Maine "Top Gun" Customer Development Broadcast 021512

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Steve Blank

www.steveblank.com

Twitter: @sgblank

How to Build a Startup

This Talk is Based On• Business Model Generation• Four Steps to the Epiphany• The Four Steps to Epiphany

This Talk is Based On• Business Model Generation• Four Steps to the Epiphany• The Startup Owners Manual

But First,…

WHAT’S A STARTUP?

Lesson 1

Startup

Lifestyle Startups Work to Live their Passion

• Serve known customer with known product

• Work for their passion

Small BusinessStartup

Small Business StartupsWork to Feed the Family

• Serve known customer with known product

• Feed the family

Small BusinessStartup

Exit Criteria- Business Model found- Profitable business- Existing team< $500K in revenue

Small Business StartupsWork to Feed the Family

• known customer known product

• Feed the family

Large Non-Profit

Social Startup

Social Entrepreneurship Startups

• Solve pressing social problems• Social Enterprise: Profitable• Social Innovation: New Strategies

ScalableStartup

Large Company

Scalable Startup

Goal is to solve for: unknown customer and

unknown features

Search Execute

ScalableStartup

Large Company

Scalable Startup

Goal is to solve for: unknown customer and

unknown features

Search Execute

Exit Criteria- Business model found- Total Available Market > $500m- Can grow to $100m/year

ScalableStartup

$2 to $50M Acquisition

Buyable StartupBorn to Be Big

Goal is to solve for: Internet, Mobile, Gaming Apps

Search Sell

Sell to larger company

THE DELUSIONS OF ENTREPRENEURSHIP

Lesson 2

I Have a Vision

I Have the “Right Stuff”

I Know What Needs to Be Done

Lets Start A Company!

#1 I Know Who The Customer Is

#2I Know Exactly the Product They Need

#3I Know the Problem They Have

#4All I Need to Do is Execute the Plan

#5Now Let’s Raise Money

#6Let’s Do It Like a Large Company

#7We Can Fix It After We Ship It All

HOW TO GET STARTUPS WRONG

Lesson 3

Large Company Product Introduction Model

Concept/Seed

Round

Product Dev.

Alpha/Beta Test

Launch/1st Ship

When Adopted by Startups =

Concept/Seed

Round

Product Dev.

Alpha/Beta Test

Launch/1st Ship

The Leading Cause of Startup Death

Product Introduction Model:Two Implicit Assumptions

Customer Problem: known

Product Features: known

Concept/Seed

Round

Product Dev.

Alpha/Beta Test

Launch/1st Ship

Execute the Business Plan

Large Company Method – Hire Marketing

Concept/Seed

Round

Product Dev.

Alpha/Beta Test

Launch/1st Ship

- Create Marcom Materials- Create Positioning

- Hire PR Agency- Early Buzz

- Create Demand- Launch Event- “Branding”

Marketing

Large Company Method – Hire Sales

Concept/Seed

Round

Product Dev.

Alpha/Beta Test

Launch/1st Ship

- Create Marcom Materials- Create Positioning

- Hire PR Agency- Early Buzz

- Create Demand- Launch Event- “Branding”

• Build Sales Organization

Marketing

Sales• Hire Sales VP• Hire 1st Sales

Staff

Large Company Method – Hire Business Development

Concept Product Dev.

Alpha/Beta Test

Launch/1st Ship

- Create Marcom Materials- Create Positioning

- Hire PR Agency- Early Buzz

- Create Demand- Launch Event- “Branding”

• Hire Sales VP• Pick distribution

Channel

• Build Sales Channel / Distribution

Marketing

Sales

• Hire First Bus Dev

• Do deals for FCS

Business Development

Large Company Method – Hire Engineering

Concept Product Dev.

Alpha/Beta Test

Launch/1st Ship

- Create Marcom Materials- Create Positioning

- Hire PR Agency- Early Buzz

- Create Demand- Launch Event- “Branding”

• Hire Sales VP• Pick distribution

Channel

• Build Sales Channel / Distribution

Marketing

Sales

• Hire First Bus Dev

• Do deals for FCS

Business Development

Engineering • Write MRD

• Waterfall

• Q/A • Tech Pubs

WHAT DO WE NEED TO GET STARTUPS RIGHT?

Lesson 4

Is It Big Enough?

Is It Big Enough?

How Do You Know?

Do You Have What it Takes?

Do You Have What it Takes?

ResilientRelentless

AgileCurious

PassionateDriven

Do You Know Why Startups Fail?

More startups fail from a lack of customers than from a failure of product development

Do You Know What a Startup Is?

A Startup is a temporary organization

A Startup is a temporary organization designed to search

A Startup is a temporary organization designed to search for a repeatable and

scalable business model

Startups Are Not Smaller Versions of Large Companies

Startups Are Not Smaller Versions of Large Companies

Startups Are Not Smaller Versions of Large Companies

Large Companies Execute Known Business Models

Startups Are Not Smaller Versions of Large Companies

Startups Search for Unknown Business Models

Startups Fail Because They Confuse Search with Execute

Startups need their own tools, different from those used

in existing companies

Startups need their own tools, different from those used

in existing companies

THE 3 TOOLS FOR STARTUPS

Lesson 5

Startup Tool #1: The Business Model

All I Need to Do is Execute the Plan

No Business Plan Survives First Contact With Customers

CUSTOMER SEGMENTS

which customers and users are you serving? which jobs do they really want to get done?

VALUE PROPOSITIONS

what are you offering them? what is that getting done for them? do they care?

CHANNELS

how does each customer segment want to be reached? through which interaction points?

CUSTOMER RELATIONSHIPS

what relationships are you establishing with each segment? personal? automated? acquisitive? retentive?

REVENUE STREAMS

what are customers really willing to pay for? how? are you generating transactional or recurring

revenues?

KEY RESOURCES

which resources underpin your business model? which assets are essential?

62

KEY ACTIVITIES

which activities do you need to perform well in your business model? what is crucial?

KEY PARTNERS

which partners and suppliers leverage your model?

who do you need to rely on?

COST STRUCTURE

what is the resulting cost structure? which key elements drive your costs?

65images by JAM

customer segments

key partners

cost structure

revenue streams

channels

customer relationships

key activities

key resources

value proposition

sketch out your business model

(c)2010 K+S Ranch Consulting Inc. www.steveblank.com

67

KEYPARTNERS

OFFER

CHANNELS

CUSTOMER RELATIONSHIPS

CUSTOMERSEGMENTS

REVENUE STREAMSCOST STRUCTURE

KEYACTIVITIES

KEYRESOURCES

67

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buildingblock

buildingblock

buildingblock

building

block

buildingblock

buildingblock

building

block

buildingblock

buildingblock

buildingblock

Business Model Canvas – Any Business

building

block

9 Guesses

Guess Guess

Guess

Guess

GuessGuess

Guess

GuessGuess

Startup Tool #2: The Agile Development

Agile Development is How We Build Startups

Startup Tool #3: Customer Development

Customer Development is How We Search for the Business Model

CUSTOMER DEVELOPMENT

Lesson 5

Customer Development

There are no facts inside your building

So get the heck out

Customer Development is how you search for the model

CompanyBuilding

Customer Creation

Execution

Customer

Discovery

Customer

Validation

Pivot

Search

Customer Development

Customer

Discovery

Customer

Validation

Pivot

Search

The Search For the Business Model

Customer Development

CompanyBuilding

Customer

Discovery

Customer

Validation

Customer Creation

Pivot

Execution

• Articulate and Test your hypotheses• Design experiments, start listening• Continuous Discovery• Done by founders

Customer Discovery

CustomerDiscovery

CustomerValidation

CompanyBuilding

CustomerCreation

Execution

Search

Pivot

Discovery

• How big is the market?• Who’s the customer?

– What’s their problem/need

• What’s the product/service/need?– Does it solve the customers problem?

• How do you create demand?• How do you deliver the product?• How do you make money?

Customer Development =process to search

Business Model Canvas =the Scorecard

Agile Engineering is How We Build Startups

• Research Labs

• Equipment Manufacturers

• Distribution Network

• Service Providers

• Technology Design

• Marketing

• Demo and customer feedback

• Cost Reduction

• Remove labor force pains

• Eliminate bio-waste hazards

• IP – Patents

• Video Classifier Files

• Robust Technology

• Farming conventions.

• Demo, demo, and demo!!

• Proximity is paramount

• Organic Farmers

• Weeding Service Providers

• Conventional Farmers

• Dealers• Direct

Service• Indirect

Service• … then

Dealers

• Asset Sale• Direct Service with

equipment rental• … then Asset Sale

Value-Driven

Customer Validation

Customer

Discovery

CustomerValidatio

n

Customer Creation

CompanyBuilding

• Repeatable and scalable business model?

• Passionate earlyvangelists?

• Pivot back to Discovery if no customers

Pivot Execution

Search

The Minimum Viable Product (MVP)

• Smallest feature set that gets you the most …

- orders, learning, feedback, failure…

- incremental and iterative

Hypotheses Testing and Insight

The Pivot

• The heart of Customer Development

• Iteration without crisis

• Fast, agile and opportunistic

Customer

Discovery

Customer

Validation

Pivot

Search

Pivot Cycle Time Matters

• Speed of cycle minimizes cash needs

• Minimum feature set speeds up cycle time

• Near instantaneous customer feedback drives feature set

CustomerDiscovery

CustomerValidation

CompanyBuilding

CustomerCreation

ExecutionSearch

Pivot

Web/Mobile Versus Physical

• Web/Mobile startups run faster

• Different process steps for web vs. physical

• Customer Relationships are radically different

Customer

Discovery

Customer

Validation

Pivot

Customer Discovery Phase 1 & 2

Customer Relationships

Customer Relationships Physical Products – Get Customers

Customer Relationships Physical Products – Keep Customers

Customer Relationships Physical Products – Grow Customers

Customer Relationships Physical Products – Get/Keep/Grow

Customer Relationships Web/Mobile Products– Get Customers

Customer Relationships Web/Mobile Products– Keep Customers

Customer Relationships Web/Mobile Products– Grow Customers

Customer Relationships Web/Mobile Products Get/Keep/Grow

Customer Relationships Physical & Web Mobile Are Different

HOW DOES THIS REALLY WORK?

LEAN LAUNCHPAD CLASS

Lesson 6

How Does This Really Work?

Lean LaunchPad Class

National Science Foundation

Pivot ExampleRobotic Weeding

Talked 75 Customers in 8 Weeks

Our initial plan

Confidential

20 interviews, 6 site visits…We got OUR Boots dirty

WeedingVisited two farms in Salinas Valley to better understand problem

Interviewed:• Bolthouse Farms, Large Agri-Industry in Bakersfield• White Farms, Large Peanut farmer in Georgia• REFCO Farms, large grower in Salinas Valley• Rincon Farms, large grower in Salinas Valley• Small Organic Corn/Soy grower in Nebraska• Heirloom Organics, small owner/operator, Santa Cruz Mts• Two small organic farmers at farmers market• Ag Services of Salinas, Fertilizer applicator

MowingInterviewed:• Golf: Stanford Golf course • Parks: Stanford Grounds Supervisor, head of maintenance and

lead operator (has crew of 6)• Toro dealer (large mower manufacturer) • User of back-yard mowing system• Maintenance Services for City of Los Altos• Colony Landscaping (Mowing service for stadiums)

Business Plan Autonomous Vehicles for Mowing & Weeding

We reduce operating cost- Labor reduction- Better utilization of assets (eg mow or weed at nights)- Improved performance (less rework, food safety)

Mowing- Owners of public or commercially used green spaces (e.g. golf courses)- Landscaping service provider

Weeding- Farmers with manual weeding operations

Dealers sell, installs and supports customer

Co. trains dealers, supports dealers

- Mowing Dealers- Ag Dealers

- Innovation- Customer Education- Dealer training

Dealer discount COGS seek a 50-60% Gross MarginHeavy R&D investment

- Dealers (Mowing and Ag)- Vehicle OEMs (John Deere, Toro, Jacobsen, etc)

- Research labs

Asset saleOur revenue stream derives from selling the equipment

Engineers on Autonomous vehicles, GPS, path-planning

Found weeding in organic crops is HUGE problem; 50 - 75% of costs

Crews of 100s-1000

Back-breaking task

(Ilegal) labor harder to get

1-5 weedings per year/field

$250-3,500 per acre and increasing

Food contamination risk

Decision to make – mowing vs weeding

Application If ROI is < 1 yr they will

buy

Labor costs significant?

Autonomous would solve

problem?

TAM

Mowing of large fields

Yes.Professionally

run organizations

Yes Yes Adjusted up toxxx

Weeding in Agriculture

Agri Industry: YES!

Large Growers: Yes

Small Growers: No

YES! for organic crops

They are spending $500/ac!

Not necessarily

Key need is weed vs. crop differentiation

TAM increased to $2.6 B (Total

organic)

Target Market (organic

specialty) 162 M/yr

18%/yr growth

Autonomous vehicles WEEDING

We reduce operating cost- Labor reduction (100 to 1)- Reduced risk of contamination- Mitigate labor availability concerns

- Low density vegetable growers- High density vegetable growers- Thinning operations- Conventional vegetables

Dealers sell, installs and supports customer

Co. trains dealers, supports dealers

- Ag Dealers- Ag Service providers

- Innovation- Customer Education- Dealer training

Dealer discount COGS seek a 50-60% Gross MarginHeavy R&D investment

- Ag Dealers- Ag Service providers

- Research labs

Asset saleOur revenue stream derives from selling the equipment

Engineers on Machine VisionTwo problems:- Identification- Elimination

1 Week – 1 CarrotBot

Confidential

CarrotBot

• Machine Vision data collection platform– Monochrome & Color

Cameras– Laser-line sweep (depth

measurement)– Encoders

(position/velocity)– Onboard data acquisition

& power

CarrotBot 1.0

The Business Plan Canvas Updated

• Research Labs

• Equipment Manufacturers

• Distribution Network

• Service Providers

• Technology Design

• Marketing• Demo and

customer feedback

• Cost Reduction

• Remove labor force pains

• Eliminate bio-waste hazards

• IP – Patents• Video

Classifier Files

• Robust Technology

• Farming conventions.

• Demo, demo, and demo!!

• Proximity is paramount

• Organic Farmers

• Weeding Service Providers

• Conventional Farmers

• Dealers• Direct Service• Indirect

Service• … then

Dealers• Asset Sale• Direct Service

with equipment rental

• … then Asset Sale

Value-Driven

Visit Highlights

Carrot vs. WeedsDue to small root systems, carrots have no chance against weeds

Visit Highlights

Organic Broccoli, closely cultivated. Weeds close to plants are hand-picked

Visit Highlights

State of the Art in Weeding Technology for Organic Crops

Customer Hypothesis

Hypothesis Confirmed• Growers interested in own

equipment • Industrial (10,000s of acres) • Large (1,000s of acres)• Willing to pay $100k for one unit

• Smaller growers (100s of acres) usually subcontract the labor services or rent equipment

• All purchases through local dealers• Customer service is essential

Pre-Test

Post-Test

Customer Map #1 – Industrial Growers

Example: Bolthouse Farms – Large Industrial Carrot Producer – 8K acres/yr

• Equipment Operator

• Director, Ag Technology

• Justin Grove, interviewed

• VP, Growing Operations

• CFO, CEO (Jeff Dunn)

• Local Farm Mgr• Cliff Kirkpatrick, visited

Equipment Operator

Cliff, Farm Mgr

Customer Map #2 – Service Providers

Example: Ag Services – Service Provider, Salinas Valley

• Equipment Operator

• Service Mgr

• ?? (service mgr’s boss)

Me (left), Marty (middle, Service Mgr), Doug (right, Grower)

• Grower

The Business Plan Canvas Updated

• Research Labs

• Equipment Manufacturers

• Distribution Network

• Service Providers

• Technology Design

• Marketing• Demo and

customer feedback

• Cost Reduction

• Remove labor force pains

• Eliminate bio-waste hazards

• IP – Patents• Video

Classifier Files

• Robust Technology

• Farming conventions.

• Demo, demo, and demo!!

• Proximity is paramount

• Mid/Large Organic Farmers

• Agricultural corporations

• Weeding Service Providers

• Mid/Large Conventional Farmers

• Direct Service• Indirect

Service• … then

Dealers

• Direct Service with equipment rental

• ($1,500/d; 120d/yr )• Low density:

$1,500/d• High density:

$6,000/d

Value-Driven

World Ag Expo interviews:the need is real and wide spread

• 10+ interviews at show– Everyone confirmed the need– Robocrop, UK based, crude

competitor sells for $171 K

• Revenue Stream– Mid to small growers prefer a

service– Large growers prefer to buy, but

OK with service until technology is proven

– Charging for labor cost saved is OK, as we provide other benefits (food safety, labor availability)

Confidential

The Business Plan Canvas Updated

• Research Labs

• Equipment Manufacturer

• Distribution Network

• Service Providers

• 2 or 3 Key Farms

• Technology Design

• Marketing• Demo and

customer feedback

• Cost Reduction

• Remove labor force pains

• Eliminate bio-waste hazards

• IP – Patents• Video

Classifier Files

• Robust Technology

• Farming conventions.

• Demo, demo, and demo!!

• Proximity is paramount

• Mid/Large Organic Farmers

• Agricultural corporations

• Weeding Service Providers

• Mid/Large Conventional Farmers

• Direct Service• Indirect

Service• … then

Dealers

• Direct Service with equipment rental

• Low density: $1,500/d

• High density: $6,000/d

Value-Driven• R&D• Bill of Materials• Training &

Service• Sales

Autonomous weeding - Final

We reduce operating cost- Labor reduction (100 to 1)- Reduced risk of contamination- Mitigate labor availability concerns

- Low density vegetable growers- High density vegetable growers- Thinning operations- Conventional vegetables

Direct- Provide high quality service at competitive price

Direct - Alliance with service providers- Eventually sell through dealers

- Innovation- Customer Education- Dealer training

Costs for service provisionCOGS seek a 50-60% Gross MarginHeavy R&D investment

- Ag Service providers

- Research Institutes (eg UC Davis, Laser Zentrum Hannover)

- 3-4 key farms

Service provision- Charge by the acre with modifier according to weed density - Eventually move to asset sale

Engineers on Machine VisionTwo problems:- Identification- Elimination

Pivot ExampleAutonomous Robot

Talked 75 Customers in 8 Weeks

Our initial plan

Business Plan Autonomous Vehicles for Mowing

We reduce operating cost- Labor reduction- Better utilization of assets (eg mow or weed at nights)- Improved performance (less rework, food safety)

Mowing- Owners of public or commercially used green spaces (e.g. golf courses)- Landscaping service provider

Weeding- Farmers with manual weeding operations

Dealers sell, installs and supports customer

Co. trains dealers, supports dealers

- Mowing Dealers- Ag Dealers

- Innovation- Customer Education- Dealer training

Dealer discount COGS seek a 50-60% Gross MarginHeavy R&D investment

- Dealers (Mowing and Ag)- Vehicle OEMs (John Deere, Toro, Jacobsen, etc)

- Research labs

Asset saleOur revenue stream derives from selling the equipment

Engineers on Autonomous vehicles, GPS, path-planning

20 interviews, 6 site visits…We got OUR Boots dirty

WeedingVisited two farms in Salinas Valley to better understand problem

Interviewed:• Bolthouse Farms, Large Agri-Industry in Bakersfield• White Farms, Large Peanut farmer in Georgia• REFCO Farms, large grower in Salinas Valley• Rincon Farms, large grower in Salinas Valley• Small Organic Corn/Soy grower in Nebraska• Heirloom Organics, small owner/operator, Santa Cruz Mts• Two small organic farmers at farmers market• Ag Services of Salinas, Fertilizer applicator

MowingInterviewed:• Golf: Stanford Golf course • Parks: Stanford Grounds Supervisor, head of maintenance and

lead operator (has crew of 6)• Toro dealer (large mower manufacturer) • User of back-yard mowing system• Maintenance Services for City of Los Altos• Colony Landscaping (Mowing service for stadiums)

Decision to make – mowing vs weeding

Application If ROI is < 1 yr they will

buy

Labor costs significant?

Autonomous would solve

problem?

TAM

Mowing of large fields

Yes.Professionally

run organizations

Yes Yes Adjusted up toxxx

Weeding in Agriculture

Agri Industry: YES!

Large Growers: Yes

Small Growers: No

YES! for organic crops

They are spending $500/ac!

Not necessarily

Key need is weed vs. crop differentiation

TAM increased to $2.6 B (Total

organic)

Target Market (organic

specialty) 162 M/yr

18%/yr growth

Autonomous vehicles WEEDING

We reduce operating cost- Labor reduction (100 to 1)- Reduced risk of contamination- Mitigate labor availability concerns

- Low density vegetable growers- High density vegetable growers- Thinning operations- Conventional vegetables

Dealers sell, installs and supports customer

Co. trains dealers, supports dealers

- Ag Dealers- Ag Service providers

- Innovation- Customer Education- Dealer training

Dealer discount COGS seek a 50-60% Gross MarginHeavy R&D investment

- Ag Dealers- Ag Service providers

- Research labs

Asset saleOur revenue stream derives from selling the equipment

Engineers on Machine VisionTwo problems:- Identification- Elimination

1 Week – 1 CarrotBot

Confidential

CarrotBot

• Machine Vision data collection platform– Monochrome & Color

Cameras– Laser-line sweep (depth

measurement)– Encoders

(position/velocity)– Onboard data acquisition

& power

CarrotBot 1.0

Visit Highlights

Carrot vs. WeedsDue to small root systems, carrots have no chance against weeds

Visit Highlights

Organic Broccoli, closely cultivated. Weeds close to plants are hand-picked

The Business Plan Canvas Updated

• Research Labs

• Equipment Manufacturers

• Distribution Network

• Service Providers

• Technology Design

• Marketing• Demo and

customer feedback

• Cost Reduction

• Remove labor force pains

• Eliminate bio-waste hazards

• IP – Patents• Video

Classifier Files

• Robust Technology

• Farming conventions.

• Demo, demo, and demo!!

• Proximity is paramount

• Organic Farmers

• Weeding Service Providers

• Conventional Farmers

• Dealers• Direct Service• Indirect

Service• … then

Dealers• Asset Sale• Direct Service

with equipment rental

• … then Asset Sale

Value-Driven

Customer Hypothesis

Hypothesis Confirmed• Growers interested in own

equipment • Industrial (10,000s of acres) • Large (1,000s of acres)• Willing to pay $100k for one unit

• Smaller growers (100s of acres) usually subcontract the labor services or rent equipment

• All purchases through local dealers• Customer service is essential

Pre-Test

Post-Test

Customer Map #1 – Industrial Growers

Example: Bolthouse Farms – Large Industrial Carrot Producer – 8K acres/yr

• Equipment Operator

• Director, Ag Technology

• Justin Grove, interviewed

• VP, Growing Operations

• CFO, CEO (Jeff Dunn)

• Local Farm Mgr• Cliff Kirkpatrick, visited

Equipment Operator

Cliff, Farm Mgr

Customer Map #2 – Service Providers

Example: Ag Services – Service Provider, Salinas Valley

• Equipment Operator

• Service Mgr

• ?? (service mgr’s boss)

Me (left), Marty (middle, Service Mgr), Doug (right, Grower)

• Grower

The Business Plan Canvas Updated

• Research Labs

• Equipment Manufacturers

• Distribution Network

• Service Providers

• Technology Design

• Marketing• Demo and

customer feedback

• Cost Reduction

• Remove labor force pains

• Eliminate bio-waste hazards

• IP – Patents• Video

Classifier Files

• Robust Technology

• Farming conventions.

• Demo, demo, and demo!!

• Proximity is paramount

• Mid/Large Organic Farmers

• Agricultural corporations

• Weeding Service Providers

• Mid/Large Conventional Farmers

• Direct Service• Indirect

Service• … then

Dealers

• Direct Service with equipment rental

• ($1,500/d; 120d/yr )• Low density:

$1,500/d• High density:

$6,000/d

Value-Driven

World Ag Expo interviews:the need is real and wide spread

• 10+ interviews at show– Everyone confirmed the need– Robocrop, UK based, crude

competitor sells for $171 K

• Revenue Stream– Mid to small growers prefer a

service– Large growers prefer to buy, but

OK with service until technology is proven

– Charging for labor cost saved is OK, as we provide other benefits (food safety, labor availability)

The Business Plan Canvas Updated

• Research Labs

• Equipment Manufacturer

• Distribution Network

• Service Providers

• 2 or 3 Key Farms

• Technology Design

• Marketing• Demo and

customer feedback

• Cost Reduction

• Remove labor force pains

• Eliminate bio-waste hazards

• IP – Patents• Video

Classifier Files

• Robust Technology

• Farming conventions.

• Demo, demo, and demo!!

• Proximity is paramount

• Mid/Large Organic Farmers

• Agricultural corporations

• Weeding Service Providers

• Mid/Large Conventional Farmers

• Direct Service• Indirect

Service• … then

Dealers

• Direct Service with equipment rental

• Low density: $1,500/d

• High density: $6,000/d

Value-Driven• R&D• Bill of Materials• Training &

Service• Sales

Autonomous weeding - Final

We reduce operating cost- Labor reduction (100 to 1)- Reduced risk of contamination- Mitigate labor availability concerns

- Low density vegetable growers- High density vegetable growers- Thinning operations- Conventional vegetables

Direct- Provide high quality service at competitive price

Direct - Alliance with service providers- Eventually sell through dealers

- Innovation- Customer Education- Dealer training

Costs for service provisionCOGS seek a 50-60% Gross MarginHeavy R&D investment

- Ag Service providers

- Research Institutes (eg UC Davis, Laser Zentrum Hannover)

- 3-4 key farms

Service provision- Charge by the acre with modifier according to weed density - Eventually move to asset sale

Engineers on Machine VisionTwo problems:- Identification- Elimination

Genesis of the Idea

Business Model Canvas

Assumption of Customer PainPeople were even more

frustrated with parking at big

events.

Parking is a pain! People want a

guaranteed parking spot.

People DO want a guaranteed spot & would

reserve online.

200+ customers Bigger Pain

PIVOT!

80% positive response

Business Model Canvas

Assumption of Customer PainPeople were even more

frustrated with parking at big

events.

Parking is a pain! People want a

guaranteed parking spot.

People DO want a guaranteed spot & would

reserve online.

200+ customers Bigger Pain

People will pay extra to have a

great, guaranteed parking spot.

People will not only pay more,

they will pay a lot more! ($9+)

Validated!

Surveyed 75+ Customers

PIVOT!

Business Model Canvas

145

Customer Survey/Validation

• How much more would you be willing to pay to have a guaranteed close parking spot in the arena's lot or near the arena?– On average- $9.33– Max of $27.00

Assumption of PainPeople were even more

frustrated with parking at big

events.

Parking is a pain! People want a

guaranteed parking spot.

People DO want a guaranteed spot & would

reserve online.

200+ customers Bigger Pain

People will pay extra to have a

great, guaranteed parking spot.

People will not only pay more,

they will pay a lot more! ($9+)

Validated!

Surveyed 75+ Customers

People who have extra spaces will post spots and make money.

It is difficult to get a mass number of

people to post enough parking

spots.

We needed to find a new solution.

30+ People

PIVOT!

PIVOT!

Expert Validation

• Tom Lombardi and Greg Bessoni– Online parking reservation experts

Partnered with me and

put up capital.

Business Model Canvas

New AssumptionsParking lots will

post spots online so that people

can reserve them.

Yes! Lots have been looking for ways to increase revenue and fill

up lots.

30+ Parking Lots Bigger Pain

Electronic payments in

advance through an online

reservation system.

Validated!

30+ Parking Lots

20% of cash goes missing.

Loved it! Would pay about 15% of

posted price.

75% positive response

Industry Validation

Business Model Canvas

Business Model Canvas

MVP ValidationEasier ways to post parking &

track reservations.

Started with a very basic

reservation system.

All Pro Parking (30 lots)

30+ person focus group Search process

was too hard. Wanted mobile

site as well.

Fixed search, cleaned up site,

mobile site in the works.

Made it even easier to post

and track parking.

All Pro Parking’s

Customers

With no marketing-

50 reservations in just a few

months.

Business Model Canvas

Business Model Canvas

Our Model

$5 Reservation Fee

15% of Price Paid

XoomPark

We estimate being able to collect about $8 per reservation

Go to Market Strategy & ValidationTalked to Tom

Lombardi, industry expert.

Lots located throughout Florida and in Dallas,TX

Lots located all over West Coast and Texas

Parking lots in all 50 states

Over 250 lots throughout Eastern US.

25+ years experience

Go to Market Strategy & Validation

Tom and Greg’s Affilate Networks

3,000 Affiliates

Go to Market Strategy & Validation

Customer’s recommendations

for the future

Focus group of

30+ people

Market Size

$8.2 Billion USA Parking Industry

$4.5 Billion Parking Facility/Management

$1.4 Billion Event Parking

$240,000 Buffalo and Atlanta

TAMSAMTarget

Market

Apex

Competitors

Usability

Reliability

Low High

High

Low

Parkwhiz

ParkingCarma

GottaPark

ClickandPark

Revenue Projections

Year 1 Year 2 Year 3 Year 4$0$2$4$6$8

$10$12$14$16$18$20

Revenue

Revenue in Mil-lions

70% Gross Profit Margin

• 2 Partners• 30+ Parking lots• 50+ Reservations• Working Website

• Validated Revenue Model

How Does This Really Work?

The National Science Foundation

8 Weeks From an Idea to a Business

I Write a Blog www.steveblank.com

Thanks

www.steveblank.com

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