare.net/sblank/redox-final-nsf-presentation

2. NeonLabs from Carnegie Mellon University:

http://www.slideshare.net/sblank/lighttip-nsf-final-presentation

3. Phioptics from the University of Illinois:

http://www.slideshare.net/sblank/phioptics-nsf-final-presentation

4. OmegaChem Iowa State University:

http://www.slideshare.net/sblank/omegachem-nsf-final-presentation

5. City Climber team from City University of New York:

http://www.slideshare.net/sblank/city-climber-story-video-nsf

6. Soliculture team from UC Santa Cruz:

http://www.slideshare.net/sblank/soliculture-story-video-nsf

Story Video Details (2 minutes)

If I can replace your team name and get the same story, that is BAD! Be unique! Be very specific! (note: my addition, the rest is from Steve Blank’s curriculum)

Think of the story video as the heart of the team presentation as told through video.

Suggested Story Video outline:

• What are your names and what is your team’s name? Introduce yourselves. Pan the camera around your office so we can see where you work.
• How many customers did you talk to?
• Did you find this easy? Hard at first?
• When you started the class, what was the most important thing you thought you would have to do to successfully launch a scalable startup?
• How do you feel about that now?
• Thinking back across the class, who was the most interesting customer you met and where did you meet them?
• What happened?
• Why, specifically, was this your most interesting customer conversation?
• And how, specifically, did your business model change as a result?
• Now that the class is over, what was the most surprising thing you learned in the class?

Lessons Learned PowerPoint Presentation (8 minutes)

The “lessons learned” slide deck is a very short list of definitions and simple declaratives that are intended to increase the quality of the presentations. Here it is, in full:

• Story.
• Be specific.
• Show me, don’t tell me.
• Arcs.
• Beginning, middle, end.
• Character, setting, plot.
• Editing.
• Notes.
• Look before…
• Practice!
• Be specific.
• Use (or enhance) the diagrams you developed in weekly presentations to illustrate these points.

Common Student Errors: Presentation and Video

Students often make very bland story videos:

• They don’t naturally hone in and choose very specific details of their technology, their customers, and their learning process. This is essential — the more specific, the better. (Note: I overemphasized this part. I wanted very specific details about what the students did over the summer.)

• It is only through the specificity of a storyteller that an audience can extrapolate to generality, which is what teams would want an investor to do. Students often spend time thanking instructors, speaking excitedly about the Lean Launchpad program, or making cheeky references or inside jokes. This is a huge mistake, and can make their presentation feel like a junior high school Science Fair project. Students should spend absolutely zero time on any of these topics, and all meta references to how important teamwork is should be aggressively cut. This is very hard for many students to internalize.

• None of that has any place in a 2-minute video about a real company that is actually trying to raise real money from real investors. Investors will ascertain team dynamics for themselves when they meet a company and get to know the people involved. Students think they need to tell a whitewashed success story: This is another big mistake, and will damage their attempts at getting subsequent financing.

• Students must strive to tell the authentic, honest story of their successes and mistakes, pitfalls, discoveries, and pivots.

• Most importantly, students must talk in the most specific terms possible about the customers they actually met, what they actually said, and how that changed their Business Model Canvases.

Lessons-Learned Presentations

The links below will take you to the videos the students prepared for their lessons-learned presentations, the actual lessons-learned presentations themselves, and the Demo Day presentations. For a collection of these videos in one easy-to-watch place on the web, please visit my blog.

The post Lean Product Development: Schedule for one week General Assembly & 500 Startups pre-accelerator appeared first on Accelerate Innovation.

Timeline:

5-515 Introductions & Purpose of guerrilla marketing

515-530 Social cause: PSAs, then Watch Pillows and Fuck the Poor. Get list of what people thought was effective/not effective

530 – 540 Generate the 5 rules of Guerilla Marketing

540 – 550 Use your product: Sweetgreen – how does it follow the rules?

550 – 6 First draft of your own guerilla marketing campaign

6- 610 Experential marketing Piano Stairs/U2 – how does it follow the rules?

610 – 620 Second draft

620 – 630 Share outs and critiques

Rules of guerrilla marketing:

1) Be on brand

2) Is visual

3) Will get people talking

4) Reaches the audience the brand cares about

5) Highlights the brand’s product/service in a relevant and newsworthy way

Visuals PSAs

http://digitalsynopsis.com/inspiration/60-public-service-announcements-social-issue-ads/  3, 8, 12, 14, 20, 27, 38, 59

Experential Marketing

The goal of experiential marketing is for consumers to interact with your product and then associate their immediate emotional response with your brand. Some experiential marketing ideas are a pop-up fashion show, giving away your product for free with no warning (other than possibly a tweet with your location), an impromptu concert, and live window displays where your staff models clothes or your product.

Piano stairs – https://www.youtube.com/watch?v=2lXh2n0aPyw

U2 – https://www.youtube.com/watch?v=-rkuUPXwyCI

Social Cause

A Belgian designer named Pieter-Jan Fraussen used guerrilla marketing to draw attention to world poverty. 60 pillows were printed with the message “Still too many people sleep in the streets” that were left in a main shopping area for people to find. It created buzz, got people talking, and was covered by the media. A campaign like this creates exposure not only for the social cause, but for the company or person behind it too. This is a great example to use as inspiration for your own thought- provoking social cause campaign.

Pillows – http://osocio.org/message/pillow-against-poverty/

Fuck the poor – http://prexamples.com/2014/04/fuck-the-poor-shock-tactic-campaign-from-charity/

Clothing/Sexuality

Booty Call underpants – http://money.cnn.com/2004/08/13/news/economy/weirdads/

Use your product

Apples – http://inagorillacostume.com/2011/calgary-farmers-market-guerrilla-marketing-fresh-apples-winter/

Sweetgreen – http://www.sweetgreen.com/blog/2010/10/07/random-acts-of-sweetness/

Hijack something else that’s PR worthy – http://prexamples.com/2014/03/queen-takes-royal-family-selfie-for-mothers-day/

DHL – http://prexamples.com/2014/02/dhl-pulls-inspired-stunt-on-rivals/

Speak to the other half

Dog posters  – http://prexamples.com/2014/03/park-posters-scented-with-dog-food-in-match-com-barketing-campaign/

The post Guerrilla Marketing for Social Entrepreneurship appeared first on Accelerate Innovation.

This is best illustrated by an example. Perhaps I’m thinking about starting an ice cream company and I want to figure out what customers in my neighborhood prefer to eat. Quite often, the startup would create a survey like this, and ask customers to rank in order of preference, from 1-5. Here’s what I would say.

1. Chocolate
2. Vanilla
3. Cookie Dough
4. Caramel
5. Mint

After handing out the survey, we would know what order people put their preferences in.

Heat mapping asks the respondent to allocate a certain number of points (often 100, but it doesn’t matter), between their preferences. Here’s what mine would look like.

80 Chocolate

10 Vanilla

5 Cooke Dough

3 Caramel

2 Mint

Notice the difference? It is quite clear in the heat map that I have a VERY strong preference for chocolate.

I recently used this technique in my work at Google on Primer – https://www.yourprimer.com/. We were trying to figure out which topic areas would be of the most interest to our users and only wanted to launch with a handful. We came up with a list of about 10-15 topics and then asked users to vote on the topics they cared about. They got about 5 votes that they could spend as they wished: all five on one topic to all five on different topics.

When dealing with limited amounts of feedback, it is often just as important to get the intensity of the preference as well as the order.

The post Heat Mapping to Register Preferences appeared first on Accelerate Innovation.

1) Trello – This essentially allows you to stack “cards” in columns and add comments. Each “card” is a specific experiment. Cards can be tagged, grouped, notated, assigned, etc. Columns are generally “Backlog” for all generated ideas, “In Progress” for ideas being tested, and “Completed” for tests that are finished. Key agile principle here is that you cap the “In Progress” column at a limited number of cards, forcing experiments to get finished before new ones begin. All for free! This is the tool I most often recommend if I’m starting from scratch. However, large, existing organization normally already have a variety of tools and might not want to add to the load.

2) WhichTestWon – This is a repository of real life tests! There are many ways of finding tests, including groups and a search bar. It is basically a generic news website or blog. You can see how individual tests are recorded – https://whichtestwon.com/case-study/awebers-homepage-urgency-test/. There are normally screenshots, the hypothesis, the test and the results, plus room for comments.

3) Google Docs/Dropbox – If the team is already sharing files and wants a real lightweight solution, then you can agree on a common format for the experiments (like on whichtestwon), record tests and results in word docs, and then store in a central location. Google Docs is convenient cause it is shareable. Similar story for Evernote if you use that tool. This solution is what I most often recommend for teams that already have lots of software tools, some of which they may not use… It is very simple to get started and just requires a common format. Here’s an example from WhichTestWon, mostly for inspiration, cause I don’t love the design.

On a similar note, if you’d like to see what it looks like when the theory of class gets translated into the everyday of real life, I’ve included a pre-release chapter of my new book (Lean Accelerator Intro). Go to p. 12 (PDF p. 20) for a description of how I asked startup teams I worked with to record their experiments. And then you can see how they actually did it!

Some additional resources (although I do think these get overly jargony and aren’t really necessary to run and track good experiments)

http://www.quora.com/What-are-some-tools-to-track-Lean-Startup-experiments

http://practicetrumpstheory.com/the-lean-stack/

http://www.lean.org/LeanPost/Posting.cfm?LeanPostId=193

Good luck! Definitely let me know if you find a system that works for you.

The post Tracking Lean Startup experiments appeared first on Accelerate Innovation.

The proposed lean test

The entrepreneur wants to convert their company’s home page banner into a newsletter capture opportunity instead of a ‘Get a Free Session’ opportunity.. this will allow them to capture emails at a faster clip

Hypothesis:

Parents need to sign up for the newsletter and receive valuable content before signing their teen up for a free session with one of our agents. We believe that after collecting 100 parent emails from our homepage banner we can get 10 parents/teens to sign up for a free session.

Experiment:

Gather 100 parent emails through various channels and provide an email with value (our free best selling book, webinar opportunities, our favorite blog posts). Once parent receives email we will follow up and ask if he/she would like a free session.

Metrics for pass/fail:

Pass = 10 or more parents sign up for a free session
Fail = Less than 10 sign up for a free session

My analysis

First, the test is proposed perfectly. There is the hypothesis and what the authors suppose to be true. There is the experiment, or how to test the the validity of the hypothesis. And finally there are metrics, which determine whether the test passes or fails.

Second, my response.

This test is pretty close to being good. I think you are trying to test whether changing the home page banner from a quick kill (get a free session) to an info ask (email capture) will improve bottom line conversions (parents signing up for a free lesson). The test is essentially whether your clients need to be nurtured/given information before being closed. That’s a good thing to find out and has direct implications on your sales channel. (Next time, can you include screenshots too please?)

1) For the test to be apples-to-apples, you can’t collect parent emails through “various channels”. You need to run this test with emails collected only from your home page banner.

2) You need a metric with more meaning than 10%. Seems arbitrary to me. If only 9 went to a free session, would you really convert your banner back? A more useful metric is to be better than your home page banner. So if your current banner converts at 9%, you would stick with the newsletter signup if it hits 10%. Admittedly, you’d need bigger numbers than 100 users to make that call. But it’s a start.

The post Critique of a lean test and ideas on when to kill it and move on appeared first on Accelerate Innovation.

Lessons Learned

Driven Analytics video

Driven Analytics presentation

XiP Technologies video

XiP Technologies presentation

Levaté video

Levaté presentation

Icarus Aerial Technologies video

Icarus Aerial Technologies presentation

Sowers Publishing video

Sowers Publishing presentation

Demo Day pitches

My introduction to demo day and the program

Driven Analytics pitch

XiP Technologies pitch

Levaté pitch

Icarus Aerial Technologies pitch

Sowers Publishing pitch

https://www.youtube.com/watch?v=nY_mIT8MYlc

The post Videos from the OU Accelerator: Lessons Learned and Demo Day appeared first on Accelerate Innovation.

Pre-commitment means deciding ahead of time what you’ll do if the results of a lean experiment turn out one way or the other. It was one of the most effective tools I used this summer to move five startup teams from ideas to revenue in ten weeks. In this post I’m going to dig deeper into the actual mechanism involved.

The start – figuring out what you want to learn

Lean Startup and experimentation is a powerful way to determine if your startup’s assumptions are true or false. The standard cycle lean startup describes is build-measure-learn. It means build an experiment, measure the results and learn from them. Here’s how it worked for the University of Oklahoma summer startup accelerator.

Icarus Aerial Technologies spent the summer investigating potential uses for drone photography. One key issue they needed to figure out early on was which customer segment to focus on. They had heard from a variety of friends and acquaintances that certain industries, like farming and real estate, would love the opportunity to use their tech. That is an assumption that needed to be tested!

The first thing Icarus wanted to learn was whether farmers would be interested in the drone’s capabilities. It’s critical that the learning step (the hypothesis) is framed as a yes or no question, so it can be validated (farmers are interested) or invalidated (farmers are not interested).

The experiment – how you’re going to test your assumption

Icarus then needed to figure out how to test the hypothesis. There are a few simple ways to test if someone is interested in your product and my favorite is the pre-sell, or “Sell and Scramble”. Lean startup is heavily focused on not building products or services that people aren’t interested in. So a good experiment will test demand before building anything.

In this case, the experiment was for Icarus to approach 10-20 farmers, primarily at farmers’ markets, and try to get just one of them to invite the team out for a test flight. No money needed to be exchanged. Instead, Icarus was looking for a verbal commitment that they could fly over one farmer’s fields. If Icarus could find one, they would consider the test passed, or validated. If not, invalidated. This is a pre-determined indicator of success.

The pre-commitment

Icarus then needed to pre-commit to what validating or invalidating the test meant. In other words, regardless of the outcome of the test, what would they do next. This is very important because frequently a team will setup a test, invalidate the test, and then continue on anyway because they felt the test didn’t really do what they wanted. This is a waste of time; in the summer accelerator’s case, a week out of ten weeks. If the results of the test won’t change the startup’s mind about an assumption they hold, or it won’t change the next thing they want to do, there isn’t any point in running the test.

I want to highlight that running tests is definitely not about throwing ideas against the wall and seeing what sticks. Tests are designed to learn certain things (like if a certain customer segment is interested in a product) and to validate assumptions and hypotheses.

For Icarus, if they couldn’t find one farmer out of twenty to invite them out to do a test run, it would mean that farmers were not a viable customer segment at this particular moment in history. Icarus decided that if they invalidated the experiment, they would move onto a different customer segment, probably real estate. If they validated the experiment, they would dig deeper into the farmers’ needs who invited them to fly.

Running the experiment

This part is the most conceptually easy (just do it!) but also the most difficult. Because everything up till now took place in the safe confines of the classroom, on the whiteboard, in discussions and in our imagination. But experiments always happen in the real world, where I can guarantee that things won’t go as easily or smoothly as planned.

For Icarus, they faced the gamut of responses from the farmers they talked to. Some ignored them, others yelled at them, and still others chatted but immediately shot down their ideas. All in all, it was quite clear that the people Icarus spent the week talking to were not interested in the idea.

Another key point happened here. Icarus did not go ask people what they thought about the idea in the abstract. They tried to actually sell the service to people. They asked for firm commitments in cash and time. And they were pretty firmly shot down.

Looking at the results

Which is actually great! It became pretty clear to Icarus pretty fast that the local farmers they were speaking with were not interested in their service. After spending many months doing business planning in a classroom, coming up with a “sure-fire” idea, one that was already working in other parts of the world, they came up with an immediate no as soon as they approached some customers. That’s why I like actually trying to sell your idea to real people as soon as possible with this experimental approach. It means you don’t need to waste any more time once an assumption gets invalidated! This is good news, because it means you can spend your valuable time and resources chasing down another lead.

Adding additional insights

Validating or invalidating an assumption or hypothesis is the main point of running an experiment. But it isn’t the only one. I also asked all the startup teams to share their insights from the experiment. Insights are hard to capture broadly but the often arise from the conversations the teams had with their potential customers after they were rejected. Many startups find their real business after pitching one idea and then asking one of my favorite questions after getting turned down “What frustrations do you have that you wish I could build a solution for?”

Presenting experiments in class

Each week the startup teams came up with new experiments to run, just like the one Icarus ran with the farmers. In class the teams would present their experiments for the week on Tuesday morning. They would state very clearly:

• The hypothesis as a yes/no question
• The test they would run to validate/invalidate the hypothesis
• What success or failure looks like
• What they would do next in the case of failure, indicating what failure (invalidation) really meant

The following Tuesday we started class by opening with a presentation of the results of the prior weeks experiments. The teams presented:

• Hypothesis: Here’s what we thought
• Experiment: Here’s what we did to test that thought
• Results: Here’s what we found out (the real data!)
• Insights: Here’s what else we learned

Accountability & Agile

The purpose of setting up these public experiments in class is to keep everyone accountable to each other. It is hard to slack off when you know you will be accountable for what you publicly said you would do (see the book Influence for a lot more on that). What ended up happening though is that the teams found themselves feeling accountable to me personally, rather than to the group as a whole. This works well as long as they are in the accelerator! But I wanted them to feel more accountable to each other during the summer as well as after, when the structure of the accelerator was removed.

What I would like to do next time is to have the teams provide more critique of each other’s experiments during the summer itself. I just read the Five Dysfunctions of a Team and accountability to the team as a whole is one key element. The teams are continuing to meet bi-weekly after the accelerator and are planning on holding each other accountable. For example: https://www.youtube.com/watch?v=St2BhIbOLUs.

One last point I want to close on is using a weekly Agile/Scrumm sprint to structure the accelerator program. The purpose of a sprint is to pre-define work that needs to be done and allow teams to manage themselves. It also sets clear goals as to when the works needs to be finished by. That structure allowed the teams to stay on weekly sprints, biting off small pieces of work (in the form of experiments) as we went along, rather than worrying about a bigger picture that is outside their control. It also allowed the teams to make steady progress each week, which is critical for startups in time-crunched situations.

The post The pre-commitment mechanism for accountability in Lean Startup appeared first on Accelerate Innovation.

The first dinner we spent BBQ’s at Jeff Moore’s house. I invited Danny from Tailwind and the investors from i2e to talk about how the deal came together. I found it pretty compelling to hear how both sides of the deal positioned themselves and what they were trying to get out of it. At the base it’s pretty simple – the company needs cash to grow quickly and the investor wants a return on their capital. Underneath that though, there was some interesting conversation about the traction a company needs to find before taking on investment. And what kind of traction the investor wants to see to reduce the risk before making the investment.

Risk was definitely the word of the evening and it jived very neatly with what the accelerator and lean startup are all about. Entrepreneurship is inherently about taking risks. But that doesn’t mean the entrepreneur should be reckless. Verifying demand and following the money will allow the entrepreneur to build things people want to buy. At some point the company will have to grow and scale and face new challenges, but that comes after product/market fit.

The next class (Class 16), Pat Jones from Petra Industries came in to introduce the students to entrepreneurial account. We started with a fairly boring read to get some of the terms down – Accounting made simple. While the shortest book I can find, it didn’t bring this relatively staid subject to life enough. Pat’s stories from his adventures at Hobby Lobby and Petra provided a much needed boost.

Class 17 was group pitch feedback. The teams came in with their demo day-ready pitches to get feedback from the group.

Our last team dinner, between Class 17 and 18, was the Rehearsal Dinner. Everything was setup to resemble what demo day will look like at CCEW. The teams used the projector that they’ll use on the day of. And Reese Travis, CEO of Orange Leaf Yogurt, came in to give the teams feedback. Here are the pitches:

Our second to last class, Class 18, we looked at financial modeling. Doug Woodward, formerly of Oracle and Microsoft, taught the teams just enough to be dangerous as CEO’s of their organizations. Here’s the spreadsheet he used as an example:

Small Biz Forum – Seminar Business Model 07 17 2014

Financial modeling is something I didn’t know anything about, so I particularly enjoyed this class! As a sales and marketing guy, I just think about how to acquire customers and sell them product. The model shows how the business will make money as a whole.

To me, it seems the natural next step after the business model canvas. If we go all the way back to day 1 of the accelerator, the students drew out their business model and then transferred that to the business model canvas. The bmc is perfect for tracking assumptions about the business. And as we went through the accelerator, we validated those assumptions or invalidated them and made new ones. Eventually the business model should be fairly well validated and can be expressed to investors and the internal team in spreadsheet form.

Next week, in the final class, we have lessons learned presentations. The purpose of the presentations is for the teams to reflect on what they learned in the previous nine weeks. And for me to learn what worked when I taught it (because the students found it useful) and what didn’t. The director of the Entrepreneurship program will be sitting in too.

After that, the last stop on this train is Demo Day! The teams will present their pitches and we’ll wrap up with conversations with the audience and lunch. It’s been a wild summer! I’ll be back with two more posts, after lessons learned and demo day, to wrap up my documentation of the summer and what I learned.

The post From Launch Pad to Demo Day appeared first on Accelerate Innovation.

Product Market Fit

All of the work the teams did to validate their market answers the first startup question: does anyone want to buy or use what I’m making? That goes by the handy name of product-market fit.

Paying for the product

The second question is can I make money selling the product or service that people want? That gets into all the questions of customers and channels, culminating in the revenue box on the business model canvas.

A profitable business

The third question is whether the business makes enough money to be worth operating it. Costs are the critical piece of the puzzle here. If people are willing to pay for a product, are they willing to pay enough to generate the surplus needed to pay for the folks and equipment who make the product and have enough left over to return the founders’ and investors’ capital contributions.

The business model canvas (bmc)

It takes seven weeks to get through the bmc using the Lean Launchpad curriculum and I believe by the end the teams have an understanding of what it takes to put a business together. In many way, running the summer accelerator was a startup experiment of whether running teams through weekly cycles of learning about building a business and running lean startup-style experiments (link to MVP examples) would be effective. And by effective I mean could they find people willing to pay (or at least use) their product.

Coming into the accelerator, none of the teams had asked for any firm commitments from their customers. That’s a big piece to be missing! By the end of the summer, we’ve had quite a bit of success in that area. Driven Analytics has a paid pilot with two dealerships. Levaté has 150 people signed up to be beta testers. Xip (né Park Ave) has a $10,000 grant from the University of Oklahoma’s parking director to run a proof of concept. Icarus has verbal commitments from construction agencies to do paid flights this very weekend.

In my estimation, that’s a fair amount of progress to have made in two months. And that’s just from the business side. From the academic side, the students have been exposed to, and used, a variety of methodologies that are very much in vogue in the business world, particularly agile and lean. They also have experience in using the business model canvas and a kanban board. They learned how to make weekly commitments and stick to them to keep momentum always moving forward. They learned how to deal with outside investment, form a company, negotiate among founders, track cash inflows and outflows, build and test a sales channel, and how to close a customer. And most importantly, in my estimation, how to truly validate if an idea holds water and to make the tough decisions about whether to pursue ideas or change to new ones (pivot or persevere).

All that’s left is the pitch

At this point, the main event, Demo Day, is what remains of the summer’s activities. The teams need to pull together all their learnings, all their experiments, and all their progress into one five-minute presentation. There are quite few folks coming to Demo Day so the teams will have a strong audience full of critical thinkers in the entrepreneurship space.

At this point, the teams have had to officially pitch their business at least once a week at the team dinner as well as one class mid-way through on pitching. They’ve also had a storyboarding class that helped them think through the flow of a pitch. And last but not least, they had to think of how they would pitch their business almost every single day when talking to potential customers, clients, partners, and investors.

The post Class 15, Week 8 – Resources, Activities and Costs appeared first on Accelerate Innovation.

What’s an MVP?

First and foremost, the biggest problem I see when developing a MVP is that MVP gets confused with beta.

A beta product is an early release of your product, designed so customers can play with it and the business can see what happens, get feedback, etc.

A MVP is an experiential prototype the business uses to answer a specific question.

After the first few rounds of testing, the MVP might become a beta. But I often see people’s first instinct is to create the first draft of their product right away and I think they would be better served by going with a true MVP to start.

MVP Example #1 – Experiential prototyping

Levaté is one of the teams in my summer startup accelerator at the University of Oklahoma. Here’s an image they currently have on the front page of their website – http://www.levatelift.com/.

What you’re looking at is a quintessential beta product. It looks, acts and feels much like the final product will look, act and feel.

To get this point though, the Levaté team used human-centered design and agile production principles to run a series of experiments, or MVPs. One thing the engineering team wanted to know was whether a wheelchair user preferred to be lifted up from the seat of the wheelchair or to have the entire wheelchair itself be lifted, passenger included.

The MVPs they used to test this question looked nothing like this product. In the first test, the team placed stacks of paper underneath the butt of the wheelchair user, lifting that person up from the seat. The team found out that the users did not like the sensation of being far from the wheels, which they tend to grip for support and balance.

In the second test, the team lifted the entire wheelchair up onto wooden pallets, to replicate the experience of being off the ground but still in the wheelchair. The users reported they preferred this feeling, but only up to a maximum height of 12 inches.

Teams using experiential prototyping to test hypothesis can move much more quickly than teams building fully functioning betas. That allows the MVP teams to figure out what customers or users want faster and better.’

MVP Example #2 – The smoke test

One of the first questions any new product or service faces is: does anyone even want this? In other words, is it worth the time, money and effort it’ll take to develop this service? An auxiliary question is does a customer or user want this product or service in the form that the business is imagining?

Most businesses try to solve this problem with the Build it and They Will Come strategy.  The business rationalizes the solution in a board room, removed from any contact with real customers. They are often shocked to find out what they imagined as a perfect solution isn’t well received in the real world.

The best solution is to use a smoke test or pre-sale. A smoke test uses a tool like Unbounce.com to build a variety of landing pages that then have paid web traffic directed at them. The goal is to see if anyone signs up to buy something. It very similar to kickstarter, where businesses try to raise money for projects they want to work on.

Both are doing the same thing – verifying that there is customer demand or interest in a product before building it.

Another variant on this is the cold call/email. Here you are making a pitch to a potential customer by phone or email and measuring the response rate. One of my summer startup teams, Project Xip, used this methodology when they were ready to make a potential pivot away from their marketplace parking app, where private sellers of parking spots could find buyers. They couldn’t find anyone who was interested in using this app, so they thought about another application in the parking space that would measure the usage of university parking lots. They ran the test by sending cold emails to 20 email addresses of parking directors at universities within a day’s driving distance of OU. And within 24 hours they had 8 responses. That’s a 40% response rate and good enough to validate there is enough interest in the product to continue moving forward. (Note: the product had not yet been built at this moment in time.)

A similar tactic that works well for existing businesses is to ask customers to pay for feature enhancements they want to prioritize. So all feature requests come into a central repository and the development team works on them in the priority the company deems best. But any feature can be bumped to the top of the line if the user is willing to pay for it. This system quickly highlights what features the user really cares about, and which ones are just nice to have.

Levaté used this pre-order system to build a landing page form on Google Drive and take beta user signups. Within a few weeks of opening the form they had already collected over 150 interested users, complete with contact info. This is a strong indication that there is customer interest in the product. Not quite the gold standard of Kickstarter, but pretty close.

MVP Example #3 – The paid pilot

Driven Analytics is another business going through the accelerator this summer. They plan on using a physical device that plugs into the dashboard to track car usage data. The device also has bluetooth, GPS and a cell phone/data connection. They want to sell this product as a service to car dealerships to help with customer satisfaction and retention.

Driven Analytics really needs to test two things at this stage of its development: will businesses pay for any of its proposed features and what should those features look like. The best MVP for this is the paid pilot.

For Driven Analytics, a paid pilot means getting a car dealership to pay a meaningful amount of money to test out the devices and the data they produce over a specified period of time. As it turns out, two dealerships signed up within the first week of pitching them! That answers the “will anyone pay for this” question in the affirmative. Now comes the task of trying to figure out exactly what the dealerships need from the device and how they would use the data it collects. Suffice to say, within the first week of selling the device and its benefits, the value prop of the business has changed pretty dramatically, as actually selling a pilot gets a startup business very valuable feedback.

MVP Example #4 – Little Bets

Another common question I get is how to to start using lean startup or experiential prototyping today. It’s all well and good to talk about it in a classroom, but people want practical tips for translating that into real work.

I’ve borrowed the name of this section from Peter Sims’ excellent book – Little Bets. And the Mine Fellows in Tulsa, OK recently applied its principles in a project for United Way. The challenge was to bring new people and projects into the social entrepreneurial ecosystem in Tulsa. The United Way had a special pot of money called the New Venture Grant that was earmarked for exciting new initiatives. But it was only the existing nonprofits that were applying for its funding.

The fellows first came up with the idea of having a pitch competition for the money and giving the cash away in large blocks to the best ideas. But this begs the question: where will new entrepreneurs come from and how will they get prepared to use the cash? And even more importantly, how will the United Way check for quality in the projects? In short, this is a very typical launch project where there is a lot of risk and uncertainty.

I proposed that rather than creating an elaborate system of checking in on the new entrepreneurs to see if they were using their cash appropriately, and also instead of giving away large chunks of cash all at once, that the pitch competition should be stripped way down to only give away a small amount of money, say $1000. And rather than giving away $100k to 2 or 3 projects, at first $10-20k could be given away in 1k increments. The recipients would then have 3-6 months to do something with the money. I think of that “something” as a lean startup-style experiment. After the time went by, the entrepreneurs would come back to the Fellows, discuss what they accomplished, and then be considered for a bigger grant.

And that is the essence of little bets. Rather than placing a few big bets on some very risky propositions, it is better to start with lots of little bets, and then double down on the ones that seem to be working. This exact same methodology would work well in any enterprise. If there’s a challenging problem, full of risk and uncertainty, the best bet is to let a lot of different people and ideas have a run at it. If you keep the experiments small, low in capital and short in duration, then the risk of a huge failure goes way down. And when the results of all those tests come back, the company can use data, instead of logic, to decide where to continue investing in innovation.

The post MVP examples from the real world appeared first on Accelerate Innovation.

Writing for the web is a critical skill that will impact a startup during all of its life phases. Writing will almost always be how the company introduces itself to potential customers and investors. As the startup progresses, the kind of writing it will need to do will change based on the target demographic. A first-time customer learning about the business needs a very different type of writing/marketing program than a long-term repeat customer exploring new offerings.

Here is the one page worksheet I use to teach writing for the web.

Step 1 – Time boxing

I find it is much easier to learn to write by actually writing! And the best method for writing for time-pressed startups is time boxing. Time boxing means setting aside a short period of time (I like 15 minutes) to do NOTHING else other than write. That means no email, no phone calls, no drinks of water, no walking around the room – really just writing. And for first drafts, that means spewing everything that’s in your head onto the page. Students are always surprised how much they can get done in ten to fifteen minutes. In my experience, that’s just about enough time to get 500 words out, which is a normal length blog post.

Step 2 – Critique (and learning)

After writing the first draft, and while the content is still in its really raw state, I ask the students to swap with a partner and analyze their partner’s writing using the checklist from above. Pedagogically I think it is easier to learn all of these rules through their practical application and it is easier to see the flaws in other peoples’ work.

Step 3 – Revision

After exchanging commentary, it is time to go back into another timebox (again, 15 minutes is about right) and do a first revision. I ask the students to focus on on quality and readability of the ideas. Each and every blog post or writing should take the customer on a journey, carefully laying out stories or arguments or facts. There will be time later (if necessary) to polish for grammar, spelling and punctuation.

Step 4 – Sharing

The final step is to think about how the writing will be shared on the web. Normally writing will go on the company’s website, because that’s where customers will expect to find information about the product or service. But how will the customer know how to find the content? That’s where sharing the writing via social, Google or email comes into play. The worksheet below is what I use to get the students thinking about the different space and image requirements for each medium.

The post Class 14, Week 7 – Writing for the web appeared first on Accelerate Innovation.

Partners is the first box on the left side of the business model canvas that we consider and is starting to get a little removed from sales and marketing. I view the right side of the business model canvas as the “business” side – meaning how you’ll test demand for a potential product and then deliver that product to your customers. The left hand side of the BMC is more about product development, or the technical side of the business. I view that split as quite natural and is why many startups have both a business and product co-founder.

Partners can be hard to define, especially for startups, because it feels like the customer development process is one long slog through building partners. But even though you will be working with customers to develop your product, they are not your partner. A true partner would identify you as a partner too!

There are a variety of categories that Steve Blank identifies that a partnership can fall into:

• Strategic alliance
• Competition
• Joint venture
• Buyers
• Suppliers
• Licensees

I consider most of these types of partnerships product-development tools. I approach partnerships, with my marketing mind, from a customer development perspective. In marketing, a partnership can form between two companies that have a similar demographic (customer) but different products. For example, Nike sponsoring a marathon. Or a hipster coffee shop hosting a bike repair night.

In developing this kind of partner, a startup needs three skills. The first is identifying a partner who has an overlapping demographic but a different product. This is why it is so critical to have a good sense of who your actual customers are. The second is being able to figure out what need you solve for the partner. And the third is to pitch them!

In order to pitch a potential partner, you need to be able to explain what is in it for them to work with you. The teams all did a practice quick pitch and the number one improvement was to put first what is in it for the partner. The first sentence needs to be “I’m want to help you do ____”.

One of  my favorite Steve Blank terms is Earlyvangelists. That’s because early stage startups are in a fight against time to make someone care about what their doing. Partnerships aren’t that important for earlyvangelists, at least until they start getting some traction. Big companies will often need partners because it is impossible to be good at doing everything yourself.

The post Class 13, Week 7 – Partners appeared first on Accelerate Innovation.

For this week’s Startup Skills class, we did one of my absolute favorites: storyboarding! Anytime you’ve seen an intro or explanatory video on the web, it started as a storyboard.

Introducing explanatory videos

I teach the class by first introducing a few videos. For example:

Coin (my personal favorite)

Groupon (30 seconds!)

Who Gives A Crap?

Colspace (disclaimer: I created this one):

After each one I ask the students to say what they liked and disliked about each video. This gives the class an interesting baseline to start from.

I then ask the students to come up with their own explanatory video storyboard. Each student works alone to increase the number of initial ideas we get. After five minutes of sketching and brainstorming, the students share their ideas with each other through a short acting out of the video idea.

Get excited!!

And then I show Solar Freaking’ Roadways. Start with the indiegogo page: https://www.indiegogo.com/projects/solar-roadways

Consider their first video:

Sadly, it is quite boring. But then, consider the second video.

This is the launching off point for a different style from what most people come up with at first, which tends to be straightforward and relatively low energy. Launching new products can be fun and interesting as well as helpful!

So the students go back to the drawing board and come up with a totally different version of their storyboard, this time with high energy, in your face action! I also ask them to start thinking about patterns and repetition. You only need to get one or two ideas across in a 60 second video, and those ideas should be repeated a handful of times for maximum stickiness. At the end of the second iteration, the students once again share their storyboards with the group by acting them out.

Round three: Something you’ll actually use

I start off round 3 by again showing a few videos to get the ideas moving and asking the students what they like and dislike.

Pepple:

https://www.kickstarter.com/projects/597507018/pebble-e-paper-watch-for-iphone-and-android

Zencash (drawing):

Dropbox:

The Girl Effect:

The goal of this class is to have the teams walk away with a storyboard they could actually make into a video. For example, here’s a video put together by Kevin Hicks for Triangle Bikeworks after a storyboarding class at the Cube at UNC:

The goal isn’t to be perfect! It’s to get a first draft of the video out to your customers to get feedback.

So here, for your viewing pleasure, are what the teams came up with!

Icarus storyboard presentation

Xip storyboard presentation1

Levaté storyboard presentation

Xip storyboard presentation3

http://youtu.be/SWI2a-w1l6c

Xip storyboard presentation2

Driven Analytics storyboard presentation

The post Class 12, Week 6 – Storyboarding appeared first on Accelerate Innovation.

After 6 weeks, I wanted to meet with each team one on one to get a deeper progress report, check on the current status of the business model canvas assumptions (meaning can the company make money as it is currently positioned), and set in place a good plan for the sprint to the finish line. Rehearsal day is a short three weeks away!

I also asked for questions about accounting and finance, because Pat Jones, CFO from Petra (and formerly Hobby Lobby) is coming in to teach. Here are the questions that were posed:

• How to keep books balanced and legal
• Rundown of balance sheet, income statement, statement of cash flows, how they correlate
• Taxes – How to file taxes and how to avoid personal taxes on $10k investment they got (most are LLCs)
• Double-entry accounting intro
• Essential guidelines on business expenses and taxes
• How to maximize small amount of cash, leverage investors
• W2 and 1099 employees – withholding and filing quarterly (escrow accounts?)

I had originally envisioned the teams teaching more of the classes themselves, since I believe there is no better way to learn a subject than to teach it. Ultimately I scrapped that idea. I preferred to keep the teams laser focused on their customer and product development. However, the day before the rehearsal dinner I’m going to NY to teach lean with GA and GE, so I asked the students to meet and help each other prepare. During our last pitch session I felt the teams gave each other great advice so I’m confident they will once again do so.

Present last week’s experiments

As always, the teams started the day by presenting the results of their last week’s experiments. They followed the formula of hypothesis, test, results and insights. I thought after 6 weeks of going through this process this would be second nature but the teams have varying levels of comfort with presenting their ideas in this manner. I need to think more about about how I teach the students to present their ideas and come up with new exercises to improve this ability. I rely very heavily on practice and real-time feedback and it seems more is needed.

Revenue Streams

We then discussed the next box in the business model canvas – Revenue Streams. Steve Blank defines “Revenue Model” as the strategy the company uses to generate cash from each Customer Segment. In short, it’s how the company gets paid. When devising the revenue strategy, each customer segment needs its own revenue model.

A key question that always comes up for new companies is how to price themselves. The specific dollars and cents that make up pricing is called a tactic and is different from a revenue model, which is more of a strategy for converting customer value into money. In addition, revenue streams are not income statements, balance sheets and cash flow. Those are accounting terms, and while critical for the startups health, do not describe how the company makes money.

Steve identifies a variety of types of revenue streams.

• Asset sale – like an apple or a house (you buy it, you own it)
• Usage fee – like amazon web services or electricity (the more you use, the more you pay)
• Subscription – like a newspaper or SaaS (repeating fee over a set time period)
• Renting – like hardware or houses (use it as much as you like during a set time period)
• Licensing – like IP (you can use the IP but you don’t own it)
• Intermediation – like ebay or airbnb (connect two sides of a market, take a transaction fee)
• Advertising – like magazines or google (sell ads next to the primary content)

A good jumping off point for thinking about revenue streams is to ask how are customers paying for your type of product today. In some cases, you’ll want to follow the same model, since that’s what consumers are already familiar with. But disruption frequently occurs when you find a different revenue model. Zipcar started by renting by the hour, not by the day. Google charged advertisers by the click, not by the number of viewers. Amazon web services charges by usage, rather than selling hardware.

Another big question is how do you price your product – on cost or value? I think it’s always a good idea to go for value! Don’t start with how much the product costs to make. Think from the customer’s perspective and find out how much they are willing to pay for the value you bring them.

The teams then presented their current thinking on revenue streams and we closed with the presentation of new experiments for the week.

The post Class 11, Week 6 – Revenue Streams appeared first on Accelerate Innovation.

At just past the halfway mark for the ten-week accelerator, the teams asked if we could look at how paid advertising works, particularly for Google and Facebook. This is a class I teach all the time, that I wrote a book on, and is how I first got started teaching about marketing and entrepreneurship. In many ways it feels like coming home each time I teach this class!

I follow this worksheet when teaching digital marketing – Digital Marketing for Business Growth. Since that worksheet is coupled with an all day class (about 7 hours), I decided to focus in on the foundations of digital marketing and then jump to paid ads.

Demographics

Digital marketing always starts with the demographic the company wants to target. The teams already have done a lot of work on defining their customer (in lean startup/launchpad also called the customer persona), so this kickoff wasn’t too difficult.

Digital channels

There are three main digital channels startups should be concerned with, also called owned media, because the startup has control over them. They are website, social media and email. We went through the exercise of thinking about the type of content that goes into each channel and the main takeaway for each. Website – answer customer questions, Social – zoom out from your business, and Email – every email to your customer database needs to be a gift.

Digital ads

I have two full classes on paid advertising available on youtube for free.

Class 1 – http://www.youtube.com/watch?v=79k2b34CcMQ
Class 2 – http://www.youtube.com/watch?v=2kB7NLc4QZY

In short, a startup can buy ads in order to put their messaging in front of their audience that has been aggregated by someone else. For example, Google aggregates people searching for certain things by the keywords they type into the Google search box, and then sells ads next to the search results. Facebook aggregates people interested in sharing photos and status updates and shows ads based on their expressed interests. And blogs aggregate people interested in the same topic, for example exercise or cooking, and sells ads based on those interests.

The actual ad and landing page

Regardless of the platform, the first step in running an ad is to decide who the ad is going to target – ie: the demographic! It could be based on, for example, search keywords, demographics, or expressed interests.

The second step is to decide on the content of the ad. Different platforms have different requirements (ie: Google is normally all text, Facebook has a small picture). The common denominator though is normally to make a compelling offer. For example, “Sign up to be a beta tester for a new wheelchair lift” or “Take weekly photos of your construction site”.

The third step is to take the person who clicks on your ad to a well-constructed landing pages. Check out unbounce.com for my favorite resource on landing pages. In general, the landing page should be a continuation of the offer and ask the visitor to do something. Normal actions are to buy something or leave their email to get more information.

Email database and analytics

That was about as much of a crash course in digital marketing and paid advertising as I could fit into two hours. We also touched briefly on maintaining a good email database with all of the company’s customers and interested leads. And took a quick look at how Google analytics, tied with Goals, can tell you how effective your website is.

We may return to digital marketing if the teams need help with finding more leads and moving leads through the sales process.

The post Class 10, Week 5 – Digital Marketing (paid ads focus) appeared first on Accelerate Innovation.