Successfully Apply
“Lean” Start-Up Principles
to
University Spinouts
Live Webinar - 10 April 2012
www.technologytransfertactics.com – Phone: 877-729-0959
David J. Miller
Adjunct Professor - The School of Management
George Mason University
Mr. Miller is an entrepreneur and has spent the last 10 years
working with and managing a various new ventures. In December
2007 he founded FamilyFantasySports.com, the first fantasy sports
site dedicated to family play. Mr. Miller holds an MBA from the
University of Chicago (Entrepreneurship, Finance, & Strategic
Management), an MSc in the International Politics of Asia from the
University of London’s School of Oriental and African Studies
(dissertation: Changing Definitions of Security in the Information
Age: The People’s Republic of China and the Internet), and a BA in
international relations from the University of Michigan.
dmillerq@gmu.edu
http://CampusEntrepreneurship - http://twitter.com/campus_entre
Gerard Eldering
Founder and President
InnovateTech Ventures
Mr. Eldering specializes in venture creation based on inventions
licensed from universities and research institutions. He has been
working in the technology transfer community for more than a
decade and is passionate about the creation of professionally
managed and funded start-up companies. Prior to launching
InnovateTech, he founded and served as Director of the Technology
Transfer Office at The MITRE Corporation.
gerard@innovatetech.com
www.innovatetech.com
Overview
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Introduction
Ries, Blank on Entrepreneurship; Start-Ups
The Lean Basics, Business Models
Hypotheses
Customer Development
The Movement, Lean Myths & Other Issues
Questions
Path to Lean
• Internet Bubble
experience from B
School (99-01)
• Startups Since
• Research high impact
firms created by
students at US
universities
Path to Lean
• Stanford, Harvard using lean
– Engineering, business schools
• Lean Startup (Eric Ries)
• Four Steps to the Epiphany (Steven G
Blank)
• Created out of their experiences
• Builds on other management
methods/tools (lean manufacturing, boot
strapping, software development)
• Customer focused
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Eric Ries | IMVU
• Experienced team, strong market =
failure
• Hypotheses about customers,
markets, partners
• Build, measure, learn – feedback
loop
• Experiment, multiple attempts,
fast iterations
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Customer Development
• Steve Blank
• Four Steps to the
Epiphany
• Stanford/Berkeley
• Startup Handbook now
out (apparently easier
to read)
Ries & Blank Rethink the Startup?
Human institution designed to deliver a new product or
service under conditions of extreme uncertainty.
(Ries)
Nothing to do with size of company, sector of the
economy, or industry
The product and
customer are
unknown.
If truly innovative, even
more uncertainty
STARTUP
=
EXPERIMENT
Blank & Ries: Some Thoughts
Businesses fail because THEY DO NOT HAVE ENOUGH
CUSTOMERS
A startup is an organization formed to search for a repeatable
and scalable BUSINESS MODEL (ITERATIONS)
Startups that don’t iterate (PIVOT) fast enough fail
There are NO facts inside your building, so get outside and find
them
Create & TEST the business MODEL first, business plan &
business will follow
Lean Theory in Brief:
Experimenting to reduce the
time between iterations (pivots)
Will increase odds of success
before funding runs out
Which activities are value-creating
and which are waste?
Value is created by delivering
products or services to customers
Innovators use business models to sketch out
quick and dirty conceptual
prototypes of a business around
the product (not just the product
itself) in a format that is generally
understandable and generates
dialogue with others.
“Business models...are the
managerial equivalent of the
scientific method. You start
with a hypothesis, which you
then test in action and revise
when necessary”.
Magretta, Why Business Models Matter.
Harvard Business Review, May 2002.
Hypothesis For Everything
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Value Proposition (Product or Service)
Customers
Channels
Revenues
Costs
Key Partners, Activities, Resources
Customer Hypotheses
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What types of customers
Customer Problems
A day in their life
Organizational map and customer influence
map
• ROI justification (or emotional if consumer)
• Minimum feature set
Customer Development Model
Focuses on understanding customer problems and
needs, developing a sales model that can be
replicated, creating and driving end use demand,
and transition from learning and discovering to
execution (Steven G Blank)
Customer Discovery
• Discovering who the customers for your product are
and whether the problem you believe you are solving
is important to them
• Are there customers and a market for your vision?
• Not just any customers, those with a problem they
need solved (the more effort/money they have put
into this the better)
Customer Validation
• Proves you have found a set of customers with a
proven and repeatable sales process that has been
tested – early customers are a key
• If you complete discovery & validation: you have
verified market, located customers, tested value of
product, identified buyer, established
pricing/channels; you have found a business model
Customer Creation (Marketing)
• Create end user demand and drive customers
to your channels
• The type of market you are entering will
determine how you create customers (Blank)
Minimize TOTAL time through the loop
Ries
Some of the Methods for Lean (Ries)
Build Faster
Learn Faster
Unit Tests
Split Tests
Usability Tests
Customer Development
Continuous Integration
Five Whys
Incremental Deployment
Customer Advisory Board
Free & Open-Source
Falsifiable Hypotheses
Cloud Computing
Product Owner
Cluster Immune System
Accountability
Just-in-time Scalability
Customer Archetypes
Cross-functional Teams
Measure Faster
Refactoring
Developer Sandbox
Semi-autonomous Teams
Smoke Tests
Measure Faster
Split Tests
Continuous Deployment
Usability Tests
Real-time Monitoring & Alerting
Customer Liaison
Funnel Analysis
Cohort Analysis
Net Promoter Score
Search Engine Marketing
Predictive Monitoring
Minimum Viable Product
Lean Theory in Brief:
Experimenting to reduce the
time between iterations (pivots)
Will increase odds of success
before funding runs out
Lean Startup Movement (JOIN!)
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Ries, Blank books, classes (Stanford, Harvard)
Software
Social Media (blogs, videos, slideshare, etc)
Online Courses
Related Books (Business Model Generation,
Nail it then Scale It, Blue Ocean Strategy)
• Meetup/Other Groups/Skillshare
• NSF – Innovation Corps (led by Steve Blank)
Lean Startup Myths
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Lean means no money
Lean only works with bootstrapped firms
Lean is only for tech companies
Lean is only for startups
Lean is only for profit firms
Final Thoughts on Lean
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Customer, not product focus initial
Test hypotheses quickly, learn, pivot?
No facts inside the building
Searching for business model
Just a part of the new venture creation
process
• Needs more testing, experimentation,
evolution
University Spinouts as Lean Startups
• In many cases the lean startup approach is ideal
for university spinouts
– Well suited for faculty and student lead startups
– Academics should be comfortable with key concepts –
validated learning, build – measure – learn
– Can work well for low resourced startups
• But can it work for life science startups, energy,
electronics?
– What elements of the lean startup approach work for
these types of startups?
The Entrepreneurial Tech Transfer
Officer
• Most tech transfer offices operate more like a
on campus startup than a typical university
office
“The concept of entrepreneurship includes anyone who
works within my definition of a startup: a human
institution designed to create new products and services
under conditions of extreme uncertainty”
Eric Ries, The Lean Startup
• So doesn’t each tech transfer officer need to
act like an entrepreneur?
Using the Lean Startup Approach for
TTO Innovation
• Thinking like an entrepreneur – how to I take this
unique disclosure and get it to market?
• Build – Measure – Learn
– Can we apply this concept to marketing inventions?
• MVP
– In house product launch as market experimentation?
– Leveraging the university community
• Applying the concierge MVP concept to tech
transfer marketing
Questions, Comments, Thoughts?
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